Apple's iPhone 4 antenna flap: Overblown, hubris or simple testing mistake?

Apple's iPhone 4 antenna flap: Overblown, hubris or simple testing mistake?

Summary: The iPhone 4 antenna issue becoming a major headache for Apple, but larger questions remain. Is Apple too cocky, handling a skirmish with Consumer Reports well or in denial about overlooking a design flaw in its testing?

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With the iPhone 4 antenna issue becoming a major headache for Apple, analysts are busy handicapping the costs of a potential recall, which observers like Piper Jaffray analyst Gene Munster deem "highly unlikely." But the larger questions are whether Apple is too cocky for its own good or handling a skirmish with Consumer Reports properly since the antenna flap may be overblown.

In recent days, it has been an interesting duel between Consumer Reports and Apple. Apple has admitted that there is an antenna reception problem on its iPhone 4, but told customers that the fix is to hold the phone the right way---when you touch the antenna, reception dies. Consumer Reports and other testers have documented signal degradation when touching the lower left portion of the device, bridging the iPhone’s antennas. A bumper case (right) fixes the problem. Update: Apple is holding a press conference Friday most likely to address the iPhone 4 issues.

Consumer Reports verified that there's a hardware issue and has called on Apple to fix the iPhone 4. Duct tape seems to help.

Simply put, Consumer Reports says "we think it's the company's responsibility to provide the fix—at no extra cost to consumers." Typically, Consumer Reports' recommendations are gold and companies don't mess with the publication's findings. In most cases, product companies respond to the concerns in an open and public fashion. Every once in a while Consumer Reports is off, but its track record is solid.

Apple hasn't given much of a response. After all, it's still moving a lot of iPhone 4s. Macquarie analyst Phil Cusick says in a research note:

While we do not see any evidence of a slowdown in sales and our checks indicate almost no returns, the antenna issue could become a public relations problem and potentially impact Apple’s sterling brand image.

In the meantime, analysts have been handicapping the costs of a recall or providing a bumper case free of charge. Bottom line is that the expense is negligible. To wit:

  • Piper Jaffray's Munster says Apple could give away bumper cases that it sells for $29. Giving away a case for free at $5 each would run about $178.5 million for every iPhone 4 over the next year. That equates to 1 percent of operating income.
  • According to CNet News, Bernstein Research analyst Toni Sacconaghi pegs a recall at $1.5 billion. Like Munster, Sacconaghi says that a recall isn't likely.
  • The cheapest option for Apple is to do nothing. Munster explains:

A second is option is for Apple to do nothing; as we've mentioned, we estimate that only 25% of iPhone users are periodically affected by the issue, and Apple could weather the storm by letting the current demand for the iPhone speak for itself.

Delivering bumper cases would be the easiest option. Apple could keep customers and Consumer Reports, which accounts for a lot of word-of-mouth marketing, happy. The issue here is that Apple would have to admit there's a real design problem with the iPhone 4.

That brings us to the hubris issue. Sacconaghi says that Apple's limited disclosure about Steve Jobs health, the attack on Adobe's Flash and skirmish with Gizmodo over a lost iPhone add up over time. Meanwhile, Apple's argument that customers need to hold the iPhone 4 a different way doesn't go over well.

Munster isn't so sure. He thinks the iPhone 4 flap is overblown. In fact, Apple probably just made a testing mistake. Munster notes:

We believe Apple field tests every iPhone model. However, recall that the lost iPhone 4 prototype was disguised as an older model iPhone with a case. Given its proclivity to secrecy, it is possible that Apple required all test units to have a case, which would render the issue undetectable. In other words, Apple may never have known the problem existed on test units in the field because they all had cases on them.

At this juncture, there are good arguments to be made for all sides. Apple can be too cocky. The iPhone 4 flap could very well be overblown. But it's clear that Apple needs to do something. Risking a brand over what could be fixed with a case doesn't make a lot of sense.

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Topics: Hardware, Apple, iPhone, Mobility, Smartphones

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252 comments
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  • Err

    Does a case fix it? I mean I see it addresses the technical issue, but the iPhone 4 isn't just about making calls. Part of the lure is the design - putting a case on it, somewhat blunts that. Personally I think a "cure" needs to not affect the way the iPhone 4 looks for EVERYONE to be happy. I don't see Apple's "bumpers" cutting it.

    What I don't understand is why it's only 1/4 of the phones affected - what gives?

    Is this a "US" problem - unique to AT&T's service, the problem as described seems universal - but I've not been able to recreate the problem on a UK iPhone 4?
    Jeremy-UK
    • RE: Apple's iPhone 4 antenna flap: Overblown, hubris or simple testing mistake?

      @Jeremy-UK
      Is this a "US" problem - unique to AT&T's service, the problem as described seems universal - but I've not been able to recreate the problem on a UK iPhone 4?

      UK as well, sadly. Mine's gone back. I'll miss the great screen and fancy camera, but dropped calls etc. disappointing for a device that's supposed to Just Work.
      capeleopard
      • iLemon 4G is a real problem

        @capeleopard The fact that many Apple fans and Apple want to look the other way, doesn't change this fact.

