Good call Apple, to give free cases and allow total refunds on returns to Sept 30

So the Apple extraordinary press conference on the iPhone 4 Death Grip problem is over. I was following the twitter feed on it and several news sites but obviously was nowhere near it and the press conference was not on the major 24 hour news channels.

APPLE ADMITS

There were some who attended the event who were not happy with Apple's way of communicating the matter, but to me that really doesn't matter in the current smartphone bloodbath. It is clear there is an antenna problem. Apple said that 0.55% of those who have bought an iPhone 4 have already called Apple to complain about it - as a percentage that may be small, but remember that many buy cases with their phones which would eliminate the problem; and the US networks are bad so if the user knows the network is patchy at their home, they might not even notice that the new iPhone 4 has more dropped calls, etc. But 0.55% is 16,500 people calling to complain. Thats not a couple of Toyota Prius cars with brake problems. Thats 16 thousand people who have already found the problem so bad they have called Apple - how many more have called AT&T etc.

I think it was totally disingenous of Apple to try to argue earlier that there was 'no problem' or that it was only software, if 16 thousand people called Apple directly about this very problem (I would venture to guess, that there were many tens of thousands more emails and Apple help forum posts and complaints about this too, so the problem must have been massive and obvious from early on). And no doubt they heard from AT&T calling center that it is getting many times this number of calls with this same recurring problem. But that was part of the early mistaken PR spin approach that Apple had taken. Thankfully Consumer Reports came in with their verdict, which finally forced Apple to own up to this mounting problem.

APPLE COULD HAVE BEEN EVIL ABOUT IT

The real point is, that Apple could have said 'no big problem, you deal with it, there is a bandaid solution if you don't like it, go buy a case, or return the phone.' Apple didn't. They could have taken a half-way solution, of giving a discount on cases but not a free case. But no, Apple did the right thing.

APPLE DID THE RIGHT THING

They admitted to the problem and they gave a free solution. So yes, Apple admits there is a problem with their Antenna, and they admit they are not perfect, but then they did the right thing. They gave every iPhone 4 owner a free case or the Apple rubber band that will cover the metal antenna and remove the Death Grip problem. If the consumer has already bought one, they get a refund.

Furthermore, Apple is working to fix the problem which it hopes is fixed after by early Autumn. And meanwhile Apple has extended the return period which normally is 30 days for refund, to September 30, with full refund without even a restocking fee. 

This could have turned into a PR nightmare. Now its a small blotch in what has been an impressive history of excellence in high technology. No company is perfect. This was handled with reasonably good PR, and reasonably rapid response, before it seriously damaged Apple's brand and reputation.

That was the right thing to do. Thank you Apple.

HOW NOW BROWN COW?  WHAT NEXT?

My instant vibe on what will follow. The existing Apple users of any Apple brand will feel this is more than fair. They will see this as proof Apple goes beyond what is needed to satisfy their customers. So this reinforces their loyalty and love of the brand. With media, I think that early part of every smartphone has problems and the magnitude is very tiny in the big scheme of things - when added with the free cases - pretty much shuts up most who may have wanted to pursue their Pulitzer Award dreams on the antennagate revellations. So the negative vibes should calm down. On sales - the iPhone is still having demand far exceed supply. For those who may have been deterred from buying an iPhone 4 on the rumors, or now on the admission of a fault - the effect will be miniscule. The iPhone 4 will continue to be a smash hit product for Apple and will become easily their best-selling iPhone model ever. Of the investors/owners in Apple stock, I am so bad at guessing what trhey do, but to me, the fair thing would be that this could have been a devastating situation, it is now cleared and Apple can return to growth and huge profits. I thing the investors will reward Apple for handling this crisis well and the stock should rebound (but I am not an investment analyst haha)

For some non-Apple customers who are considering an iPhone, this may give pause, but not in a meaningful degree. Especially as the story will now mostly diminish and vanish from the press. But be rest assured, the press will now be hunting other smartphones for Death Grips too, so the tables will be turned. Apple will have learned from this to test every future phone antenna every which way possible. The interesting story is what other new smartphones currently in the market, or launched this Autumn, will fall prey to the same problem (or if we find a famous big phone model is suddenly delayed for 3 months after today, there could be an antenna problem or some other such glitz and that manufacturer would want to avoid another such PR nightmare.

