Schwarz: Investment ramifications of iPhone 4 reception issue, esp. regarding Consumer Reports

iphone 4 cases“Highly respected Consumer Reports announced that it can not recommend iPhone 4 because of the reception weakness caused when the phone is held in the lower left corner,” jason Schwarz writes for Seeking Alpha.

MacDailyNews Take: “Highly respected” by grandma when she’s in the market for a new toaster, that is. Consumer Reports sucks at reviewing and quantifying computers and electronic devices. When they do get it right and miraculously choose the right computer or smartphone, it seems to be by sheer dumb luck, not by any design.

Schwarz continues, “Consumer Reports mentions that this is unique to the iPhone 4 model compared to past iPhone’s and it is also unique to the AT&T network as no other phones suffer from like reception issues. If the market was at a high this kind of news would cause AAPL to sell off $10. But because the market is near the low end of its trading range the stock is able to overcome the negative news. A market wide focus on low valuation is helping AAPL on a day like today.”

Schwarz has four thoughts on the matter:

1. This is nothing new… Consumer Reports is merely releasing an independent analysis that is hitting Wall Street today.
2. Nobody is in a hurry to return the phone. Apple users are confident that the problem will be fixed.
3. The Apple model of dealing with problems is that they don’t tell us anything until it is resolved.
4. These reception issues are not affecting sales. iPhone 4 is sold out everywhere.

Full article here.

[Thanks to MacDailyNews Reader “Arline M.” for the heads up.]

46 Comments

  1. My iPhone 4 arrives August 3rd. Since a lot of people claim that they have no problem, I plan on thoroughly checking mine to make sure it’s not an issue. If I can replicate the problem, I’ll keep returning it until I get one that works fine. If I can’t locate one – I’ll just buy another 3Gs.

    Hold it different is bullshit. And no – I don’t like using a case. I’ve had all three iPhones and have never cracked a glass.

  2. So, MDN, If Consumer Reports’ review and evaluation methods are questionable, as you suggest, then how does that reflect on Apple’s number one rating in Consumer Reports for Technical Support for the last ten consecutive years? Do you make a distinction between their hardware evaluation methods, and how they evaluate Technical Support effectiveness and efficiency? Please elaborate.

  3. Umm.. I’m usually with you, MDN, but let’s also not forget that Consumer Reports has named Apple’s customer support #1 for all technology companies every year since 2003. It’s up to me as a responsible consumer to get as much information as possible before buying a product. I bought an iPhone 4 and my experience has been terrific regardless of what they say about reception issues. But just because I’m not having that issue, it doesn’t mean that others aren’t.

    However, I do agree that if they had the resources to test the phone in their own (extremely expensive) controlled environment, they really should have tried the $29 bumper while they were at it.

  4. OK, so I didn’t look at my own link; MDN called CR a “garbage publication” as recently as 2006 (and of course, MDN (or is that IDN – iPod Daily News?) itself represents the “highest standards” of whatever it is).

    However, why quote “garbage” sources when the news is positive, without a disclaimer about the unreliability? As others have said, it’s disingenuous to use a source favourably only when it suits you; you’re only hurting your credibility…

    Maybe that explains why as good a repository of stories as MDN is, the headlines, notes and takes here are becoming increasingly disposable.

  5. Whenever you release new hardware with a significant upgrade to the software, you should expect issues. Apple’s no different than any than software company. I’d expect the problems to go away when the update comes out. My phone has worked well in both the San Francisco Bay and in Cabo San Lucas, Mexico. I still get dropped calls from time to time. I look forward for Verizon to balance the load.

  6. Buy a case to protect the edge of the iPhone 4 and you can’t touch the shiny metal (with your wet conductive hands). People really need to get grip on this. Get a cover and enjoy the world’s best smart phone or buy 1 get 1 free of those want-to-be RIMM berry phones.

  7. If it doesn’t affect the signal too much, their best bet is to disable the bottom section of the antenna when the signal starts to attenuate, or just disable it entirely. This would mean a design change / hardware fix, and a possible recall for people who want it. Before I noticed this issue, I was going to get a case as soon as Incase has them available.

  8. Customer satisfaction results are based directly on reports by consumers and polls of consumers. Actual customers.

    Testing and rating products is done by Consumer Union itself.

    There is a major difference between the two. (Their hi-fi evaluations are just awful. They try to use a few parameters to determine overall quality. Does not work.)

  9. Let’s be fair: If Apple is really, genuinely experiencing a problem with one of its products then what is the harm in genuinely acknowledging it? I get that what we are in reality fighting here is the hordes of haters who have detected a chink in the king’s armor and are swarming in to take advantage of it, but bashing back at them seems somewhat beneath us (or should be). Why worry about them? Their words are nothing but petty and jealous blog attacks. Who gives a shit, seriously? I know Apple makes fantastic products, I know they back them up with outstanding and thorough support, and I know they have earned my respect and customer loyalty. That is all that matters. Clearly they are experiencing an issue with this, but they will fix it. Clearly the antiMac crowd has jumped on it, but that ammo will soon be removed from their arsenal. Do you think Martin Scorcese goes out of his way to start pissing all over any film critic that doesn’t get his latest film? No. Why? Because who gives a shit what they think?! I just get a little bit worried about the pedestal (no matter how much they’ve earned it to date) that we automatically place Steve and Co. on. The fall is going to be HUGE when and IF the ever fail. And believe me, EVERY company fails eventually. Until then, again, who gives a shit what they say…

  10. My parents used to subscribe to consumer reports. Every time they reviewed cars, they would recommend some Chrysler or the Ford Tempo.

    I went for the BMW anyway.

  11. Consumer Reports is a fraud. They have been since the 90s when they ranked the Mazda Navajo much higher than the Ford Explorer. The funny part is that both vehicles were identical and built on the same assembly line. Any differences were the badges and branding on the vehicles.

    Wolf!

  12. On my second iPhone 4 (1st one gave me temp warning) and I love it dearly. However the antenna is a real problem for me and many users. I’ve learned to cope with it and I am very confident that Apple will address the issue. THERE IS NO WAY I go to android. I envy those who have no issues at all but let’s not rip other people who are experiencing the issue. It’s a real issue.

  13. I enjoy and appreciate the articles from this site, but I really get annoyed by the owner’s unrealistic zeal for Apple products and attempts to discredit any naysayers in the “MDN’s Take:” It gets tiresome and is absurd. I think Consumer Reports is more well-respected and renowned among the tech world and Wall Street than say, Mac Daily News. I realize this is a place for Apple enthusiasts, and I’m as big of an Apple supporter as the next guy, but the “takes” expressed here not only lack objectivity but are often illogical and unfounded.

    It’s ok for someone not to like an Apple product. The world (or Apple) won’t end as a result. But to blatantly discredit Consumer Reports is just absurd. It had legitimate reasons for calling Apple out on the iPhone 4. I own one and have had issues with the antenna. I’ve also had problems with the hypersensitivity of the screen when it’s close to my face. These are issues I hope Apple will resolve, but they have been very nonchalant in their admission of any errors, when obviously, the problems exist.

    But MDN really needs to evaluate its own credibility and how we Apple admirers even view its approach.

  14. This is what I don’t get: Why do we not hear reports of this being a problem on Vodaphone, Softbank, O2, Orange, etc? iPhone 4 isn’t just sold in the US. What’s the word from foreign carriers?

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