Apple chief executive Steve Jobs apologized to users for the iPhone 4’s reception problems and said the company would offer free rubber bumpers, or cases, to help users deal with the problem of dropped calls.
Will that strategy be enough to mollify critics and keep customer demand for the iPhone 4 — which has sold 3 million units in 22 days and is Apple’s best-selling phone ever — strong in all parts of the world?
“I think he did exactly what he had to do,” said Tim Bajarin, analyst at Creative Strategies. “He laid out the data, clarified the problem, and said he would do something about it.”
Jobs answered questions from the press for the better part of an hour, after giving his own lengthy explanation of the problem. His approach, in summary, was to explain that all smartphones have weak antennae. That the return rates are really low, and customer complaints about reception problems are really low. He apologized to customers who were upset and promised Apple would make them happy. And he said those who want to do so can get a free rubber bumper to reduce the reception problem and those who are really unhappy can return the phone within 30 days for a full refund and no restocking fee.
During the press event, Jobs’ demeanor spanned the spectrum. He was both humble and proud, sincerely apologetic and also very annoyed at what he perceived as inaccurate press reports and attempts to tear Apple down.
Van Baker, an analyst at Gartner, said, “The phone is fine. I think they have handled this very poorly. I think they will be criticized for being defensive.”
In an update to that comment, Baker said, “While I do feel that the issue could have been handled better in the early stages I felt today was handled reasonably well. I think that most companies would not have made the offer that Apple made. Most companies would have stated that their product performed in a manner comparable to other products and left it at that. Apple chose to stay customer focused and offer a free case even though they clearly felt that the iPhone 4 reception was no better or worse than other popular phones in the market. For this I think they deserve a lot of credit.”
Apple did not earn any friends among its competitors by pointing out the flaws in their antennae. And the argument that all smartphones have a weakness is just one step away from saying that customers should get used to dropped calls as a fact of life. So while it adds perspective when Jobs says something like this, it is not earning him points among customers who have a problem and want it fixed.
There were three things that Jobs perhaps should not have said at the event. He criticized the press for blowing the problem out of proportion. He said he had no apology for short-term investors who are unhappy because the stock fell $5. He added that he really wanted investors who care about the stock for the long term. And he said that people love to tear down those who are successful. All of these statements reek of denial. But there are those who will probably agree with Jobs on those points and think kindly of him for being honest about them.
Baker said that Jobs’ apology to customers was smart. But he added, “In the trade press, they will be criticized for being defensive and arrogant. But then it blows over.”
Jobs said Apple would not recall the phone and would not redesign the hardware in this generation. He has promised that Apple will work harder on antenna design in the future and will work hard to make customers happy.
At this point, Apple has probably cleared the air as much as it can. It is moving down the road toward regaining customer trust. How this turns out from now on is a customer service issue. Apple should not, for instance, argue with customers who want to return those phones. If it can execute on service and deliver the free bumpers to those who want them, I think this will blow over.
Nokia, which Jobs called out for having the same antenna problems, has issued the following statement:
“Antenna design is a complex subject and has been a core competence at Nokia for decades, across hundreds of phone models. Nokia was the pioneer in internal antennas; the Nokia 8810, launched in 1998, was the first commercial phone with this feature.
Nokia has invested thousands of man hours in studying human behavior, including how people hold their phones for calls, music playing, web browsing and so on. As you would expect from a company focused on connecting people, we prioritize antenna performance over physical design if they are ever in conflict.
In general, antenna performance of a mobile device/phone may be affected with a tight grip, depending on how the device is held. That’s why Nokia designs our phones to ensure acceptable performance in all real life cases, for example when the phone is held in either hand. Nokia has invested thousands of man hours in studying how people hold their phones and allows for this in designs, for example by having antennas both at the top and bottom of the phone and by careful selection of materials and their use in the mechanical design.”
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