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iPhone 4 Bumper Conspiracy


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How Apple will earn three times more on accessory than hardware sales.

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iPhone 4 Bumper Conspiracy

  1. 1. How Applewill profit on the iPhone 4 reception issues.<br />ArsenyLebedev B.S. PH.d<br />
  2. 2. Theory:<br />Apple’s (AAPL) strategy with iPhone 4 was to release a product that required a vast majority of users to purchase accessories offered officially by Apple. <br />In order to do this, the hardware has to be defective by design.<br />
  3. 3. iPhone 4 has documented reception issues when holding the exposed antenna a certain way.<br />Sources:<br /><ul><li>
  4. 4.,2817,2365940,00.asp
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  7. 7.</li></li></ul><li>Further Evidence<br />Steve Jobs had connectivity issues during the keynote announcing the new iPhone.<br />Death Grip<br />
  8. 8. Debunked Theory<br />Theory: Fat fingers are the cause of reception issues. Fat fingers mean more water interference, which greatly affects RF attenuation.<br />Rebuttal: Not all iPhone nerds are fat.<br />Not fatty.<br />
  9. 9. Obvious Evidence<br />Apple released bumpers that cover the entire exposed antenna of the iPhone 4 hardware.<br />Antenna not visible!<br />
  10. 10. Bumper Cost & Income Analysis<br />Apple keeps $25.90 when selling a bumper<br />Sources: <br /><ul><li>Based on polyurethane and aluminum commodity prices July 2, 2010
  11. 11. Cost estimates are for operating (DIRECT MATERIAL, LABOR) costs.</li></li></ul><li>iPhone 4 Income Analysis<br />Sources:<br /><ul><li>Leaked AAPL proforma income statement
  12. 12. Op income for iphone4 hardware as of July 2, 2010
  13. 13. +- 1-2 million for full price sales.
  14. 14. Cost analysis:</li></li></ul><li>Hardware versus Accessory Income<br />30% sales rate for normal accessory sales,<br />100% sales rate for forced market purchasing of bumpers.<br />
  15. 15. Conclusion<br />Apple stands to make 3 times more cash from sales of accessories than hardware by injecting a design defect into the iPhone 4.<br />