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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.


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RE: Look out iPhone...
By Chaser on 8/31/2008 1:25:02 PM , Rating: 2
Thats right. Some Apple thugs pulled up in an AT&T cargo van at 2am and dragged me off to an Apple store and said, "sign zee contract young man. Resistance is futile, Yyou will use Safari".

And now this assimilated sheep I can't text while he drives.


"People Don't Respect Confidentiality in This Industry" -- Sony Computer Entertainment of America President and CEO Jack Tretton














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