∞ Analyst: iPhone 4 antenna issue 'overblown,' will not affect sales

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Apple’s much talked about iPhone 4 reception issues may have an affect on short term sales, but shouldn’t affect sales of the device long term, according an one analyst report released Tuesday.

iPhone 4Calling the antenna issue a “PR black eye,” Piper Jaffray Senior Analyst Gene Munster said in a research note to clients on Tuesday that “while the issue has gained significant traction in the press, the reality is that we estimate this problem periodically affects 25% of iPhone 4 users given the fix is easy (a case for the iPhone), and 75% of customers choose to use a case anyway.”

Munster went on to characterize the issue as being “overblown.”

Apple does have a couple of options to deal with the issue, including offering a free Bumper case and doing nothing at all. Munsters estimates that Apple would have to give away 36 million cases, costing them $178.5 million.

“The third option is a recall, which we see as a highly unlikely scenario given the issue is completely resolved with a case, which is a significantly less expensive solution for the company,” said Munster.

Echoing thoughts I first posted in late June, Munster feels the iPhone problems were not detected by Apple because all iPhone 4s were required to be in a case during off-site testing.


  • http://www.yourmaclifeshow.com Shawn King

    “Munster feels the iPhone problems were not detected by Apple because all iPhone 4s were required to be in a case during off-site testing.”

    And as Spencer Webb said when I interviewed him, there’s *no* chance Apple didn’t know about the issue. It’s a factor of the design and anyone smart enough to design it that way would also be smart enough to know the design would require this kind of compromise.

    It’s got nothing to do with whether or not Apple tested it with a case on or off.

  • http://www.noonedriving.com Howie

    “Overblown” is right. Almost to the point of hysteria. I’ve been an iPhone user from day one and the iPhone 4 is the best model so far. I drive an AT+T dead zone everyday and my iPhone 3GS used to drop calls constantly there. The iPhone 4 hasn’t dropped a single call so far.

    I’ve got to think that potential customers are asking the iPhone owning friends if they are having problems. If their experience is anything like mine they are hearing that this is a damn good phone. Makes you wonder how all this is going to impact the credibility of organizations like Consumer Reports in the long run. Their flip-flopping with and without testing, etc, etc is a mess.

    Apple does have a PR mess on their hands however. It would be good for them to get out in front of that ASAP. They don’t really have to do much more than publish data that shows that all phones suffer signal attenuation when being held and remind everyone that they can return the phone within 30 days if they are not satisfied. They just need to be seen to be taking it seriously.

    The level of hysteria about this issue is so great that it make the conspiracy theorist in me wonder if someone like MSFT or Nokia is fueling the fire behind the scenes….

  • http://tewha.net Steven Fisher

    Certainly overblown, but not affecting sales? That’s just crazy talk. Of course it’ll affect sales. Just not much.

  • Joe Ro

    Overblown? Sure. “Hold Different” DOES fix the problem. Still, the problem IS there and it IS quite an inconvenience, especially considering how awesome the phone is in practically every other regard. I think it would do Apple a lot of good at this point to own up to the fact, since they have obviously failed at sweeping it under the rug.

    • Daniel Swanson

      I don’t think it’s a matter of “not owning up.” I think it’s simply a matter of, “They’re working on it.” Most any words on Apple’s part at this point would be wasted and perhaps only add fuel to the flames.

      The best solution is simply to fix the problem, which is most likely underway as we speak. It may very well be a non-trivial change. Perhaps a change in the manufacturing process is involved. Possibly re-tooling, etc., all of which simply takes time.

      In the mean time, for me it’s just as well, as I have to save up a little more to get mine, and I’m waiting for the white one anyway. But if I had the money now and I wanted the black one and one was available, I’d buy one. I’ve played with them in the store, and I’d say it’d be rare for me to span that gap. But if I did and it dropped a call, I’d simply adjust my grip and try again.

