This is now BAD news for Apple, as Consumer Reports won't recommend iPhone 4, finds death grip to be proven

Guys, I do NOT hate the iPhone or Apple. I told you in my iPhone 4 review that it was the best iPhone yet and a big leap forward. But I am tracking the smartphone wars this year, and have to report all the major facts. And this Consumer Reports incident is now a major fact. Now that 'death grip' story has been escallated very very badly for Apple.

APPLE SPINS STORY, IS ONLY DISPLAY GAFFE

So what do we know. First some early technology blogs started to report that holding the iPhone 4 could cause the signal to be lost (ie dropped calls). Then the story got some media attention, and Apple's CEO Steve Jobs made an uncharacteristically non-elegant (for Apple's smooth PR machine) gaffe, suggesting iPhone 4 owners should hold the phone differently.

Then as the complaints continued, Apple issued a formal statement about it, suggesting the error was in the display of the network connectivity bars on the display of the iPhone - that Apple had been calculating wrongly the display. So Apple suggested there was no technical problem in the antenna design, that it was a display problem where the connectivity indicators would decline while the connection was still strong. Sounded plausible and it seemed like the story was going to be over. Meanwhile Apple suggests consumers can buy the 30 dollar rubber bands to cover the sides of the iPhone (something many complain is not the responsibility of iPhone 4 owners to spend more to fix an Apple error)

CONSUMER REPORTS VERIFIES DEATH GRIP

Now we have the most trusted and neutral US consumer products reviewer organization, Consumer Reports, which has tested the iPhone 4 and came with a devastating conclusion. They were able to verify in laboratory conditions that blocking parts of the outside of the iPhone 4 would cause a 20 decibel drop in the connectivity on the AT&T network. They also tested other phones and found that for example the iPhone 3GS did not have this problem. Therefore, Consumer Reports ends the review that this problem is so signficant, it causes so severe consumer problems, that the iPhone 4 is 'not recommended' and they suggest buying the older iPhone 3GS instead. See the story at Into Mobile who entitled their story as 'Liar liar pants on fire'

This is now escallating the problem enormously. We now have tons of parodies and jokes on Apple's death grip, even UK car show Top Gear used the death grip to poke fun at their test driver 'The Stig'. The iPhone 4 is becoming synonymous with death grip phones, much like Toyota became synonymous with cars without brakes.

First, this is very bad image for Apple. They are caught with lies. They said in public that the problem with the iPhone was the display of connectivity. Now Consumer Reports verifies that a - the iPhone 4 does have an antenna 'death grip' problem - that it is so severe it will kill phone calls - and this is not typical of all phones, for example Apple's own previous phone iPhone 3GS does not have this problem. So Apple must have known about it. And yet they issued that ridiculous statement that 'its only in the display'. They are caught with lies to the industry, so Into Mobile's conclusion - 'Liar liar, pants on fire' is justified - and very uncomfortable for Apple. How can the smooth and PR savvy Apple fail so badly with this kind of error. This certainly looks a bit like an Apple 'Toyota moment'.

Then come the demands for recalls. I was surprised to find how many very high profile PR gurus are already weighing in on Apple's iPhone 4 Death Grip problem, and saying the only way to get past this, is to do a total recall, fix all the iPhone 4's and obviously do it for free (rather than demanding all iPhone 4 owners buy a new 30 dollar rubber band to cover the problem). Just the rumors of a recall have Apple shares taking a severe decline.

BUT NOT ALL iPHONES EXPERIENCE IT

So I was watching Bloomberg news and there was a Consumer Reports person being interviewed and I think it was very revealing what was said. The man said he had used the iPhone 4 at their office right after they got it, and he was unable to replicate the problem. And he was already willing to accept there is no systematic problem. Then he took his iPhone 4 home and found the problem intermittently at his home. And then when Consumer Reports did their lab tests (on 3 separate iPhone 4 models, bought from 3 separate outlets) they were able to verify the problem and measure it. The 'death grip' will not 'eliminate' all connectivity, it will dramatically reduce the connection - ie by 20 decibels. So if you are in a very well connected location (strong signal) then even after your iPhone 4 suffers 20 decibels of signal loss, you still will maintain enough of a connection to carry on a call and never notice the problem. But if you are in an area of weak or modest connection, then the 20 decibel decline will result in a dropped call.

That is why some users experience the death grip often - and find it infuriating - and others find it rarely - and considering how lousy the US networks are (AT&T hello?) - will just think its 'normal' network drops, and not even really personally notice the death grip, thinking it was just a 'standard' dropped call incident. Obviously this will be far more - FAR MORE - observed and hated phenomenon in all the countries with perfect cellular networks, like in Japan and Europe and Russia and China etc haha..  Where dropped calls are nearly non-existent, any Death Grip' incidents will be immediately spotted.

