>>>
what is
apple
going to do about the major problem with the new
iphone
's antenna? the company has scheduled a news conference
later today
to address some mounting complaints. nbc's
george lewis
is outside
apple
headquarters in cupertino, california.
>> reporter:
apple
will not announce a full blown recall of the
iphone
. will
apple
opt for a simpler, cheaper fix? mark
contreras
makes his living as a tennis pro. when he's not giving lessons, he's taking calls from potential clients.
>>
every call for me is very important.
>> reporter:
that's why
contreras
got worried when his new
iphone
started dropping calls.
contreras
is one of the 1.7 million people who bought the
iphone
4 when it came out last month, and he's not alone in complaining about its reliability.
consumer reports
tested the
iphone
and said it could not recommend it after finding a design flaw in the
stainless steel
antenna that surrounds the device. if you touch the bougttom left side of the phone while you're on a call, the signal fades and you can lose your connection.
>>
only the engineers who built this phone can really explain what happens when you touch the phone this way.
>> reporter:
according to bloomberg news,
apple
's engineers knew about the problem before the
iphone
went on sale.
>>
it is the thinnest
iphone
in the planet.
>> reporter:
apple ceo
steve jobs
wanted a sleek design and the
stainless steel
antenna made it possible.
>>
while they chose a design they knew could pose potential reception problems, they felt confident their engineering team could solve the problem.
>> reporter:
one solution, a $29 plastic accessory called the bumper that fits around the phone like a
rubber band
and prevents you from touching the antenna, or you could go with a piece of duct tape. all of this has made
apple
an easy target.
>>
and the number one sign you purchased a bad
iphone
, it only accepts calls from
mel gibson
.
>>
it's certainly a known, real issue. what i think is interesting about it is as an
iphone
4 user i don't notice it. there aren't lines of people waiting to return their
iphone
4s.
>> reporter:
despite the problems he's had with his
iphone
,
contreras
says he's willing to stick with it as long as
apple
serves up a quick fix for the flaw. now one quick fix might be to give away those rubber bumpers to people who have already bought the phone, although that kind of detracts from the phone's sleek appearance. matt?
>>
george lewis
, we'll wait to see. thanks very much, george.
michael paul
is a corporate crisis manager here in new
york city
.
omar
wasso is a technology analyst. good morning to both of you guys.
>>
good morning.
>>
michael, let me start with you, okay, this is somewhat new territory for
apple
. this is the darling of the technology world. they're used to people patting them on the back saying, you guys are hip, you guys are great.
>>
that's right.
>>
and how do you think they have to handle this at this news conference today?
>>
this is not only an
apple
but a
steve jobs
hit. he supposedly knew himself about a year ago from one of his techs. he said keep moving forward. so i think the
bottom line
here, though, is this rubber bumper is not going to be the fix. if i bought the phone a couple days ago and my buddy gets it
30 days
from now and it's perfect, i want the perfect phone.
>>
in terms of handling a corporate
public relations
crisis and you're the expert on that, so far this company has basically taken the problem -- one problem approach. they can't have that tone at this news conference, can they?
>>
the root of this is trust. they can't have that tone and the
bottom line
is we
need to know
what happened, when it happened, when you knew it, and make sure you're coming transparentally to us.
>>
is it possible that because they've been such a darling and haven't had a situation like this they simply don't have the people in place who knew how to deal with a crisis like this?
>>
they may have some folks in place who had experience. they don't have the experience within
apple
of having problems like this on a consistent basis and that's going to be a problem for them.
>>
you mentioned
steve jobs
. conflicting reports. one major newspaper said he may have known of this problem before these phones were shipped. another says he didn't learn about it until after. if it turns out he did know, how big a hit?
>>
major hit. we want some humility. we want him to admit that he was wrong. we want the tech to come clean as well because he is nervous about speaking to the media right now, and there are a lot of people trying to reach him.
>>
omar
, let me bring you in here. 1.7 million people rushed out to buy the
iphone
4. many of those people are not happy with it. what do they want to hear at this news conference today?
>>
well, i think mike made the main point which is people do want a clear explanation.
apple
made clear you can return your
iphone
up to
30 days
and given it only came out less than
30 days
ago, there is that option for people who might be from frustrated with their current phone. people want to hear a clear explanation, the ambiguous explanation that is have come out so far are insufficient and what you are going to hear is the detailed report on how they're engaging this problem, the latest
software update
that came out yesterday makes some progress, how perhaps it's not just hardware, it's an interaction between software and hardware.
>>
if they tell me i can get a band around the
iphone
, even if it's for free, i like george's poi point, people bought the phone because they like the looks of it, the aesthetics, the way it looks in their hand.
rubber band
. to look down at
>>
and certainly that's a complaint, but it's a relatively -- i mean, asking people to put a
rubber band
or the bumper on isn't a major imposition either. i think you will see, though,
apple
wants to make a stronger claim that this is fixable with things like software, with perhaps a coating they may be putting on the current batch of iphon iphones. so it's unclear whether they actually are going to do the bumper as the solution. i think maybe a sort of more sophisticated presentation that tries to say this is something that is partly about software, pa partly about how the algorithm they used to represent the antenna signal and interact with the antennas. i agree with you, though, the bumper -- they're doing a press conference, that's going to leave people wanting more.
>>
you followed this business a long time,
omar
. have you seen anything with
apple
like this before?
>>
well, you know, the one thing that's a little bit like this when they first released the
iphone
it came out and had a $600 price and then a few months later they dropped it quickly and there was an outroar of people saying, hey, wait a minute, you've just burned your most loyal customer and they issued a $200 gift certificate to everyone who wasn't an adopter. they have had moments like this. they seem to have been caught off guard by this and are now trying to play catch-up.
>>
omar wasow
, mike paul, we'll see what happens when they
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