      Nothing’s perfect, and there’re far too many good things about the iPhone 4 which make it a great phone, even with a flaw or two.

    • http://tewha.net Steven Fisher

      This makes me giggle. So many people are asserting Apple’s trying and failing to sweep this under the rug. I see no evidence they’ve tried at all, but that rather we’re seeing Apple take a wait and see approach (while probably doing contingency planning within the company).

      There’s no cover up, there’s just no response yet. There’s a massive difference. Among the differences is that believing there’s a cover up requires an unhealthy amount of paranoia.

  • Eric

    AT&T just gave me a free Mini 3G Cell to install at home. I’ll not be having any more dropped calls at least when I’m there. Now, for the rest of the world…

  • Mike

    As far as hurting their sales is concerned, I’ve been on a waiting list to get one at my local Apple Store for over two weeks, now: Apple can’t come close to meeting current demand, so I don’t see the antennae issue hurting their current earnings. The only thing hurting their earnings is they can’t make them fast enough.

    • http://tewha.net Steven Fisher

      This is because they still have far more demand for iPhone 4s than they can supply. But eventually, they’ll satisfy the demand. And if the hysteria has convinced one person to not buy a iPhone 4 ever, that’ll have reduced the pent up demand and eliminated a single sale.

      Could this hysteria convince a person who had been planning on buying an iPhone 4 not to get one? Absolutely.

  • Jocca

    The antenna issue has indeed been overblown. I just received my new iPhone and it is way better than my 3G iPhone. It has been years since I consulted consumer report because I have had too many disagreement with their recommendations. This one is the worst one I have hear nof. Time to give CR a kick like I did long ago.

  • Allen

    “…the reality is that we estimate this problem periodically affects 25% of iPhone 4 users given the fix is easy (a case for the iPhone), and 75% of customers choose to use a case anyway

    “ONLY 25%” ?!!! That’s a quarter of the all buyers!! a mere 5 % would already be a big deal.
    Whoever think the antenna is not an real issue is either an idiot or a apple shareholder …and besides cases look lame! Anybody with a gram of coolness knows that!!

  • AdamC

    There is already a sort of recall going on – unhappy iPhone 4 buyers can return their phones and get a full refund.

    Kind of wonder why is this piece of news missing in all blogs.

  • Rob

    I personally will not be upgrading from my 3GS to the iphone 4 because I don’t like to use a case & therefore don’t want to have to worry about my calls being dropped! Untill Apple fixes the antenna issue I’ll be sticking with my 3GS.

    • http://www.yourmaclifeshow.com Shawn King

      Sorry Robb but your logic is faulty.

      The vast majority of people have *no* issues with the antenna design. It happens to *very* few people. So the odds are, you won’t be one of them.

      Go ahead and buy the iphone 4 and, if you happen to be one of the unlucky few, Apple will accept the phone back and give you a full refund.

  • Eric

    The difference in dropped calls between the 3Gs and the iPhone 4 is virtually indistinguishable. You are not better off on that front than with the iPhone 4. You’re falling for the hype. In fact, I get better reception with my iPhone 4 than I ever did with my iPhone 3G. Was the 3Gs better than the 3G?

    Of course, I do at home because of the Mini Cell 3G AT&T gave me. But I just spent the week in Manhattan and had terrific reception all over the city. (Gramercy Park, and around 5th Avenue and 47th street most of the time.) I was able to check my mail except deep inside our lab next to an X-ray machine. (Why did my hair just start falling out?) :-P

  • Vamsmack

    http://www.dailytelegraph.com.au/news/iphone-4-the-verdict/story-e6freuy9-1225898632579

    I read this article and John Gruber linked to it. We don’t seem to have this issue down here in Australia. It could just be the people have used it for more than a day haven’t ‘death gripped’ it quite right but it does seem by all accounts to be a less severe issue here in Australia. It could be all the kangaroos we had fitted with cell towers though.