Apple iPhone 4 recall unlikely, say analysts

Rumours that Apple may recall the iPhone 4 seem unlikely, say analysts – but they agree the firm needs to take action quickly to avert longer-term damage to its widely respected brand.

Apple iPhone 4 recall unlikely, say analysts

US group Consumer Reports this week said it could not recommend the iPhone 4 after its tests confirmed concerns about signal loss when the device is held in a certain way.

That report spurred widespread discussion across the web about the possibility of an iPhone 4 recall: an unheard-of event for a company lauded by investors and tech aficionados for its marketing savvy and product quality.

Apple, which has called the iPhone 4’s June debut its most successful product launch ever, has not responded to the widely watched nonprofit organisation’s report or to the recall talk.

Analysts said Apple needs to take quick action to avert any lasting damage to its reputation for quality products though they did not see sales being hurt for now.

“There’s nothing to recall. There’s people lining up in droves to buy this phone,” said Gleacher & Co analyst Brian Marshall. He said he could not replicate the antenna problem on the iPhone 4.

JP Morgan warned that reports of wireless reception problems on the smartphone may eventually affect demand. “Consumer Reports is a well-respected product reviewer, and the report should turn up the heat on Apple,” analyst Mark Moskowitz said in a client note.

“Concerns around iPhone 4 reception do not appear to be impacting demand, but we think there are risks when a well-respected product rating agency such as Consumer Reports issues an unfavorable report.

“We continue to expect a fix from Apple, whether the solution is software- or hardware-related.”

And that fix can’t simply be telling customers to buy a “bumper” case. “They need to provide an actual fix – not a bumper fix – so that the product performs as it should,” said Ashok Kumar at Rodman & Renshaw. “Apple should have taken a higher road when addressing the design flaw, instead of taking the hard-line stance that they did.”

“This is not a Toyota problem, but it is a problem that Apple needs to address head-on,” he said, referring to the Japanese automaker’s global recalls of more than 10 million vehicles since late last year.

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