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Apple must again choose between good and evil

So will it recall the faulty iPhone 4?

It's Google that has the company tagline "Don't be evil", one that it has found harder and harder to stick to as it's gone from underdog to an advertising-driven search behemoth. But it is Apple that is now grappling with the conflict between profit, or keeping its fervent customers happy.

After Apple launched the iPhone 4, a fault came to light involving the placement of its antenna. Scores of users complained of experiencing poor reception, or reception that cuts in and out intermittently. To which Apple replied with a statement in which it simply argued that people were holding the gadget wrong:

Gripping any phone will result in some attenuation of its antenna performance with certain places being worse than others depending on the placement of the antennas. This is a fact of life for every wireless phone. If you ever experience this on your Phone 4, avoid gripping it in the lower left corner in a way that covers both sides of the black strip in the metal band, or simply use one of many available cases.

Perhaps not surprisingly, that wasn't enough to satisfy many of Apple's customers, and the grumbling on user forums and in the media gathered steam.

Apple again responded, this time with a little more detail about a fault with signal strength, but not a lot less arrogance: while admitting it had made a simple mistake in the way the phone displays signal strength, thereby giving false readings to users, it still had the gall to start the letter like so:

The iPhone 4 has been the most successful product launch in Apple's history. It has been judged by reviewers around the world to be the best smart phone ever, and users have told us that they love it. So we were surprised when we read reports of reception problems, and we immediately began investigating them.

That investigation left Apple "stunned" when it discovered it had got its signal strength formula wrong. To fix this, it said it would adopt AT&T's recommended formula for calculating how many bars to display for a given signal. That it was using its own (totally wrong) formula in the first place is just classic Apple: it thought it knew better.

Incredibly, it also said it would be making "[signal strength] bars 1, 2 and 3 a bit taller so they will be easier to see". In other words, they still couldn't do anything about the faulty antenna problem and they couldn't improve signal strength, but they could sure as hell make very weak signals look that bit more healthy by making the bars bigger. Strike two for evil?

But the complaints about the antenna issue continued to flood in, and the matter came to a head when the influential US consumer watchdog Consumer Reports issued a statement on Monday saying it could no longer recommend the iPhone 4 because of the antenna problem.

Given the huge influence that Consumer Reports has, it seems Apple may now have to act. It's reported to be holding a press conference later today in which it says it will be discussing the iPhone 4, and presumably the antenna problems. We'll bring you news as we have it.

Meanwhile analysts believe Apple now has three options open to it regarding the fault: give out free "bumper cases", which keep fingers further from the antenna and seem to alleviate the problem; do a full product recall and fix the fault; or simply do nothing.

Giving out the bumper cases will cost it a few million dollars, which is small change to the firm. But it would be an embarrassment to admit that its shiny new gizmo works effectively only when clothed in a strip of black silicone. A full recall will cost at least $1bn, according to analysts, and even more embarrassment. Yet perhaps it would at least avoid its reputation being tarnished any more than it already has been.

Then, of course, there's the "do nothing" scenario, which is perhaps the most likely. I've been saying for some time that Apple has been becoming increasingly complacent about customer service and fixing product faults, though its army of loyal fans won't hear a bad word said about the firm.

Consumers have been left to turn to the courts over faulty MacBook power supplies. A man was alleged to have been offered a full refund on an exploding iPod on condition he sign a confidentiality agreement. Apple's own user forum has hundreds of complaints about the way its third-generation Shuffle MP3 player, which is marketed as ideal for people hitting the gym, develops a fault when exposed to even a small amount of sweat.

Most technology companies have occasional issues with product bugs and faults: they're pushing the boundaries of what's possible with the latest components, and even rigorous testing prior to release is not foolproof. But it is how companies respond to such faults when they are discovered that should be the barometer of the company's professionalism, decency and -- let's face it -- respect for its own customers.

Whatever Apple announces later today about the iPhone 4, what many have come to realise about the company is what I have been saying for some time: it is really not deserving of the ardent loyalty of this army of Apple fans. Apple would surely still be telling users to hold the device differently or to buy their own bumper case if Consumer Reports had not come out to back up disgruntled punters.

 

UPDATE: At its press conference at 6pm BST on Friday as we went to press, Apple CEO Steve Jobs announced free bumper cases for any iPhone 4 buyers, and if they have already bought a bumper case, a refund.

Jobs also argued that it isn't just Apple's smartphone that suffers from such problems, taking the opportunity to sling a bit of mud at HTC, RIM (Blackberry) and Samsung phones. More arrogance? In other words, it's not us, it's smartphones in general. In which case, why the free cases to reduce the patchy antenna coverage?

Meanwhile a recall looks to have been ruled out of the question. RIM's chief executives have already reacted strongly, saying:

Apple's attempt to draw RIM into Apple's self-made debacle is unacceptable. 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. RIM is a global leader in antenna design and has been successfully designing industry-leading wireless data products with efficient and effective radio performance for over 20 years. During that time, RIM has avoided designs like the one Apple used in the iPhone 4 and instead has used innovative designs which reduce the risk for dropped calls, especially in areas of lower coverage. One thing is for certain, RIM's customers don't need to use a case for their BlackBerry smartphone to maintain proper connectivity. Apple clearly made certain design decisions and it should take responsibility for these decisions rather than trying to draw RIM and others into a situation that relates specifically to Apple.

 

Jason Stamper is NS technology correspondent and editor of Computer Business Review.

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