iPhone 4 Woes Spook iPhone Owners More Than Would-Be Buyers

The brouhaha over the iPhone 4's antenna and reception problems may be making current iPhone owners more reluctant to purchase the new device. But users who don't currently own an iPhone aren't as likely to be dissuaded from buying the hot, new and controversial device, according to market research firm IDC.

IDC's survey, released on Friday -- the same day as Apple CEO Steve Jobs's press conference to address the antenna issues -- showed 66 percent of current iPhone owners will delay a future purchase of the iPhone 4 because of the phone's widely publicized antenna and reception issues.

That finding might not be surprising. Since its launch, the iPhone 4 has been bedeviled by reports that holding the phone a certain way in your left hand could cause the signal to drop unexpectedly. Apple initially responded by blaming a software glitch, saying it caused the phones to display incorrect signal strength readings. But criticism grew after Consumer Reports claimed that its own testing showed a design flaw in the iPhone 4's hardware that caused signal interference and dropped calls. On Friday, Apple's Jobs fired back, saying that all smartphones suffer a measure of signal loss when held, but offered free bumper cases for owners as a way to mitigate the signal loss issue.

In spite of the fracas and the fact that two-thirds of current iPhone owners say they'll delay their future iPhone 4 purchases as a result, IDC found that among phone users who do not own an iPhone but plan to buy one, 74 percent said that the antenna and reception problems would not delay their purchase plans.

"We're trying to wrap our head around this," Will Stofega, research director for mobile devices at IDC, told InternetNews.com. "We were saying, 'OK, maybe those people have been waiting and are looking for a new phone.' More importantly, there is a whole group of people who bought totally into [the iPhone] and just want to join the crowd."

Stofega admitted that part of IDC's questioning did not take into account that many iPhone 3GS customers who locked into long-term contracts, and for whom an upgrade would mean either an early termination fee (ETF) or buying the phone without a carrier subsidy. In June, AT&T jacked up ETFs from $175, descending $5 per month until the end of the contract, to $325, with the $5 monthly drop. The iPhone 3GS came out in July 2009, so someone looking to buy an iPhone 4 would either have to buy a whole new phone at the unsubsidized price of $599 for the 16GB model or $699 for the 32GB model, or pay about $160 for an ETF and then $199 to $299 for the phone.

"Our overarching thought was: What's the mindset? Is there enough in the iPhone to make you change or is there an inhibitor?" Stofega said. "Our question [to people surveyed] was, given what you know, what is your thought on upgrading? Have the issues associated with the phone made you change your plans?"

It can't be hurting the phone much. Apple's online store shows a three-week delay in delivery of the phone and many stores are out of stock. At the Friday press conference, Jobs said the company has sold three million iPhone 4s in the three weeks since its launch.

Additionally, there might be some holdouts, Stofega added.

"What we've heard anecdotally from folks is they are going to upgrade but they are waiting to see which way the wind blows. Do they need that bumper, or can they wait a few months for a new batch of phones with the problem solved," he said. "That's where it's going."

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

TAGS:

iPhone, Apple, survey, IDC, antenna

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