Well, the Q2 sales numbers for iPhone are coming out Tuesday and they will not be impacted by the Death Grip in any case, as the story hadn't broken to the mass market press by that time. (the Apple watchers expect mild decline sequentailly from Q1. I think they will report roughly flat sales, but we'll see on Tuesday). The actual sales impact of antennagate will impact Q3, in a very modest way, which nobody will really know. No doubt Q3 will be Apple's best-ever iPhone sales quarter, and the cost of these free cases won't be meaningful in the few dozens of millions of dollars, out of the Billions that Apple makes in profits. But the one long term redeeming factor, the silver lining in this little turbulence is for Apple - is that its brand loyalty will no doubt be strengthened by this story. The Apple loyalist customers - the 'army of fanatics' as Jonathan MacDonald would call them - will be even more convinced after this that Apple is the best tech company, that even when it stumbles, it gives the best possible solution to its customers. This will build Apple loyalty over time - helping then of course, to drive the profits that Apple can generate from its premium products, sold to customers who care for the brand. Yes, a win for Apple. 

Comments

[Jody]

Maybe you were following a different press conference.

I don't see that Apple admitted to anything. Their answer was that everyone else does it too, so it isn't our problem. But just to take your mind off things here is a free cover.

They were asked directly about the loss of signal with a single finger bridging the antennas and ignored it completely.

[Tomi T Ahonen]

Hi Jody

They admitted to over 16 thousand complaint calls coming to Apple directly over the past three weeks, explicitly about the death grip. And that Apple have engineers working to fix the problem which they hope is solved by September. What press conference were YOU following?

Tomi Ahonen :-)

[Nemus]

Sorry Tomi but i think Jody is right.
Lies, damned lies, and statistics. 16k sounds big, but Steve doesn't mention that number anywhere. You know it and i know it but average Joe doesn't do math that well :)
And to quote one comment from ArsTechnica:

"So, Mr. Jobs, you're saying these free bumpers will solve this problem?"

"No, you misunderstand me. We're not admitting there's a problem with the phone, we're just admitting that there's a lot of people who think there's a problem and apparently they want a free bumper that will act as a placebo to help them get over their delusions."

"So...uh, the phone doesn't have any problems."

"Of course not. Now, let me just show you how you need to hold the phone if you decide not to get a bumper..."

btw Mentioned there is that iPhone 4 drops <1 call more per 100 vs 3gs. Meaningless of course if we don't know number for 3gs. Do you have any info regarding that?

./Nemus

[kevin]

Tomi, I too think Jody is right. About .5% of iPhone users called Apple about this problem. Even if the same number called AT&T, that's still about 1%, which is not a crisis number for any mainstream consumer product. 10%, or even 5% is a very big deal, but not 1%.

Apple cast this hand-attenuation problem (what I referred to as Problem 1 in my previous comment on another post) as an industry-wide problem, not Apple's problem, just as I said they would. You may want to dispute that, but you'll have to bring evidence. And Apple lumped the touching of the gap (what I referred to as Problem 2 and a unique iPhone 4 problem) with this Problem 1, just as I said they would.

Apple's response will be seen by most as more than fair, and even generous, precisely because Apple convinced most that it wasn't just Apple's problem. For those who think it is still Apple's problem, they'll stay away. And those who have chosen already to stay away for whatever reason (including Apple-hate), will choose to see this as Apple's problem, and not an industry-wide problem.

[sami]

Well none of the tech blogs I read was convinced about Apple's explanations. Neither was Consumer Review. So not a huge win for Apple

Starting a smear campaign rises the risk of nasty retaliation spiral, bad for the industry as a whole. Showing competitor devices in their web pages in such negative context, I don't think I've seen that in this industry so far. RIM, HTC and Samsung have to react accordingly.

