Apple gets egg on its face — single platform = single doom

One of the predictable responses to my recent writings on the smartphone market and the rise of Android has been a deluge of scornful invective by Apple fans confidently predicting that Android’s 1Q2010 surge in unit share represented a bubble that would pop under pressure from Apple’s “superior user experience”.

Then came the flap over the iPhone4’s antenna problems, and the silence of the fans. Yeah, that’s a superior user experience, all right – huge percentages of dropped calls (including reports that it drops 100% of calls when the bottom left corner is touched), and Steve Jobs telling iPhone 4 users it’s all their fault because they’re holding their phones wrong. The satirical backlash at Jobs on the Internet has been merciless, and completely deserved. Nokia even had the cheek to post a blog entry on the many ways you can hold your Nokia phone.

Now comes Apple’s attempt to spin the problem out of existence. The tone of desperation is palpable. “Oops…” Apple says “…we fucked up the display algorithm for the signal strength meter.” Oh, yeah, that’s a superior user experience all right. It’s Apple, and It Just Works!(tm).

But there’s a story behind this story. Actually, two stories. One is that Apple is lying outright about the scope and nature of the problems. And the second, more important one, is that the fragility of the single-carrier, single-platform strategy for iOS has come around to bite Apple hard. There’s a lesson here for the future.

First, Apple is lying. While I have no trouble believing the iOS signal-strength meter is screwed up, there’s a hardware-design problem too. We know this because the company has posted job openings for antenna engineers. In fact, it gets better. Apple knew there was a problem before launch because it was looking for top antenna engineers before Jobs announced the product. Remember, though, Apple’s user experience is superior! In other breaking news from the Ministry of Truth, war is peace, freedom is slavery, and the Obama stimulus worked.

Second…in outlining Apple’s struggle against disruption from below by Android, I’ve repeatedly used the term “outflanked”. Apple’s single-carrier, single-platform strategy leaves it exposed to single-point failures that Android can recover from more easily because it’s got other carriers and hardware to fall back on. If, say, my Nexus One were to have a problem when you grip it a certain way (and there are reports it does) consumers would correctly identify this as an HTC problem rather than a Google problem. Apple, having elected to own everything, gets to own every failure. And to be hostage to AT&T’s crappy network and its pricing moves.

It never looked very likely that the iPhone line would recover the unit share advantage against Android that it lost earlier this year. Now Apple has taken a serious hit to their brand image and they’ll be lucky not to watch their share drop like a rock. And there’s no one else Apple can blame; they launched the iPhone 4 with serious user-visible software errors and (on the evidence of those job postings) knowing the antenna design was defective. Apple owns every failure.

In the future, the Apple fanboys trumpeting the “superior user experience” among my commenters will be pointed to this post and mocked without mercy. Your god has failed you, even in the terms it set itself as the criteria of excellence. The iPhone 4 now stands for lies and incompetence.

107 comments

  1. Apple is now saying a patch for the weird touch / holding issues should be available ‘in a few weeks’. Interestingly, Samsung is pushing its own answer to the iPhone, which is apparently courting several carriers at once. It will run (you guessed it) Android. I’m interested in seeing how it does, Samsung is pretty clever with making units feel good to hold and operate, I own a few.

    The fan boy crowd is just that, fan boys. I don’t want advice on what to purchase coming from someone that stays awake at night looking at a picture of Steve Jobs while listening to Bryan Adams songs. I don’t even engage them. The minute I hear “You should [verb]” coming out of one of them, I stop listening.

  2. Eric: Nobody’s perfect, not even Apple.

    The ham radio geek in me is shaking his head at Apple’s ineptness, especially since it’s an easy thing to avoid. It doesn’t take a rocket scientist, or even a PhD antenna engineer, to realize that the antenna doesn’t go where the user’s hand will hide it, because 900-1900 MHz RF at cellphone power levels isn’t going to penetrate all that well…

  3. > Eric: Nobody’s perfect, not even Apple.

    I for one completely excuse them. They were the first company to market a product in this still extremely immature mobile phone industry. It’s not like any other companies can produce a working product yet. If there had been a couple of decades of good engineering practise to model your design upon _then_and_only_then_ could you fault them for doing something so obviously boneheaded and then trying to pretend that nothing was wrong.

    1. >It’s not like any other companies can produce a working product yet.

      Huh? My Nexus One works just fine. Signal-strength meter and all. It gives me, dare I say it, a superior user experience.

  4. Here at the large public school district I work for: we found a flaw in the way the iOS 4 handles web redirects the very first day that version 4 was available.

    Their response: “Oh, we never thought of that.”

    All that said, I do like my iPhone. It was the first PDA that I found was convenient enough to actually use.

  5. IPhone fans were ripe for a black eye like this one. How many times have we been told of Apple’s “legendary attention to detail”? Apple is just as fallible as the next company. Plus, they’ll have to wait a whole year before the hardware gets fixed. People waiting for an Android phone have to wait about 3 months before a new one is available from someone else.

    As amusing as this is; however, I think longer term, AT&T’s new Aria phone will be a more interesting development.

    1. >Plus, they’ll have to wait a whole year before the hardware gets fixed.

      Yes, this is a straight-line implication of the single-platform strategy for iOS. Apple can’t afford to refresh iOS hardware as fast as eleventy-skillion other smartphone vendors competing with each other can refresh Android hardware.

  6. Aha, because of {SINGLE REAL BUT RELATIVELY MINOR PROBLEM], the {COMPANY I DON’T LIKE] is completely doomed.

    Calm down……

  7. esr> Apple can’t afford to refresh iOS hardware as fast as eleventy-skillion other smartphone vendors can refresh Android hardware.

    Actually I think it’s worse than that, because hardware vendors are encouraged to develop for Android because it doesn’t mean they can’t use that same hardware from something else, or they can take popular, already developed hardware and refresh it with an Android Face like was done for the G1, and what some hackers are doing for older iPhone hardware.

    I again scratch my head at the idea of a company trying to be both the hardware AND software manufacturer. It never works out long term.

  8. In the future, the Apple fanboys trumpeting the “superior user experience” among my commenters will be pointed to this post and mocked without mercy. Your god has failed you, even in the terms it set itself as the criteria of excellence. The iPhone 4 now stands for lies and incompetence.

    Retire, relax, enjoy your family. It is just a phone. Not worth it. :)

    ESR says: Why, yes, Jeff, I was thinking of you!

  9. > because 900-1900 MHz RF at cellphone power levels isn’t going to penetrate all that well…

    If only it were that excusable. We are terrible radio mediums, true, and any phone with an internal antenna is going to have some body-based attenuation. And that’s a tough problem to model or test in every conceivable situation, so I could forgive problems in that. However, the iPhone’s problems seem to stem from the use of an external uninsulated antenna; that’s right, it’s a conductance problem. Adding the body to the circuit–and in the worst case, also adding the second antenna–seems to be the cause of the problems–along with unrealistic expectations set by an extremely non-linear (and totally standard) bar meter.

    Most anyone with any antenna theory should know that touching an antenna is likely to change its characteristics; heck, anyone who’s fixed TV reception by “holding it just right” knows this. But you’re just as likely to do harm as good, and with the carefully engineered antennas modern phones have you’re probably more likely to screw it up–and there’s lots of YouTube videos of this happening.

