Apple Inc Offers Free iPhone Cases to Assuage Antenna Angst

Vaunted Apple finally admits fault in 'antennagate'

   

Apple Inc. (AAPL) has learned a lesson in humility. And Apple iPhone owners are getting a free case out of the deal. Ending a week of fervent speculation as to how the computer manufacturer would combat the torrent of negative press surrounding the iPhone 4, Steve Jobs announced that Apple would be providing free protective cases for everyone who has purchased the smartphone. Jobs made the announcement at a press conference held this afternoon to address “Antennagate,” referring to the iPhone 4′s well-publicized problems with reception and dropping calls thanks to the device’s antenna.

While Jobs’ apologized to early adopters of AAPL’s latest phone, he also noted how exasperated he and his company are with the exaggerated coverage of the iPhone 4′s antenna problems. After taking the stage at Apple Inc.’s headquarters in Cupertino, California, Jobs stressed that all smartphones on the market suffer from the same signal issues seen in the latest version of iPhone. He also noted that, while the press and numerous web-based communities have been incredibly vocal about the new smartphone’s failings, the device has still been an undeniable success. As the AAPL CEO was quick to point out, the iPhone 4 has sold 3 million units since its release on June 24th. Of those 3 million customers, a mere 0.55% have called Apple to complain about the antenna-related service issues, and just 1.7% of the devices has been returned.

Making strides to quell consumer rage-fueled fires, Jobs told the assembled press that Apple would provide a protective case to every iPhone 4 owner who wants one. The offer will stand for any iPhone 4 purchaser between now and September 30th, indication that devices shipped out this coming fall will not suffer from the same problems as those manufactured for the launch window. When users first began reporting service issues online in the days following the iPhone 4′s release, Apple’s first recommendation (made in a press release) was to use a protective case with the phone. Jobs said that any individual who had purchased a case prior to today’s announcement would be reimbursed.

Earlier this week, some analysts had already predicted that providing free bumper cases to customers would be the most logical and cost-effective solution to Apple’s PR woes, though some were expecting Apple to offer a repair program for the iPhone 4. Others predicted that Apple would go as far as to recall the device, costing the company an estimate $900 million.

While the iPhone 4′s sales have remained relatively unaffected by the negative press during “Antennagate,” AAPL shareholders have felt the sting. Following a scathing article on the device in Consumer Reports this past Monday, AAPL shares dropped to around $250, down nearly 4% from a series of escalating highs. The bad press has been a lone blemish on an otherwise sterling year for Apple. The iPhone 4′s remarkable sales are just the latest success story, the other being the launch of Apple’s lauded tablet computer, the iPad. The iPad has, since its launch in April, sold nearly 3 million units by itself.

With “Antennagate” hopefully resolved, Apple is moving forward to promising second half of 2010. Rumors abound about a series of new product launches, including an autumn release for an updated iPod Touch with a 3-miegapixel camera, a smaller iPad featuring an OLED screen, and the nigh-on-mythical Verizon iPhone.

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Article printed from InvestorPlace Media, http://investorplace.com/2010/07/apple-inc-offers-free-iphone-cases-to-assuage-antenna-angst/.

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