'Worst case' in iPhone reception issue: Apple gives away bumpers

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Despite well publicized reports of iPhone 4 reception issues, one analyst said he sees Apple, in the "worst case," discounting or giving away protective bumpers with little financial impact on the company.

Analyst Shaw Wu with Kaufman Bros. issued a note to investors Friday in which he discounted the antenna concerns as "overdone." Since the iPhone 4 launched, discussion of dropped calls from holding the device in one's left hand has grown, and Apple even publicly commented on the issue.

"We don't think the antenna issue is that big of a deal where it would warrant a product recall," Wu wrote. "The reason is that most users have a case anyway to protect their iPhone and to customize to their personal preferences. In our view, in the worst case, Apple provides a discount on the $29 iPhone 4 bumper case or includes one for free with an iPhone 4 purchase. Either way, we do not think this would have a material impact impact on our forecasts."

Apple, in a statement, said that gripping any mobile phone will affect its antenna performance. The company suggested that users avoid gripping the device in the lower left corner.

But the problem is also alleviated by using a case, which prevents the metal band around the perimeter of the device from making contact with the user's skin. The issue can reportedly be avoided when using the official "bumper" case sold by Apple.

Wu is particularly bullish on Apple's launch of the iPhone 4, predicting that the company sold between 1.5 million and 2 million units. On the high end, that would double the debut of the iPhone 3GS a year ago.

Wu's prediction of 2 million is higher than other analysts who believe Apple will sell closer to 1.5 million of the iPhone 4 at launch. Last week, after the first day of preorders, Apple revealed that more than 600,000 devices had been sold.