Are Steve Jobs' iPhone 4 Antenna Woes Over?

No phone is perfect, according to Apple CEO Steve Jobs at a high-profile press event last week. Josh Lowensohn/CNET

No phone is perfect, according to Apple CEO Steve Jobs at a high-profile press event last week.
Josh Lowensohn/CNET

Are Steve Jobs' iPhone 4 antenna woes over, or did he ignite a new PR crisis while trying to douse an old one?

On Friday, Jobs announced during a hastily-called news conference that Apple would provide free protective cases, or full refunds, to unsatisfied iPhone 4 owners. He hoped that would defuse the criticism that Apple had ignored complaints about problems affecting the smartphone's antenna reception. But Jobs woke up on Monday to a renewed chorus of criticism for claiming that competing smartphones also are given to similar reception glitches.

Over the weekend, both Research in Motion and Nokia disputed Jobs' contention, saying that their products do not suffer from similar antenna and signal reception issues. And On Monday, executives from HTC and Samsung similarly rejected Jobs' claim. (While Jobs did not mention Motorola by name, the company's co-CEO also said his company's devices don't encounter the same antenna problems.)

Post-mortems on Jobs' presentation also took note of his sometimes sarcastic, sometimes defensive tone and it left left some wondering whether Apple's CEO was too convinced for his own good that Apple was on the side of the angels.

Jobs talked for 45 minutes and then took another 45 minutes of questions after bringing up on stage the company's chief operating officer, Tim Cook, and Bob Mansfield, a senior Apple executive in charge of hardware engineering. It soon became clear that Jobs was more than slightly irritated with the media treatment of a story that he said had been blown out of proportion. Responding to a question whether he might have done things any differently, he said:

We're an engineering company. We think like engineers. We love it, we think it's the right way to solve real problems. I don't think that's going to change, and the way we love our customers isn't going to change. Maybe it's human nature -- when you're doing well, people want to tear you down. I see it happening with Google, people trying to tear them down.

And I don't understand it... what would you prefer? That we were a Korean company, that we were here in America leading the world with these products... maybe it's just that people want to get eyeballs on their sites. We've been around for 34 years... haven't we earned the credibility and the trust of the press?

I think we have that from our users. I didn't see it exhibited by some of the press as this was blown so far out of proportion. I'm not saying we didn't make a mistake -- we didn't know that it would have these issues, we didn't know we were putting a bull's eye on the phone... but this has been so overblown. But to see how we could do better is going to take some time.

Jean-Louis Gassee': Learning The Lessons of "Antennagate"

That performance left Bernstein Research's Toni Sacconaghi concerned about the growing appearance of a bunker mentality taking hold at Apple headquarters.

"Apple's press conference reinforced what we believe is a bigger longer term concern for Apple investors, which has been the emerging pattern of hubris that the company has displayed, which has increasingly pitted competitors and regulators against the company, and risks alienating customers (and shareholders) over time," Sacconaghi wrote in a research note.

Although he described Apple's steps to remedy the situation as "a sensible solution," Sacconaghi added that was still unclear whether the company had successfully put the controversy behind it or whether there may be "potential fall-out from Antennagate."

Ominously, investors' early reaction continued to be negative. After selling off the stock on Friday, they continued to dump Apple on Monday, just one day ahead of the company's third-quarter earnings call. In fact, the stock plummeted from the opening bell on Wall Street and was off more than 6% in early afternoon trading. In part, the reaction reflected new worries that supply constraints on the iPhone 4 might damage profit margins.

The other worry for Apple: Strong early sales of the Droid X, the newest Android smartphone in the market. The Droid X debuted Thursday and reports over the weekend had the unit selling out.

"We are encouraged by positive early feedback, strong initial demand, and general acceptance of Motorola's Droid X," Gleacher & Co. analyst Mark McKechnie wrote in a note to clients. "Our first weekend checks, along with expectations for a Droid 2 follow-on for the holidays, increase our confidence that Motorola can meet or exceed its 12 to 14 million unit target" for Android phones sold this year.

  • Charles Cooper On Twitter»

    Charles Cooper is an executive editor at CNET News. He has covered technology and business for more than 25 years, working at CBSNews.com, the Associated Press, Computer & Software News, Computer Shopper, PC Week, and ZDNet. E-mail Charlie.

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