Apple better give iPhone 4 owners free cases, say crisis experts

Company is 'perceived as arrogant,' says PR specialist, needs to come clean

Facing mounting public relations troubles over the iPhone 4, Apple must act swiftly to quell customer complaints about poor reception by giving away free cases, crisis communication experts say.

"This is undeniably doing damage to Apple's brand," said Gene Grabowski, senior vice president of Washington, D.C.-based Levick Strategic Communications, referring to the company's refusal to respond to customer complaints. "Apple's being perceived as arrogant by trying to minimize a problem that users say is a big problem."

Grabowski and others were interviewed earlier this week, before Apple announced late Wednesday that it would hold a news conference Friday at 10 a.m. PT, 1 p.m. ET, at its Cupertino, Calif. headquarters. The company has said the quickly-called conference -- a major departure from its usual practice -- would be about the iPhone 4, but has provided no additional details.

Analysts have assumed that Apple will use the event to address the iPhone 4's antenna and reception issues.

Complaints about the iPhone 4's reception surfaced within hours of its June 24 launch, as buyers griped that touching the external antenna -- embedded in a steel band that encircles the case -- often dropped calls or caused the signal strength indicator to plummet. Apple quickly acknowledged that holding the iPhone 4 could weaken the signal, but told consumers to hold their phones differently, or buy a case. A week later, the company claimed that the iPhone 4's signal formula was flawed and promised to update the software.

"Apple's correctly assumed that existing iPhone owners and Apple devotees are mostly unfazed by this," said Grabowski, "but it's the potential buyers it should be worrying about. With these complaints, people who aren't yet iPhone owners won't want to buy one until they resolve this."

And the clock is ticking, Grabowski said Tuesday in an interview with Computerworld. "It's still fixable," he said. "Apple has such a strong brand reputation and so many resources. There's still time. I don't think we're at the point of no return yet, but we're getting very close to it."

Other experts said Apple's problem isn't that big of a deal.

"I think this has been made into a mountain from a molehill," said Jim Lukaszewski of The Lukaszewski Group, a crisis management consultancy. "Apple is a brand we trust, and consumers are hungry to buy its products whether they work or not. People will buy Apple's products until the cows come home."

Both Grabowski and Lukaszewski said that if Apple was their client, they would urge the company to come clean on the iPhone's antenna and reception problems, then give away free Bumper cases, or sell them at steep discount to all iPhone 4 owners.

"Apple should consider the problem as real, then offer cases at no-cost or low-cost," said Grabowski. "That would address most of the problems. They need to make a grand gesture that shows the company does care about its customers."

Grabowski also recommended that Apple be more transparent in its messages to consumers, something the company has traditionally resisted. Even among technology companies that typically play things close to the vest, Apple is notorious for its secrecy.

"They have to show some responsiveness on this," Grabowski said.

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