IMPACT TO APPLE

First, there is an immediate short term PR disaster. The best thing for Apple to do now, is to immediately confess up to it, to promise all buyers an orderly and free recall with a fix, and obviously halt sales of faulty iPhone 4 phones while that problem is fixed with the millions of phones in the pipeline. Then issue an iPhone 4B or whatever clearly identified 'fixed' version. This would obviously be a very costly PR nightmare and hit Apple profitablity and also hit iPhone 4 sales severely. It would be a big gift to the rivals, in particular the Android phones - and buy time for Nokia to release the N8 and RIM to release its touch screen/QWERTY Blackberry.

The more likely way forward by Apple - judging by recent past - is to 'fight it' and deny and use the old tired spin of PR to fight it (I saw some Twitter comments that Apple is now removing some forum postings which mention the Consumer Reports story?) This is classic outdated Cheney-Drumsfeldian spin doctor approach - deny deny deny and fight the story. The modern Web 2.0 world won't put up with that, and if Apple doesn't understand that soon, they may have something far worse than a 'Toyota moment'. If they go against the Blogosphere and Twittersphere and the social networks, they would have their 'Kryptonite moment' ie Toyota moment (failing brakes) only hurt Toyota profits and market share. Kryptonite (denying that their locks were not secure) nearly bankrupted the whole company. Similar to the Sprint 1,000 moment for Sprint-Nextel, which still today is hurting the company's competitiveness and devastated its market share to the point of the CEO, CMO and CFO being fired.

The conclusion is clear - its a fact that there is a Death Grip problem with the iPhone 4. It can not now be denied. The longer Apple denies it, the more foolish it will look. The longer Apple delays its free fix, the more the world will hate Apple for it. And where the US market has been kind to Apple so far, the rest of the world will not be as kind, most of all, because the Death Grip will be far more easy to verify outside of the USA. So the longer Apple delays its apology, the more all types of news organizations and tech sites and consumer support organizations will test - and verify - the Death Grip and cause more bad publicity for Apple.

IS STILL BEST iPHONE

Now, what of the actual sales? There is a hungry lot of 20+ million users of older iPhone 2 and 3 models, whose contract is up now or soon, who can't wait to get the latest iPhone. They won't buy the iPhone 3GS, and they will love the iPhone 4, which is such a huge improvement over the iPhone 2 and iPhone 3. The iPhone 4 will sell very very well to existing Apple users, the loyalists. And they have no problem either adjusting their grip - or more likely - to pony up the extra 30 dollars and buy the colored rubber band solution. 

The problem for Apple's growth is that it needs NEW users to buy the iPhone 4 now. They NEED growth, to try to match the growth that RIM is having, that HTC is having (and Nokia is having) and the astronomical growth rate of the Android family of smartphones (which already sell more than iPhones globally). This is NOT the time to have a problem - and Apple's problem is FAR worse than any with smartphones by Nokia or RIM or HTC or Samsung or Motorola - as Apple only has one new phone model per year (something I have been urging them to change for more than 3 years now, they need more than one model - do not put all your smartphone eggs in one basket, Apple, please spread your product line to more than one model, please!)

So if Apple halts its production to fix this, that would be devastating market share crash for Apple, right as the company formerly known as Apple Computer now calls itself a mobile company. The iPhone drives most of Apple's revenues and most of its profits. If its only iPhone model falters, Apple is deeply in trouble.

One more angle - remember many iPhone 4 buyers had to 'order' their smartphone and had to wait for delivery. Yet this problem was discussed right from the launch. Some buyers of any goods (cars, TV sets, phones..) will experience 'buyer's remorse' ie they are not sure they bought the right product, after they have the new gadget in their hand. Three years ago, there was no rival to iPhone's multitouch touch screen and its great internet access. Now most Androids can match the user experience (to common users, obviously tech geeks will find finer points where Apple continues to lead). There always are returns for any phone model. But this time, with all the negative publicity about the Death Grip (and often other gripes a given expert may have about the iPhone 4) - I am afraid this will be the most returns Apple has ever had with its iPhone models. In that way it could be like Motorola's Razr moment, when parents loved the Razr, bought it for kids, who hated it (because you couldn't hide the phone under the sleeve and send SMS text messages blindly). The Razr was one of the most returned phones of any major Christmas launch of a phone and it stunned the sales departments of various operators/carriers as tons of Razrs were being returned, and the buyers asked to replace it with a phone by some other manufacturer like Nokia, Samsung, SonyEricsson etc (and always the flip phone was being replaced by candybar phone factors). Later as we studied the issue, we found they were almost all Razr models given as gifts for kids. Parents loved it, their kids hated it..

