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. We can mock CR as much as we want, but they have some credibility. Unlike those sites like Gizmodo or CNET/ZDNET who are just a bunch of hit whoring bloggers. CR actually has a voice that people may listen. I think Apple may be in for a hurt with this one.

  2. @ottawamark
    By me, too.

    @Exregis
    They do the testing themselves, except when they don’t.
    I’ll never forgive them for the cover story they did about ten years ago on vitamin supplements. Essentially, they republished the bullshit spewed by one Victor Herbert, author “The Vitamin Pushers.” He had to go through contortions to ignore a competitive product ours for another which did not belong in the comparison in order to cite it as a poor value.

    I’ll look at their tire ratings, appliance rating, etc., but for the most part, all they know is the price of everything and the value of nothing.

  3. I never was a fan of CR because I’m in the automobile industry and boy do they get it wrong most of the time when it comes to cars. But its their call on what the problem is with the new iPhone4. Everybody experience seems to be different regarding the antenna issue. I finally took off my case today because I was tired of hidding the beauty of my iPhone4. I love the design but fear dropping it, so this is why mine was in a case. I am not having the same issue others claim to have, so results may very. For those who are getting upset because they are having issues, please return the phone and move on. Its been less then a month and their is no need to get nasty toward Apple or anyone who isn’t having the same issue. You have a choice. Put up, or shut up. Return the phone or live with the issue if it is hardware related. The ball is in your court. Droid Does!

  4. MDN is a little harsh, but generally correct with their criticism of CR. When it comes to electronics, they really don’t seem to have much of a clue.
    They test many things over and over again, bit often only come to a pre determined conclusion about a piece of electronic equipment.
    For example, when they tested PowerPC macs, the magazine routinely ignored the platform as insignificant and not worth buying. After the intel switch, they started doing hardware to hardware comparisons, and left out the OS from their opinion.
    Now because of Apple’s market presence they have gone to the trouble of using their customer service and products and ranked them best in class. Except that every time they review an iMac they don’t put it next to a compatible desktop model, and apple laptops are typically compared against themselves with another manufacturer typically winning the category. (just hardware comparisons, no mention of software or os. Also a convenient lack of the mention of the malware deterrent ability of apple products)

    So, while I agree that MDN may be a little over zealous in their criticism of CR, theydo have a valid basis for said criticism because of past behavior on CR’s part.

  5. CR isn’t the most qualified to evaluate technology gadgets, but it does look at products it reviews from the general consumer’s point of view. The other factor is that CR isn’t swayed by freebies, extra advertising, etc., so its reviews are about as neutral as it gets.

    Also don’t forget, the review of the iPhone 4 puts it at the top of the smartphone list, but it earned a “not recommended” because of the reception issues. That reception issue is real, and should not be in the iPhone 4. Apple will fix it, but Apple will have to deal with the negative publicity for some time.

  6. Recently Consumer Reports has come around about Apple products. However, for many years before, the Consumer Union testers and reviewers demonstrated an antipathy for Apple and its Mac products.This latest negativity does seem calculated. If all that stands between the iP4 and top-rated-ness is a small piece of duct tape, it is odd that CU is making a stand on principle vs. giving a rational opinion. Their testing makes the iP4 out to be great. So why not say it is great vs. quibbling about a “problem” that millions of us have not experienced and is not preventing us from enjoying our iP4s?

  7. Hey, what happened to the 3rd page of comments on the recent article “Consumer Reports: We cannot recommend Apple iPhone 4”????

    I had a post there that disappeared along with that page.

  8. Consumer Reports states that the problem of recetion drop off could not be replicated in a Palm Pre or other earlier models, then they go on to state that perhaps the statement of dropped calls may not due to AT&T;’s network problems. Yet we’ve been hearing about dropped call problem since the first generation IPhone, and you can’t replicate the problem in Apples earlier models. So which is it? Faulty experimentation leads to faulty data and improper conclusion and this bad recommendations. IthinkDN has a point. Still I doubt this will have much effect as the phone remains a hot seller , there
    aren’t a rush of returns like with the
    Pre or some Android units and were not hearing any loud echos from the overseas markets about this problem. Hopefully Consumers Union will keep the units they bought and when the software fix is implemented, do a reevaluation of their results. In the mean tim how about doing real world comparisons rather than lbad lab tests.

  9. I’m not so happy with reception on my iPhone 4 compared to my 3G. If the $29- bumper is the solution, Apple should be giving them away or selling them at cost. I’m an Apple fan and a shareholder, but I have to admit, this thing drops more calls- a lot more- than my 3G. Even so, I wouldn’t trade it. . . but what a shame to step backwards.

  10. I’m confused. A couple of weeks back MDN was holding CR up as some sort of reliable authority when it said the iPhone 4 antenna problem was a non-issue…

    MW: step. As in, dare to step out of line and mdn will take you down.

  11. Consumer Reports gave my front-loading GE washer their highest rating. Had I read the user comments, I would’ve realized in advance it was an aggravating POS and should have bought a Samsung.

    I subscribe to CR- but it is not infallible. I first discovered this years ago with their ratings of VCR’s. They are totally off the mark on many things- coffee- and operating systems, for example. A Mac is a PC is a computer. Macs get “fewer viruses.” They rate Apple’s tech support and frequency of repair on reader feedback, not their own “Geniuses.”

  12. You know… Just about everyone I know now has an iPhone and I’ve only seen 2 that weren’t in a case. Honestly…2. And those 2 people have repeatedly told me that they want a case, but haven’t found one they like. The new phone is mostly glass, and now people don’t want to use a case??? Why? Because the new phone is such a gorgeous design? So were the first 2 designs. I put my new iP4 directly into a case (and my kids iP4) before we even did a Face Time. The thing is 95% GLASS. Protect it as best you can… And the antenna issue magically disappears as a bonus. Also, most everyone knows AT&T;’s 3G coverage can be a problem for some, so turn off the 3G and use Edge. I have never had a dropped call on any of my 3 iPhones and the first thing I do is turn off the 3G (due to its battery devouring) and life has been good and my battery life is better. And I do hold my iP4 any way I want to. Get a case!!! I picked up a Rocketfish case at Best Buy for $20. So far, best case for any iPhone I’ve owned.

  13. @ Voice of Reason. I agree. I recall reading computer reviews by CR in the 2004-2007 time frame. Typically, they would give the computer hardware good reviews because of the component and build quality, but invariably would cite the high cost of the computers compared with, say, Dell, and advise people that they may well consider getting a Dell or HP because they present good “value”. They seemed to miss the point of the value of OSX.

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