July 17, 2010

Apple Loses Around $1 Billion Due To iPhone 4

Steve Jobs organized a press conference and presented a data about the percentage of users affected with the iPhone 4. If you translate that percentage into numbers and dollars you will realize that Apple is losing around $1 billion due to iPhone 4.

Steve Jobs told select media that around 1.7% customers have returned their iPhone 4. According to his own statement, Apple has sold more than 3 millions iPhone 4 till date.

1.7 percent of 3,000,000 is around 51,000 units. A simple calculation shows that 51,000 iPhone 4 have already been returned. This means half of the population of United States Virgin Islands has returned their iPhones. This is one of the worst return rate ever.

Let's now translate it into dollars. We are not clear about whether these are 32GB or 16 GB models thus we are going by an average of $250 per unit. According to Steve Jobs own figures Apple has already lost 12,750,000 dollars due to returned iPhones.

By the end of the conference, Jobs has announced that they are offering 'free' bumpers to current iPhone 4 users.

According to Job's own figures that means around 2,500,000 (51,000 subtracted from the 3million units) bumper cases. If you estimate by the store price (no doubt there is thick margin in these bumpers) that means another $72,500,000.
Let's add the loss due to returned units to the price of bumpers. This already amounts to a total of $85,250,000 loses. 

According to WSJ, 'Apple's stock has taken a beating since the release of the new iPhone, dropping nearly 8% from record highs just a month ago. Its shares were recently up 44 cents at $251.89.'

Steve Jobs informed that AppleCare data shows around 0.55% customers have called in about reception issues. In numbers it means more than 16,500 users have already registered their complaints about the antenna problems. It is half of the population of Monaco, a sovereign city-state located in South Western Europe.

So, in the nutshell, Apple has already lost around $1billion due to iPhone 4. And Jobs calls it the most successful product Apple has ever launched!

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