What Antennagate Did to Apple

Remember just a few weeks ago, when all we heard about was the flaw in Apple's (Nasdaq: AAPL  ) iPhone 4 antenna? After the most successful product launch in the company's history, many were wondering whether that controversy might significantly dampen iPhone 4 sales.

Steve Jobs finally addressed the issue, offering free cases or full refunds for any dissatisfied customers who bought the phone. What are we hearing now about the issue now? Not much.

Still, investors might be interested to know whether this really did hurt sales. Fool analyst Rex Moore says we'll find that this brouhaha had almost no effect. He did some channel checks, and nearly two months after its launch, the iPhone 4 is still hard to find. New units are only trickling in to AT&T (NYSE: T  ) and Best Buy (NYSE: BBY  ) stores, and they tend to sell quickly. Things aren't much different at Wal-Mart (NYSE: WMT  ) , and Apple's online store is quoting three weeks for shipping.

The bottom line is that "Antennagate" had no material effect on sales. A more likely damper could come in the form of these supply constraints. Investors should hope to see some phones flooding into stores in the next month or so before the holiday season hits.

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Fool analyst Rex Moore loves it when the day goes down on the water town. He owns no companies mentioned here. Best Buy and Wal-Mart Stores are Motley Fool Inside Value recommendations. Apple and Best Buy are Motley Fool Stock Advisor selections. Motley Fool Options has recommended a bull call spread position on Best Buy. The Fool owns shares of Best Buy. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.


Read/Post Comments (5) | Recommend This Article (9)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 20, 2010, at 4:07 PM, gregorypierce wrote:

    That's simply a bad way to determine whether or not the impact was as intended. The way one will figure this out is the uptake rate on the NEXT devices that Apple ships out.

    The logic which suggests that the impact would be immediate and easily measurable overlooks that the device might be "good enough" but actually results in an image impact that might cause users to have pause when selecting/considering the device again. A much better way to measure the impact would have been to perform a "consideration" survey and see whether or not fewer consumers would rush out and buy Apple's next device sight unseen or not based upon the antennagate scandal.

  • Report this Comment On August 20, 2010, at 4:25 PM, kevisrs wrote:

    If you believe that immediate impact and easily measurable cannot go hand in hand then take a look at the Blackberry Torch's recent price history.

  • Report this Comment On August 20, 2010, at 4:50 PM, TechnoHistorian wrote:

    Antennagate, Smantennagate!

    Anyone who believes all that smoke and mirrors, should contact me to buy the Brooklyn Bridge! I've had an iPhone 4 since they came out, and it provides the best iPhone reception I've ever had. The Apple Flameboys (yes, "Flameboys") were out in force on that one, eager to trash Apple. The one "reliable source" on the so-called problem was Consumer Reports, which tested the phone in a lab. And BTW, check out the latest issue of Consumer Reports, and you'll see that they ranked the iPhone the best smartphone overall -- and also in the same issue CR ranked the Mac the best in almost every category of computer. The iPhone 4, like other Apple products, will continue to thrive simply because on the whole the men and women who actually use them, like them.

  • Report this Comment On August 21, 2010, at 9:55 PM, scanlin wrote:

    AAPL has been a consistent money maker for writing covered calls against. And now they trade weeklys on it. Do yourself a favor and buy some on Monday and write an Aug 27 expiration 250 strike call against it. If not called away you'll own it at a reasonable price and can keep writing weeklys against it each week.

  • Report this Comment On August 22, 2010, at 1:42 PM, plange01 wrote:

    apple was so overpriced any bad news was enough to start a sell off this one really has gotten ridiculous....

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