The longer Apple denies the problem the worse it will get. If Apple doesn't want this to be the start of the end for the short reign of the iPhone, its time now to confess, to apologize, and to do an immediate global recall of the iPhone 4, to fix the antenna and end the death grip. Come on, Apple, you are a good company caring for your customers aren't you? You know it was a faulty product that should not have been launched. Its not like there aren't bad smartphone launches, we've seen Nokia stumble with the N97, Google fail with the Nexus One and Microsoft do a rapid exit with the Kin. The sooner Apple admits and fixes this, the sooner it can return to the image of being the hero and leader of the consumer experience in smartphones. They could turn this disaster into an opportunity. But the clock is ticking..

Comments

[dissident]

Ironically, CR still has them at the top.

[Jody]

Sorry to be picky, but the things that stop cars are "brakes", not breaks. Unfortunately for foreign speakers English has many homophones. http://en.wikipedia.org/wiki/Homophone

[Beth Mahoney]

This phone seems to be a complete disaster for Apple. Although they have sold a lot of them their reputation has taken a huge hit, customers are filing law suits, and it seems Apple will have to recall this phone. I can't believe Apple would even put out a product like this..

[Tomi T Ahonen]

Hi dissident, Jody and Beth

Thank you for the comments.

dissident - yeah haha, ironically eh. Best phone in tests yet can't recommend. Ironic.

Jody - hey, its a blog and obviously am rushed. I'd catch that when I do a major re-read of the blog. But thanks for the sarcasm. I'll go fix the brakes.

Beth - yeah, very very many things going wrong for Apple this time. The stolen prototype and Apple's Gestapo tactics to retrieve it, then Steve Job's bizarre comment 'hold it differently' and the bogus 'network signal indicator' software bug story and now this. And there were some problems with the retina display with yellow dots etc. All speaks of the phone being too rushed and Apple being hostage to their one phone model per year (crazy) strategy. If they released 4 phones per year, and one was found to be defective before launch, no problem. They'd delay its launch by a month, no biggie and the stock price would not even budge but Apple fans would be guaranteed a solid product. Now that they are married as the 'mobile company' - with their one annual phone, they had to launch in June or the stock price would take a huge hit (remembering that the non iPhone 4 model sales of the older iPhone models in April-June quarter are dismal, and Apple cannot take that negative press if their sales 'crashed' in this quarter while the Android phones are jumping off the shelves)

Thank you all for writing

Tomi Ahonen :-)

[kevin]

Tomi, I agree that Apple needs to issue a response and soon because CR carries some weight, even if misplaced, at least in the US. And I believe Apple is preparing one.

But I wanted to point out that there are two separate problems. Problem 1 - holding the phone. Problem 2 - holding the phone such that your finger touches the gap between antennas.

Problem 1 is true for all phones. See http://www.youtube.com/watch?v=amPG52DVQuk for E71 (this was posted back in May but not enough people or media cared about the phone or about the problem to make anything of it.) I also looked through a bunch of cell phone user manuals, and they all have sections titled something like "BLOCKING ANTENNA WHILE
MAKING A CALL: CORRECT/INCORRECT FINGER POSITION", usually with accompanying pictures showing the correct way to hold a phone. Even Nokia manuals have something similar.

Apple made Problem 1 look worse than it was by the weird allocation of reception performance to displayed bars.

It's also been pointed out to me by co-workers who are RF engineers that CR didn't really perform the tests the way they should've. There is one such report online at http://mobileanalyst.wordpress.com/2010/07/12/iphone-4-report-consumer-reports-study-is-full-of-crap/

Problem 2 is unique to iPhone 4, though it could be lumped with Problem 1. Just as you don't hold a cellphone and cover the camera lens when taking a picture, or hold a cellphone and cover the speaker when trying to play music or when following turn-by-turn nav instructions, one shouldn't hold a cellphone and bridge the gap when trying to use the cell network.

If I'm Apple, I'd be careful about what problem I admit to and point out only those things that differ, for better or worse, from other cellphones. Anyway, agree with you that Apple mostly controls how this will be resolved and dissipated in the days ahead.

[Alex B]

As a former electronics engineer who is aware that anything to do with wireless technology is a complex black art due to all forms of phenomena, from multipath distortion to interference, Apple have since iPhone 2G focused much more on the GUI than the 'phone' element. That is what happens when you don't purchase or work with a company with decades of experience in wireless, such as Nokia, Motorola (they had a chance!) or other. Even Apple's previous and current WiFi equipped laptops suffer (wireless) problems that are lesser on other (plastic) Windows laptops.

