What will Apple say about the iPhone 4?
A case giveaway? A recall? Duct tape? Analysts says any of those options, and nothing, is possible
By Matt Hamblen
July 15, 2010 10:56 AM ET
Computerworld - By now, the civilized world knows Apple has called a press conference for tomorrow, presumably to address the antenna and reception problems experienced by some iPhone 4 users.
There is speculation that Apple could announce some kind of program to give away a $29 Apple-branded Bumper case that would fix the wireless signal reduction. The disruption occurs when a user holds the lower left side of the phone and covers the gap in the antenna that encircles the exterior edge of the phone.
Consumer Reports recommended that Apple give the plastic and rubber Bumper or some other phone case to iPhone 4 owners, since its own testing showed that a Bumper would help prevent the reduction in the wireless signal.
Consumer Reports had issued an earlier finding that it could not recommend the iPhone 4 because of the reception issue. Even duct tape over the lower left side gap help, or holding the phone differently, the magazine said, but noted that those solutions put the burden for a fix on the user.
Apple did not respond to requests for comment.
As a respected, independent testing authority, Consumer Reports' recommendation to give away a Bumper has considerable weight, as several financials firms have noted, including Bernstein Research analyst Toni Sacconaghi. A Bumper costs Apple $1 or less and would be "financially immaterial," Sacconaghi said, and much less than a full recall.
While the Bumper giveaway may sound logical, several analysts today said Apple still could appear at the Friday event and obfuscate the issue and then give away nothing. Some even said Apple could use a software update, iOS 4.0.1, which is reported by Macrumors to ship today with a new signal strength indicator for the phone as the basis of the event, to show it had addressed the reception issue with a promised software update. Apple first described the need for the update in July 2 letter on its Web site.
Successful as it is, Apple can be stubborn for many reasons, analysts said, and might avoid a hardware fix, recall or Bumper giveaway because it wouldn't want to admit it made a mistake in design or testing of the iPhone 4 before it went on sale.
"They need to acknowledge there is a problem, which they probably won't do very effectively," said Jack Gold, an analyst at J. Gold Associates. "They should say they've heard their customers and take the complaints very seriously, even if just a small minority of customers are experiencing problems. I suspect they will downplay this and say how many happy and loyal customer they have."
Gold and others said the signal indicator fix (which basically makes the bars bigger on the interface) is a red herring for the overall reception issue. "It's a lame excuse saying they were stunned that their software calculations on signal strength were wrong," he said. "The question is, will they step forward and take some responsibility and the do the right thing for customers and their credibility or just continue to obfuscate and make excuses?"
Gartner analyst Ken Dulaney basically agreed. "There are two things going on -- a software [signal strength] bug and an antenna design problem," Dulaney said. "Apple has left it very easy for users to conclude the antenna issue could be overcome by software."
But Dulaney said a software fix is not enough, a position bolstered by the Consumer Reports testing and his own insights. Telling customers to hold the phone differently to improve signal strength, as it has suggested before, "would not be acceptable to most, [meaning] Apple criticism on the issue would continue."
Dulaney went so far as to say that Apple might actually come up with some kind of "aesthetically pleasing tape" to fix the problem, but he agreed that a free case would be the best option. Customers should be offered refunds if even a free case doesn't work, he said.
Dulaney said he would be surprised if Apple issued an iPhone 4 recall over the reception issue, because processing of the units would be an "enormous task."
Whether the reception issue is due to the software or more likely the hardware, "Apple should just fess up to the problem and do what they need to do in order to get customers a phone that works properly," said Zeus Kerravala, an analyst at Yankee Group. "Their obligation is to give customers a working phone, not just skirt the issue continually."
Article by Matt Hamblen From Computer World