HUA HIN, Thailand - The silence was deafening, especially for those who had
recently purchased an iPhone4 and were waiting for the manufacturer to admit
that it did make mistakes and that it did not, after all, produce the best
products on the planet.
With Consumer Reports (the website of the non-profit Consumers Union
organization founded in 1936) publicly failing to recommend the iPhone4, with
analysts estimating the cost of a recall at US$1.5 billion and with Apple
telling people to use a plastic cover on their new $300 handset, the whole saga
has become a bit of a fiasco for the Cupertino-based company.
The problem is with the gadget's exposed antenna, which doesn't function
properly if the smart-phone is gripped in a particular way
or held left-handed; the result is fewer bars of cell signal strength,
prematurely disconnected phone calls, and data outages.
Apple initially denied that the problem even existed, then suggested that users
hold the phone differently, then removed a number of lengthy topics about the
issue from their support forums, before mentioning that a "bumper" accessory
would solve the problem ... for an additional $29.
Many Apple aficionados are unperturbed by its faults and the inability to make
a phone call if you happen to be using your left hand and don't have the
dexterity of Jimi Hendrix, as the kudos of owning such a revered device appear
to be paramount to whether it actually functions or not. The brand is hip,
buyers want to be seen with it, the units are still selling, and Apple knows
it.
A recall, which many consumers are now calling for, could be a costly venture
for Apple. With an estimated 300 million handsets already sold or pre-ordered,
the cost to the company could be as much as $900 million. Industry observers
estimate adding $100 per unit to fix the problem, resulting in a total
estimated cost of over a billion dollars. The longer Apple waits the bigger the
bill will get, as up to $200 million could be added every week that the iPhone4
continues to sell.
Apple has now announced a press conference for the morning of Friday July 16,
California time, to discuss what has become a huge public relations migraine.
But the company still continued to play down the issue with statements like
"all iPhones have reception issues when held wrongly" and "a software glitch is
causing more cell signal bars to show than there actually is". A software patch
was released on Thursday, but the grievous grip issue remains.
According to a report in the Wall Street Journal, there were already internal
concerns about the reception problems before the phone was released and Apple
engineers were aware of the risks associated with the new antenna design as
early as a year ago. Apple's highly secretive approach to product development
prevented any effective testing and evaluation of the unit in real-world
environments.
The company's share price has dropped by 2% this week and 7% in total since the
iPhone4 was launched. Though this incident isn't likely to damage the company
or its rapidly expanding profits in the short term, the escalating hubristic
approach that Apple has displayed in this and other recent incidents such as
the attacks on Adobe, restrictions on developers, and heavy-handed dealings
with a lost prototype, may well have a greater impact in the long term.
Industry
Microsoft has jumped on the tablet-computing bandwagon with announcements that
a number of Windows 7 devices will be launched in the coming months. Chief
executive Steve Ballmer told delegates at its Worldwide Partner Conference this
week that entering the slate market was "terribly important" for the company.
Asian manufacturers including ASUS, Samsung, Toshiba and Sony are all working
on hand-held slate computers to run a streamlined version of Windows 7.
Microsoft also admitted that Windows was not designed for a touch-screen format
and the operating systems have been fundamentally built for keyboard and mouse.
The company also reaffirmed its intentions with cloud computing technology and
the increased investment and development of the Windows Azure cloud-based
platform.
Telecoms
Also in the Microsoft pipeline is a Windows 7 phone that offers a complete
revamp of the present mobile operating system, Windows Mobile 6.5. Only a few
teasers were offered at the conference, such as a different interface to those
currently used on the iPhone and Android units called hubs. The company
admitted that its existing smart-phone platform was heading down the wrong
path; further evidence of this is evident from a declining market share.
The unit is likely to be marketed towards business users with communication and
productivity applications at the forefront. It has a potential advantage over
rivals Apple and Google already as most businesses use Microsoft Office, so
seamless integration without the use of third-party workarounds should give it
a boost.
If there is flexibility with applications and developers, a wide range of
business and entertainment apps, and some serious quality control, the unit
could be a contender to industry leaders iPhone and Android.
With Microsoft on the chase and Apple taking a beating there was no better time
for Motorola to launch its highly anticipated Droid X smart-phone this week.
The Android-powered device comes with an 8 megapixel camera, 1GHz processor,
and 8GB of internal storage. Priced at $200 with a contract from partner
carriers it is likely to give a boost to Google, Motorola and Verizon -
providing that it can actually make calls without an additional rubber jacket.
Martin J Young is an Asia Times Online correspondent based in Thailand.
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Industry
