DJ TECH VIEW: Apple Can No Longer Afford Clumsy Launches
DJ TECH VIEW: Apple Can No Longer Afford Clumsy Launches
By Therese Poletti
A DOW JONES COLUMN
Apple Inc. (AAPL) may be able to line up customers around the block, but even the iconic technology company can no longer afford clumsy product launches in the hotly competitive smartphone field.
Since Apple reshaped the smartphone business in June of 2007 with its first iPhone, there are now a host of other competitors gunning for a share of the fast-growing market. Most notable among these is Google Inc. (GOOG), the Web search giant that has bankrolled the creation of a rival mobile operating system that supports a host of devices. It is proving a popular alternative for consumers looking for high-end wireless devices.
Many of these rivals are probably chomping at the bit to take Apple down a notch for its rather flawed introduction of its latest gizmo, the iPhone 4.
While fans lined up last week for blocks to buy the iPhone 4 and Wall Street analysts were pounding the table over potential sales, some consumers were quickly venting about a problem with the new smartphone's reception. Demonstration videos on YouTube popped up. Consumers complained in tweets about losing reception if they held the phone in a certain way.
Apple's initial response, telling consumers how to hold the mobile device, was, to put it mildly, lame.
Chief Executive Steve Jobs responded to one consumer complaint in an email, saying, "Just avoid holding it in that way," he wrote, according to Engadget, a popular technology blog.
"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 in a statement. "This is a fact of life for every wireless phone."
On Monday, Apple touted the fact that it has sold 1.7 million units of the device in its first three days on the market. The company is also reportedly working on a software update to fix the issue with the iPhone 4, similar to what it did for its iPhone 3G two years ago, when poor battery life and other technical issues plagued early adopters.
But such missteps may prove to be more costly now. Unlike two years ago, the iPhone is no longer the only compelling, touch-screen, Web-friendly smartphone available. Products like the Droid from Motorola Inc. (MOT) and the Incredible from HTC Corp. (HTCXF, 2498.TW) are racking up big sales numbers. An updated version of the Droid goes on sale next month, and Samsung Electronics Co. (SSNHY, 005930.SE) has lifted the wraps on an ambitious line of smart phones called the Galaxy family that are generating strong buzz in the market.
Even Research In Motion Ltd. (RIMM, RIM.T), which took a beating last week on concerns about slowing demand for its BlackBerry line of devices, is slated to introduce a line of new devices over the next few months, along with a major overhaul of its own operating system and mobile Web browser.
Combine that with the continuous network problems with Apple's only carrier in the U.S., the overburdened AT&T Inc. (T), and consumers are now starting to realize that Apple is no longer the only game in town. AT&T's arch-rival Verizon (VZ) is spending heavily to promote Google's Android operating system and devices built for the platform, and that carrier enjoys a far better
reputation for service and coverage than the resurrected Ma Bell.
Recent market research data shows that phones designed around Android are starting to gain ground. Gartner Inc. said last month that in the first quarter, sales of smart phones based on Android surpassed iPhone for the first time in the U.S.
Most analysts, for now, don't believe the iPhone 4 antenna issue is going to be a big deal or hurt sales. But Shaw Wu, an analyst with Kaufman Brothers, said he was getting a lot of questions from investors about the iPhone 4's reception. "We don't think the antenna issue is that big of a deal where it would warrant a product recall," Wu wrote in a note on Friday.
The fact that an analyst even mentioned the word "recall" in a note about an Apple product has got to have both investors and consumers a bit nervous. In fact, Apple's shares barely budged upward on Monday on news about record iPhone 4 shipments.
Apple should not be resting on its laurels, nor can it afford to bungle new product launches with half-baked responses. Consumers now have plenty of other options in smart phones, and with better networks to choose from.
(Therese Poletti is a special writer for MarketWatch. She can be reached at 415-439-6400 or by email at
AskNewswires@dowjones.com.)
(END) Dow Jones Newswires
June 29, 2010 08:14 ET (12:14 GMT)
Copyright (c) 2010 Dow Jones & Company, Inc.