Apple’s General Motors Moment

Apple held a rare snap press conference at its Cupertino headquarters today to deal with the rumours of reception problems with the iPhone 4. But instead of announcing a mass recall, or a change in device design, the only meaningful thing that came out of the presentation by Apple chairman and CEO Steve Jobs was the announcement that the company would offer its $29.99 (£25 in the UK) silicone cases for free to any iPhone 4 customer, until September 30.

That’s sort of like an automobile maker responding to complaints about a stalling engine by offering free oil changes for the next year.

Apple’s iPhone 4 has been plagued by glitches ever since its release on June 24. Some devices from the very first shipments had a yellow tint to their screens; Apple said that the glue hadn’t set, and the tint would fade away with a little more time. A few days later, reports of reception problems surfaced, and Jobs’ response to a complaint he received by e-mail was: “You’re holding it wrong.“

Then, corporate users started reporting problems with iOS 4 devices overloading Microsoft Exchange servers – not  limited to the iPhone 4, but including 3G or 3GS devices that had been upgraded to the new OS – the answer was to push out a patch to the Active Sync profile that increased the interval between connections. Then Apple confessed that it was using an algorithm in the iPhone software that incorrectly calculated the appearance of the signal strength indicator, which could display five full bars in a situation where two or three would be more accurate.

Apple’s response today was a mocking of the fanboy community (which was richly deserved), a lot of statistics and obfuscation, and finally, a small concession in the form of free Apple-brand bumpers. That giveaway is going to apply worldwide, which makes sense given Apple’s unchanged plans for releasing the iPhone 4 to another 17 countries at the end of this month. Apple may extend the offer beyond September, but Jobs would not explain what would trigger such a decision.

If Apple made cars, it would be General Motors

As a child of Detroit’s auto industry, I’m tempted to draw a parallel between Apple’s tribulations with the iPhone 4and some of the more spectacular problems that AMC, Chrysler, Ford and GM created for themselves. The question is: what metaphor works? The iPhone 4 isn’t an Edsel; people are going to keep on buying these things, because they’re iPhones. It isn’t a Pinto; I have yet to hear of any devices bursting into flames upon sudden impact. No, what we have here are General Motors’ X-body front-wheel drive cars of the early 1980s; whether the iPhone 4 is a Chevrolet Citation, Pontiac Phoenix, an Oldsmobile Omega, or a Buick Skylark is a distinction without a difference.

Those GM products had a poor reputation for quality and a number of recalls; they’re number 2 on Popular Mechanics’ list of “10 cars that damaged GM’s reputation.” I know that going back thirty years is dating myself, but those cars marked a nadir of sorts for GM’s public image, which had already taken hits from reports of a faulty suspension design for the Chevy Corvair, and documented problems with its early cast aluminum engine blocks.

Arguably, the company made more mistakes in the next quarter-century that had a more direct impact on its bottom line, but after the failure of an entire design family, the writing was on the wall for GM. In 2009 it filed for bankruptcy and is now majority-owned by the US government.

Apple seems to have the same mindset as GM toward complaints about product quality from the press and the user base; both companies prefer that we shut up and buy more stuff. Apple created a problem for itself by using an algorithm for calculating the display of the signal strength that turned out to be flawed and misleading, showing a much better signal than actually existed. But Apple does owe the press and the user community some thanks, if only for forcing the company to take a closer look at that algorithm; without the barrage of criticism, we’d still be seeing five bars in some places instead of two.

By putting the antenna on the outside frame of the iPhone 4, Apple set itself up for more trouble. Although every smartphone has to contend with the problem of interference from the human body, very few (if any) manufacturers insist on having direct interface between the antenna and the meatware, as the iPhone does. Apple’s tacitly admitting that there’s a problem with this design, with its bumper giveaway.

But does that antenna problem mean the iPhone is a terrible device? Probably not; although I have yet to put one through the proverbial wringer, I suspect that I’ll like it as much as its early adopters seem to. Is the antenna problem a disaster for Apple? Not really; I’m sure the company won’t make nearly as much money from accessory sales as it had projected, because having to give away a piece of silicone that might cost the company $1 to manufacture and distribute (but which sells for $29.99) is clearly going to foul up the forecasts.

No, what this experience should teach Apple is that multimillion-dollar anechoic chambers are nice, but field testing is all-important. Even if an engineering flunky takes a prototype in a beer garden and fails to bring it back, there’s just no substitute for real-world experience. Preferably without a rubber disguise that hides a potential problem.