Four Things We Learned From iPhone 4 'Antennagate'

By Michael Comeau  JUL 26, 2010 10:00 AM

Overall, Apple's iPhone 4 -- despite reported antenna issues -- is a hit. But there are still lessons here.


Stick a fork in Apple (AAPL) iPhone 4 Antennagate -- aka the lamest scandal ever; it's done.

Though I’m merely a self-appointed observer of the technology landscape, let’s look at the recent happenings in Apple-land.

On Apple’s third-quarter earnings call held last Thursday, Apple COO Tim Cook had this to say in response to a question about how iPhone 4 demand has been impacted by Antennagate:

“My phone is ringing off the hook for people that want more supply.”

I’m going to assume that Mr. Cook is telling the truth, since as of 8:32 p.m. ET last night, there's a three-week wait for the iPhone 4 at Apple, and a one- to two-week wait at AT&T (T). That’s exactly what we saw two weeks ago, when Antennagate began building steam.

Apple also issued a fourth-quarter forecast that was well above analysts’ expectations -- an unusual move for a company that typically lowballs guidance.

So yes, a few people are having legitimate reception problems with their iPhone 4s. But the phone’s a hit and that officially kills Antennagate as a potential fundamental problem for Apple.

But don’t just let this episode completely slip into the rear-view mirror, because there are four important lessons to be learned:

1. Apple is great at marketing, so-so at PR.

While Apple ultimately did right by unhappy customers by offering a free case for the iPhone, its response was convoluted.

In its letter addressing the problem, Apple claimed that “the iPhone 4’s wireless performance is the best we have ever shipped,” while also admitting a software flaw that led to the miscalculation of signal strength.

And later at Apple’s July 16 press conference, Steve Jobs admitted that the iPhone 4 had a slightly higher dropped-call rate than the predecessor iPhone 3GS. A call-drop rate isn’t the only indicator of wireless performance, but it’s hard for the average person to reconcile a higher dropped-call rate with a claim of the best wireless performance ever.

In the future, Apple must be better prepared to publicly deal with technical snafus because every single one will turn into its own media circus. That means simple, fast responses -- not what we saw with iPhone 4 Antennagate.

2. Absolute perfection is not the name of the game.

The iPhone 4 isn’t perfect. If it were, nobody would have problems with it.

But the overall iPhone 4 package makes up for some minor technical shortcomings: While most phones feel like mass-produced plastic toys, iPhone 4 feels expensive, precise, and German -- much like the Leica cameras Steve Jobs referenced in the iPhone 4 unveiling.

Besides this, the iPhone 4 is also a very practical device. It’s easy to use, has an unbelievable display, and unlike many Google (GOOG) Android phones, has great battery life.

3. Regular People > Techies

You may not know it, but your own family and friends can help you gauge the mass appeal of consumer products and services.

If a lot of people you know are saying the same things about a specific product, odds are they’re speaking for an even larger population. I should have bought Netflix (NFLX) years ago, specifically because everyone I knew was trying it out and loving it.

Techies on the Internet were fondling their phones every which way to make their iPhone 4’s signals drop -- but people out in the real world were too busy doing regular things with their iPhones to bother.

Every iPhone 4 owner I spoke with loves their phone, and none were considering returning it whether they heard of Antennagate or not.

4. If Nobody Hates You, You Don’t Matter

A lot of people are going to hate Apple simply because it’s on top. Backlash is part of being big -- you can’t get to the top of anything without angering some people along the way, and that’s doubly true in business. Those that learn to deal with criticism and public outrage -- think Walmart (WMT) and Goldman Sachs (GS) -- dominate and make lots of money.

And while Apple’s biggest asset is its rabid fan base, that audience comes with a unique price.

Apple fanboys -- and I could be considered one of them -- love to tell people how much they love their Apple products. But some of us go wrong by doing two things: 1) assuming that anyone not using Apple products is a self-hating masochist too terrified to step out of the Microsoft (MSFT) Windows world and 2) aggressively trying to convert the disinterested.

That annoying over-enthusiasm creates a lot of Apple haters.

Finally, a lot of people roll their eyes at Apple’s idealistic “change the world” mentality, especially since Apple’s business model entails sucking people into its walled garden before slamming the doors behind them.

If nobody hated the iPhone 4, it would be a complete failure -- much like Microsoft’s Kin line, which died too quickly to tick anyone off.
Position in AAPL.

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