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.]


  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.

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