No Recall For Apple iPhone 4

Apple is not expected to announce an iPhone 4 recall at its 16 July press conference, predicts one analyst, although the company could be preparing an extensive mea culpa that includes monetary compensation.

Although the iPhone 4 proved a considerable sales success in its early days of release, it has been wrestling with reports of dampened reception whenever the device’s exterior antenna rim is touched. With Apple staying largely mum on the actual content of the press conference, speculation abounds that executives will take the stage to address the issue, as well as propose a solution.

Humble Approach

In a 16 July research note, Brian Marshall, an analyst with Gleacher & Company, wrote that he expects Steve Jobs will host the event “and adopt a humble approach,” that were will be no iPhone 4 recall, that Apple will offer to refund the full purchase price of the device for dissatisfied customers, and that it will focus on how the signal degradation issues are reportedly being experienced by less than 1 percent of users.

Marshall also believes that Apple will offer a verbal and monetary apology, the latter to the tune of either a free bumper that covers the smartphone’s antenna rim or a $30 (£19) gift card, and will discuss the iOS 4.0.1 update from 15 July. Either Jobs or another executive will also “explain minor tweaks to future production (external and/or internal nonconductive coating to avoid short antenna issues.”

When Apple pushed out iOS 4.0.1, the accompanying screen suggested the update “improves the formula to determine how many bars of signal strength to display.” Apple had previously claimed in a 2 July statement that the formula it uses to calculate that signal strength was “totally wrong,” and made an iPhone “liable to display four bars’ worth of signal strength when it should, in actuality, be displaying as few as two bars.”

Despite those claims of a software issue with the iPhone, outside groups – including Consumer Reports and U.S. Senator – have argued that hardware lies at the heart of Apple’s current problems. Consumer Reports wrote on 12 July that it would be unable to recommend the iPhone 4 because of what it ermed “signal strength issues” related to touching the antenna rim.

Overblown Issue

Marshall seems to feel that those complaints are somewhat overblown.

“We believe this topic has already garnered far too much attention,” he wrote, “but the important part now is how Apple reacts from a public relations perspective … if we are correct in our preliminary assessment above, we believe [Apple] will rebound materially in short order.”

Until the press conference at 1pm EST, though, it remains pure speculation what steps Apple will take.