        Sales and time will show the final outcome, no matter how much we discuss it now.
        Uralbas
      • @uralbas

        Precisely. And the fact that returns are almost non-existent despite weeks of solid propaganda that the iPhone is a piece of crap, sort of demonstrates the whole antenna issue is a tempest in a teapot. The one thing the tech pundits WON'T tell you is that this is not an issue that affects everyone. It has to do with galvanic skin response shorting out the antenna, and it's a fairly small number of people who have the right skin chemistry.
        frgough
      • RE: Apple's iPhone 4 antenna flap: Overblown, hubris or simple testing mistake?

        @capeleopard <br><br>POOR LIAR!!!!!!!!!!!!!!!<br><br>HOW MUCH MONEY ARE Ya EARNING BY CIRCULATING SUCH " SEE-THROUGH" LIE??????????<br><br>TELL US WHICH SHOP OF WHICH DISTRICT OF WHICH CARRIER, EXACTLY????????????????<br><br><br>IT'S VITAL SIN TO TELL A LIE!!!!!!!!!!!!!!!!!!
        xenobia
      • Only the MS/Anti Apple trolls are raising a stink about this non issue.

        And they are either too stupid or too scared to buy anything with an Apple logo on it.

        It's technology common sense... Some people are just plain stupid and lack technology common sense... These are morons who stick forks in electrical outlets or wonder why they cant use an electric toaster under water while soaking in the bath tub. To a person with technology common sense, it's a no brainer... To a person who spent their whole life without technology, electrical outlets and toasters are magic...

        And those who are too stupid to "get it", short out an iPhone antenna by bridging the seperation of 2 antennas with something conductive (thier finger).

        Don't stick forks in electrical outlets you morons...

        Don't hold the iPhone 4 that way you morons...

        It makes perfect sense... Unless you are a friggin moron.
        i8thecat
      • RE: Apple's iPhone 4 antenna flap: Overblown, hubris or simple testing mistake?

        @capeleopard you must have a phone that is missing the antena then because the phone is athe same the uk and us.
        I know I work in the assembly line.
        don't post comments if you don't know the story correct.
        have a nice day.
        fcarreon@...
      • RE: Apple's iPhone 4 antenna flap: Overblown, hubris or simple testing mistake?

        @xenobia And how do you know he is lying? While I personally think the issue is overblown there ARE people who do indeed have this issue...
        athynz
      • RE: Apple's iPhone 4 antenna flap: Overblown, hubris or simple testing mistake?

        @frgough

        don't believe it.
        the way apple censors blogs, hides, ignores and distorts data the number of returns is likely significantly under reported.
        rhonin
      • RE: Apple's iPhone 4 antenna flap: Overblown, hubris or simple testing mistake?

        I think it's body chemistry (see my other post).

        Many who have followings in one way or another are suggesting a replacement for a (properly) working model.

        I think by the time it could be planned & implemented, iPhone5 will be out.

        If someone wants to capitalize on this, they should offer a generous trade-in for Android machines.

        Heck, I'd do it if I were in the business and had just a single store.

        In the Jeff Slutsky "Streetfighting" style, one could get a heck of a lot of free advertising by letting the local media know what's going down. I have no doubts they'd even send someone out to do a quick interview dealing with why people would come out ahead. They'd add it to ongoing coverage.

        I don't hear Microsoft jumping in with their Kin machines.

        ;)

        I'd do the sales prospects right by knowing enough about apps/widgets to be ready, but I think it would be a good (God, I hate doing this) "win-win" opportunity.

        Anyone think a trade-in party would work? ;)
        Mihi Nomen Est
    • Real Issue But Don't Sue

      @Jeremy-UK
      iPhone flaw, but don't sue about it. Let the free market speak on this one. Anyone who bought the iPhone 4 knew the issues either prior to the 30 day return window (and the restocking fee was waived, by the way) or they knew it before they bought the phone. If users don't like certain aspects of the phone they will return it or no buy it...which will then force Apple to recall it and fix it.

      Let the buyers be the judge, not a black robed man.

      Really FUNNY Apple satire articles on this site, check it out:

      http://www.dailygoat.com/2010/07/apple-announces-stunned-iphone-suck/
      pchrun
      • RE: Apple's iPhone 4 antenna flap: Overblown, hubris or simple testing mistake?

        @pchrun

        Don't sue? But all the "ambulance" chasing lawyers would lose such a lucrative source of new revenue! Come on, they have to pay for their expensive cars somehow! Besides, I wouldn't want to miss out on my generous $5 settlement check..../sarcasm off
        wgragg1@...
      • RE: Apple's iPhone 4 antenna flap: Overblown, hubris or simple testing mistake?

        @pchrun
        No sir,no sir, no sir! Sue, sue, sue! This is the American way. Don't believe it, ask Microsoft.
        eargasm
    • RE: Apple's iPhone 4 antenna flap: Overblown, hubris or simple testing mistake?

