Free Bumper Costs $ 175 Million to Apple

22 July 2010 by Vinay 3 Comments

On 16 July 2010, at a press conference, Steve Jobs announced that Apple would provide all iPhone 4 owners with a free case to help solve the antenna issue and a refund to those users who had already purchased a Bumper. The free case offer would be valid until 30 September 2010, when Apple would reevaluate the situation. Free bumper solution is not permanent solution to Antenagate problem, though a good first step.

However, in the shareholders meeting Apple, confirmed that free Bumpers going to cost $ 175 million. If you think about the cost of a bumper, surely Apple will not cost much more than $ 1, after all it’s a piece of plastic.

This translates into a loss of $ 175 million in the account balance the next Q4, but seeing that earned $ 15.7 billion, a loss of $ 175 million does not mean much for Apple. In turn, all customers will have happy and may fix the problem antennagate meantime.

Random Posts

3 Comments »

Stuee said:

$175 million?! How on earth did they calculate that?
Even if Apple sold 175 million iPhone 4′s by September 30th (absolutely unfeasible of course) it still wouldn’t cost them that much as I’m pretty certain bumpers cost less than $1 to produce, especially in those quantities.

This is total bunkum.

The refunds to people who bought 3rd party cases would cost more per unit, but Jobs himself said that there aren’t very many out there.

I call BS on the whole thing. A more realistic estimate would be 15 million sales x $0.50 = $7.5 million (- lost sales & support costs)

# 22 July 2010 at 11:09 pm

Eddie said:

That’s if you count retail prices of those bumper (more like opportunity cost). the actual expense would be $0.5 per one, if it sell 20mill of them, they will loose like $10million.

# 23 July 2010 at 10:35 am