Apple tells iPhone 4 owners to get a grip
June 25 (Bloomberg) -- Apple Inc. responded to complaints about reception on its new iPhone 4 by telling customers they should hold the device differently.
“Gripping any mobile phone will result in some attenuation of its antenna performance, with certain places being worse than others depending on the placement of the antennas,” Apple said today in an e-mailed statement. “If you ever experience this on your iPhone 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.”
Yesterday’s introduction of the iPhone 4 was marred by criticism that signal strength diminishes when users cover the bottom-left corners with their palms. The iPhone, which first debuted in 2007, has become Apple’s top-selling product. It accounted for 40 percent of sales last quarter.
Chief Executive Officer Steve Jobs added a high-definition video camera, multitasking and video calling to the iPhone 4 to fend off competition from phones running Google Inc.’s Android operating system. It also has a stainless-steel band that’s designed to improve network reception.
Customers have posted videos on the Internet demonstrating trouble with the iPhone 4’s new antenna. Users experiencing the problem expressed disappointment with Apple’s response.
‘Really Awful’
“I’m an Apple person going back a long time and have spent a small fortune on Apple stuff over the last few years,” said Patrick Coleman, 58, a senior systems administrator from Rockville, Maryland, who purchased two iPhone 4s. “It’s really awful when Jobs has this kind of attitude.”
Shaw Wu, an analyst at Kaufman Bros. LP in San Francisco, doesn’t expect the antenna problem to lead to a product recall.
“Most users have a case anyway to protect their iPhone,” he said in a report. He recommends buying Apple stock. “In the worst case, Apple provides a discount on the $29 iPhone 4 bumper case or includes one for free with an iPhone 4 purchase. Either way, we do not think this would have a material impact on our forecasts.”
David Carey, vice president of technical intelligence at UBM TechInsights, an Austin, Texas-based company that studies the engineering of electronic devices, said it’s not clear whether the antenna problem can be fixed with a software update or if it’s more structural.
Software Solution?
“There is a point where software can’t dig you out of a hole,” he said. Still, given the phone’s rigorous testing process, “it would strike me as surprising that they would have a permanent problem on their hands,” Carey said.
The antenna matter didn’t stop analysts from increasing their projections. Yair Reiner, an analyst at Oppenheimer & Co., said Apple probably sold 1.5 million iPhone 4s yesterday and said the company’s stock may reach $345 a share.
“Apple continues to capture the attention and catalyze the passions of the American consumer in an unprecedented way,” Reiner said.
Apple fell $1.28 to $267.72 at 1:08 p.m. New York time in Nasdaq Stock Market trading. The shares had gained 28 percent this year before today.
The company said this week it’s delaying the release of white iPhone 4 models until the second half of July because of unexpected manufacturing challenges. Jobs unveiled the phone on June 7.
Android Phones
Apple, based in Cupertino, California, is facing increased competition from Android phone makers, such as HTC Corp., which rely on Google’s operating system. There are some 60 Android- based mobile phones.
In the U.S., a 16-gigabyte model of the iPhone 4 costs $199, and a 32-gigabyte model is priced at $299. AT&T Inc., the exclusive U.S. carrier for the iPhone, said this month it will end unlimited data plans, an effort to manage the surge in demand caused by devices like the iPhone. The carrier has been criticized for dropped calls.
Apple may sell more than 10 million iPhones in the quarter ending in September, said Colin Gillis, an analyst at BGC Partners in New York.
--With assistance from Arik Hesseldahl in New York. Editors: Ville Heiskanen, Tom Giles
To contact the reporter on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net; Crayton Harrison in New York at tharrison5@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net; Peter Elstrom at pelstrom@bloomberg.net
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