Tech

Should FTC Require Apple to Recall iPhone?

Apple has acknowledged reception issues with the iPhone, and promises a software fix to solve the problems. But the company has yet to announce when that patch will be released, and experts are beginning to speculate about a product recall. 

Should the FTC intercede on behalf of consumers and require Apple to issue a recall? 

The Federal Trade Commission's mandate is to protect America's consumers. One of the ways it does so is by forcing companies that issue faulty or shoddy products to patch or repair them. Since Apple has admitted to a problem with the iPhone that inhibits its ability to function as a phone. 

Shares in Apple have fallen after an influential consumer guide slammed the new iPhone, amid rumors swirling on the Internet that the product will need to be recalled.

Consumer Reports said it could not recommend the iPhone 4 after its tests confirmed concerns about signal loss. "Consumer Reports' engineers have just completed testing the iPhone 4 and have confirmed that there is a problem with its reception," the report states.

"When your finger or hand touches a spot on the phone's lower left side -- an easy thing, especially for lefties -- the signal can significantly degrade enough to cause you to lose your connection altogether if you're in an area with a weak signal."

"Due to this problem, we can't recommend the iPhone 4."

 

The company did not respond to the review, but it did take the time to censor postings to its website regarding the Consumer Reports article. meanwhile shares slid as much as 4.2% to $246.43 before rising to $250. This means the company valuation fell by almost $10 billion. 

Analysts say Apple now needs to take quick action to avert any lasting damage to its reputation.

JP Morgan said that "Consumer Reports is a well-respected product reviewer, and the report should turn up the heat on Apple."

On the web, some experts are suggesting a recall is "inevitable." Others are likening the problem to a Toyota-style public relations crisis and demanding Apple responds with a more meaningful fix than a software patch.

Apple says the phone's debut last month was its most successful product launch, with worldwide sales of 1.7m units in its first three days.

SkyNews contributed to this report.