Apple Computer's vaunted marketing machine seems to slip a gear when things don't go its way, but in the eyes of their loyal customers, they can still do no wrong. I just finished listening to the CNBC Power Lunch coverage of Apple’s press conference in Cupertino that featured no less than seven commentators providing real time analysis of the proceedings. This was all the more ludicrous given that no cameras were allowed into the event and the commentators were left responding to texts and emails from producers inside.
First the highlight: if you bought one of the 3 million probably defective iPhone 4s that have been sold since they were released 3 weeks ago, you’ll get a free bumper or "case" that mitigates the antenna problem. That’s it--essentially what everyone and his dumb cousin have been predicting for the past week. The case costs about $1 to make, so the fix is clearly not going to break Apple. The crazy thing is that Apple managed to turn the whole situation into an "event" that has virtually no downside for them and it has kept their name (and the iPhone brand) in the news for weeks.
Apple was apparently caught flat-footed when reports of the antenna problem broke concurrently with the iPhone 4's release. Mr. Jobs indicated that they began receiving complaints "22-days ago", which a quick check of your calendar will tell you is June 24, the day the iPhone 4 went on sale.
In their initial descriptions of the iPhone 4, Apple had highlighted the wrap-around antenna as one of their unique design features. Unfortunately, touching the lower-left corner of the device diminished the signal power significantly. The problem apparently stems from the fact that different frequencies call for different antenna lengths (i.e. the optimal length is ¼ of a wavelength), and touching the device at that point apparently connected two of the elements together, changing the length. This was a bigger problem for lefties, but as only 6% of people are left-handed, it was probably a good design choice (don’t tell my left-handed wife).
Engadget reported that Apple's initial response was to issue a statement advising users to "avoid gripping it in the lower left corner in a way that covers both sides of the black strip in the metal band". Steve Jobs himself responded in one of his spontaneous e-mail answers: "Just avoid holding it in that way" (i.e. the phone’s okay, the customer is broken). Not known for their comedy, even Nokia got into the act with a blog titled "How Do You Hold Your Nokia?"
Compounding the mess (and further shifting the blame), on July 2 Apple published a letter saying that the iPhone is okay, but a previously undiscovered software glitch (i.e. if all else fails, blame the software) causes it to display signal strength far greater than what is really available.
The final straw came when the well-respected Consumer Reports confirmed the antenna problem and said they could not recommend the device. In good engineering fashion they recommended covering the problematic lower-left corner with duct tape.
To put the matter to rest, Apple announced that they would hold a hastily arranged press conference and speculation abounded about whether Jobs himself would take the stage or pass the unpleasant assignment off to one of his underlings. Not one to let an opportunity at unabashed grandstanding to pass, New York Sen. Charles Schumer got into the act, sending the company a letter requiring them to provide iPhone 4 customers with a clear, written explanation regarding the phone's reported reception problems, and to fix the problem at no extra charge.
When the curtain rose, it was Jobs himself on stage and he proclaimed, "We're not perfect…and phones aren't perfect." He went on to point out that other handsets have antenna problems too. Some of the commentators characterized Job’s performance as "snarky", which for those not familiar with British slang means "sarcastic, snide, short-tempered, or irascible". Wear a turtleneck and maybe you can get away with it too.
While some might point to the massive mishandling of the antenna problems as one of the biggest PR fiascos of all time, in Apple's case, it really doesn’t matter. Product awareness is through the roof, and as one sage observed, Consumer Reports is read by 50-somethings and iPhones are bought by 20-somethings! The brand loyalty Apple has spawned among consumers is so great that the normal tenets of marketing simply don't apply.
With a marvelous combination of technology, pizzazz and attitude, Apple has built up such brand equity, that they can torture their customers with poor battery life and terrible audio quality, and they'll come back begging for more. Basically, they occupy a marketing universe that operates by a different set of rules, so we can expect customer defections close to zero. Enterprise users as a whole are less forgiving, and dissatisfied users complain to IT managers who in turn overreact to negative user feedback. That sort of calculus doesn’t affect Apple, and Apple users chose that phone to begin with.
At the end of the day, users who hate Apple will continue to do so, those who love Apple may or may not use the free bumper they're provided, and the iPhone 4 will continue to sell in the millions.
iPhone users, enjoy your new bumper.
