iPhone recall fears batter Apple’s stock
APPLE shares recovered to chalk up a small gain yesterday, a day after an influential US watchdog criticised its new iPhone 4 handset.
On Tuesday, investors had flocked to sell their shares in the firm, temporarily wiping £6.5bn off its market value, amid fears Apple may have to issue a recall of the product, which has been plagued by complaints of antenna problems.
A report by Consumer Reports is the latest – and most high profile – to highlight the design flaw.
The issue has overshadowed an otherwise successful launch, with the iPhone 4 shifting a record 1.7m units in its first three days on sale.
The Consumer Reports investigation said the antenna problem is enough to kill a call if a certain part of the phone is touched.
It said: “When your finger or hand touches a spot on the phone’s lower left side … the signal can significantly degrade enough to cause you to lose your connection altogether … Due to this problem, we can’t recommend the iPhone 4 until Apple comes up with a permanent – and free – fix.”
It said the problem can be partially solved by sticking non-conductive tape over the problem area but this is unlikely to appease style-conscious Apple fans. Steve Jobs has already attempted to play down the issue, telling users to hold the phone in a different way or buy a £25 bumper from the Apple store. The firm has also suggested the problem may be a software glitch that affects how many “bars” of signal are displayed on the phone. However, Consumer Reports’ findings appear to scupper this theory.
Analysts are now speculating a full recall of the phone could cost Apple more than £1.5bn, as well as severely denting the firm’s reputation.
The shares gained 0.9 per cent to close at $252.61 yesterday.