Apple iPhone 4 Recall Could Cost $1.5 Billion: Analyst

iPhoneWith Apple's (AAPL) iPhone 4 antenna problem getting so much attention, especially after Consumer Reports said it would not be recommending the device, analysts began to assess the impact on Apple. Bernstein Research analyst Toni Sacconaghi said in a research note Tuesday that a recall could cost $1.5 billion. He doesn't think, however, a full recall is likely.

Sacconaghi estimates that the more likely option is that Apple would offer customers a free bumper case, which currently retails for $29. That would cost just $1 per unit.

Looking long-term, Sacconaghi further says a more troubling consequence is Apple's response to the antenna problem. He speculates that "these issues may, over time, begin to impact consumers' perceptions of Apple, undermining its enormous prevailing commercial success." Another analyst, Gene Munster of Piper Jaffray, estimated Tuesday that a fix from Apple could impact its operating income by 1%.

On Tuesday, Apple shares closed down 2.13%, on a day the Nasdaq composite jumped 1.99%.

And while some believe a recall of the iPhone 4 is inevitable, others won't hold their breath.
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