    Basically, it’s a failure of over-hasty (and/or under-scrutinized) innovation. Someone had a clever idea that would save space in the phone (making the antenna structural), but didn’t think it all the way through, and didn’t realize the problem until it was too late. Motorcycle manufacturers figured out some years ago that they could save space and weight and get a better center of gravity by making a combined frame/gas tank–but you can bet they made sure it worked just as well as a separate gas tank before they started manufacturing and selling them.

  10. The ham radio geek in me is shaking his head at Apple’s ineptness, especially since it’s an easy thing to avoid. It doesn’t take a rocket scientist, or even a PhD antenna engineer, to realize that the antenna doesn’t go where the user’s hand will hide it, because 900-1900 MHz RF at cellphone power levels isn’t going to penetrate all that well…

    But it does take a Steve Jobs to screw this up royally. This is the man who insisted that the Mac’s circuit boards be laid out in order to look pretty, in defiance of engineering’s concerns. He only relented when it could be shown that there were issues with the memory bus that made the Mac hardware incredibly flaky.

    Teh Steve has to constantly strike this delicate balance between playing the cantankerous fascist auteur and letting the technical people do their damn jobs. Sometimes he ends up on the wrong side of this line, and Apple suffers as a result.

    It’s not like any other companies can produce a working product yet.

    Huh? There were smartphones before the iPhone. Some of them even worked. They just weren’t as nice.

  11. Tim Post> Apple is now saying a patch for the weird touch / holding issues should be available ‘in a few weeks’.

    That’s amazing – Apple are somehow going to solve what is obviously a hardware/RF problem (in other words, amend the laws of physics) in software?

  12. That’s amazing – Apple are somehow going to solve what is obviously a hardware/RF problem (in other words, amend the laws of physics) in software?

    Of course — didn’t you hear? The latest officially denied, totally-not-from-Apple rumor indicates that Apple engineers have isolated the exact mechanism underlying Steve’s Reality Distortion Field, and are building an RDF generator into all iOS-based devices. There’s supposed to be a big announcement at WWDC 2011 that developers will be given limited API access to the generator. Imagine — making sure your toast comes out just right, the lights are all green on your morning commute, your plane is never grounded for hours on the tarmac, the boss gives you that raise, and the cute girl from marketing likes you? There’s an App for that!

  13. My interpretation of the current events is that the software patch is a way to cut down on the noise. Every actual review of the phone (from people who actually tested the antenna as well) shows that for all the signal problems, the iPhone 4G gets reception in places where previous iPhones never did. By that metric, this makes the iPhone 4’s antenna better than previous ones. Unfortunately, by the metric of signal strength, the antenna is worse. It’s all about trade offs. Better reception in weak areas in exchange for more risk of signal attenuation when certain conditions are met. Unfortunately, this combined with a poor representation of a poorly understood concept has lead to much shrieking and wailing and gnashing of teeth. By releasing this software update, I think apple is trying to change the tone of the conversation from one of “OMG TEH BARS!!! THEY ARE SHRINKING!!!” to “I used to get signal here, now I don’t, and I didn’t get signal here, but now I do”.

    The problem with issues like these are that suddenly everyone start paying attention to their bars and sees things that were always there, but are just now problems. So there is a whole lot more noise and less useful discussion and feedback. Apple I think is choosing to issue a software update in the hopes it shuts up some of the shrieking so they can get a real understanding of what issues people are actually experiencing. They’re hoping to eliminate all the people who wouldn’t be saying a damn thing right now if the iPhone simply reported 5 bars until -110 dbm.

    That isn’t to say there isn’t still a problem that may need to be addressed, but ultimately how much of a problem it is matters based on real world performance and behaviors, not on numbers and not on bars.

    On a slight tangent, the fact that Apple is hiring antenna engineers says nothing about whether they knew before hand about this issue. Is it really so unreasonable that a hardware manufacturer and designer of radio transmission and reception equipment might want to hire an antenna engineer?

    >It doesn’t take a rocket scientist, or even a PhD antenna engineer, to realize that the antenna doesn’t go
    >where the user’s hand will hide it, because 900-1900 MHz RF at cellphone power levels isn’t going to
    >penetrate all that well…

    And yet most phones currently on the market do just this. The overlooked difference is the contact with the antenna.

    1. >Is it really so unreasonable that a hardware manufacturer and designer of radio transmission and reception equipment might want to hire an antenna engineer?

      No, but the particular timing was kind of indicative that they knew they had a problem with the iPhone 4 before launch.

  14. Right. Actually, at those frequencies, you don’t have to have electrical contact between your hand and the antenna to detune it and otherwise screw it up. Close proximity will do the job.

    No wonder Apple’s looking for antenna engineers…

  15. I’m pretty certain that The Dread Pirate Neck Beard is using very dry, deadpan style sarcasm. Normally I have a very bad internet sarcasm detector, but I love very dry deadpan humor, so I think some extra circuits kicked in for me….

    It helps that I am holding my sarcasm detector very carefully, so as to neither touch nor block the antenna…. Ouch!

    I think that exposed wire, which encourages me to hold my sarcasm detector very carefully, in a way that I both touch and block the antenna, may be an issue here. Who designed this thing anyway? Hmmmm. I see a little red, white and blue donkey logo. Oh noes! A holdover from my decades as a Democrat!

    Yours,
    Tom

  16. I have no opinion on the stupidity or lack of stupidity of the hardware problem. But the arrogance of the spin attempt is repellent. They should simply have apologized for not catching the problem, announced the software fix, and promised that the next model will be 100% better. Instead they chose to come off like n00bs who didn’t know better–and conceited n00bs at that.

  17. >No, but the particular timing was kind of indicative that they knew they had a problem with the iPhone 4 before launch.

    OK, OK… I’m a big fan of Android, but let’s turn down the dial on the conspiracy detector a notch. You just can’t infer much of anything about a job posting at a company the size of Apple. I spent many years at a competitor of similar size, and as I recall, we had literally dozens of “antenna experts” in house, easily more than one per phone. If it’s not obvious from this debacle, designing, testing, and validating antennas for consumer electronics is a pretty labor-intensive process. And you really can’t get a phone through FCC certifications without a small army of antenna folks. So in a team that size, churn alone could easily explain Apple’s posting, as would organic product line growth (like, say, a new iPad derivative in the pipeline).

    Put it this way: There’s a whole page of software engineer postings — does that mean that Apple is hiding a bunch of bugs? I mean, they could be, but is that the only explanation?

    Of course, if you find a *former* Apple antenna expert who got canned the week before launch, that might be a smoking gun… :)

    I figure Apple’s going to take it in the pants for this, whether they knew about it at launch or not. That’s the important bit. Actually discerning their state of mind seems unnecessary to your argument, and probably not possible from the evidence we have.

    Casey

    1. >So in a team that size, churn alone could easily explain Apple’s posting, as would organic product line growth

      Fair point. We’d need more information on their headcount fluctuations over time to be certain, I guess.

      I still think the odds they knew at some level they had a lemon are pretty good, though. This is the sort of thing engineers tend to warn about before product launch only to get stepped on by line managers anxious to not be seen to be missing deadlines.

