iPhones Catch Fire the Wrong Way?

Recently, several incidents have been reported against exploding Apple Inc. (AAPL - Analyst Report) iPhones and iPods. The incidents took place in certain European Union (EU) member states, prompting the European Commission to ask for clarification from manufacturer Apple. It appears that the overheated devices exploded before catching fire.

In the recent past about three such iPhone explosion cases have been registered with the European Union, of which two occurred in France and one in United Kingdom. This iPhone explosion case has been preceded by a similar incident registered in Marseilles, France.

Rapex, which is involved in the rapid exchange of information between the European commission and EU countries with respect to exchange of information on harmful consumer products, has not yet issued any report about the issue. Besides EU countries, the Japanese government has also told Apple to do an investigation regarding the iPod Nano’s catching fire.

Apple was a late entrant into the smartphone market, with companies like Nokia (NOK - Analyst Report), Research In Motion (RIMM - Analyst Report) and Palm (PALM) already firmly entrenched. However, the company made very rapid progress, wresting share from the existing players.

iPhone 3G and iPhone 3GS were the major growth drivers for the company during the recently concluded quarter. In that quarter, the iPhone handset and accessory revenue reported a 300.0% increase over the year-ago quarter. This apart, the iPod also forms a substantial part of its sales volume, with the company selling around 44.1 million iPods during the first nine months of 2009.

So, being the major growth drivers for the company, Apple should take the utmost care to ensure product quality. All these scattered incidents are affecting the reputation of the company, and are likely to have a negative impact on customer sentiments. While a constructive reply from Apple authorities is still awaited, there is surely some buzz in the market.
 

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