iPhone 4 antenna problem spooks Apple customers, says IDC

Two-thirds of current iPhone owners plan to delay buying new model

The iPhone 4's antenna and reception problems have given pause to two out of three current iPhone owners, who said they would postpone upgrading to the new model, said research firm IDC.

IDC's survey, which polled IT professionals last week, showed that 66% of current iPhone owners will delay their purchase of the iPhone 4 because of the smartphone's widely-publicized antenna and reception issues.

On Friday, Apple CEO Steve Jobs held a quickly-called news conference to defend the iPhone 4 antenna design and announce that the company would give customers a free case, which will reportedly minimize the signal- and call-loss problems.

Jobs' news conference came after three weeks of negative publicity that reached a crescendo a week ago when Consumer Reports said it could not recommend the smartphone because it dropped calls and lost signals when users held it in certain ways.

Complaints about the iPhone 4's reception surfaced within hours of its June debut, 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 acknowledged that holding the iPhone 4 could weaken the signal, but told consumers to hold their phones differently or buy a case.

Because current iPhone owners who haven't yet bought an iPhone 4 said that they would delay upgrading, Will Stofega, a mobile device analyst for IDC, expects that the affect will be to extend the upgrade cycle, not stymie it.

But another survey result clearly puzzled Stofega.

According to the IDC poll, 74% of those who do not own an iPhone, but plan to buy one, said that the antenna and reception problems would not delay their purchase plans.

"That's a very mixed message," said Stofega. "It looks like a perfect example of the difference between behavioral economics and market economics. The iPhone 4 clearly isn't working as it should, Apple's saying that 'We'll give you a Bumper,' but people seem committed to the iPhone. Many of them see this as overblown, and that Apple will fix it."

Stofega added that IDC's research had revealed that the iPhone 4 continues to "sell like hotcakes."

Currently, Apple's online store shows a three-week delay between the time an iPhone 4 is ordered and when it ships to the customer.

Last week, Jobs said that Apple had sold three million iPhone 4s since the smartphone's June 24 launch. On Tuesday, the company will spell out numbers for its second calendar quarter of 2010, including overall iPhone sales.

Stofega said it will be worth watching Apple's results over both the mid- and long-term to see what affect, if any, can be attributed to antenna problems. "In the long term, what does this do to iPhone sales?" Stofega said is the question that will be on his mind when he compares Apple's sales numbers with those of other smartphone makers, such as Research in Motion, Nokia, HTC and Samsung.

Wall Street analyst Brian Marshall of Gleacher & Company has forecast iPhone sales of 8.75 million for the quarter that ended June 30 -- the quarter Apple will report tomorrow -- a 68% increase over the 5.2 million in the same period of 2009.

Apple will audio-cast its quarterly results Tuesday starting at 5 p.m. ET, 2 p.m. PT.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer or subscribe to Gregg's RSS feed . His e-mail address is gkeizer@ix.netcom.com.

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