Apple CEO Steve Jobs' response to the iPhone 4's antenna - or "Antennagate," as he mockingly referred to it - has drawn new criticism, instead of downplaying the issue, as he may have liked.
Apple CEO Steve Jobs' quickly called press conference July 16
-- in which he disputed whether there were problems with
his company's new iPhone 4 device, blamed the media for
the widespread coverage of reception issues, and offered a
free accessory to take care of design problems in the antenna
-- was supposed to tampen down the controversy surrounding the
Instead, Jobs' comments are fueling the debate, drawing criticism
from the analyst community as well as from competitors who say the
CEO showed a lack of contrition, pointed fingers at the media rather
than the company itself, and unfairly tried to paint rival smartphones
as having the same problems with their antenna designs, spotty
reception and dropped calls. In addition, analysts with
market research firm IDC are finding that the issues are keeping
iPhone users from upgrading to the new iPhone 4 due to the antenna
issue, a development that could hurt Apple and its efforts to grow its
Jobs mockingly referred to "Antennagate" during his press conference, in which he sought to dial down the mounting criticism surrounding the Apple iPhone 4's antenna design
During a portion of his presentation, Jobs noted that the smartphone's
reception fluctuation was quite normal, and that a number of other
popular handsets did the same - an "Apple to BlackBerrys"
comparison that Research In Motion co-CEOs Mike Lazaridis and Jim
Balsillie didn't appreciate.
"RIM has avoided designs like the one Apple used in the iPhone 4 and
instead has used innovative designs which reduce the risk for dropped
calls, especially in areas of lower coverage," the two said in a July
16 joint statement, according to Crackberry.com
thing is for certain, RIM's customers don't need to use a case for
their BlackBerry smartphone to maintain proper connectivity."
The comment referred to Jobs' offer of a free rubber "bumper" case
to each iPhone 4 owner - while maintaining that iPhone 4 is still the
best phone that the company had ever made. (How many purchasers called
AppleCare to complain about the smartphone's reception? Just 0.55
percent, Jobs said.)
Jack Gold, principal analyst with J. Gold Associates, also wasn't
keen on the smartphone comparisons. Gold wrote in a July 19 research
note that Jobs spent a good deal of time insisting on how excellent the
iPhone 4 is, "even saying it is the world's best smartphone," but then
went on to compare its antenna to competitors' devices and say that
everyone in the industry has the same problems.
"Yes, physics is physics and radio waves are hard to control, but
none of the phones he demonstrated have had the same problem in the
marketplace, and none have been called unacceptable by Consumer Reports
Gold wrote. "Sorry, Steve, but you can't have it both ways. Yes, all
phones in weak signal areas have issues to a greater or lesser extent.
But they don't claim to be perfect and the best phone ever invented."
Gold was also quick to jump on a statistic Jobs offered - that
the iPhone 4 drops less than one more call per hundred than the iPhone
3GS. For rounding purposes, Gold suggested assuming the figure is 1
percent, versus average network drop rates of 2 to 4 percent.
"So if the iPhone 4 is adding 1 percent to dropped calls, then it's
increasing dropped calls by 25 percent to 50 percent over the iPhone
3GS," Gold wrote. "That's a huge jump in dropped calls and highly
significant. This should not be ignored, as it indicates a potentially
significant end user satisfaction problem, further compounding the
issue for both Apple and AT&T."
Are users truly unsatisfied? Jobs suggested that the media had
overblown Antennagate, considering that iPhone 4 return rates have been
just 1.7 percent.
Despite the iPhone 4 breaking sales records for Apple, its antenna
issue nonetheless does appear to be hurting sales, according to a July
16 report from market research firm IDC. Citing a brief survey, the
firm noted that 66 percent of current iPhone owners have said that
they're delaying their purchase of an iPhone 4, "thus lengthening the
normal upgrade cycle associated with the release of a new device."
However, that figured was countered, wrote the research firm, by the
74 percent of non-iPhone owners who aren't delaying a purchase.
Analysts have noted that for Apple to continue to grow, it's
important to bring new customers into the fold, versus relying on the
brand's established fans. How these two sides will shake out, however,
time will tell, IDC suggested.
Noting that he was "pleased that Apple is working with its customers
to offset the reception issues related to the iPhone 4," IDC program
director William Stofega said he'll be keeping an eye on the matter.
"It will be interesting to monitor the effect of Apple's response to
the antenna problem over the next several months ."