Apple Inc. should have listened to its experts. It didn’t.
Now, the company is experiencing the limits of goodwill and the corrosive effects of public dissembling.
News reports indicate an Apple engineer and others at an unidentified service provider in 2009 warned the company of reception problems with the iPhone 4’s design.
I don’t know exactly what Apple did when the engineers voiced their concerns but obviously the company went ahead to build the iPhone 4 with the antenna embedded in the housing.
Now, Apple is facing complaints about dropped calls from customers and got a black eye from Consumer Reports magazine, which after conducting some controlled tests declined to endorse the Apple smartphone. In fact, Consumer Reports cautioned against buying the phone and suggested Apple pay for the fix, a rubber “bumper” that effectively shields the waning signals from degradation.
Apple didn’t handle the entire event right from the beginning. After making the first blunder of not listening to its engineers, the company muddled up the situation by offering explanations that even many of its most ardent fans could not believe.
One of Apple’s the-goat-ate-my-homework explanations included the befuddling “simple and surprising” fact that: “the formula we use to calculate how many bars of signal strength to display is totally wrong,” the company said in a statement.
Apple added: “Our formula, in many instances, mistakenly displays 2 more bars than it should for a given signal strength. For example, we sometimes display 4 bars when we should be displaying as few as 2 bars.”
Many frustrated iPhone buyers and AT&T customers thought that explanation was a load of hogwash. The real culprit, according to the Consumer Reports investigation was the iPhone 4’s antenna design. On Friday, July 16, Apple will presumably offer additional explanations.
What has this debacle cost the company? A bundle in market value and even more in lost goodwill. Apple formally released the iPhone 4 on June 24 and since then the company’s market capitalization has fallen more than $10 billion.
The shares rose to a record high in June ahead of the iPhone 4 release, propelling the company past Microsoft Corp., as the world’s most valuable technology company, but began declining after Apple customers reported problems with the antenna.
As at Thursday, July 15, Apple’s market value was $228.8 billion, down $17 billion from $244.8 billion on June 24 and well below the all time high of $253.88 billion from June 21.
What may prove even more costly to Apple is the goodwill it is losing and may further lose if it continues to ignore customer concerns or talk to its varied audiences in idiotic techno-jargons. At this point, a recall or an offer to give each iPhone 4 buyer the “bumper” could save the company a lot of unnecessary headache.
Apple has built a large following of fans that swear by the company and buy not only its products but also its publicly traded shares. On the other hand, the company also has a legion of consumers that abhors its business policies—such as the exclusive contract with AT&T as the sole seller of iPhones in the United States—and would like nothing but to see it fall flat on its face.
Apple can easily shake off the iPhone 4 problem. However, the controversy has already smeared the company’s carefully cultivated image as the world’s most innovative consumer electronic company. That’s an opening rivals will be keen to exploit.
All these could have been averted, simply by listening to an engineer already on Apple’s payroll.
Well, I am may be outdated, but I am used to culture, where something was sold if it was ready and companies did not waist
time to calculate when is time to release the product, they used the time to develop it,and as we know here in America is no time enough to make ready something the first time.
I worked for a tech company that planned something and I went on record as saying what they were doing was a mistake. They did it anyway with the end result I'm out of a job and they have gone from 50 people to 5. Don't under estimate the ability of upper level management to ignore the best advice from their lowly staff. Priority level: 1=Marketing, 2=Sales, 3=Management, 4=Engineering
I have had problems with an 80G iPod too where they have made a fundamental mistake in an audio algorithm, and even after advising them what the problem was they haven't addressed it. They don't really deserve their current reputation and standing in the tech community.
@Mar, I think your comment about this article is not fair. Apple is a company that takes top segments in all the major TV networks when they debut a product. Cable news relentlessly cover them free. It remains the most innovative company on earth from many angles. I think Mr Ojo's article is timely and needful. This is news because I am yet to see a firm that has the followership as Apple. Like it or hate it, it is the leading TECH firm on earth and it makes products that are light years ahead of the competitors.
My concern is that Mr Ojo and others should be investigating the Apple design way. What makes them great. Like the old TQM, Toyota Kaizen, what is Apple? Is it Jobs Perfection? what and tell us?
Correct. I would add that: the risk of getting some aspects of a new product into the market wrong is part of the cost that has to be rigorously estimated. As long as this cost is less than the cost of not putting a new product into the market, companies will more often go ahead with the new product launch than not.
PS. Companies should be very careful with possible faults that might endanger lives.
A flood of reports or just media hype grabbing a chance to score points. It was interesting to hear Jobs attempting to put some quantitative measurement concerning the flood. Reporters should check numbers and ask the basic question "Compared to what?"
Hi Mar, Thanks for the note. I take my job seriously and consider each story carefully before writing. Apple is a major company and the coverage it gets is well deserved but you should also know that EE Times reports on other companies and issues with the same intensity. I look forward to future comments from you.
Please Mr. Ojo, we need you. We need you and you've let us down. You are an influential person in a position of responsibility. We need you to report on the news that matters, not to follow the herd of helpless hacks with their breathless headlines repeating unsubstantiated rumors and second hand stories as if they were facts. You have let us down.
Join our online Radio Show on Friday 11th July starting at 2:00pm Eastern, when EETimes editor of all things fun and interesting, Max Maxfield, and embedded systems expert, Jack Ganssle, will debate as to just what is, and is not, and embedded system.