With iPhone 4, Apple have as before, put aesthetic over practicality, and that does not just refer to the use of an exposed antenna. The camera may be excellent, but there is no mechanical shutter release (making it easy to drop the phone - I know, I had a 3GS for 3 months, and it was a fiddle to take photos - oh, and it dropped calls all the time too) and there's no self timer on the camera either. Not to mention, no ability to Bluetooth content to other devices, something Sony Ericsson, Nokia and Samsung phones have done for years).

Whilst I"m a massive Apple fan (Mac Mini their most sensible and 'trustworthy' product in my view), they have got to stop over hyping specific features that in the long run just don't matter due to their over reliance on being flashy rather than really that useful on a day to day basis. Note that the HTC Desire, which has received ZERO hype is not only receiving excellent reviews across the board, but doing HTC well too.

Apple need to get back to their roots and that of NeXT (go watch the 1992 NeXTStep demo on YouTube!) and offer versatility and practicality to match the bling. (And more reasonable pricing, the achilles heel for NeXT.)

[HCE]

As someone who owns an iPhone 4 and who has had no problems with it, let me say a few things.

1. If what CR reported is accurate then the isssue is overblown. No problem that can be fixed with a one-inch piece of duct tape can be regarded as that terrible. I'm not saying that what's going on is good - far from it - but it isn't (yet) the disaster that people are making it out to be. Also, it has been just about 3 weeks since the product launched. There are bound to be bugs in any new product - so give Apple time to fix it before crucifying them. That said, if by (say) August end, the problem still persists, I'll jump on the Apple-bashing bandwagon.

2. It is amazing that there are so many armchair quarterbacks insisting that it is a hardware problem. Let us wait for the software update and better analysis before coming to that conclusion. If the software update fixes issues then people who insisted that it was a hardware problem are going to look fairly silly. My (purely subjective) feeling is that the software update is going to be more involved than just changing the algorithm for how many bars get display. Apple never says much and in this case they (IMHO) are probably hiding the true extent of the software fix. Just changing the algorithm for determining number of bars should not take this long to put out.

3. Apple's response to this issue has been nothing short of terrible. Starting with Steve Jobs' comment about "holding it differently" to the press release belittling the issue, it seems a textbook example of how not to handle an issue such as this - very surprising given how good Apple PR normally is. What would have been infinitely better would have been to
a. Say (very briefly) that a software update is being worked on to fix the problem.
b. Tell people that regardless of when they bought the phone, they have until 2 weeks after the update is released to return the phone for a full refund.
c. Let people buy bumper cases at cost price (which should be something like $5, instead of $30) until the software update is out.

- HCE

[Test]

Even negative reviews help businesses like Apple. Bad PR doesn't mean less sales.
GoDaddy proves this.

[Paul G]

My iPhone 4 has the death grip problem, even with the bumper. Also, the signal strength display might well be faulty, but in my area of patchy coverage, the phone is seldom reachable when sat on my desk in exactly the same place as my 3GS.

Operators might not publicize this, but there is a view that the iPhone receiver generally is less sensitive than other devices.

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[Tomi T Ahonen]

Just as a final comment from me to all

Obviously as Apple admitted to the Antennagate issue in the big press conference, there is a problem. As I blogged that Friday, I thought the matter was over. But because Apple then had to do the dumb thing - to provoke rivals by claiming that everybody suffers from Death Grip (not true, all phones suffer from SOME signal loss) now the world's handset makers and the world's consumer watchdogs are rushing to test Apple's claim and time and again Apple is in the news, with consumer watchdogs reporting again and again, that Apple has the worst Death Grip problem and this is not symptomatic of any other phone and there so far is no watchdog that has put any other phone in the 'cannot recommend' category, but Apple is already not recommended by Consumer Reports in the USA, as well as similar watchdogs in Germany and France.

So in the end, yes, Apple messed up with its design, placing aesthetics ahead of functionality. It could have had this pass as a minor goof, if they left it to the acknowledgement, apology and free bumpers in the press release. But Apple then did the dumb move of antagonizing all rivals of the industry and now the Antennagate Death Grip lives on with daily press coverage. Both Samsung and Motorola have released formal ads spoofing the Death Grip and Apple cannot escape the bad publicity around it.

That was a rare bad call by the usually bulletproof Apple PR gang.

Tomi Ahonen :-)

[Mobile Phone]

With iPhone 4, Apple put aesthetic over practicality, and that does not just refer to the use of an exposed antenna. The camera may be excellent, but there is no mechanical shutter release (making it easy to drop the phone.

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