  18. This is why you don’t become an early adopter for something that is mission-critical regardless of software or hardware maker. The first few months (years if you’re Microsoft) of the release of any technology is really just the final beta stage anyway. If your phone is that critical to what you do, then if you’re waiting in line hoping to be first through the door on the release date, you’re taking a risk. As a rule of thumb for things like this in my personal life I usually wait several months before even considering a purchase of some technology that I intend to integrate into my life. Professionally, I wait longer the more mission-critical it is. This is especially true for an overhaul like what Apple did with the iPhone 4. I’d do the same with any Android phone. I’m sure there are lots of people here who have held off on an upgrade from a vendor to give them time to work out some more bugs. Have we all bought a bit of the hype surrounding Apple’s products that we throw away our own professional judgment? Sure, this looks bad for Apple (though Apple’s board may want to strongly consider a muzzle for Mr. Jobs) but like Kathy said, this has so much more to do with Apple’s response than the problem itself. The early adopters of the iPhone 4 are just pissed off because they got bit by something that Apple should have done something about. I hope the whole industry takes a moment to realize what rushing a product to market can mean. I personally thought Apple knew better, but apparently they’re buying into their own hype. I hope Apple emerges from this with a good bit of humility.

    As has been posted already, this is an industry that is still in its infancy. It is currently being lead by a company that isn’t used to being first place for devices that are as important to people as their smartphones are. Sure, Apple led the media player industry (and still does), but there is a quantum leap in complexity between an iPod (excluding the iPod touch) and an iPhone. Apple was bound to make a mistake eventually. Companies like Motorola and Nokia have been in the cell phone market for years. Apple has been in the phone business for what 5 years? I’d say up until this incident, their track record in the phone space has been pretty impressive. We shouldn’t be overly eager to predict the demise of the iPhone. I’ll still maintain that Android need iOS and vice versa. Do we really want another trip back to the “good ol days” of a single vendor monopoly on any aspect of the smartphone market like we had with PCs for so long?

  19. >I still think the odds they knew at some level they had a lemon are pretty good, though. This is the sort of thing engineers tend to warn about before product launch only to get stepped on by line managers anxious to not be seen to be missing deadlines.

    From that angle, I agree completely. I think the job posting was probably benign business-as-usual. However, it’s certainly reasonable to think that some engineer or tester somewhere along the line would have seen this. And if a maniac like Steve was your manager, would you have the balls to tell him you needed to go back to the drawing board and delay his next big product release? Probably not.

    Something else occurred to me, though: You know how that 4G prototype was found in the wild with a “shell” intended to make it look like a 3G so it wouldn’t attract attention? I wonder if that shell prevented their field testers from seeing the problem… Ha!

    Casey

  20. >It’s not like any other companies can produce a working product yet.

    Huh? My Nexus One works just fine. Signal-strength meter and all. It gives me, dare I say it, a superior user experience.

    I can report the same for my wife’s EVO 4G. And speaking of “superior user experiences” did I mention that not only you can speak your Google searches, but you can fill out ANY text field with voice recognition, no matter where it’s coming from. Furthermore, it’s search capability is a universal search, like Google Desktop Search. When I first tried it, I wanted to find out the phone number of our local Denny’s to place an order (yeah, I know, but the wife likes the Super Bird ;) hit the search feature in Google Maps and spoke “Denny’s” and it turned up not only results from Google Maps, but also it turns out that my wife had the number already in the contacts, so it returned that as the first result.

    Can iPhone do that? :-P

    Companies like Motorola and Nokia have been in the cell phone market for years. Apple has been in the phone business for what 5 years?

    And that’s the difference between Android and iPhone; Android phones are being made by companies like Motorola, HTC, Samsung, LG, etc. iPhone is being made Apple. I’ve made this point before. If you think that this doesn’t matter, I suggest you

  21. @Jeff Read

    It is just a phone. Not worth it.

    Why Jeff, I can scarcely believe you’re actually saying the Iphone 4 isn’t worth it.

    @ESR

    I still think the odds they knew at some level they had a lemon are pretty good, though.

    I’d go even further to state assuming that the problem is as has been reported (touch the band, drop the call) there’s a very high probability of one of two possibilities. A) They knew because they user test extensively and it came up in user trials or B) IPhone 4 was effectively “rushed out the door” wrt user testing (either insufficient the-boss-tried-it testing or no testing at all) to combat Android’s multi-vendor advantage.

    Either of these possibilities says, to me, bad things for Apple. The first one means they’re playing the “ship it and patch it later” game which almost never bodes well when money is changing hands. The second suggests they’re specifically shelving their competitive advantage to try to avoid playing catch up. I’m not sure which option would be more ominous.

  22. I’d say up until this incident, their track record in the phone space has been pretty impressive. We shouldn’t be overly eager to predict the demise of the iPhone.

    Ultimately I don’t think Eric is predicting the iphone will go away. More likely this is just another step along the way to being relegated to “no more important than any other smartphone os”. Which to him is all the victory he wants.

    Also never expect consumers to give allowances to a newcomer. Especially since the joined branding may have the effect of giving the impression that Apple has been in this market since the first Ipod came out… it’s all just computer thingies right?

  23. Something else occurred to me, though: You know how that 4G prototype was found in the wild with a “shell” intended to make it look like a 3G so it wouldn’t attract attention? I wonder if that shell prevented their field testers from seeing the problem… Ha!

    Hmmm you raise an interesting scenario. Yes that is a potentially viable third option to my above post. However If the only testers were outside testers with a modded device then their testing is still pretty stilted which moves it closer to scenario 2.

  24. The antenna debacle is going to give Apple’s general strategy a butt-kick. They try to see that their products are styled; they don’t want them looking like potential competition. Unfortunately for them, the antenna is critical to the perfomance of a cellphone, and there is probably just one way to optimize it. This is likely to drive all the phone makers eventually to make phones that pretty much look alike, and who will want an overpriced phone that looks like the cheap ones?

  25. Ultimately I don’t think Eric is predicting the iphone will go away. More likely this is just another step along the way to being relegated to “no more important than any other smartphone os”. Which to him is all the victory he wants.

    Well, you’ve got to give Eric credit for predicting the future of Microsoft. Though they are certainly becoming much less important that any other smartphone OS:

    http://www.engadget.com/2010/07/02/life-and-death-of-microsoft-kin-the-inside-story/

    In fact, given the magnitude of this and other screwups they’ve had recently, I really think this is the end of the road for them. Perhaps another post is due on this one Eric?

    1. >Ultimately I don’t think Eric is predicting the iphone will go away. More likely this is just another step along the way to being relegated to “no more important than any other smartphone os”. Which to him is all the victory he wants.

      I want a bit more than that; I want the dominant smartphone OS to be open source. I wouldn’t be much bothered if iOS kept the same 5-8% market share Macs have.

  26. @Jay:

    It doesn’t take a rocket scientist, or even a PhD antenna engineer, to realize that the antenna doesn’t go where the user’s hand will hide it, because 900-1900 MHz RF at cellphone power levels isn’t going to penetrate all that well…

    I saw an interesting article last week on this point, and all the design tradeoffs that go into cellphone antenna design.