Oh and didn't you find the 1 more dropped call per 100 calls huge number? Dropped calls aren't usually measured per 100 calls. How many dropped call there was with Iphone thus far? 2 per 100? 5 per 100? That's a lot!

Ok, 1 more per 100, big deal? This affects people making calls left handed, right? About 10% of US population is reportedly left handed, so if no right handed person experience this, that's 10 more dropped calls per 100 left handed Iphone 4 users. Not a big deal, really?

Ok, how in proportion to the complains, 0.55% complained. If this affects mostly the people who complained, they get problems pretty much on every call. So much so that many of them were unable to call to Apple to complain!

Yeah, win for Apple.

[sami]

Correction: Consumer Reports is the publication that dropped the final straw and they're still not recommending Iphone after the explanations.

[Reda]

Jodi is right on this one, sorry. Apple said there is a problem in every phone and in customer heads but they didn't say there is a problem with their apple phone. :-(
It's really getting interesting because customer respond positively to outstanding customer service but here it's deception (and customer can see that too! they are not stupid, you know) under the false pretense of outstanding customer service

[mark]

So a group of us were together, and we did an unscientific test in one location. Between the four of us, we had an iPhone 4, iPhone 3GS, Blackberry Bold, and Nokia E71. With the latter three, if we hold the phone in a normal way (not a death grip) but closer to the bottom than to the top, we could make it drop 2 or 3 bars. If we cover most of the strip on both sides of the iPhone 4 or touch the gap (even with one just one finger), we could make it drop 2 or 3 bars.

So my general conclusion is that many phones have the holding problem. In addition, the iPhone 4 has a unique touch-this-spot problem, which is remedied by the bumper (which we tried with the bumper we have). The bumper doesn't remedy the more general holding problem.

There are phones out there that have less of a problem. I tried this on some of my older non-smartphones - Moto RAZR & PEBL, and LG Vu, and I could only make them lose 0 or 1 bar by holding them in a normal way (top or bottom)

A lot of people will be trying unscientific tests and finding that some phones are better than others, but because so many phones have a holding problem, I think Apple will come out of this just fine for the mainstream consumer.

[Manu]

Hi Tomi,

I often enjoy reading your views and predictions. And I should say, I seldom found them contradictory with mine set of views.

However, this time I'm not sure if you & readers of this blog were following same press conference.;)

I too feel Apple denied their mistake, infact they followed a strange way to offer clarification. I can understand that Mr.Jobs say take away free bumbers but our product is not having any problem. Is Mr.Jobs offering charity ???

I believe one should accept mistake gracefully but Apple only tried to give counter-arguments out of nothing !!!

I'm neither Apple hater nor fanboy but it doesn't appears me to be the right way to deal the issue.

[Mark]

Tomi, I've been reading the comments in tech blogs both in the US and the UK and there's quite a difference in attitudes. In the US there is very much a desire to see this episode closed and move on whereas the UK they're much less forgiving. Perhaps this mirrors the greater choice of handsets in the UK?

Either way, although I agree that this iPhone will sell well, the gloss seems to have come off a bit.

[Tomi T Ahonen]

ATTENTION ALL WHO LEAVE COMMENTS

THE 'ADMISSION' DISCUSSION ENDS HERE

This blog is very open to discussion and we welcome differing, opposing and even hostile comments - we have over 4,500 comments on this site, you can see we are most tolerant. But we will not waste the time of our readers on fantasyland commentary.

