Wednesday, July 14, 2010

An Apple Story

Insignia wrote a post on apple. From that post, I got an idea to write a post on apple too. Thanks Insignia. You are always my inspiration. But this is different apple. The Apple Company.

Apple, Inc. has been in the news a lot for the past 3 months. Their IPad and IPhone 4 have suddenly become attractive products all over the world. Apple’s profit has skyrocketed. They have become the largest technology company in the world (replacing Microsoft) through market capitalization. The stock is at $253 now and estimated to go over $390 in a year.

Now comes the problem. From day one IPhone 4 has antenna problem. When the phone is held in a certain way the signal drops. At first Steve Jobs, CEO of Apple, brushed aside telling that the customers are holding the phone in a wrong way. Then they came out and said there is a problem with software algorithm used to define the signal bars on the phone.

Immediately, the stock plummeted from $279 to $242. Apple still has not fixed the software problem.

Since announcing the sale in late June, they have so far sold approximately 2 million Iphone 4. Now experts are suggesting different solutions. Some experts suggest that users buy a case ($30) to eliminate the issue. Some others suggest that Apple should issue a free case to those who bought their IPhone4. Apple is sitting on a cash of $42 billion (that is billion) in their checking account with no debt. The cost of giving away free case will amount to $60 million only. This is nothing for Apple.

Some people have suggested that Apple should refurbish all the phones that were sold. This would cost Apple about $200 million. No big deal for Apple.

Then why they are not doing it? If they do anything like this (issue case or refurbish) it would mean admitting that they made a mistake.

Some people are demanding total recall. This is not likely. This is about how you hold the phone and not whether this phone will blow up or not. Experts on crisis management and public relations say that Apple handled the situation very badly. Even if there is nothing wrong, acknowledging the problem is key. Steven Job’s flip remark (holding the phone the wrong way) did not help. Apple had a chance to dictate how this story will be developed. But by ignoring and giving unsatisfactory response to the customers, they have a potential recall on their hands.

PS: I am long on Apple with heavy investment. Hope Apple handles the situation well and come out of this.

24 comments:

  1. Who Posted This?July 14, 2010 at 9:19 PM

    iTHINK the iPHONE4 is iGAY.

    Losing signal strength and dropping calls because of the way you hold the phone is iSTUPID.

    Look, AT&T already has piss poor coverage.
    And with this problem iTHINK that iDON'T want an iPHONE4.

    DRRRROOOOID!!
    Yeah fool! Steve Jobs can eat me...you cheap Bastard!

    It's a Droid World and you better recognize it.
    The Droid X is coming out soon and it is going to kick the crap out of iSUCK4.

    DRRRROOOOID!! If you don't know about it yet, you better ask somebody...or you can stay with AT&T's coverage and hold the phone with your feet.

    Regards,
    DROID NATION
    DROID X - all the way

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  2. I know very little about this issue but it was very informative to read about it on your blog. From what you've written, it really looks like Apple handled the situation very badly and the mess is there for everyone to see. I liked the bit where you've stated, "Apple had a chance to dictate how this story will be developed. But by ignoring and giving unsatisfactory response to the customers, they have a potential recall on their hands."

    It's the truth with most professionals, isn't it? It's just that we don't realize or perhaps we underestimate the potential that's latent in our roles and scope of functioning. Like you've said, lets hope that Apple tackles this issue and comes out of it better.

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  3. Thanks for your comments droid pumper. I can come up with a dozen defects about Droid X. For the sake of time, I will mention only a few. The speakerphone is not louder. It is too big in size. Display does not like bright sunlight. We must remove the battery to access microSD card. They still have that irritating “DROOOID” sound.

    Hey I am long on Apple. I am sure they will come out OK.

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  4. Thanks for your comments Sanand. You are correct that we underestimate the potential that is latent in our roles and scope of functioning. I hope Apple fixes this problem soon. Since yesterday, Apple has slid another $4.33 and now at $248.40 this morning.

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  5. That was an amazing story to know.. thanks for sharing!!

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  6. Thanks for your comments Swatantra. I am glad you liked this post.

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  7. I too can up with a dozen iPHONE4 defects but for the sake of time will only mention a few.

    But first you said the following -
    The Droid X is too big?
    The screen is 4.3 while iSMALL4 is only 3.6. 3.6 is good but 4.3 is great. Bigger screen is better looking and clearer.

    You said the display is not good in bright sunlight but tell me which phone likes bright sunlight?
    All touch screen display phones hate it. It's like saying the DROID X can't be used underwater. Which phone can?

    The SD card is behind the battery so there is an extra step to get to it on the Droid X?
    Yes, that is TRUE and I don't dispute it...but I have a question for you. How do I get to the iDON'T's SD card?
    Anyone? Anyone? Oh yeah...that's right. iDONT has NO SD CARD slot.
    You can't put an SD card in the iOOOPS4.
    Yup, it's built in memory only no card swapping.

    No FM radio on iCANT but DROID X has it.
    5MP camera for iBLURRY vs 8MP camera on Droid X.

    I too am long on Apple but iPHONE4 will lose to Droid X...even if they didn't have these problems.

    DRRRROOOOID!
    Being released today...and I'll own one (or two) within 72 hours.

    DRRRROOOOID!

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  8. Thanks for your comments Droid X. I give up. Why limit buying 1 or 2 only. May be your parents are rich. Go buy at least 4. And, then come back to IPhone 4.

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  9. So my guess was right.You are using the Apple gadget.Hence the post. Don't worry things will get sorted out.

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  10. Apple is a trusted brand and m sure they must b coming up with some great solution. It can be that more publicity is being given to the problem by Microsoft being the rival company.

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  11. Thanks for your comments Chitra. Hope Apple sort out this problem soon.

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  12. Thanks for your comments Nazish. Yes, you are correct. More publicity is given to this. The big and fierce rivalry that is coming is Apple Vs. Google.

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  13. didnt know abt this this issue... but i have heard a lot of people complaining abt apple's products ...

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  14. Good one SG! Good luck to Apple & of course to YOU - the investor!
    ~ NRIGirl

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  15. Thanks for your comments Rajlakshmi. This is not a product problem. This is a PR problem.

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  16. Thanks for your comments NRIGirl. I hope they fix this issue soon.

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  17. well now we are talking abt "an apple a tilt, keeps the signal away", :) ! hope steve hears this!

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  18. Thanks for your comments HaRy. That is cute. I hope someone brings up this in their tomorrow's (Friday) special press conference.

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  19. Oh I didnt know that!!
    Thats a very sad situation, the attitude thats been carried out is just not acceptable...if big names do such a thing, whom would the customers rely on!
    I guess theres a lot of confidence attached to the names we trust and if this is what happens...they would stand a weak chance to remain high up in the market coz whatever said and done...for them to survive....they should hold customer satisfaction as their top priority instead of playing the blame game!!
    Thats a very informative post SG, thanks for sharing!

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  20. Returning your visit to say hello. An interesting post though I'm afraid much of the technical details went over my head.

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  21. Thanks for your comments New Beginning. And, welcome to my blog. You are correct. If name brand companies behave like this, where will the customers go.

    Please visit here as often as possible. Thanks.

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  22. Thanks for your commens Petty Witter. And, welcome to my blog. Other than technical details, Apple did not serve the customers well. That is it.

    Plese visit here as often as possible. Thanks.

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  23. I heard about it..some one is saying taht they forgot to think that some people hold the phone in left hand also, as its then it gives problem, for right handers its ok:)

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  24. Thanks for your comments Samvedna. Yes they are saying the problem occurs only if you hold the phone near your left year.

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