  27. I was a big mac fan for many years until they made my g4 iBook obsolete OS10.5 is it. Oh well at least I can install linux on it if I ever feel like it. The things I like about apple nothing I could install OS10.6 on my HP mini 311 oh wait thats a violation of the software license. I am reminded of the joke that there is one man that makes Bill Gates look good thats Steve Jobs how true it is.

  28. Let this be a good lesson to the youngens brainwashed into believing centralization and rigid control are a good thing. Their benevolent dictator Jobs has let them down.

  29. Why Jeff, I can scarcely believe you’re actually saying the Iphone 4 isn’t worth it.

    You (and possibly Eric) missed the joke; that was a verbatim quote of a message allegedly sent by Steve Jobs to an irate iPhone 4 buyer complaining about the antenna issue.

    Now Apple PR is denying it.

    Apple has pulled bigger gaffes — remember the G4 Cube? that first bad run of MacBooks from 2006? — and come out smelling like a rose. I’m not going to lie to you and say that Apple didn’t make a mistake, or it’s something they should get a pass on. But in the long run, it won’t matter: iOS will continue to be the smartphone platform that garners the most respect from users and developers alike.

    And besides, it is just a phone. :)

  30. Boy, the hopeful and wishful thinking is really thick in Android fantasy-land. I began to realize you guys had some problems with mathematics with the clear misunderstandings of network effects in previous threads. But let’s look at it this way: a few people report problems after the initial launch of a 1.7 million units. In terms of signal to noise ratios, this doesn’t even amount to random background noise.

    Absent all of the media hype and scrutiny, this wouldn’t even make the news. In the end, the meme that will stick in the majority of people’s mind is “well, I heard they had some problem, but they musta fixed it because people sure are buying a lot of them. And most people I know who have one didn’t have any problem.”

    Prediction: this will be forgotten in a couple of weeks. And Apple will probably spin it to its advantage.

    Basis: history. Right after the initial iPad launch there was all sorts of hysteria about various wifi issues. Months old now. Ancient history. And iPad sales have only continued to grow.

    This isn’t a problem in the least. Apple’s only problem is filling demand, which continues to remain off-of-the-charts, which only indicates that this is a non-issue.

  31. esr wrote:

    “Apple is lying. We know this because the company has posted job openings for antenna engineers. In fact, it gets better. Apple knew there was a problem before launch because it was looking for top antenna engineers before Jobs announced the product.”

    Whoo boy. Now there’s an epistemological leap. This should be used as an example in every intro college class on critical thinking.

    If Apple was looking for personnel to address this issue, they’d certainly not bother going through the long and convoluted processes of hiring personnel. They’d most likely discretely hand it off to a consulting firm, which would be vastly faster and also much less expensive than hiring people to address this one thing. And if they knew they had a problem beforehand I suspect their approach would have been quite different.

    You guys are grasping.

    Meanwhile, it appears the few month old iPad has already surpassed web page views of all Android devices combined….

    Enjoy the summer, Android boys. Because it’s gonna be an iOS Christmas.

  32. Looks like Consumer Reports is already on this one:

    “even if the alleged signal loss is real, there’s an absence of hard evidence that iPhone 4 reception is problematic; indeed, there’s evidence of just the opposite.”

    “Most of the Web sites reporting dropped signals and even dropped calls have demonstrated several techniques, or “death grips” for recreating the problem (which we’ve yet been able to reproduce in a meaningful way). But those almost always require squeezing the phone hard, in an unnatural way.”

    “Bottom line: There’s no reason, at least yet, to forgo buying an iPhone 4 over its reception concerns. And even if those do materialize, Apple’s Steve Jobs helpfully reminds new iPhone buyers that “you can return your undamaged iPhone to any Apple Retail Store or the online Apple Store within 30 days of purchase for a full refund.””

    http://blogs.consumerreports.org/electronics/2010/07/apple-iphone-4-antenna-problems-dropped-calls-att-signals-bars-os-software-bugs-glitches-os-os4-iphone4-reception-problems-in.html

  33. What a wonderful world we live in. The market provides beautiful boutique products, for people who value beauty, and functional geeky products for those who like to tinker. Personally, I think the HTC EVO is a bit of both, but I haven’t lived with one as I have my now three iPhones. I’m looking forward to getting a Nexus One to tinker with, compliments of my employer.

    Both the original iPhone and the 3G tended to drop calls if I wrapped my hand around their tops. So I learned to hold them between thumb and forefinger, with a gap between the back of the phone and my hand. The new iPhone 4 doesn’t work as well if I grasp it around its bottom. So I don’t do that. But I usually talk with the phone in my shirt pocket and the speaker and microphone facing up, or sitting on my desk with the headset plugged in, or not. Haven’t found any problems there. And I’m not bathing my brain in up-close radio waves that way, either. Harmful? Don’t know. But I don’t risk it.

    Typed on a Debian Linux laptop, with an iMac, now mostly my wife’s computer, sitting a few feet away.

  34. @Leif:

    This isn’t a problem in the least. Apple’s only problem is filling demand, which continues to remain off-of-the-charts, which only indicates that this is a non-issue.

    I think you’re ultimately right about this — at least for this particular issue, but only if they’re successful in pulling off a fix better than “well, don’t hold it that way, then,” The Apple spin machine is pretty damned good.

    But esr’s point isn’t about the antenna problem. Instead, he’s using the antenna problem to illisutrate the wider issue that Apple is producing a single-vendor solution, and that as a single-vendor, it can only do so much and move so fast. Contrasting with Android, entire ecosystem of companies producing Android phones. They’re likely to solve problems and advance the state of the art more quickly than Apple can do on its own.

    As someone else pointed out, the smartphone market is in its infancy. Look at the plethora of platforms out there — Maemo, Blackberry, Symbian, Android, Meego, iOS, WebOS, Windows Mobile. Ultimately, the number of platforms will pare down to one or two major players, but it may actually be a couple of years before the dust completely settles.

    I see a couple of a real issues brewing that may be deciding factors. One is that as smartphones are being brought to work, both by workers brining in their personal phones and by organizations looking to roll them out to their workforces, enterprise IT organizations are looking to manage those devices. They want to be able to do things like manage software patch levels, do inventory control, lock down configurations, and make other necessary steps to integrate their workers smartphones with their IT infrastructure.

    The other is in the consumer market, where customers are very, very fickle. They see the smartphone as a status symbol and a fashion accessory. To them, the phone is just bling. These people don’t give a rat’s ass about platforms; they’ll buy the next thing looks sufficiently blingy. That’s the majority of that market.

    The smartphone platform(s) that move quickly to address evolving needs in both categories will be the platform(s) that dominate. As a single company, Apple is currently struggling with the former, and won’t be able to move quickly enough to address the latter. OTOH, Google and its merry band of phone manufacturers already have experience in both categories, and are moving fast to address these evolving issues.

  35. Morgan:

    The big mistake I see being made here is the belief that the smartphone market is going to see a replay of the dynamic of personal computers from the 1980s and 1990s, ending with a single clearly dominant platform. Far from establishing a law of nature, I see the Windows monopoly as actually being a freak accident. And about the only meaningful parallel Android has is the notion of a single OS with multiple hardware vendors. But the market for smartphones is radically different from the computer market of the 1980s, which in and of itself is quite different from the market of the 1990s.

