iPhone 3GS is about to hurt Apple stock

If you haven’t heard already, the net is growing with complains of iPhone 3GS users brand new units overheating and having discoloration issues.

Of course Apple has done a great job as usual to own up to the problems and immediately offered to remedy the situation to those who have paid up to $400 for the new units. NOT! They have blamed everything from 3rd party cases to phones being left in hot cars for the issue. In fact, if you do a search on the Apples iPhone site, you won’t see a single mention for any of these potential product defects. In the past, Apple had a very spotty record dealing with issues and criticism of their products. In some cases, they have waited until being taken to court before deciding to address the issue. While ignoring minor issues might have worked when they had a cult following for their Macs, they have a whole new customer base with the iPhone. One that may not be as tolerant to issues not being addressed promptly. In the business world, the old adage goes “Perception matters”, and I doubt Apple is too big or too popular to avoid scarring from bad perception by premium paying customers.

Common sense dictates that when so much more powerful electronics are packed into the same size case as the previous generation, there will naturally be some extra heat generated. Usually, this issue is solved by adding some type of a heat sink or fan. Of course when dealing with a computer (really, it is a computer more than a phone) the size of the iPhone 3GS, there isn’t much room to put in a heat sink or any other cooling system.

Apple did have issues with discoloration on other products before, such as their portable Macs. It seems perhaps they don’t test out their products as hard as most Apple fans use them.

It will be interesting to see how Apple handles this wrinkle in their extremely popular new product (1 million sales in the first 3 days alone). Either way, unless some urgent damage control is done, Apple stock should be taking a hit when market opens on Monday.

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