That’s the gist of Steve Jobs’s hastily arranged and moderately defensive iPhone press conference today discussing the antenna-finger-reception issue.
There’s nothing press-conference-worthy about the issue, really, other than the fuss that’s being made. Apple felt the need to respond to its critics, which, I suspect, has more than a little to do with Consumer Reports’ product damnation earlier this week. Stodgy as it may seem, CU wields a lot of influence, as evidenced by its recent safety warning on the Lexus GX460, which forced Toyota to immediately suspend its sales. (Disclosure: I am a subscriber.)
Apple’s sales are a combination of its near-flawless execution and the halo of respect and admiration the company receives for its products. With the iPhone 4, Apple wound up with a) a tangibly flawed product, whether it wants to admit it or not, however minor it may be; and b) the potential loss of some of that all-important respect and admiration. Apple had to try and remind people of its general excellence and plug the hole in the proverbial dyke.
Let’s analyze the specifics of the “solution,” then, which has been cited as potentially costing the company hundreds of millions of dollars. Apple will give away free bumpers to all its iPhone 4 customers. This has an opportunity cost of $87 million, given Apple’s $29 price point versus the three million phones already sold.
Seriously, though: that bumper’s $29 ask is laughable. It’s a molded plastic ring. A lay consumer can buy full-size iPhone cases for $1.50 for as few as 30 pieces in bulk. What do you think Apple’s wholesale cost is for three million, sourced directly from the manufacturer? Thirty cents? Maybe less?
At $0.30 per case, Apple’s big giveaway will cost the company $900,000 for the first three million, plus overhead. Given that Apple has brought in at least $600 million in revenue (probably a lot more) on those three million iPhone 4s, nine hundred grand seems like a pretty painless repair. (As an Apple shareholder, I should note that this pleases me.)
The iPhone 4 remains an incredible product, and Apple a remarkable company. Today’s press conference didn’t really change things one way or the other. Their hope is that with their case-and-refund announcement in place, the issue will quiet down, and people will feel good about buying and using the iPhone 4. We’ll see if it works.