Consumer Reports' announcement that it can't recommend the Apple iPhone 4 is the latest installment in a saga relating to the phone's antenna. To make good with consumers, analysts say Apple needs to act quickly.
A year ago, Consumer Reports put the Apple iPhone 3GS at the top of its
smartphone rating list. The advertisement-free publication has been a champion
of consumers' interests since 1936, and so while a significant accolade, it was
a surprise to few, if any, that the can-do-no-wrong Apple once again came out
The iPhone 4, however, is creating a new narrative for Apple.
While Consumer Reports reviewed the iPhone 4 highly-commending its display
as the very sharpest, its video camera as the best it has seen on any phone and
its built-in gyroscope as succeeding in turning the phone into a "super-responsive
game controller"-when it came to recommending the phone, the
magazine felt forced to stop short.
"When your finger or hand touches a spot on the phone's lower left side
... the signal can significantly degrade enough to cause you to lose your
connection altogether if you're in an area with a weak signal," Consumer
Reports' Mike Gikas wrote on the site's blog. "Due to this problem, we can't
recommend the iPhone 4."
The position is a new one for Apple officials, who went from denying there was
a problem to announcing,
to their "stunned" surprise, that there was an issue
, but that it
simply had to do with a bad software formula. On top of customer complaints and
disappointments, what kind of fallout should Apple expect from losing the
backing of such a respected and trusted publication?
"I don't know if the person usually so adroit at handling these types
of matters is on vacation, or what," Charles King, an analyst with
Pund-IT, wryly told eWEEK. "Until now it's been a company that could bend
the news cycle to its will, but it's just gotten hammered on this day after
day. [Apple CEO] Steve Jobs is definitely
gritting his teeth somewhere."
King added that it was a mistake for Apple to suggest that people buy
buffers-rubber covers that ring the iPhone 4 and reportedly help to
resolve the antenna issue. "If it's a technical error, it's the company's
responsibility to do that. They should be sending out [bumpers] in large
numbers," he said, explaining that the fewer steps Apple takes now, the
greater the mess, and expense, it's likely to face later. "They've got to
move quickly to address this."
Analyst Ken Hyers, with Technology Business Research, agrees. "I think
that Apple is at a crossroads with the iPhone 4," Hyers told eWEEK. "The
device has moved well beyond the Apple fan-boys and tech-geek cognoscenti and
is truly a mass-market device. That's great news for Apple (and AT&T)
because it means higher sales, but it means that Apple needs to recognize that
its customer base expects the device to be an exceptional phone, not just an
exceptional platform for running mobile applications."
Hyers, too, said that Apple "needs to do something concrete," such
as begin sending out bumpers to the millions of people who have already
purchased the smartphone.
Consumers have also made their frustrations known with more than simple
complaints. Early this month, two
iPhone 4 owners filed a class-action lawsuit in a Maryland District Court on
behalf of all iPhone 4 users
, accusing both Apple and AT&T of deceptive
trade practices, intentional misrepresentation and fraud by concealment, among
other unsavory practices.
In a San Francisco District Court, two other iPhone 4 owners filed a similar
suit, accusing Apple alone of "perpetuating a massive fraud upon hundreds
of thousands of unsuspecting customers" by releasing a phone it knew to
have antenna issues. The suit also called for Apple to send each iPhone 4 owner
a bumper free of charge.
Neil Mawston, an analyst with Strategy Analytics, calls the antenna issue
the "first major chink in Apple's armor since the iPhone launched in 2007."
However, he told eWEEK, his firm doesn't expect the Consumer Reports article to
impact Apple's established fan base-though it will make consumers on the
margins think twice before purchasing.
"The iPhone brand remains gold-plated," Mawston said, "but
the company has probably lost some heart-share among consumers during this
episode, and its attempts to explain and fix the problem have so far been less