    I simply do not see any reason to believe that if Android hits 51% that it will then suddenly boom to dominance. The smartphone market is fractured between several platforms now, and it will likely remain that way for some time.

    To suggest that Steve Jobs doesn’t know history or doesn’t understand network effects is the height of hubris. Whenever people suggest he’s stupid or has the wrong idea, the best advice I can give them is to suggest they are overlooking something. We’re talking about a guy who took a company that was hemoraghing cash at a time when Bill Gates said “he knows he can’t win” and Michael Dell said, “he should give the money back to the shareholders” and ended up building a company larger than both of theirs combined. And he did it by going after the market created by the Japanese consumer electronics giants, and by being one of the few people who realize that there was actually money to be made in music at a time when everyone was convinced Napster was going to rule the world.

    Android doesn’t need to beat iPhone in sheer numbers (something its still far from doing.) It needs to beat down everyone else. As long as there remains “others”, Apple can hold the dominant position with just 20% of the market. Because they’ve already locked in the most lucrative parts of it.

    In the meantime, every Android handset maker will also be looking to diversify and differentiate. The smart ones will not allow themselves to be tied down to one OS. Otherwise the phone industry becomes like the PC industry, with ever shrinking margins and utterly stuck and unwilling to invest in new capabilities outside of what the OS will support.

    The big problem is this: 1) Android phones will run other operating systems. 2) the sheer sameness of iPhones results in economies of scale that no Android manufacturers will be able to approach. Look at Apple’s ability to lock up component supply as a good example, such as advancing LG half a billion dollars for displays.

  36. Morgan,

    Secondly, while I understand the supposed advantages of multi-vendor, I believe that these are vastly overstated.

    Above, I mentioned Apple’s advantage in economies of scale. The flip side of this is a network effect Android will never match: the accessory market. From cases to docks, the network effects favor Apple.

    Going further, there is ability to lock up components, most obviously demonstrated in the retina display. Gonna be a while until there’s a surplus on those. Or take a look at the A4 chip: we know Apple’s had at least 5 million of those manufactured just this year. It goes on and on, perpetually guaranteeing Apple higher margins than any Android manufacturer will be able to hope for.

    Which leads us to the issue of agility, or speed of response. Again, I think Android fans are radically misinterpreting things here. They seem to think that Apple just can’t seem to keep up. Nonsense. Heck, they could easily call up Samsung or LG and put them to work. Worse yet is when people point to things like “multitasking”, thinking Apple is “way behind” on this. iOS is obviously and clearly a full multitasking OS; it’s unix. Apple’s approach to it, being somewhat controlled, is not an indication of tardiness. It’s a measured rolling out, a very careful effort to avoid problems. All one has to do is look at the amount of ink wasted on “should I use a app killer on my android?” in countless forums.

    Apple’s not lethargic. They are measured and carefully choose their emphasis and focus. 1 big update once a year is really all they need at today’s normal contract rate. And 1 big update per year will continue to leverage them more publicity, hype, and free advertising than lots of little updates in the same period of time. It’s the difference between shooting a safe door 1000 times with a .22 versus throwing a cannonball at it.

    This is going to drag on much longer than many of you are anticipating. And then there are the other disruptions likely to be caused by a company with $40 billion in cash, a rapidly growing dev base, its own retail distribution, a $1 billion server farm, and perhaps the best branding in American business.

  37. And about the only meaningful parallel Android has is the notion of a single OS with multiple hardware vendors. But the market for smartphones is radically different from the computer market of the 1980s, which in and of itself is quite different from the market of the 1990s.

    Ah, but that’s what you’re missing. Android isn’t a single OS; it’s open source.

    To suggest that Steve Jobs doesn’t know history or doesn’t understand network effects is the height of hubris. Whenever people suggest he’s stupid or has the wrong idea, the best advice I can give them is to suggest they are overlooking something. .

    Granting Steve Jobs deity status because he created a new market niche for MP3 players is height of hubris.

    Android doesn’t need to beat iPhone in sheer numbers (something its still far from doing.) It needs to beat down everyone else.

    Something it’s already done, save for Blackberry. Apple similarly needs to beat Blackberry.

    As long as there remains “others”, Apple can hold the dominant position with just 20% of the market.

    Only if you redefine the term “dominant position” to mean something other than control of the smartphone market. You lack complete understanding of the dynamics of marketing, markets and business, that much is clear.

    In the meantime, every Android handset maker will also be looking to diversify and differentiate. The smart ones will not allow themselves to be tied down to one OS. Otherwise the phone industry becomes like the PC industry, with ever shrinking margins and utterly stuck and unwilling to invest in new capabilities outside of what the OS will support.

    Every Android handset maker (save for Google) is already producing smartphones for other OSes. Just look at HTC. Of course, HTC used to be predominantly a Windows Mobile handset maker, and they’re already making fewer of those, becoming the rising star of Android phones. In the end, the smartphone vendors will sell whichever OS gives them the most profit. Smartphone vendors these days tend to focus on short term profits instead of being in the game for the long haul. Still, the dynamic must be considered, of course.

    BTW–minor nit: Apple isn’t really larger than Microsoft and Dell combined. Market cap isn’t a true indication of a company’s size or worth, it’s just a yard stick, a rule of thumb so-to-speak.

  38. So I saw some videos on YouTube demonstrating a similar antenna problem on several different phones manufactured by various companies. I’ve had several different phones, Motorola, Sony-Ericsson, BlackBerry, iPhone, Nokia, and they have all had various problems with reception based on how I was holding the phone, the orientation of the phone, where my head was positioned, etc.

    So Apple has now an iPhone that overall performs better than the previous version with respect to reception, but they appear to have a flaw when it is held in a certain way (similar to many other phones) and this is a huge deal?

    I guess when you make great products the expectations are so much higher than other products and then make something with a glitch (even though the glitch seems to be a common problem in other products) it is now the end of the fucking world. Really.

    I’ve suffered through lots of hardware and software products. When it came down to the best user experience and things working Apple has always done the best job (and TiVo). And like most hardware and software products there have been problems. But on the whole, for me and what I need those products for, the Apple products I have owned and used have been ridiculously better than the competition, ridiculously, no comparison.

  39. So I saw some videos on YouTube demonstrating a similar antenna problem on several different phones manufactured by various companies. I’ve had several different phones, Motorola, Sony-Ericsson, BlackBerry, iPhone, Nokia, and they have all had various problems with reception based on how I was holding the phone, the orientation of the phone, where my head was positioned, etc.

    Both esr and I have reported no such problem with our phones. esr has the Nexus One, my wife’s phone is an EVO 4G.

  40. “””
    I again scratch my head at the idea of a company trying to be both the hardware AND software manufacturer. It never works out long term.
    “””

    Uh. Apple’s been around longer than some people reading (and possibly commenting) here.

    IBM has been around for EVER (the modelling of the results of the first “let there be light” were run on a System 1 mainframe).

    Sun may have fallen on hard times, but as a brand it’s still around and shipping both Hardware and Software. HP still sells HPUX midrange stuff last I looked.