      @Jeremy-UK <br><br>LARRY, THAT'S TOO UGLY OF YOU TO WRITE DOWN SUCH SHAMELESS " PAPARAZZI-LIKE " ARTICLE NEVER BEING CONFIRMED AT ALL, POOR " LIAR "!!!!!!!!!!!!!!<br><br><br>JEREMY, YOU WELL SAID!!!!!!!!!!!!!!!!!!!!<br><br>?What I don't understand is why it's only 1/4 of the phones affected - what gives?<br><br>ABSOLUTELY!!!!!!!!!!!!!!!!!!!!!<br><br>WHAT KIND OF TRUSTWORTHY RESEARCH INSTITUTION IN WHICH COUNTRY HAS RELEASED THE RESULT OF " 1/4 of the phones affected - what gives? " OUT OF ALREADY SOLD OVER " 2 MILLION!!!!!!!!!!!!!!!!!! " OF i-Phone 4 ALL OVER THE WORLD, INCLUDING MY COUNTRY, JAPAN????????????????????<br><br>I'M WRITING FROM JAPAN.<br>AND NONE OF THE PEOPLE AROUND ME - QUITE A MASS AGGREGATE - WHO ALREADY BOUGHT AND ENJOYING USING i-Phone 4 HAVE NEVER NEVER ENCOUNTERED ANY PROBLEM, OF COURSE INCLUDING ANY ANTENNA ISSUE, AT ALL!!!!!!!!!!!!!!!!!!!!!!!!<br><br>HEY, LARRY, EXPLAIN IT TO THE DILIGENT READERS HERE HOW COME THAT HAPPENS??????????????<br><br>GUYS, DID YOU WATCH THE VIDEO OF " GRAND OPENING " OF NEW Apple Store in OPERA, PARIS LAST WEEK?<br><br>ENORMOUS EXITEMENT AND SATISFACTION THERE, REGARDLESS OF RECENT AT-MOST " MALICIOUS ATTEMPT " OF ATTACKING AND ASSAULTING Apple BY THE PROTEGES MEDIAS OF WALL STREET ( ROTHCHILDE ) AND HYENA-LIKE MILLION $ HUNTING LAWYERS, GENERATING AND CIRCULATING " FABRICATED YET-to-EXIST FLAW CASE "<br>!!!!!!!!!!!!!!!!!!!!!!!!!!!<br><br><br>WHAT DID " SHAKESPEA " SAY???????<br><br>THE FIRST THING YOU HAVE TO DO IS " KILL THE LAWYERS ", DIDN'T HE??????????<br><br>AND NOW WE HAVE TO ADD SHAMELESS PROTEGES MEDIAS OF " MERCHANTS OF JEWS " AND " CAIN ITSELF " WHO ARE MASTERMINDING THESE " HELL'S CONDUCT " ON THE LIST, HAVEN'T WE???????????<br><br>I'M IN THE STOCK BUSINESS SO I CAN TELL WHAT'S GOING ON NOW.<br><br>THEY ARE DOING " THAT DIRTY BUSINESS " DELIVERATELY TO MANIPULATE Apple's STOCK PRICE UNDER THEIR CONTROL, THIS IS THEIR WAY OF MAKING COLOSSAL PROFIT!!!!!!!!!!!!!!!!!!!!!!!!!<br><br>THE KEY WORD IS<br><br>" SHORT SELLING "!!!!!!!!!!!!!!!!!!!!!!<br><br>THAT'S IT!!!!!!!!!!!!!!!!!!!!!!!!
      xenobia
      • I hate to criticize a post on things other than a poster's argument, but...

        @xenobia using all caps in an Internet post is considered "shouting" and I don't think you wanted to shout the entire post. In addition all caps is just plain hard to read. I say this just as an educational moment, assuming you weren't up-to-date on Internet etiquette <img border="0" src="http://www.cnet.com/i/mb/emoticons/wink.gif" alt="wink">
        jgpeters
      • RE: Apple's iPhone 4 antenna flap: Overblown, hubris or simple testing mistake?

        @xenobia Taking your meds?
        azurehi
      • RE: Apple's iPhone 4 antenna flap: Overblown, hubris or simple testing mistake?

        @xenobia Typed on an iPhone 4 (Missing letters are the clue!)
        PMC-CON
      • Are you mentally insane?

        @xenobia No offense, but you sound as though you're writing from deep inside of mental institution. You should probably have someone check your brain for some sort of abnormality.
        trickytom2
      • RE: Apple's iPhone 4 antenna flap: Overblown, hubris or simple testing mistake?

        @xenobia
        CAPS LOCK IS CRUISE CONTROL FOR COOL!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
        IT REALLY LOOKS GREAT WHEN YOU USE HUNDREDS OF !'S TOO!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
        pwn0tr0n
      • RE: Apple's iPhone 4 antenna flap: Overblown, hubris or simple testing mistake?

        @xenobia <br>Are you, by chance, a Tea Party candidate?
        rt@...