Is Apple's iPhone 4 Antenna Flap Overblown?

With the iPhone 4 antenna issue becoming a major headache for Apple, analysts are busy handicapping the costs of a potential recall, which observers like Piper Jaffray analyst Gene Munster deem "highly unlikely." But the larger questions are whether Apple is too cocky for its own good or handling askirmish with Consumer Reports properly since the antenna flap may be overblown.

In recent days, it has been an interesting duel between Consumer Reports and Apple. Apple has admitted that there is an antenna reception problem on its iPhone 4, but told customers that the fix is to hold the phone the right way--when you touch the antenna, reception dies. Consumer Reports and other testers have documented signal degradation when touching the lower left portion of the device, bridging the iPhone's antennas. A bumper case  fixes the problem.

Consumer Reports verified that there's a hardware issue and has called on Apple to fix the iPhone 4. Duct tape seems to help.

Simply put, Consumer Reports says "we think it's the company's responsibility to provide the fix--at no extra cost to consumers." Typically, Consumer Reports' recommendations are gold and companies don't mess with the publication's findings. In most cases, product companies respond to the concerns in an open and public fashion. Every once in a while Consumer Reports is off, but its track record is solid.

Apple hasn't given much of a response. After all, it's still moving a lot of iPhone 4s. Macquarie analyst Phil Cusick says in a research note:

While we do not see any evidence of a slowdown in sales and our checks indicate almost no returns, the antenna issue could become a public relations problem and potentially impact Apple's sterling brand image.

In the meantime, analysts have been handicapping the costs of a recall or providing a bumper case free of charge. Bottom line is that the expense is negligible. 

Read the complete story at ZDNet