iPhone 4 Free Bumper Cases Will Cost Apple $175M

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Apple’s “generous” move to fix the iPhone 4 antennae issue will cost the company $175 million dollars the company announced during their earnings conference call yesterday. Apple will expense the cost of the cases as deferred revenue in their 4th quarter balance sheet.

What is not clear is how Apple arrived at this figure. Assuming that Apple will sell approximately 6 million iPhones by September 30th, 2010 (which is the final day anyone can purchase an iPhone 4 and get a free case for), the cost of it case to Apple will be $29.16. Considering that the case sells at the store for $29.95, something does not add up. The estimated production cost of the bumper case (and cases similar to it) is anywhere between one to two dollars per case. Considering the minimalistic approach to product packaging and shipping, the cost of the case will top out at three dollars. So where is the rest of the $26.16 being used?

Although Apple has not released exact figures, one could deduce that Apple will incur additional costs such as Marketing, Infrastructure (web site and store infrastructure to process the free case orders), Personnel, and the cost of third party cases that will have to be sourced since Apple has already said that they will not be able to make that many bumper cases. What is also not known is whether or not Apple is including the estimate cost of returned iPhones in this figure as well.

Any which way Apple looks at it, it is definitely cheaper than the estimate of $1.5 billion that a complete recall would have cost Apple. It is clear that Apple wants to put this issue behind them.

Will you order a bumper case from Apple? Are you planning on returning your phone? Let us know your thoughts in the comments section below.

  • Dcsdrs

    This is so right. Apple is always bragging at there keynotes how much they make off there incredible markup. Now there trying to do the same about losses. Only corporate america would put on such a scam.

  • iPhone4Owner

    There is an iPhone 4 case program APP you can get from the store for free. Just load it onto your phone and run through it. Only takes a min or two. Pick the case you want and submit…it is on its way to you.

  • cell phone leather Flip cases

    Good supportive language are used in this blog I like very much the review of this fashionable blog and subscribe it so give more details about.Thanks

  • S Lemon 002

    people just need something to complain about. i love my phone! no problems with it at all and i dont even have a case although i will be getting one either way just to protect my phone because i love it… no complaints here with my iphone! people are to money hungry the lawsuits are bs

  • S Lemon 002

    people just need something to complain about. i love my phone! no problems with it at all and i dont even have a case although i will be getting one either way just to protect my phone because i love it… no complaints here with my iphone! people are to money hungry the lawsuits are bs

  • Joreyes19

    I will be keeping my phone… I have not had issues with signal… I have tested the signal strengh and only decreases if you hold the phone on all three areas where the metal band separates… Now who talks on the phone like that because it is not even confortable… I actually have two cases anyways but I have tested without the cases and no problems here…

  • jessykat

    keeping my phone! I always get a case for my phones, so it hasn't been an issue. no dropped calls, no sudden decrease in signal strength. nothing but awesome ALL THE WAY!

  • Mcgrath082

    “cost” includes losses from previous and future sales as well. All of their profits turn into 100% loss from this program. Thats where the additional cost is.

  • Jmauck

    noit sure a recall might not still be in order. I am on my 5th iphone4 due to issue with crashing and dropped calls. I will keep it with hopes that it works this time. If I get to a 6th then it is getting returned fro a refund and I will go back to my 3g. I have had a cover from day one and still having issues.

  • Minhhausa

    I will definitely keep the phone. Hopefully the free case will be in my hands soon.

  • Jim Zafrani

    Apple has not released anything yet as to how one would go about getting one but I would imagine that they would link the iPhone's serial number to some database and register if a case was already given. For those who purchased them, most likely the same except that you will need to produce the receipt. Stay tuned.

  • jose_ndc

    APPL will lose $175 million from giving out free bumper cases to alleviate the big problem surrounding the iPhone 4's antenna design flaw. Another $5 million will be lost stemming from one lawsuit filed along with more millions of dollars of losses expected to mount from class action lawsuits filed in multiple states across the country.

    Analysts expect APPL stocks to continue to plunge lower as it underperforms way below expectations. Apple is not doing so well with Investors since it's initial launch of the iPhone 4.

  • Mitchcurry12

    Can not imagine they would have actually sold 6 million bumpers. Part of the cost may be to refund bumpers already sold @ $30.

  • Mitchcurry12

    Can not imagine they would have actually sold 6 million bumpers. Part of the cost may be to refund bumpers already sold @ $30.

  • Michael

    How does one go about getting the bumper of the iPhone 4? I have seen no instructions onthat as pf yet..

  • Al

    I love the way that large companies mangle words & figures… The cost of 6 million bumpers made & given to customers = 6 / 12 or 18 million Dollars. 6 million bumpers at cost of 1, 2, or 3 dollars each… however it will cost Apple, in the sense of lost revenue & lost income $180 million, $30 retail per bumper x 6 million customers.. So it wont actually cost them $180 million, it will just be lost profits.

  • Hansonc8

    Although I think the antenna issue is really a non-issue in general. I won’t turn my nose up at a free case…. Wether I use it is a different matter. Time will tell….. Think I’d prefer to use http://bit.ly/oAmbm. If anybody’s used this solution let me/us know

    Craig