  41. While I think Leif’s view is blinded by his fanboy goggles, he does have points worth thinking about:

    The ecosystem that has sprung up around the iPod and iPhone is not to be sneered at. It’s hard to buy a car stereo these days that doesn’t talk to the iPod and iPhone, to pick one example. The range of aftermarket accessories is truly astonishing. You can buy things that work with it in any convenience store. Can you say that about the Nexus One? Or the EVO?

    I also agree that there is room for more than one dominant player in the market. I doubt that iOS will shrink to the 5-8% market share that Mac OS X has. I do see it and Android sharing the market, perhaps on a 60/40 or 70/30 split – either way – and see no reason that could not be a stable state.

    Never underestimate Apple’s marketing power. They have now created two market segments entirely on their own.

  42. >The ecosystem that has sprung up around the iPod and iPhone is not to be sneered at. It’s hard to buy a car stereo these days that doesn’t talk to the iPod and iPhone, to pick one example. The range of aftermarket accessories is truly astonishing. You can buy things that work with it in any convenience store. Can you say that about the Nexus One? Or the EVO?

    Most hardware that will talk to an iPod/iPhone specifically will also talk to a simply aux in port; given a $5 cable you can connect a music-playing Android phone to that. Admittedly, this doesn’t have the advantage of being able to control the device from the accessory hardware.

    1. >Admittedly, this doesn’t have the advantage of being able to control the device from the accessory hardware.

      I’ll be astonished if Android apps for that don’t materialize.

  43. # Morgan Greywolf Says:
    > Market cap isn’t a true indication of a company’s size or worth,

    Oh really. How come? I thought market cap was exactly a measure of a company’s value. (I am not really sure what “worth” means in this context, but I presume you are just using it as a synonym for “value”.)

  44. >Admittedly, this doesn’t have the advantage of being able to control the device from the accessory hardware.

    I’ll be astonished if Android apps for that don’t materialize.
    The problem here is that there’s no one hardware standard interface for that function once you get away from the iPod Dock connector. The app is easy, but how do you connect the control interface to the car stereo to let the stereo control the phone?

  45. Oh really. How come? I thought market cap was exactly a measure of a company’s value. (I am not really sure what “worth” means in this context, but I presume you are just using it as a synonym for “value”.)

    It is the value of their stock. Market cap == share price * outstanding shares. This is not the same thing as net worth. Net worth is total assets – total liabilities. Traditionally there is usually some correlation between net worth and market cap, but in times of wild market speculation, this is definitely not the case,

  46. In this instance, Apple reminds me of auto makers and their recalls. Same ineptness and ability to royally piss off their customers.

  47. @Jessica: Addendum to my last post This is one reason why “blue chip” stocks are considered safer investments, because their market cap usually correlates well with their actual net worth. Some of the .com companies in the heyday of .com speculation had market caps in the billions, but their net worth was in the red.

  48. I again scratch my head at the idea of a company trying to be both the hardware AND software manufacturer. It never works out long term.

    Actually, when it comes down to it, Apple isn’t really a hardware manufacturer. They’re a software and engineering company with a hardware sales organization. They don’t manufacture anything anymore; it’s all farmed out to suppliers like Foxconn. It’s similar to a once often-proposed scenario in which Ford Motor Co. farmed out all their manufacturing to Toyota or Hyundai.

  49. > The problem here is that there’s no one hardware standard interface for that
    > function once you get away from the iPod Dock connector. The app is easy,
    > but how do you connect the control interface to the car stereo to let the stereo
    > control the phone?

    I foresee the Apple interfaces becoming standard across phones/mp3 players in the next 5 years, maybe less. Unless Apple tries to quash the competition by claiming some bs patent infringement or some such nonsense, I can’t see any other way for everyone who isn’t Apple to have their devices supported by external hardware in a way that would satisfy consumers.

    Does anyone know if Apple has full control over that connector form factor?

  50. @ Leif > Meanwhile, it appears the few month old iPad has already surpassed web page views of all Android devices combined….

    Can’t resist. What the hell do web hits from a non-phone, netbook-style made-for-surfing-the-web-plus-a-few-extra-things device have to do with web hits from an OS currently only available on phones? If what you said weren’t the case, I’d be absolutely shocked having not heard from anywhere about the complete failure of the device. Jesus.

    It’s comments like this that have you branded as ‘completely bonkers’ in my mind.

  51. Contrasting with Android, entire ecosystem of companies producing Android phones. They’re likely to solve problems and advance the state of the art more quickly than Apple can do on its own.

    Morgan, I think that’s very questionable. I am not convinced that ecosystems of different companies necessarily advance as quickly as one company that’s strongly focused on design. Apple has a huge advantage because they create both the hardware and the OS. If they want a gyroscope, the hardware guys build it, the OS guys hook it up, and there it is on the next iPhone. With new hardware features, Android not only has the chicken/egg problem (why make hardware if there’s no software for it, and vice versa), plus the problem of getting the integration right when the hardware guys don’t control the OS and vice versa, but also the problem of not all the hardware makers getting on board, leading to an “Android feature” that doesn’t actually exist on all Android phones.

    And that’s one way Apple is indispensable: it gives Android something to follow. ;-) Just look at an early Android device and see how much more-iPhone-like Android is today.

    By the way, I was in an AT&T store last week and looked at the iPhone 4: the display was breathtaking.

  52. Morgan Greywolf Says:
    > This is not the same thing as net worth.

    Most companies’ “worth” is considerably different than their book value which is roughly what you described. Why? because you are only measuring measurable assets and liabilities. All companies have assets and liabilities that can’t be measured on a balance sheet. For example, what is the value of the unrealized R&D? What is the value of a company’s reputation or customer list, or good will, or efficiency of operations or market position? For example, how much is Froyo worth to Google? On their balance sheet it is a huge liability. These aren’t measured by the accountants. However, they are measured by the shareholders who are assessing the value of the company, and are reflected in the share price.

  53. PapayaSF:

    If a manufacturer wants a widget, they build the widget into the phone and write the functionality into the OS. The new functionality gets pushed back upstream, and now everyone can build that kind of widget in with little additional development cost, unless they want to improve it. There is no chicken-and-egg problem here. It is simply taking what Apple is doing and multiplexing it.

  54. jsk: “In theory there is no difference between theory and practice. But, in practice, there is.” For complex problems of consumer industrial design that involve mass-produced hardware, OS software, and applications meant to be used by millions of non-geeks, I think a design-focused company doing that under one roof will likely come up with a better overall result.

    You are glossing over a crucial aspect: Apple can create the hardware, make sure the OS supports it, write an app using it, and make sure it works the same way in every new iPhone (and often older models as well). With Android, sure, everyone can build that widget, but will they? And if they improve it, will it work the same way? (And will it actually be “improved”? Ever been part of a team that designed something quite nice, only to have to hand it over to some other team to implement, and watch it get screwed up?)

    In purely theoretical Darwinian terms, the Android approach is superior: it’s decentralized, the failures fails, the successes succeed, knowledge is swapped, improvements are made. It’s great and I support it… up to a point. Unfortunately, the world is more complex and messy than an ecosystem. Good consumer product design is very hard, especially when it’s the sort that has to be done by teams of people working in different mediums. Successful consumer products certainly evolve, but above all they are “intelligently designed.” Apple is excellent (though not perfect) at design, and it shows in the iPhones. That advantage is going to be hard to match, much less beat, by the less-coordinated group of companies and individuals that make up the Android ecosystem.