I said already, that I did not attend the Apple press conference. So I can only report on what is in the public domain. It is now Monday 19th June my time here in Hong Kong. I have just checked Google News and there are over 4,500 news stories about Apple's Antennagate. They are overwhelmingly unanimous, that there WAS an official Apple admission of a problem. Here is a small sampling of US major press:

Wall Street Journal "Apple admits"
Blooomberg "Apple admits"
Business Week "Jobs says Apple knew"
ABC News "Apple apologizes"
Voice of America "Apple CEO offers fix"
San Francisco Chronicle "Jobs apologized"

And the international press agree also:

Financial Times "Jobs apologizes"
BBC "Apple deals with problems"
ITN News "Steve Jobs admits"
Economist "Jobs acknowledged"

It is very clear that a) - Jobs admitted iPhone 4 is not perfect. He then admitted B) it has a dropped call problem which is worse than 3GS. He acknowledged that c) Apple has known of this since the phone shipped 3 weeks ago. He admitted d) they are working on a permanent hardware solution 'working their butts off'. He admitted e) iPhone has received over 16,500 calls from iPhone 4 buyers - which is nearly 1,000 per day. This level of complaints is by the way, a huge amount of complaints, completely beyond what has ever happened in this industry, by any phone maker, in any country, with any product release.

It makes NO difference to 'whether Apple admitted or not' that Apple also claimed other phone makers have this problem. Saying others do it too, is not in any way removing Apple's admission.

It makes NO difference at all whether this is considered by you the reader, or by Apple, that it is supposedly a 'small' problem or not - to Apple actually admitting the problem. The size of the problem is not in any way removing the fact, that Apple did admit to having a problem.

That Jobs later says in some Q&A about what is or isn't happening, doesn't remove the fact, that in the press conference arranged by Apple and videotaped by Apple and reported by 4,500 press - that Apple did admit its iPhone 4 has an antenna problem that is worse than 3GS before, and that the problem is that serious, that 16,500 people have called to complain, and it causes 1 in 100 more dropped calls than iPhones before, and that Apple is working to solve the issue. And that the iPhone is not perfect and it has a measured reduction in its reception if held some way.

Anyone who feels after that, that Apple did 'not admit' a problem with the iPhone 4, may freely believe so. I am sure they are happy to believe in Tupolev being the world's bestselling jet airliner, Yugo our most beloved car on the planet, that Betamax won the video recorder wars, and that Apple Macs sit on all desks of the world's PC users. And that Santa Claus truly visits all children at Christmas, and the Easter Bunny lives, and that Americans will be greeted as liberators, etc. You are fully entitled to hold any belief system you want.

But the children who can't deal with reality will have to play with the other children on some fantasyland blogsite. This blog deals with reality.

ALL DEBATE ABOUT 'WAS THERE AN ADMISSION' ENDS NOW

As of today, any more silly comments that mention 'Apple did not admit' will be instantly removed no matter what other valid comments they may contain. If thousands of real professional journalists came to the conclusion there was an admission, why am I wasting my Monday morning answering some readers like Nemus, kevin and Reda? I will let their comments stay here, forever as evidence of the hilarious level of denial that some people can live in, if these readers really believe like Jody before, that there 'was no admission'. Good luck with your delusions, please return to this site if you grow up some day.

They will of course get no further reply from me to their original postings here, and if they return to talk of other things - like mature adults, on issues based on realtiy - I will of course reply to those, but this blog will not waste any more time on 'was there an admission.'

Case is closed.

I will return later to reply to the others who had valid comments that were based on reality.

Tomi Ahonen :-)

[Call Middle East]

as in this world of communication people like to communicate with each other so free calling is very important for all the user nice blog i really like it.

[Raleigh North Carolina Med]

i very interesting stuff for all the readers i really like it and also share it with my friends.

[Adam Horwitz Mobile Monopoly Bonus]

Free iPhone cases? That’s a good deal! Who wouldn’t want a free item these days? And I do hope that it could really fix reception problems..

[Buraq]

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[MACIASSally]

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[pass4sure cissp]

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[Polly]

Il ya certainement beaucoup de détails comme celui de prendre en considération.

[Henry Peise]

The Christmas time is comming, and the most desire present i want to get, is the latest white iphone 4, can i get one? Tell you after Xmas.