Perhaps you’ve heard that the iPhone 4 handset has an issue with dropping calls if it’s held the wrong way? While some expected a recall, Apple Inc. on Frday rejected the severity of the problem and will instead address the issue for now by giving everyone a free case to shield the antenna – a steel band that goes around the edge of the device – from issues with touch.
It’s also “tracking some problems with the proximity sensor,” and is working on solutions. No other details were given on that issue.
Even though the bumper-as-antenna-fix plan was announced, CEO Steve Jobs decried the iPhone 4 antenna concerns during the press conference Friday, dubbing the affair as “Antennagate." He said that many news reports on the problem were "crocks," intimating that the issue is more negative hype than reality, and painting Apple as the victim of unfair portrayals in the media (or..in Consumer Reports, perhaps?). Only about .55 percent of customers have actually called to complain, Jobs said, but “if you read all these articles out there, you would have thought that at least half of our customers have called in."
As for returns, only 1.7 percent of users have returned the phone to AT&T, compared with 6 percent for the 3GS. Apple has sold more than 3 million iPhone 4 devices since its June launch.
The iPhone 4 is “possibly the best product we’ve ever made," he said.
He explained that the antenna issue is not unique to the iPhone 4, and showed several videos with other devices, including BlackBerry and a Samsung Windows Mobile phone, showing bars for call signal dropping if they’re held in a certain spot.
He said that after spending $100 million on testing in its 17 antennae testing facilities, Apple knew that the antenna would fail if touched in a certain way. But it’s a cost of doing business. “That’s life in the smartphone business,” he said. They have weak spots, he added.
All of that said, "we are being totally transparent," Jobs noted, admitting that call drops on AT&T with the iPhone 4 are indeed higher than that of the iPhone 3Gs, which is at the heart of the problem — the phone was billed as having better signal reception than its predecessors. “We care about every user, and are not going to stop until every one of them is happy."
To that end, all users will get to choose a case, which run about $17 to $30 in stores — the offer is good through Sept. 30. Those with bumpers already will be issued refunds. If users are still not satisfied, they can bring their iPhone 4s back within 30 days for a refund, with the re-stocking fee waived and no questions asked.
"We are going to take care of everyone," Jobs said.
He also provided a few Apple updates. The iPhone will soon launch in 17 more countries, and the white iPhone should be arriving at the end of the month in limited quantities. He reminded everyone that Apple released the iOS 4.0.1 update to its iPhone operating system yesterday, which should help with signal strength.
So what did we learn today? No recall, and Apple delivered a rejection of the severity of the problem. "There's a whole lotta hoopla about the iPhone antenna,” as an opening video noted. Was the media unfair? Perhaps. But considering that Jobs touted improved signal capability as a hallmark of the device at launch, it's certainly a case of setting expectations too high on Apple's side as well.
Apple taking the heat today is of course lucky for AT&T Inc., which has been mum about the problem handset it’s helping to sell. And why should it pipe up, really? It’s benefitting from a business model that was previously a frightening one for carriers — the handset maker carries the consumer relationship there. The iPhone takes AT&T out of the equation for all but network connectivity, leaving it with all of the capex to handle congestion and very little of the customer loyalty associated with the device. That’s certainly off now. There are benefits to adjusting one’s place in the value chain.
Compare that with consumer response to Verizon Wireless’ launch of its top smartphones, the Droid Incredible and the Droid X, which are both sold out. The lack of availability is one thing, but the heavy advance marketing in both cases and widely publicized assurances of supplies for the Droid X whipped up consumer hopes, only to dash them against the rocks of improperly set expectations. Verizon has been subject to comments, many of them unprintable, about the shortages, as a result. Forget who might be to blame — all people see is a carrier that promised them something and didn’t deliver. If it were a hardware issue, would consumers think “Motorola” or think “Verizon” as the go-to complaint-receiver? This reporter’s money’s on Verizon.
