Analyst: iPhone 4 Press Event Gives Apple Positive Spin

| Apple Stock Watch

Apple held a press conference on Friday to address concerns over the iPhone 4’s antennas and signal strength, and the company handled the situation well, according to UBS analyst Maynard Um. In addition to discussing the technical aspects of smartphone antennas, Apple also offered all iPhone 4 owners free cases even if they aren’t experiencing signal loss issues.

“We believe Apple’s event should nip the issue in the bud,” Mr. Um said. “Though free bumpers come at a cost, we see it as relatively immaterial and helps to put a little shine back on Apple’s customer-centric focus. We believe Apple did not have to offer free bumpers but did so for its customers.”

Apple has been dealing with negative press ever since the iPhone 4 was released because some users have been able to cause the signal strength bars to drop when covering the lower left corner of the case. Consumer Reports jumped into the game with its own report stating “When your finger or hand touches a spot on the phone’s lower left side — an easy thing, especially for lefties — the signal can significantly degrade enough to cause you to lose your connection altogether if you’re in an area with a weak signal.”

Apple released a software update on Thursday that addressed an inaccurate signal strength problem, and followed up on Friday with its free case offer for iPhone 4 owners.

“Despite similar issues with competitive smartphones and the impact only affecting a ‘small batch’ of users,” Mr. Um said, “Apple is offering a free bumper for every iPhone 4 user through Sept. 30 or a refund if users already purchased one. The company will also offer full iPhone refunds (with no restocking fee) for unsatisfied users.”

Even though some iPhone owners have been complaining about antenna issues, Apple is still selling the iPhone 4 as fast as it can build units. “Excluding the 1.7 million sold in the first three days, Apple is selling about 72k iPhone 4s per day,” Mr. Um said.

Mr. Um is maintaining his “Buy” rating and US$320 target price for Apple’s stock. Apple is currently trading at $252.74, up 1.29 (0.51%).

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