Apple Is Not "Too Big to Fail"

Is the Apple juggernaut spinning out of control? By their recent response to “Antennagate”, this may be the start.

First, I have to say that I am no Apple Fanboy nor an Apple hater, but the last Apple product I purchased was an iPod Nano (1st Gen). I never had any problems with Apple products, it was really just their attitude towards marketing and the media. It seemed to me that their stance was, "Hey! We are Apple and you must buy our products. Without our products, who are you really?"

That being said, this whole "Antennagate" has turned out to be a very big problem for Apple. Many people have written articles, post, blogs etc about the subject so if you are reading this, you should be well aware of the reception issues. If not, my previous post on iPhone 4's issues will bring you up to speed.

Daniel Lyons for Newsweek wrote a great article about Apple's Rotten Response. In the article he wonders if panic has started to set in at Apple yet. He thinks it should have because of the hastily called news conference—ostensibly to discuss problems with iPhone 4 and how Apple intended to fix them—only did further damage to Apple’s reputation.

Apple called a small group of hand-picked journalists to the event to address mounting concerns about the antenna design in the new iPhone 4, which shipped in June. Earlier this week Consumer Reports declared it could not recommend the phone until Apple comes up with a fix for this problem.

Do you know what Apple's fix was?

Apple CEO Steve Jobs came up with a two-part solution:
Part 1: There is no problem.
Part 2: Even though there is no problem, we’re going to give everyone a free case, which should insulate the antenna and prevent the interference that we just told you isn’t actually occurring. But if you’re still not happy, you can give back the phone for a full refund

Lyons comments that Jobs’s snotty tone made it clear that he was pretty fed up with all the whining about a problem that he says doesn’t exist. Apple is so arrogant that it still won’t admit the obvious truth—that the design of the phone itself is the problem.

“No other phone has ever put an electrically active antenna on the exterior of the device,” says Richard Gaywood, a wireless-networking engineer. Gaywood says that as an outsider he can’t tell what the problem is, “but if I had to bet, I’d bet on it being a hardware problem they will never completely resolve for existing customers.”

But why would thousand of people complain about an issues that doesn't exist? Some in the blogosphere believe this "Antennagate" might have been manufactured by a recent new Apple foe: Gizmodo.

Blog The Pungoverse asks a simple question: Is Antennagate traceable directly back to Gizmodo?

Well, in my humble opinion I say no. But let's look at the reasoning behind Pungoverse's question:
I went searching for the earliest reporting of the iPhone 4 antenna issue, using the search term "iphone 4 antenna issue", and I found something I find interesting.  Before we get to that, let's establish a time line. Gizmodo first reported about the iPhone4 that they-ahem-acquired back in April.  Jason Chen of Gizmodo's home was raided on April 27th.

If you don't remember what happened two months ago between Gizmodo and Apple here is a quick synopsis:
Apple gave a prototype of the iPhone 4 to an engineer. This engineer either forgot or lost this prototype (dressed up to look like an iPhone 3GS) at his local bar. A person noticed this strange looking iPhone 3GS and discovered it was indeed a prototype iPhone 4. The engineer notified Apple of the lost prototype and the phone was remotely bricked.

The finder of the prototype first attempted to return to the phone to Apple, but his efforts went unnoticed, so he sold this phone to Gizmodo. Gizmodo reported the story about the iPhone 4 prototype and they also offered to give back the phone to Apple. Apple then requested that the police forcefully acquire the prototype from Gizmodo editor Jason Chen.

Pungoverse continues:
As a result of this case, Gizmodo was not invited to WWDC to cover the actual iPhone 4 announcement.
The iPhone launches to much fanfare on June 24th, though some pre orders were getting their phones early.  One such person was a poster on the MacRumors Forums, who first noted a problem with the antenna on June 23rd.  Gizmodo is all over it the next day...launch day.  Let me rephrase that: Gizmodo goes full goose bozo on launch day, updating that blog post 52 TIMES.

Now I do believe Gizmodo felt a little burned by Apple, but this was one of the largest product launches for 2010. How does one of the major tech blogs not report about iPhone 4?

Pungoverse asks "Why would they do that?  Simple.  When it comes to Apple Computer, the company that anyone and everyone in the tech media wants to cover, Giz has been shut out." also adding, " They threw a temper tantrum in the form of a blog post designed to take Apple down a few pegs.  The mainstream media was sure to pick up on the story, which it dutifully did, and you know the rest of the story."

Pungoverse does clarify that this is all just speculation and a fair amount of exaggeration on his part. But this post does point to the power of the tech blogsphere. During last April Gizmodo almost seem obsessed with Apple, so much so that many of their commenters complained about the Apple non-stop coverage.

But even if Gizmodo did a hit job on Apple starting “Antennagate”, we still have the real physical problem that iPhone 4 has a major flaw. By refusing to acknowledge the problem, Jobs just reinforced the image of Apple as a company that is in deep denial and unable to admit a mistake—a company that has for so long been able to bend reality to suit its needs that it now has lost touch with reality itself.

Daniel Lyons finishes his article stating that the real issue here is how the product is perceived. If you need to put a rubber case on a phone to make it work correctly, there must be something wrong with it, don’t you think? Jobs clearly doesn’t. He seems scornful of customers who have complained. Toward the end of the news conference, he blamed the media for blowing the problem out of proportion. Thanks Gizmodo!

Apple’s rivals will have a field day with this, because Apple looks weak here. They just need own up to the issue and fix it.They still do and for a long time have a massive loyal customer base. Apple could release brick and call it iPhone 5 (Builder Edition) and it would sell millions the first day. Probably not, but it makes you wonder sometimes...

What do you think of  “Antennagate”? Let me know in the comments!

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