Apple Stock Taking Hits As iPhone 4 Scrutiny Continues

The stock dip follows a string of bad notices for iPhone 4 that included a widely circulated Consumer Reports "can't recommend" dismissal, a class action lawsuit against Apple and AT&T, and most recently, whispers of an iPhone 4 recall.

Earlier this week, Consumer Reports said it couldn't recommend the iPhone 4 thanks to a flaw in antenna design, and later, on Tuesday, urged Apple to press into action as quickly as possible in an Electronics Blog post titled "Why Apple -- and not its customers -- should fix the iPhone 4."

"We think it's the company's responsibility to provide the fix -- at no extra cost to consumers," wrote Consumer Reports.

In the past two days, recall talk has crescendoed from scant whispers to full-on speculation, it's been the subject of much debate, with everyone from bookmakers to analysts attempting to gauge its likelihood.

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A full-on recall would be a big financial hit for Apple, according to Sanford Bernstein analyst Toni Sacconaghi, who in a Tuesday research note estimated the full recall costs as $1.5 billion for Apple.

Vijay Rakesh, an analyst with Sterne Agee, was a bit more optimistic, suggesting in a Tuesday research note that a recall would cost Apple about $20 a phone.

Some analysts suggested that the iPhone 4 isn't so much causing Apple's stock headache as the perception that it isn't doing anything about it.

"The stock is being impacted by general concerns about the impact this is having to the brand, and the financial impact, and the uncertainty about what Apple will do about this," said Andy Hargreaves, an analyst with Pacific Crest Securities, according to Bloomberg News.

The far more likely scenario -- that Apple will provide bumper cases to each iPhone 4 customer to help mitigate the antenna issues -- could still cost it between $1 and $5 per customer, according to analysts interviewed by The Wall Street Journal.

Apple said it is working to address what has been described as a software glitch affecting the iPhone 4's signal strength, but has maintained the device's wireless service is sound.