With a full product recall apparently off the table, Wall Street analysts weighed in at the last minute on Friday, to share what they think Apple will reveal at the press conference on its Cupertino, Calif., campus.
RBC Capital Markets
Analyst Mike Abramsky sees a voluntary recall as a likely option for Apple, particularly if the issue affects a specific set of serial numbers with the iPhone 4. In that scenario, only iPhone 4 buyers who qualify -- and only those who request a new handset -- would have their faulty hardware replaced. This would save Apple face, and money.
Abramsky sees Apple Chief Executive Steve Jobs today offering an apology to customers, and suggesting that users who think their hardware is affected can go to Apple's website and enter in their serial number. From there, users could opt to try out a free bumper to see if that resolves their issue, or if they prefer, they could exchange their device for a new iPhone 4.
In this scenario, Abramsky said, he could see Apple requesting users' contact information, to let them know when their updated handset can be shipped to them. Users will be able to exchange at no cost, and will receive a $50 gift certificate for their problem.
If there is a hardware fix, Abramsky said he believes Apple will say it began shipping the updated devices this week. This would ensure customers considering a purchase that their handset will not be affected.
He sees the total impact costing Apple between $131 million and $525 million, with anywhere from 400,000 to 1.5 million iPhone 4 replacements.
RBC Capital Markets
"Steve (Jobs) has to show Apple cares deeply about its customers," Abramsky said of today's press conference. "If he doesn't, the downside impact to the Apple brand -- already tarnished by this issue -- may be significant. Can Apple and Steve pull this off? My call is they will."
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