Unfazed by "Antennagate," Apple Steamrolls Ahead

By  Mike Cole — July 27, 2010

Reams of copy have been written and tons of blogosphere space have been devoted over the last few weeks to Antennagate, the controversy over the signal strength of the new iPhone 4.

Yet in the post mortem over the Apple firestorm, the company has seemingly emerged unscathed by the incident -- by some accounts, even stronger.

As an analyst from Oppenheimer wrote in the wake of strong earnings reported last week by the company, "To those (like us) who fretted that Antennagate might hamper iPhone sales, Apple's guidance seems to say 'antennagate schmantennagate.'"

That scribing came after Apple's announcement that the company's quarterly profit skyrocketed 78 percent as the company recorded strong initial sales of the iPad and the iPhone 4. Additionally, Apple issued a strong forecast for the current quarter to assuage concerns that the iPhone 4's antenna problems might slow Apple sales.

Drawing from recent figures, Apple says it had sold more than three million iPads in the 80 days since its April release (the figure now is presumably much higher).

As for iPhone 4, Apple's chief operating officer Tim Cook dismissed Antennagate in its earnings call, saying "my phone is ringing off the hook from people that want more supply."

Cook also said Apple is selling iPads and iPhones "as fast as we can make them," and "is working around the clock to try to get supply and demand in balance."

In its earnings press release, Apple founder and CEO Steve Jobs touted the company's financial results as "phenomenal" and said Apple had "amazing new products still to come this year."

Here's a Free Phone Case

While receiving decidedly mixed reviews at his July 16, 2010 mea culpa press conference to diffuse Antennagate (his "we're not perfect," statement encapsulated the event), Jobs' performance at it apparently quelled the controversy. He announced that Apple would provide all iPhone 4 owners with a free case that helps solve the antenna issue. .

At the press conference, Jobs cited figures from AppleCare which showed that only 0.55 percent of all iPhone 4 users have complained to the company about the antenna issue, while the number of phones returned to Apple was 1.7 percent -- 4.3 percent less than the number of iPhone 3GS models that where returned in the first month of the phone's launch.

Additionally, Jobs compared iPhone 4 to several competing phones also experiencing signal loss when gripped, including the BlackBerry Bold 9700 from RIM, Samsung Omnia II, and the HTC Droid Eris.

Shortly after the press conference, Apple added a new section to its site to explain smartphone antenna performance. The Blackberry Bold 9700, HTC Droid Eris, and Samsung Omnia II were again displayed alongside the iPhone 4 and iPhone 3GS as suffering from a drop in signal when covering the "weak spot."

(For their part, the competitors fired back: RIM. for one dismissed the references as an unacceptable "attempt to draw RIM into Apple's self-made debacle." The statement, signed by co-CEOs Mike Lazaridis and Jim Balsillie, went on to tout RIM as a "global leader in antenna design" that has been designing "industry-leading" products for more than 20 years. RIM called on Apple to "take responsibility" for its design decisions, rather than "trying to draw RIM and others" into the situation.)

Survey Says: "Continued Strength With Enterprise Customers"

Amidst the recent controversy, a new survey of enterprise technology managers, conducted by the firms ITIC and Sunbelt suggested "accelerating interest in purchasing first-time or additional Mac OS computers and iPhones."

Satisfaction with the performance, reliability and security of Apple devices -- particularly Mac hardware, OS X 10.x operating systems and the iPhone 3 and 4 was cited as being high, according to the study.

Approximately two-thirds of the survey participants rated the performance and reliability of Apple devices as "Excellent" or "Very Good."

The ITIC/Sunbelt survey also found unmistaken enthusiasm for the iPad with 23 percent or nearly one in four IT managers stating they've already purchased or ordered the new Apple tablet.

Another 18 percent said they plan to purchase an iPad within the next nine months.
Among the other survey highlights:

-- As the line between consumer and enterprise usage continues to blur, 63 percent of respondents indicated they/their organizations use Apple devices for both personal and business functions.
-- A strong 82 percent majority said they use their iPhones to access corporate email and data.
-- Twenty four percent, who did not currently own an iPhone, said they "have already decided" or are "very likely to switch" with an additional 35 percent saying "it's possible we'll switch when the current contract expires."
-- Eight out of 10 organizations said they are "more likely to allow more users to deploy Macintoshes as their enterprise desktops" in 2010-2011, up from 68 percent in the 2009 survey.
-- The number of organizations reporting large complements of Macs and OS X 10.x in their organizations continues to rise: Seven percent of respondents said they have more than 250 Macs in their enterprise. (In the 2008 survey, only 2 percent had more than 250 Macs.)

"The growing popularity of Apple products in the personal lives of IT managers is having a continued spillover effect in the enterprise," the report concludes. The acceleration of interest compared to our previous surveys (suggests) this trend will continue unabated during the next 12 to 18 months."


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