    1. >That advantage is going to be hard to match, much less beat, by the less-coordinated group of companies and individuals that make up the Android ecosystem.

      But hey, guess what? They’re already beating it!

      I know you’re going to say they’re not, but the unit-share figures for Q1 refute you. So do the screwups in the iPhone’s signal-strength meter and the antenna design. These are not arcane, minor problems, they are epic fails of the most user-visible kind.

  55. # Morgan Greywolf Says:
    > Some of the .com companies in the heyday of .com
    > speculation had market caps in the billions, but their
    > net worth was in the red.

    Sorry, I missed your addendum in my previous reply. But let me ask you: do you claim that companies with “net worth” in the red are not worth anything?

    Amazon was in the red, as a strategic business decision, for a decade before they became one of the most valuable companies in the world. When their book was red, were their shares worth less than zero?

  56. When I say “hard to beat,” I mean things like overall design and build quality, usability, developer and accessory ecosystem, revenue and profitability, even mindshare. In consumer electronics, a known success, even flawed, has an advantage over an aggregation of smaller, lesser known competitors (which have their own flaws). I don’t claim any smartphone industry expertise, but I think that to take the overall lead, Android needs more than unit-share numbers. That may come, but with all due respect I don’t think it’s nearly as easy or inevitable as you seem to think it is. Competition is great, but it doesn’t necessarily produce good design. For a while at least I think it will be Apple in the lead and Android following, but keeping Apple on their toes. Android is established, though, and it will be there for the geeks and for cheap phones and people who aren’t on AT&T, etc.

    Leadership has drawbacks, of course. New iPhones are reviewed in detail in hundreds of media outlets, and a flaw makes headlines. How many Android phones got headlines for (off the top of my head) having easily-broken battery covers, or bad battery life, or having a screen hard to read outside, or for running a non-upgradable OS, or for failing to run Flash without crashing while being demonstrated at a conference?

    The antenna debacle has many lessons, and I’ll grant it’s a significant stumble, approaching the level of the notorious round mouse, but I think “epic fail” is too strong. Apple will issue some fixes, people will adapt and learn to live with it. Apparently it’s not an uncommon problem with all cellphones, and since this came up I’ve been shifting my cellphone grip (iPhone 3GS) to hold it in my fingers rather than cupping the bottom with my hand, and haven’t had a dropped call since.

  57. @JessicaBoxer

    Sorry, I missed your addendum in my previous reply. But let me ask you: do you claim that companies with “net worth” in the red are not worth anything?

    No. But a company who is in the red is definitely a risk for stockholders. The greater the difference between their market cap (valuation of all stock) and their net worth), the bigger the risk. If you’re looking to minimize your risk in the stock market, you invest in the blue chips. If you’re willing to gamble a bit — and you have the money to lose — then investing in a company like Amazon when it was in the red can give a good return. But you must always remember that when you’re doing that, there is considerable risk that the company in the red might not make it out of the red. If it never makes it out the red, the stock will tank.

    What that means is that ultimately, each investor must decide for him or herself if the stock’s current valuation is a fair estimate of the company’s worth. In some cases, like with Amazon, the answer was clearly ‘yes’. In other cases, like pets.com, the answer was clearly ‘no.’ So that’s just it — the valuation of a company’s stock is just another yard stick. A company isn’t really worth its market cap; it may or may not be. Or, as Heisenberg would say, a company is both worth its market cap and not worth its market cap; until the probability wave collapses by taking a peek, you won’t know. The problem is that “taking a peek” isn’t so easy, because you only have data to look at that is subject to much interpretation; everything from liquidity ratios, earnings-per-share, P/E ratio, debt-to-income ratios, return on assets, return on equity, etc.

    The specific thing which I’ve been talking about is called the price-to-book ratio, which gives you a good, if conservative, idea of the true value of a company: it’s expressed as stock price per share / shareholder’s equity per share. Shareholder’s equity is almost the same thing as “net worth,” but the differences are mostly technical.

    Unfortunately, the bad thing about P/B ratio is that it fails to account for the value of a company’s “intellectual property”. That’s why most investors tend to look at the P/E ratio — the price-to-earnings ratio, which is expressed as market value per share / earnings per-share. Of course, P/E doesn’t tell the whole story either, because you really have to compare it against other companies in the same industry and against historical data and future earnings expectations.

    So, you see, Jessica, the stock value by itself doesn’t provide a complete picture at all. It’s more useful to look at various ratios. But then, it’s all up to interpretation as to what those ratios truly represent; that’s why we have analysts. Unfortunately, sometimes those analysts are full of crap, so in the end, the true value of a company is in the eye of the beholder. Hence the reason we often see people debating about companies, their technology, and their products all the time.

  58. @Morgan & JessicaBoxer-

    I think what needs to be kept in mind about stock market valuations is that it’s all about perception. The market is a con game with players using billions of dollars in an attempt to convince other players that they know something the other guy doesn’t. To this end, there are all kinds of metrics that relate stock value to a company’s value. Those metrics are the game’s rules (for lack of a better word at the moment) allowing the players to decide if they agree that a company’s stock value is in fact worth what’s currently being charged. These competing forces create the conundrum that a company’s stock value (and therefore market capitalization) is exactly what it is at any point in time, regardless of any one players opinion. In other words, if MSFT is worth $23.27 as of the close on Friday, then at that point, that’s exactly the value the market has agreed on. Of course, lots of people will disagree with that valuation, and the market will reflect that come Tuesday. Well, it will reflect the aggregate opinions of the players willing to put their money where their mouth is.

    So the longer a company is traded, the more likely that it’s stock price reflects the “true” value of the company in dollars. But it’s always subject to correction due to new information becoming available. And the value is still just a perception.

    As related to your comments, I’d say Jessica is roughly correct regarding market valuation factoring in R&D, IP, staff quality, leadership quality, etc in addition to the balance sheet. But with the large caveat that it’s only true for THAT point in time. Morgan’s points regarding P/B and PE ratios and the like are the technical jargon used to convince players how that valuation is going to change. And he is most definitely correct when he says “the stock value by itself doesn’t provide a complete picture at all.” The complete picture involves a lot of people with different opinions about every last factor one can think of as it relates to the company and how much money their willing to pony-up as a result. From that angle, market capitalization is simply a talking point that’s supports the claims to company X’s supremacy or ineptitude.

  59. # Morgan Greywolf Says:
    > A company isn’t really worth its market cap; it may or may not be.

    The only reason I pursued this is that I believe there is a common fallacy that “value” is an objective measure. It isn’t. Value is always subjective and relative. So to say a company is “worth” this much is misleading. It begs the question: to whom is it worth that much? How much is an Italian sports car worth? To me, not much, I prefer my Toyota. However, to some people it is a bargain at $100k. To me it is worth close to zero (ignoring its trade value for a moment), to Mario, it is worth $100,000. All value is subjective. The market cap of a company reflects the corporate judgment of millions of people as to what a company’s value is (though I grant you that trade value has a significant impact here too.) You might think that corporate judgment is crazy, but I think Mario is nuts for driving his death trap too.

