Analysts on the iPhone 4 Reception Issue

A collection of quotes from prominent analysts on the iPhone 4 reception issues has been posted by Fortune.

Morgan Stanley's Katy Huberty: "Antenna Concerns Need To Be Addressed"

We view this as more of a PR issue that Apple needs to address to preserve the brand and loyal customer base than a serious reception issue for most users. We don't see a full product recall as likely but believe Apple would benefit from extending concessions to any customers experiencing issues and/or providing more details about how it can fix the problem in future production runs.


J.P. Morgan's Mark Moskowitz: "Negative Review of iPhone 4 Turns Up the Heat on Apple"

At this point, 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.

Barclays Capital's Ben Reitzes: "Get an iPhone Bumper"

As users, we have experienced some issues w/call drops; however, we have found drops go away after attaching a bumper accessory, which is quite useful anyway. In our experience, concerns around product issues tend to be overblown – AAPL will issue a software update & also work on fixing the issue. To date, we have not seen any overwhelming evidence of iPhone 4 units being returned. We do not believe these issues will materially impact AAPL's product momentum.


Kaufman Bros.' Shaw Wu: "Growing Antenna Attention Could Create Risk"

We view this conclusion by CR as negative and could create an overhang. So far, in our supply chain and industry checks, we have not seen any change in build plans or demand patterns and thus we are not changing our estimates looking for 7.5 million iPhones in the June quarter and 40 million in C2010. In fact, our sources indicate that Apple is still having difficulty keeping up with strong demand due to screen supply constraints. Should this antenna issue become a bigger deal, there could be risk to our as well as consensus iPhone estimates.

Piper Jaffray's Gene Munster: "iPhone 4 Issue Reaches Boiling Point"

One option for Apple is to give away Bumper cases it currently sells for $29. Assuming 85% of all iPhones sold over the next year are iPhone 4s and Apple gives a Bumper away to every iPhone 4 customer, we estimate the company would give away 36m cases at a $5 cost per case for a total cost of $178.5m (1% of Operating Income over that time period). A second is option is for Apple to do nothing; as we've mentioned, we estimate that only 25% of iPhone users are periodically affected by the issue, and Apple could weather the storm by letting the current demand for the iPhone speak for itself. 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.

RBC Capital's Mike Abramsky: "iPhone 4 Antenna Issues -- Thoughts and Possibly Scenarios"

We view related weakness around this issue as a buying opportunity, given (1) we believe Apple may inevitably do what is necessary to correct the problem and apologize; (2) while the fix may come at some cost, Apple can easily afford it; and (3) we expect iPhone 4 demand may rebound quickly, still outpacing supply and – along with global channel fill -- may mitigate possible near-term slowdown in sell-through. The issue, in our opinion, is likely to blow over with media and consumers refocusing on iPhone 4's appeal, market opportunity, and strong demand.

Read More