The iPhone 4 Crisis

Does one bad Apple spoil the bunch? Not to loyal Apple users.

     Apple presented the new  iPhone 4 on June 7, 2010.  The new iPhone 4 was said to feature FaceTime, or video calling, a 5 megapixel camera with LED flash, High Definition video recording, 40% longer talk time and a new design of glass and stainless steel that makes the iPhone the thinnest smartphone in the world.  Apple praised the design and functionality of the new phone, boasting that the iPhone would run on an advanced mobile operating system that featured 100 new functions and would allow users to instantly switch between these many different functions which would save battery life.1 

     On June 15, the iPhone was made available for preorder and 60,000 preorders were made in just one day.  This was the largest amount of activity Apple had ever received in this short time frame which resulted in site malfunctions and errors. Apple apologized to the the public for this in a press release posted to their website and advised customers to simply try again or wait until the phone is in stock.2 

     On July 2, 2010, Consumer Reports released its review on the iPhone 4 claiming that there were antenna problems and advised consumers to stick with the older version of the phone.3 That same day, Apple released a statement to address these issues, but in my opinion dodged responsibility. They claimed that the phone may not be working properly and placed the blame on holding the phone incorrectly.  Apple addressed reception issues and described the dramatic drop  in signal bars on a calculation error that Apple found surprising. They explained that they would provide an update not to fix the reception problem, but to ensure that the signal bars accurately represent the service level. 4

      It has been speculated that Apple CEO, Steve Jobs, was aware of these issues for two years and pushed the launch of the iPhone 4 anyways because he admired the design so much.5  However on July 16, 2010, Apple held a press conference to address the antenna issues and Jobs claims  that Apple was only aware of the problem  for 22 days. He claimed that Apple wanted to determine what the real problem is before coming up with premature solutions. Throughout the conference, Jobs minimized the issues and mentioned that Apple is not perfect and neither are phones.  Jobs stated that all  phones have weak spots that will cause reception drops due to the way a user grips the phone. He repeats that it is a problem not unique to the iPhone 4 and presented three examples; Blackberry Bold, Droid Eris, Samsung Omnia to display this point. Jobs boasted that even with the malfunctions, Apple had sold well over 3 million iPhone 4s in 3 weeks and that the phone has the highest satisfaction rating among all smart phones.

http://www.youtube.com/watch?v=e3Hy1cXwGhI

     Apple seemed to dodge responsibility by claiming that all phones don't work properly, instead of taking accountability, apologizing to its users and employing a recall.  Rather, Apple stated on their website "We now know that the iPhone 4 antenna attenuation issue is even smaller than we originally thought. A small percentage of iPhone 4 users need a case, and we want to continue providing them a Bumper case for free. For everyone else, we are discontinuing the free case program on all iPhone 4s sold after September 30, 2010."  6

     This nonchalant statement and bumper case solution was adequate for loyal Apple users and seemed to appease any unhappy customers.  Apple claims that sales have not affected. "My phone is ringing off the hook [from] people that want more supply," Apple Chief Operating Officer Tim Cook said during a July 20 earnings call. " 7   According to Apple's Third Quarter Earning Report, "The company sold 8.4 million iPhones in the quarter, representing 61 percent unit growth over the year-ago quarter."  Steve Jobs boasted that “It was a phenomenal quarter that exceeded our expectations all around, including the most successful product launch in Apple’s history with iPhone 4." 8



1 http://www.apple.com/pr/library/2010/06/07iphone.html
2 http://www.apple.com/pr/library/2010/06/16iphone.html
3 http://blogs.consumerreports.org/electronics/2010/07/apple-iphone-4-antenna-issue-iphone4-problems-dropped-calls-lab-test-confirmed-problem-issues-signal-strength-att-network-gsm.html
4 http://www.apple.com/pr/library/2010/07/02appleletter.html
5 http://nexus404.com/Blog/2010/08/09/iphone-4-antennagate-update-apple-knew-about-it-for-two-years-this-changes-everything-again-apple-now-said-to-have-been-aware-of-the-iphone-4-antenna-design-two-years-before-launch/
6 http://www.apple.com/iphone/case-program/
7 http://www.eweek.com/c/a/Mobile-and-Wireless/Apple-iPhone-4-Antenna-Issues-Deemed-Resolved-217413/
8 http://www.apple.com/pr/library/2010/07/20results.html