Apple (AAPL) Shares Getting Hit On Negative Review From Consumer Reports

Shares of Cupertino, Calif.-based Apple (AAPL) fell the most in the S&P 500, sinking more than 4 percent to $246.43. The PPS deterioration is attributed to headlines from Consumer Reports that the iPhone4 reception issues are hardware related.

Mike Gikas, senior electronics editor for the product-quality watchdog, said yesterday tests confirmed the handset has a hardware flaw that causes signal quality to “degrade enough to cause you to lose your connection altogether if you’re in an area with a weak signal.” The magazine said it can’t recommend the product until Apple finds a permanent and free way to fix the problem.

Another concern is that Apple might now have to do a product recall on the iPhone4. Some Wall Street analysts say however, they expect Apple to provide a fix for the problem. But they don’t anticipate an actual recall.

From TTD: “We consider the probability of a recall to be very low given our view that the issue in question is not serious enough to warrant a recall,” Citigroup (C) analyst Richard Gardner writes in a research note. “While bridging two portions of the antenna with one’s hand on the lower-left corner of the phone does cause signal degradation, it does not typically result in dropped calls unless the signal from the cell tower is already weak. Excluding this issue, overall signal reception on iPhone 4 seems at least as good, if not slightly better, than reception on the iPhone 3GS.”

In midday trading, Apple’s stock was down 2.81%, even as the broader market was up more than 1.5%. The stock has traded in the 52-wk range of $137.53 and $279.01.

1 Comment on Apple (AAPL) Shares Getting Hit On Negative Review From Consumer Reports

  1. RF engineering Basic Rule #1, never touch/block any antenna, okay, how about building the bezel of a phone as the antenna so you can't avoid touching it as you hold the phone! Lets recall too the recent concern of SAR energy ratings into our brains, body absorbsion of RF energy. In this case the energy is always in "di…rect contact" shorting out with your skin/fingers. The 3gs was a better more common design, antenna at bottom of phone, clear from direct contact and obstruction. This is the basic practice of blackberry, palm, HTC and most all cell's out there.

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