Apple at risk: millions await iPhone 4 patch

iPhone 4 sales are spectacular, Apple confirmed this morning. An impressive 1.7 million customers put down their cold, hard cash to acquire one of the company's new smartphones.

"This is the most successful product launch in Apple's history," said Steve Jobs, Apple's CEO in a press statement. "Even so, we apologize to those customers who were turned away because we did not have enough supply."

This success breeds new challenge.

Now the company's marketing skills must be matched by its software acumen if Apple is to avoid a gigantic black mark against the iPhone's quality record.

At issue: Reports complaining of a problem in which gripping the device by its lower left side would cut calls and interfere with signal reception (detailed description here) are not going away. They are intensifying.

That's despite claimed attempts by Steve Jobs to characterise the situation as a "non-issue", and a statement from Apple which called the problem "a fact of life".

Multiple testers now have tried to emulate the issue, and it seems repeatable in enough cases that Apple execs must be stunned -- and in at least one case, furious -- at the damage this is doing to the device during its critical launch phase.

Competitors are laughing. Nokia today published a 'How do you hold your Nokia" post on the Nokia Conversations blog. In this, the company notes:

"One of the main things we've found about the 1 billion plus Nokia devices that are in use today is that when making a phone call, people generally tend to hold their phone like a…. well, like a phone. Providing a wide range of methods and grips for people to hold their phones, without interfering with the antennae, has been an essential feature of every device Nokia has built.

"Of course, feel free to ignore all of the above because realistically, you're free to hold your Nokia device any way you like. And you won't suffer any signal loss. Cool, huh?"

You couldn't get much more below the belt as Nokia moves to step up its competition with Apple.

While Nokia has never really dented the US market, it has a huge business to protect worldwide.

Historically, that's because the US market lagged in cellphone adoption. Apple has helped drive change here, leaving Nokia in position to compete.

But Nokia's observation that Apple's product has a left-hand holding flaw isn't insignificant. Over at Fortune, Seth Weintraub lists numerous problems to declare, "The iPhone 4 is flawed". Will this be a gift to competing firm Google and its Android OS, he asks.

Can Apple address the problem?

It certainly must act -- Wall Street is already expecting about 36 million iPhone sales in the fiscal year ending in September, up 73% from last year. And the all-important Verizon iPhone launch seems set for 2011. There's a lot at stake.

Speculation currently anticipates Apple will ship a software update to address some of the early iPhone 4 SNAFU's this week.

That's in keeping with the company's usual modus operandi for iPhone releases.

There's some question if a software patch can help solve the left-hand loop.

Device Magazine tells us that there is some possibility the patch could help the OS be more flexible, identifying and adapting to fluctuations in the signal level which can be caused when hands are held near the antenna.

"The software update may not make the signal reception absolutely free of hardware interference but it would enable the iPhone 4 to get more control over the signals," a ProductReview report informs.

 Appleinsider notes comments which claimed the company is developing an update which will change the way the phone "calibrates its baseband frequency", which hopefully will address the problem.I hope it works, as I fear this matter may emerge as a watershed moment in Apple's leadership within the smartphone business.

Any perceived failure to address the claimed problem means 1.7 million customers will be immediately impacted, that would damage Apple's hard-won and much coveted credibility.

Losing mindshare would undo so much hard work that has been done to put Apple center stage in smartphones.

Look at the reviews: even Computerworld's Michael deAgonia calls the iPhone 4, 'the one to beat'. And Mike Elgan points out that iPhone 4 represents 'the triumph of the design nerds'.

(Though I'd argue the design nerds won the debate on the launch of the original iMac, when people finally cottoned-on that PCs don't need to be boring).

All this hard work is being held to ransom now. Admonitions that this is a "non-issue" will not fix this. Apple must turn this disadvantage into an advantage by whatever means necessary.

Or, in a reflection of the previous desktop OS wars between it and Microsoft, it may see its mindshare plummet under the smartphone sea.

The entire industry is beginning to take an interest in how this turns out. 

So, dear readers, is this issue Apple's biggest challenge yet? Will this turn out to be Steve Jobs' personal Waterloo?

Or will Apple rise to the challenge and show itself capable of creating a cutting edge device, and reacting fast to early problems once that device reaches consumers?

(If Apple rises to this challenge, then it will be seizing the opportunity of the watershed moment).

And where, oh where, can Apple find a decent baseband engineer to find such faults?

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