With hours to go until the iPhone 4 press conference, the New York Times and the Wall Street Journal are reporting what we can expect (or rather, not expect): a recall. Instead, yet another software update may be coming to address the hardware problem of the antenna. If so, that update may be the biggest risk Apple (s aapl) has taken since the Mac went Intel (s intc).
Regarding the decision not to issue a recall for the iPhone 4, the New York Times cites “a person with direct knowledge of Apple’s plans” who is not surprisingly “not authorized to speak for Apple.” Further, another informed individual desiring anonymity asserted the iPhone 4 “exposed a longstanding weakness in the basic communications software,” a weakness that apparently existed in previous iPhones. Presumably, that weakness can be addressed with a software update separate from iOS 4.0.1. Even if true, one wonders how this could have happened, especially with a micromanager like Steve Jobs at Apple.
According to the New York Times, Steve Jobs was blissfully unaware of the issue. However, the Wall Street Journal suggests that Apple industrial design superhero Jonathan Ive almost certainly knew, having worked closely with lead antenna engineer Ruben Caballero. Earlier this week Bloomberg News reported that Caballero not only knew about the antenna issue, but brought the issue to the attention of Jobs, which quickly brought a stern denial from Apple, not that who knew what when really matters.
What really matters is exemplified in this ChangeWave Research survey from May showing the iPhone 4 with an insanely high rate of customer satisfaction. If the iPhone 4 antenna is a problem beyond the media hype, we might not know about massive numbers of returns and complaints, or a potential drop in sales, but Apple certainly would.
Two months after the original iPhone was launched, Apple unexpectedly dropped the price $200, and offered a $100 Apple Store credit to those who already purchased an iPhone. While the company asserted the reason for the price change was to make the iPhone affordable for as many people as possible, the more skeptical among analysts suggested the higher price was impacting sales.
In the same way, the antenna may or may not be an issue impacting a significant number of people, and certainly Apple will never admit if it is, but Apple will act regardless. With the original iPhone price drop, Steve Jobs himself wrote of the loyalty of Apple consumers, saying that “we must live up to that trust with our actions in moments like these.” In a couple of hours, Apple will face another of those moments, and it’s unfathomable that the company will risk the reputation of the iPhone for years to come through action as feeble as a software patch.