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Posted by on Jul 13, 2010 in Science & Technology | 0 comments

Does Apple Have A Toyota-Style Problem?

With Consumer Reports concluding in a report released yesterday that the iPhone 4 antenna problem is a hardware issue, not a software issue as Apple has claimed, Cult of Mac’s Leander Kahney is reporting that a recall Is inevitable:

“Apple will be forced to do a recall of this product,” said Professor Matthew Seeger, an expert in crisis communication. “It’s critically important. The brand image is the most important thing Apple has. This is potentially devastating.”

Crisis communication experts contacted by, including Chris Lehane, former Clinton White House ”Master of Disaster,” agree: the iPhone 4 reception issue presents a Toyota-style PR crisis for Apple, and the company must respond with a more meaningful fix than a software patch. […]

“Apple needs to put this fire out now,” said Dr. Larry Barton, a leading expert in crisis management and author of Crisis Leadership Now. “There has to be a military-like response to this issue. And we have not seen this kind of urgency.”

Dr. Barton said Apple should quickly issue a statement that either strongly refutes Consumer Reports‘ tests; or admit the issue and detail some kind of hardware fix. Saying the iPhone 4 has a problem calculating signal strength doesn’t cut it, Dr. Barton said.

“They’re response has been lackluster,” he said. “It’s been borderline irresponsible. They are in danger of betraying customers’ trust and hurting the brand, which is infinitely more valuable than any one product.”

Compounding (or affirming?) the company’s problem is the untold story of upgrade woes everyone who owns an iPhone other than the iPhone 4 is suffering through as they switch to the new IOS 4. The iPhone was never the best phone on the market, but now placing a call is a maddeningly slow endeavor. Even launching the lowly iPod App on an iPhone 3G running IOS 4 produces a frustrating wait and a stuttering start. The promised software update is widely expected to be too little, too late.

Then there’s the astonishing revelation that for years iPhones have been exaggerating signal strength. This mistake — “we were stunned to find that…our formula, in many instances, mistakenly displays 2 more bars than it should for a given signal strength” — seems hardly plausible from a company known for obsessing over ever detail of its products.

If Apple had effectively addressed the antenna issue at the outset it likely could have avoided all of this. Consumer Reports:

The signal problem is the reason that we did not cite the iPhone 4 as a “recommended” model, even though its score in our other tests placed it atop the latest Ratings of smart phones that were released today.

The iPhone scored high, in part because it sports the sharpest display and best video camera we’ve seen on any phone, and even outshines its high-scoring predecessors with improved battery life and such new features as a front-facing camera for video chats and a built-in gyroscope that turns the phone into a super-responsive game controller. But Apple needs to come up with a permanent—and free—fix for the antenna problem before we can recommend the iPhone 4.

What should have been a huge affirming endorsement has instead made Apple the butt of a lame duct tape joke.

With that the answer to the question posed in the post’s title is: YES, Apple does have a Toyota-style problem. The question we’re left with is what is the company going to do about it.

LATER — Not a hopeful sign, “Apple seems to be deleting discussion threads about the latest Consumer Reports conclusion, and Apple-watchers are incensed—even though this behavior is old hat for Apple.”

Meanwhile, Consumer Reports posted a follow-up, Why we think it’s the company’s responsibility to provide the fix—at no extra cost to consumers.

You can find me @jwindish, at my Public Notebook, or email me at joe-AT-joewindish-DOT-com.

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