So after the news that Apple made more money than they have ever done before in their history, their CFO Peter Oppenheimer has confirmed that to give all existing iPhone 4 customers a free case it is going to cost them $175 million dollars.
It's is not the first time a major manufacturer has had to dig deep to rectify a product that hasn't met consumer expectations - Microsoft famously paid out 5 billion dollars to cover all the extended warranties for the Red Ring of Death debacle in the early years of the Xbox 360.
Openheimer, who was talking to Macworld after Apple's quarterly financial results, was keen to point out that these costs are not issue - as the money would be set aside from the September revenue - not that anyone ever suggested that money was an issue for Apple.
The bumper scheme was announced at the July 16th press conference in which Steve Jobs spoke candidly about the iPhone 4 problems and conceded that the iPhone 4 and Apple aren't perfect. He made an unprecedented move of offering any iPhone 4 customers a free case to help alleviate the antenna problems, which have harmed an otherwise successful launch.
While these costs may seem quite high, it has been revealed that for Apple to do a full product recall it would have cost them a staggering $1.5 billion, so in comparison, the $175 million is actually a bargain for the company.
It is important to note however that this scheme is only available until 30th September and so this is not the long-term fix we’ve been awaiting. For that, we’ll just have to wait and see what Apple comes up with later in the year
So Antenna gate will cost $175 million dollars – but how much damage has the brand taken ? Let us know below.
Via Macworld
7 thoughts on “iPhone 4 Bumper Case Giveaway Will Cost Apple $175million”
“but how much damage has the brand taken ?”
Do you not read your own site? It hasn’t damaged it at all, profits have risen loads.
It also goes to show why customer satisfaction for Apple products is double that of its competitors. They could have offered a free case to anyone complaining about the reception problem and it would have cost them a few grand.
Apple care about their customers, however, 99% of the people who moan about Apple products aren’t Apple customers, they just like the flavour of the “Apple bashing” bandwagon.
i consider it was a bit rushed, and disregarded some features that not many people talk about. Everybody knows that the majority new smartphones have internet, so why show that primary perform at its bear minimum. Scroll up scroll down zoom in zoom out. Really? which new cellphone doesnt do this? How bout speak about how the textual content rearranges itsself. Also the texting, very poor review. Why didnt you mention you should use the mic and textual content together with your voice? Ignored ALOT of other more necessary options
I love my iPhone 3GS. I’d consider myself a fan of the iPhone. I have been following the development and hype around the iPhone 4 for as long as long as I can remember. I can’t beleive Apple made such a mistake with their phone’s design – and what an expensive mistake it’s been.
All these issues have put me off upgrading to iPhone 4 and maybe iPhone 5 next year. I have held one and I have to say that I’m not too keen on it to be honest.
Making steps to refund cases wont make up for the lack of function over form.
It’s a shame to see so many issues with the iPhone 4 after so many people waited for it’s release. What’s more of a shame is that it seems Apple knew about some of these issues already, such as the problem with reception.
If a brand new company brought out a product and then told you needed to pay a further £25 to make it work properly, you wouldn’t bother. But Apple have created such a loyal following that people may just put up with what issues there are for the sake of owning the latest Apple product. Personally, I’d be happier with an older iPhone – at least then the issues are all ironed out.
However, it’s also interesting to see how much excitement new technologies can bring. New technology and innovation is important for new business, illustrated by entrepreneurship grants and new business competitions like http://www.ukesnc.com.
Guess it’s not all bad!
Paul – watch the Apple 16th July iPhone conference.
Self Silent: I have several friends who have the phone – they love it but all concede it doesn’t perform too well in middle to low signal situations. So I firmly believe that it doesn’t perform as well as it should.
I only pointed out that the cases do cost a bit of money and will cost around 175 million as they are having to give them for free rather than the 25 quid they normally get.
It will certainly effect the sales, not massively, but it will. I was considering upgrading from a 3GS, but will hold-off until the release 4GS or something which we all know the will.
The brand has been tarnished; it is based on beautifully designed, very advanced tech – and is meant to perfect. The iPhone 4 is not and therefore doesn’t live up too the brand expectation.
I have load of Apple Stuff, Mac Book = Dodgy CD slot drive, New i5 iMac = I have had 4, all with different faults, iPhone since the first one – have all had niggles.
Apple have been superb with me with regards to replacing faulty products and have treated me very well – sure it’s annoying. But if your a early adopter you have accept a certain amount of uncertainty. All products launches have problems.
I had more than my share of issues with Apple, but you have to manage your expectations, after all it’s all made in the same place – China.
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