Print 41 comment(s) - last by PascalT.. on Sep 2 at 11:15 AM

The rough ride of Apple's iPhone is exciting Verizon and others, but Apple fans are unmoved

Apple's iPhone went 3G and was met with great enthusiasm from Apple's fans.  Within a week of its launch, it had hit a million units sold.  The frantic pace of sales, began to slow, but still Apple managed to reach the 2 million mark, not long after, according to analysts.

Since, complaints about call quality, dropped calls, and defects have created somewhat of a public relations nightmare for AT&T and Apple.  For the signal related problems, Apple and AT&T have rolled out a fix, the details of which were finally leaked by an AT&T employee.  However, that has not stopped Verizon from seizing on public ill-will towards the iPhone and running new advertising campaigns specifically attacking it.

"A phone is only as good as the network it’s on," Verizon's ad blasts, and in an email to Wall Street analysts, a Verizon executive chided, "So much for a ‘new’ way of doing business at the old AT&T — your father’s phone company."

Part of what has left Apple and AT&T so vulnerable to such attacks is that they have done little to explain what is causing the problems.  This has created an air of uncertainty around the iPhone that is perhaps unjustified, but largely the fault of the pair's silence.

Aside from the technical details of the problem, one additional aspect may simply be logistics.  AT&T's 3G network covers only 310 cities of 100,000 people or more, though it plans to add 40 more cities by the end of 2008. 

Phil Marshall, of the research firm the Yankee Group, believes this lack of network coverage and the pair's corporate tendencies are wreaking havoc on the iPhone.  He states, "It’s hard to launch an iconic device like the iPhone on a network that it is not yet fully deployed.  As they build these networks they will need to make more improvements or the complaints will persist.  Both companies are accustomed to controlling all aspects of the delivery of its products.  It illustrates the culture clash, when you create an environment where you share the responsibilities between them. Then you have problems."

Marshall is equally sick of the almost daily emails from Verizon's management blasting the iPhone.  He bemoans, "I get almost one a day.  It’s almost like, hey, quit spamming me."

However, for all the bad news for Apple and AT&T, one piece of good news is that reports are indicating that through thick and thin Apple's fans are staying loyal to the company.  Peter Fader, a marketing professor at the Wharton School of the University of Pennsylvania describes the phenomena stating, "The objective reality is that Apple does plenty of wrong.  Very few companies have this kind of iconic status where anything they do, even if it is mediocre, will automatically have a halo around it."

Kern Bruce, a 25-year-old Web designer in Boston, Massachusetts, was among those die-hard Apple fans who waited all night in line to be among the first to receive a 3G iPhone.  He's had lots of problems with it since -- overheating, program crashes, and such poor 3G that he has turned the feature off.  It's not his first problem with an Apple product either.  He had to return an overheating MacBook Air and his Apple cinema display monitor is failing, having image burn-in.  Still he says he would never turn his back on Apple.

He states, "They're skimping on materials, on testing things to gain market share, but they're kind of pushing away people who have been with the brand even when [it was] struggling.  (However, Macs are) a lot better than the alternative in terms of stability, viruses, being able to do high-end graphics work.  I wouldn't tell people to stop getting Apple products. They make very good products."

Baba Shiv, a professor of marketing at the Stanford Graduate School of Business says that such business phenomena are not unusual.  He argues that most Harley Davidson bikes are inferior to their Asian competitors in terms of price and quality, but they still sell well in America.  He states, "In the public domain, the coolness factor matters.  (Once loyalty forms) the transgression has to be so egregious for someone to completely change the narrative.  If something like this had happened to Microsoft, the long-term impact would be much more for Microsoft than for Apple."

Apple and partner AT&T have their fingers crossed that Apple's fans stick with it, through thick and thin as they silently try to resolve the iPhone's problems.

Comments     Threshold

This article is over a month old, voting and posting comments is disabled

RE: Bloom coming off the apple tree
By EntreHoras on 8/31/2008 11:45:00 AM , Rating: 1
It's not about demographics, It's about availability. Of course Apple could design an iPhone for Verizon or Sprint, but that particular model would only work in the US and Canada. If you want to SELL your phone in the rest of the world (except Japan) you must go GSM, and GSM is AT&T.

RE: Bloom coming off the apple tree
By weskurtz0081 on 8/31/2008 1:10:02 PM , Rating: 3
If you actually do some research on the subject, you will find the person who you are responding to is absolutely correct. Apple tried to release the phone to Verizon first and was turned down because Verizon wasn't willing to bend over to Apple like AT&T did. Maybe, before you respond to something as if you know what you are talking about, you should try doing a bit of research first....

By FITCamaro on 8/31/2008 1:44:50 PM , Rating: 3
Not only were Verizon and Sprint not willing to give up control, they weren't willing to give Apple a cut of the monthly service fees as AT&T did.

The guy is correct. AT&T was Apple's third choice.

RE: Bloom coming off the apple tree
By EntreHoras on 8/31/2008 2:01:34 PM , Rating: 1
I humbly ask for your forgiveness.

I'm really sorry to comment in a subject so important like this without a profound research on the matter.

I'm terribly sorry that the logic that Apple used for choosing carriers had nothing to do with global sales.

By weskurtz0081 on 8/31/2008 2:06:44 PM , Rating: 2
I might be able to forgive you..... but I must consult the Flying Spaghetti Monster for guidance before I can forgive you (he hates Apple products).

By Solandri on 8/31/2008 4:41:11 PM , Rating: 2
It's not that difficult to make GSM and CDMA versions of a phone. It's even easier for a 3G phone since 3G on GSM and its successor (HDSPA and UMTS) are based on CDMA and wideband CDMA respectively.

The reason Apple went to Verizon and Sprint first is probably because their 3G service was mature. CDMA networks switched to 3G first because the way CDMA shares bandwidth makes 3G speeds trivial - just handle data the same way you do voice. GSM's underlying technology (TDMA) relies on timeslices so by definition can't share bandwidth. They had to graft on a CDMA standard (HDSPA) to attain 3G speeds. It took them several years longer than the CDMA carriers, and they're still trying to work all the kinks out.

Also T-Mobile also provides GSM service in the U.S. (T-Mobile is actually Deutsche Telecom.) And Korea and China are CDMA. Basically, CDMA won the wireless transmission standard war because of its bandwidth sharing advantage. GSM's successor (UMTS) is based on CDMA (but they're keeping the SIM card, which I think is a really smart thing).

"There's no chance that the iPhone is going to get any significant market share. No chance." -- Microsoft CEO Steve Ballmer

Latest Headlines
The Samsung Galaxy S7
September 14, 2016, 6:00 AM
Apple Watch 2 – Coming September 7th
September 3, 2016, 6:30 AM
Apple says “See you on the 7th.”
September 1, 2016, 6:30 AM

Most Popular Articles5 Cases for iPhone 7 and 7 iPhone Plus
September 18, 2016, 10:08 AM
Automaker Porsche may expand range of Panamera Coupe design.
September 18, 2016, 11:00 AM
Walmart may get "Robot Shopping Carts?"
September 17, 2016, 6:01 AM
No More Turtlenecks - Try Snakables
September 19, 2016, 7:44 AM
ADHD Diagnosis and Treatment in Children: Problem or Paranoia?
September 19, 2016, 5:30 AM

Copyright 2016 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki