Can Apple Withstand iPhone 4 Recall Pressure?

With mounting pressure on the company over the iPhone 4 issue, some say Apple would be well advised to recall the device because the reception issues are hardware-based and its planned software fix will do nothing to address the issue.

That's the sentiment of a group of public relations experts contacted by Cult of Mac, a blog dedicated to all things Apple. A cadre of experts ranging from a university professor to a former White House spin doctor all said that the problem is now harming Apple's brand.

The iPhone 4 antenna problem has been bubbling in the press and blogosphere since the phone first arrived in the hands of customers in late June.

Some customers found that by holding the phone a certain way in their left hand, the signal bars would drop, and some claimed calls were dropped. The story was largely anecdotal, with some users reporting problems while others said they had no problem.

Apple would claim the problem was software-related, and that it would issue a fix in an undetermined time period. That did not seem to placate people.

In-depth tests were done by tech sites first and then came Consumer Reports. The venerable consumer testing company's reviews carry considerable weight, and its test of the iPhone 4 showed there were problems with the antenna that were not software-related. The review all but called Apple liars and the publication said it could not recommend the iPhone 4 to its readers.

Now it's turned into a PR boondoggle, as The Unofficial Apple Weblog(TUAW) notes that at least six message threads on Apple's support boards referencing the CR article have been deleted.

Cult of Mac interviewed several PR experts who compared the iPhone 4 reception issue to Toyota's recent problems with runaway cars. "Apple needs to put this fire out now," Larry Barton, a crisis management expert, told the site. "There has to be a military-like response to this issue. And we have not seen this kind of urgency."

Chris Lehane, a crisis expert who advised Former President Bill Clinton throughout a series of high-profile controversies , said Apple needs to acknowledge and address the problem and abandon its historically tight-lipped public relations strategy.

"Apple must protect its brand image, its crown jewels, at all cost. Apple has enormous consumer loyalty but it depends on whether people believe it's credible," he said.

Leander Kahney, editor and publisher of Cult of Mac, said Apple needs to take some action soon. "I think Apple will recall the iPhone, but it will issue free bumpers first -- and see if that impacts sales. If sales continue to dip, the recall will follow," he told InternetNews.com via e-mail.

Total recall?

Apple is nothing if not stubborn, a trait born from CEO Steve Jobs and infused in the company. It has not commented on the antenna problem beyond its initial statement, and was not available or willing to provide a comment to Cult of Mac and did not return requests for comment by InternetNews.com.

Analysts contacted by InternetNews.com agreed that Apple is facing a PR mess comparable to Toyota and British Petroleum. But in Apple's case, some public relations professionals believe it's the stonewalling that's doing more harm to its image than any real or overblown product defects.

"They have not done an adequate job of taking care of their installed base. [Customers] are saying we have a problem and Apple keeps saying 'no there is no problem.' That's the worst way to behave in the marketplace," said Jack Gold, president of J.Gold Associates, a mobile market research firm.

"If you think it's the antenna and you think people are better served by using a case, send everybody a $0.50 plastic shell. What is the bad press worth to them?" Gold added.

"This is one of those things that spun out of control because of Apple. Because they tried to cover it up, that put all the focus on the cover-up. After the Toyota thing, that could put an interesting set of concentric circles on the company forcing them to do [a recall]," said Rob Enderle, principal analyst with The Enderle Group.

"With Consumer Reports entering the fight and questioning Apple's honesty, you've got the building of a Ralph Nader moment. And it's an election year. You [have] got a bunch of people pissed off. Someone running for office might use it as a campaign issue," Enderle added.

Gold expressed disbelief that Apple and AT&T couldn't find the problem initially, especially since AT&T has to do hardware testing for months before a product is released. "All networks go through several months of testing as well. So did AT&T not find it? Did they ignore it?T here's gotta be some AT&T liability in there somewhere," he said.

Gold figures for now, Apple's won't issue a recall.

"I think they should, but I'd be shocked to see them do it," he said. "There's not enough pressure in the system. My sense is Apple thinks it can just ride this out. They might try and fix it in production and hope it dies out. The percentage of complaints isn't the problem. It's what they are doing about it that's the problem," he said.

Enderle thinks Apple should fix the hardware and swap it out to existing customers. "That would do a lot to recover the trust they've bled out in this process, and they need to do it before someone orders them to do it. This administration could do it, but I'd be more worried about Europe than here because they are more aggressive about protecting consumers," he said.

Andy Patrizio is a senior editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.

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