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How NOT to Deal with Problems: Lessons From the iPhone 4

If you had to name a company that symbolizes exemplary customer experience, superb brand management and cutting edge products, Apple wouldn't be too far from the top of most people's lists.

Two women compare the new iPhone 4 (right) and an iPhone 3 in front of Manhattan's 5th Avenue Apple Store.
Emmanuel Dunand | AFP | Getty Images
Two women compare the new iPhone 4 (right) and an iPhone 3 in front of Manhattan's 5th Avenue Apple Store.

Which is why it's been so surprising to find the company squandering its reputation for all these things over a relatively minor flaw with the new iPhone.

In fact, the way the company has dealt with the issue can be viewed as a case study of sorts for what not to do in adverse situations.

The issue: signal problems with the recently released iPhone 4, which can cause the phone to lose service if held a certain way. The obvious solution: "don't hold it that way." Which is fine, except that Apple is charging significant amounts of money for the phone. Simply telling customers, "you're using it wrong"—as Steve Jobs initially did—doesn't quite cut it.

Perhaps realizing this, the company admitted that there was a problem with signal deterioration—the admission coming just a couple of days after Jobs' impolitic response. The problem, according to Apple on this occasion, was faulty software.

If the folks at Apple thought the issue had been addressed sufficiently, they were dead wrong: tech journalists just wouldn't leave it alone, eventually forcing an admission from the company that the hardware was the issue. Even there, however, the issue hasn't been put to rest. Apple hasn't suggested any kind of plan for dealing with the problem, beyond suggesting that customers either "not hold the phone in a manner that causes the hand to touch that lower left hand corner, or purchase a $30 bumper from Apple which would solve the problem."

That led to something of a damning report from Consumer Reports, whose engineers recently finished testing the device. Their conclusion: that "Apple needs to come up with a permanent—and free—fix for the antenna problem before we can recommend the iPhone 4."

That is a huge blow for a company that prides itself on the design of its products.

When your business revolves around making the sleekest, best-functioning devices on the market, it's damning indeed to have reviewers recommend applying duct tape to ensure those devices work properly. It's worse still when you've built a reputation for delighting your customers only to suggest that they're at fault when they find an issue with your latest product, or spend yet more money to address it.

The trajectory of this issue so far for Apple hasn't exactly been the stuff that great companies are made of. First, the phone managed to make it to market with this issue, meaning it was either insufficiently tested or assumed to not be a problem. Following the discovery of the issue, the company pointed the finger of blame first at its customers, then at a software issue, and even at AT&T's network. Only reluctantly did Apple own the problem, and since then they still haven't come up with any kind of fix or recompense that suggests they're thinking more about their customers than their bottom line.

Of course, it's important not to overstate the significance of this: the signal problem is a relatively minor flaw that won't affect the majority of iPhone users.

But the way the company has chosen to deal with it is instructive, and suggests it still has things to learn on both the tech and the customer relations side.

In the meantime, the rest of us can once again look to Apple as an example—only this time of what not to emulate.

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Phil Stott is a staff writer at Vault.com in New York. Originally from Scotland, he has also lived and worked in Japan, South Korea and Eastern Europe. He holds an MA in English Literature and Modern History, and a Masters in Research in Civil Engineering, both from the University of Dundee.

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