Apple’s Next Move: The Odds-On Favorites

With iPhone 4 complaints mounting, Bookmaker.com recently delivered odds of a recall before the end of this month, giving it a 35 percent chance of actually happening.

Those odds, however, came out before Consumer Reports confirmed yesterday that the iPhone 4’s reception problem stems from a faulty hardware design—not a software flaw, as Apple previously claimed.

Software can be fixed with an update; hardware might require a recall.

An Apple iPhone recall, of course, would make the attention given to the Toyota “sudden acceleration” recall look like a Microsoft Zune or Kin launch. That is to say, it would be epic.

After the Consumer Reports review, the odds of a recall no doubt shot up. Yet it’s still hard to imagine Apple chief Steve Jobs (and his infamous ego) signing off on one.

So what is Jobs going to do, if anything? Apple’s reaction is notoriously hard to predict, which is why Apple has spawned a cottage industry of rumors about it.

But that hasn’t stopped me from speculating. Here is my list of possible Apple reactions:

1. Apple deletes threads posted by users on its discussion boards about Consumer Reports slamming iPhone 4. (Check! Apple actually already did that.)

2. Jobs invests in duct tape, renames it Apple Magic Tape and sells it in Apple Stores. (In case you didn’t know, a piece of duct tape applied in the gap between antennas on the lower left side of the iPhone 4 will fix the reception problem, says Consumer Reports.)

3. Apple sees this as an opportunity to add to its billions of revenue and hikes up prices of iPhone 4 cases and “bumpers” that fix the problem—a very Jobsian response. (You’ll recall that when an Apple employee asked Jobs why campus benefits were limited, Jobs reportedly responded, “It’s my job to make your stock go up so you can afford these things.”)

4. Jobs does the right thing and recalls iPhone 4—and, shockingly, also recalls Apple connection cords, which are flimsy and tear easily. (Really, how goddamn hard is it to make a better iPhone cord?)

5. Apple plants rumors of iPhone 5 coming out by the holidays, along with a new deal with Verizon. Years from now, historians will argue whether an iPhone 4 ever existed.

6. Jobs pens a letter, blames iPhone 4 problems on Adobe.

7. Apple does nothing.

Tom Kaneshige covers Apple and Networking for CIO.com. Follow Tom on Twitter @kaneshige. Follow everything from CIO.com on Twitter @CIOonline. Email Tom at tkaneshige@cio.com.