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The World’s Love / Hate Affair with Apple

It seems as if the world is having a love/hate affair with Apple. People obviously love their products. How else would you explain the company’s incredible earnings report for the latest quarter, exceeding analyst expectation with a 78% increase in net income from a year ago.

The company sold 8.4 million iPhones during that period including 1.7 million iPhone 4’s which came out only three days before the quarter ended. Last week Steve Jobs said that the company had sold over 3 million iPhone 4’s in the first 22 days it was on the market.

Apple has also had great success with its iPad with sales of about 3.3 million in the product’s first three months.

Yet, despite all this success, Apple has had a bit of a tough time thanks to a minor flaw in its iPhone 4. As you probably know by now, the phone can lose signal strength if you touch a seam in the wrap-around metal antenna. I say it’s a minor problem because: Not everyone has been able to experience the problem – I couldn’t see any drop in signal strength when I tried touching that spot the other night and even if you are experiencing it you can avoid the problem completely by not touching that spot or by putting a case or “bumper” around the phone.

Consumer Reports which said that it can’t recommend the phone because of this problem said that one solution is to put a piece of duct tape around the crack. I don’t know what they recommend people not buy the iPhone 4 after coming up with such an elegant and simple solution. Seems to me that the only thing better then owning an iPhone 4 would be to own one with a piece of duct tape stuck to its lower left corner.

As you’ve probably heard, Steve Jobs held an unprecedented press conference last Friday to address the “antennagate” issue. I was invited to the event but elected instead to finish my vacation on Cape Cod rather than rush back to California on a day’s notice to sit in a room with other journalists to listen to Steve Jobs make excuses. I did, however, catch the live blogs of the press conference and watch the video replay on Apple’s website. If you have a chance to watch it, I’m sure you’ll enjoy Jobs performance, especially early in the speech where he tries to make the case that the problems with the iPhone 4′s antenna are no different than those of other smart phones.

To make his point, he showed videos of people gripping a Blackberry Bold 9700, an HTC Droid Eris and a Samsung Omnia II that showed all phones lost signal strength if gripped in a certain way. The Blackberry Bold’s signal strength meter dropped from 4 to 1, the HTC Droid Eros from 4 to 0 and the Samsung Omnia from 4 to 1. When the person in the video released his grip, the bars went back up.

Jobs demonstration didn’t convince makers of other phones. Research in Motion, which makes the Blackberry quickly retorted that “Apple’s claims about RIM products appear to be deliberate attempts to distort the public’s understanding of an antenna design issue and to deflect attention from Apple’s difficult situation.”
Other phone makers also chimed in. The All Things Digital blog quoted HTC saying “[Apple] apparently didn’t give operators enough time to test the phone.” Motorola, according to the site says that it has avoided using external antennas “because consumers don’t like being told how to hold the phone.’

Nokia issued a statement that “antenna performance of a mobile device/phone may be affected with a tight grip, depending on how the device is held. That’s why Nokia designs our phones to ensure acceptable performance in all real life cases.”

Whether accurate or not, what struck me about Jobs comparison of the iPhone to the competition was that it was an admission that the iPhone is basically just another phone with some of the same flaws as other phones. Every other press statement about the iPhone positioned it as a revolutionary product. In its press conference when they introduced the phone and in subsequent ads, Apple positioned the iPhone 4 a product that “changes everything: again.”

Jobs also admitted that the iPhone 4 drops slightly more calls than the 3G. Although he didn’t say how many calls either phone drops, he did say that the difference is less than one additional call in every hundred calls,
To make his users happy he promised a free case to any iPhone 4 buyer (offer expires September 30th) and said if that doesn’t make someone happy they can return the phone for a free refund with no restocking fees. He said he believed that AT&T would wave their early termination charge.

Job also admitted that he knew there could be a problem if people touched the antenna in that spot but, said “We didn’t think it would be a big problem because every phone has this issue.” He also said, “We went to a lot of trouble to show people where you can touch the antenna. You might as well put a red flag there.”

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