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Apple sort of accepted their could be a hardware fault with a batch of iPhone 4 smartphones and offered free cases to iPhone users from Apple, commencing sometime next week. All users who have already bought a case from Apple will get a full refund but not if the case is from a third party.
“You know, we’re not perfect. We know that, you know that. And phones aren’t perfect either. But we want to make all of our users happy. If you don’t know that about Apple, you don’t know Apple. We love making our users happy. We’re going to talk about how we’re going to do that, but first I want to talk about some data.
The iPhone 4 is perhaps the best product we’ve ever made at Apple. We’ve sold well over 3 million since we launched it 3 weeks ago. It’s been judged the number 1 smartphone. It has the highest customer satisfaction rating of any iPhone and any smartphone out there. We started getting reports about issues with the antenna system, and, the problems they were saying… Gizmodo put their video on the web, touching the corner, and people were seeing a large drop in bars.
This was 22 days ago… we haven’t had out head in the sand. We’ve been working on this for just 22 days. We are an engineering company, and we want to find out what the real problem is. We’ve been working our butts off so we can come up with real solutions. And we want to share what we’ve learned.
Antennagate — that doesn’t seem like a good thing if you can make the bars go down by touching the phone. Well we first learned that this doesn’t just happen to the iPhone, Nokia, Motorola… other phones have this issue. But we didn’t trust the videos on YouTube, we started doing our own testing… here’s what we discovered.
The BlackBerry Bold 9700… let’s see what happens when you hold it in a normal way… 5 bars… and now on holding the left side. The bars go down. There’s the Bold, 5 bars to 1 bar.”
Next, the Droid Eris. Starts off with 4 bars… and the time it takes for the bars to go down has to do with the algorithm… so it goes down to zero bars, and then it goes back up.” Definitely looks like the same behavior.
Samsung Omnia II — it’s got 4 bars to start… we grip it in a not unusual way… this one has a long hysteresis in their algorithm… None of this is standardized… and so again, you’ll see it go back up. They go back up faster than they go down.
So we could have gone on and on. Most smartphones take a hit exactly the same way. These were all tested in areas of relatively weak signal strength. This is life in the smartphone world. Phones aren’t perfect. It’s a challenge for the whole industry. Every phone has weak spots.
Now we’re not perfect. We made it very visible with a little help from our friends on websites. We put this little line here… ‘here’s where you touch it everybody! And we had a reporting error — we screwed up on our algorithm. Some of these other phones may be too generous. Our choice was to put the correct algorithm in. And we did that with the new update. You’ll still see a drop… we haven’t figured out a way around the laws of physics yet.
Now we do a lot of testing, this is an actual device we test in. And here’s our biggest room right here. You have to build these rooms or you don’t get accurate results. This is a state of the art facility. We’ve invested over $100 million on this. We have 17 anechoic chambers.
We knew that you could see bars drop on the phone when you hold it in a certain way, it’s a fact, phones aren’t perfect. But people are reporting better reception with this antenna than they’ve ever seen before. So what have we learned? Smartphones have weak spots — this isn’t just the iPhone 4, it’s all phones.
Next, some really interesting data from AppleCare, we looked at the statistics, we asked what’s the percentage of all iPhone 4 users that have called AppleCare about the antenna or reception, or anything near reception problems. Because you would have thought ‘Jesus, it must be a lot of users complaining about this’ — So what percentage have called AppleCare? 0.55% Just one half of one percent. This is not a large number. This doesn’t jibe with what you read. Let’s keep going. So smartphones have weaknesses, and AppleCare data shows only 0.55% have called in about reception issues. The third, return rates… AT&T has a ‘buyer’s remorse’ clause, you can return a phone no questions asked. Apple has the same thing.
So what are our return rates? Well we’re going to compare it to the iPhone 3GS… In the early days of the iPhone 3GS return rates were 6%… below the average, we were happy with that… so for the iPhone 4? You think half the people must be returning their phones with what you read online… well it’s 1.7% — less than a third of the 3GS returns. Pretty interesting… one more data point. AT&T has given us the early call drop information just a few days ago. They log call drops, it helps them improve their network. So we can’t give out the absolute call drop data… AT&T can’t release those numbers to their competitors, but we’re going to give you the delta.
Even though we think the iPhone 4 is superior to the 3GS antenna… it drops more calls per 100 than the 3GS. We’re being transparent. So how many more does it drop than the 3GS? Now, even less than one is too much for us. We want to find out why. But this does put it in perspective. So I have my own pet theory. We have no proof of it, but I’m going to give it to you. When the 3GS came out, we didn’t change the design from the 3G. So there were already lots of cases out there for the phone. And more than 80% of new buyers left the store with a case. Now the new phone doesn’t fit those cases, and we can’t make these bumpers fast enough, so only 20% leave the store with a case… but we’re going to figure it out.
Now when we look at this data, it’s hard to escape the conclusion that there is a problem, but that problem is affecting a very small number of users. I get emails saying the phone works perfectly, and they can’t understand what this is all about. So we think it’s affecting a small batch, but it has to do with inherent problems in smartphones. But we want all of our users to be happy.
We think this has been so blown out of proportion… it’s fun to have a story, but it’s not fun on the other side. So here’s what we’re going to do to make our users happy. The first part is the software update, that fixes the way the bars report and other bugs, that’s out now. Second, people said the bumper fixes everything… ‘why don’t you give everybody a case’? Okay — we’ll give you a free case.
A free case for every iPhone 4 buyer. If you got one, we’ll give you a refund.
We’re going to send you a free case. We can’t make enough bumpers. No way we can make enough in the quarter. So we’re going to source some cases and give you a choice.
And if you’re not happy, you can bring the phone back. We’ll give you a full refund within 30 days. No restocking fee. We want to make everyone happy, and if we can’t make you happy we’ll give you a full refund.
So I have some other updates. We’re tracking some problems with the proximity sensor and we’re working on it. White iPhone, we’re going to start shipping at the end of the month.
Also on July 30th, we’re going to bring the iPhone to 17 more countries, with the omission of South Korea. So that’s the update on iPhone 4.
In ending, I’d like to talk about how we make decisions. We love our users, we love them. We try to surprise and delight them… and we work our asses off. We have a lot of products that are pretty great for them, Macs, iPhones, iPods, iPads… So we love our users. We also connect users with great apps and developers, and great content through iTunes, and really bring content creation and our users together. We love our users so much that we built 300 Apple retails stores for them to give them the best buying experience in the world… with Genius bars, and seminars. We had 60m people through our doors last quarter. We do this because we love our users, and if we screw up, we pick ourselves up and we try harder. And when we succeed, they reward us by staying our users. We take this really personally. Maybe we should have a wall of PR people keeping us away from this stuff, but we don’t, we take it really personally. So we’ve worked the last 22 days on this trying to solve the problem. And we think we’ve gotten to the heart of the problem.
So the heart of the problem is, smartphones have issues, and we made it easy to exploit the issue by showing people where to hold the phone to cover the antenna. But the data supports the fact that the iPhone 4 is the best smartphone in the world, and there is no Antennagate… there is a challenge for the entire smartphone industry to improve its antenna technology so there are no weak spots. So today we’re going to try and take care of our customers.“
Leave a comment below and tell us what you think. Is this enough to win back Apple’s lost credibility?