    As to “worth” I don’t really know how that differs from “value”, (except that perhaps there may be undertones of moral judgment that I don’t think you are intending.) I have heard “net worth” applied to individuals, but I have never heard it applied to corporations. But perhaps that is just my ignorance showing.

  60. Gerry Says:
    > The market is a con game with players using
    > billions of dollars in an attempt to convince
    > other players that they know something the
    > other guy doesn’t.

    Wow, that is a cynical view. The stock market is in fact one of the most brilliant inventions in human history. A mechanism whereby significant amounts of capital can be raised amongst a group of risk takers, to enable entrepreneurs to bring about massive advances in modern civilization. Without the stock market we would all be much worse off. The after market in stocks (by which I mean trading in stocks after IPOs and other offerings) is absolutely vital to give liquidity and value to traders making the capital raising offerings more valuable. All the various second and third order mechanisms like options, futures, debentures and so forth (yes even credit default swaps), squeeze out further liquidity and value making the market in capital offerings more vibrant and allowing us to create great new companies products and offerings. Market regulation, especially things like SOX have greatly reduced that liquidity and we are undoubtedly worse off because of them.

    BTW, I’m not opposed to all market regulation, that is another story. However, SOX was a political tool to make it look like they were “doing something”, and which radically decreased the amount of new capital raised in American exchanges pretty much directly.

    Sure there are warts and cancers in the market, but to call it a con game is to insult the matrix of our wealth. So I have to object.

  61. >we know this because the company has posted job openings for antenna engineers.

    NO, Eric. You do NOT “know this” you merely believe it. Apple has a growing engineering department, and there have been open reqs for designers for every part of a cell phone for as long as Apple has been working on them. Adding people to a team doesn’t mean that you’re trying to replace it.

    Now, as for your claim that Apple is lying, I will remind you that Apple is a publicly traded company with a fiduciary duty to make accurate statements on any matters that may affect their market valuation. I don’t believe anyone there is lying about the antenna’s performance, or the signal-strength display algorithm.

    The proof of the pudding is in the eating, and in my house, there are some dead spots where my original iPhone would routinely drop calls, and the iPhone 4 has yet to do so. If anyone out there isn’t satisfied with the performance of your iPhone 4, they’re in luck! You can scalp them on e-bay for substantially more than they paid.

  62. This is the sort of thing engineers tend to warn about before product launch only to get stepped on by line managers anxious to not be seen to be missing deadlines.

    That’s true for many companies, but it’s not true at Apple. A manager knowingly shipping a faulty product would be in vastly more trouble than one who missed a deadline.

  63. @JessicaBoxer-

    “Con Game” from Wikipediea (first one link from a Google search):
    > An attempt to defraud a person or group by gaining their confidence.
    > The victim is known as the mark, the trickster is called a confidence man, con man,
    > confidence trickster, or con artist, and any accomplices are known as shills.
    > Confidence men or women exploit human characteristics such as greed and
    > dishonesty, and have victimized individuals from all walks of life.

    Where defraud is “to deprive of something by deception or fraud” (Merriam Webster).

    I agree that the market has (so far) been a net benefit to society. But that hardly means I can’t call it what it is. Is the issue that you believe only criminals can participate in a “con game”? Then fair enough. But at it’s cold heart, the market absolutely comes down to players deceiving one another in an attempt to empty each other’s wallets.

    With all due respect, I think you’re being a might Pollyanish here.

  64. @Jessica Boxer:

    The only reason I pursued this is that I believe there is a common fallacy that “value” is an objective measure. It isn’t.

    *blink* I said that. Specificially, I said ” in the end, the true value of a company is in the eye of the beholder,” which is a direct reference to the common saying that “beauty is in the eye of the holder,” which means that beauty, like the true value of a company, is objective.

    The difference is that I don’t think that the company’s market cap represents the “collective judgement” of the stock market.. Gerry gets it right when he characterizes the stock market as a game. That’s exactly what it is. The stock market is a very fancy form of horse track betting. (I think Gerry is overly cynical in characterizing it as a “con game.” ) You seem to equate the market cap to the odds (in race track betting, the odds are a way of spreading the bets out a bit by providing a supposedly objective measure of a horse’s chance of winning the race), whereas I’m saying that market cap is simply a count of the bets and therefore not a true collective judgement. (Yes, I realize game theorists are going to jump in and say that a count of the bets IS a collective judgement, but they would be wrong.)

  65. @Some Guy:

    Now, as for your claim that Apple is lying, I will remind you that Apple is a publicly traded company with a fiduciary duty to make accurate statements on any matters that may affect their market valuation.

    Yeah, because publicly traded companies would never lie about matters that may affect their market valuation in the positive direction. Could I interest you in some swampy real estate I’ve got for sale? It’s just a quick trip down I-75 from where I live…

    That’s true for many companies, but it’s not true at Apple. A manager knowingly shipping a faulty product would be in vastly more trouble than one who missed a deadline.

    And you know this because you’re an Apple employee?

  66. @Morgan

    > Yeah, because publicly traded companies would never lie about matters that may affect their market valuation in the positive direction.
    > Could I interest you in some swampy real estate I’ve got for sale? It’s just a quick trip down I-75 from where I live…

    Why you cynic you… ;-)

    Although slightly more seriously, you just made my point for me.

  67. Yeah, because publicly traded companies would never lie about matters that may affect their market valuation in the positive direction.

    There are consequences if they do. Remember Enron? Out of business.

  68. There are consequences if they do. Remember Enron? Out of business.

    Only if proof can be found that they knew about it, and only if they get hauled into court (they won’t.) And you can’t compare what Enron did to lying about not knowing about the antenna. Two totally different things.

  69. Nokia even had the cheek to post a blog entry on the many ways you can hold your Nokia phone.

    Nokia got busted for hypocrisy on that one, because their own user manual says that their phones also show some signal degradation based on how you hold it.

  70. And you know this because you’re an Apple employee?

    Not currently, but I still know quite a few people over there. Apple managers used to pull that kind of crap under Sculley and Spindler, as well as things like padding their sales numbers by channel-stuffing, but the company had a near-death experience in the late 90s.

    Amelio did a lot of house-cleaning and financial open-heart surgery, and SJ basically finished the job. I’ve worked in a lot of places in my career, and I’ve never seen any other Fortune-500 company with so little dead wood in their management structure as Apple.

  71. >Nokia got busted for hypocrisy on that one, because their own user manual says that their phones also show some signal degradation based on how you hold it.

    From my understanding of the issue, the point is the difference between “signal strength degrades if you hold it a certain way” (which is essentially inevitable, given a handheld device with internal antenna) and “it drops the call if you touch the lower right corner” (which is just stupid). Admittedly a difference of degree, in theory at least, but if I understand correctly it’s a difference in kind in both the reasons behind the issue (Apple put the antenna on the outside uninsulated, which again is just stupid) and the likely consequences.

  72. drops the call if you touch the lower right corner

    If you’re in a location where your signal strength is low, then you might see that happen. You can also see other phones drop calls under the same circumstances. As you can see from Anandtech’s review here, the iPhone 4 is considerably better than the previous generation.

  73. @Some Guy:

    You’re a bit harsh about Sculley and Herr Spindler. John Sculley, for all his faults, did the company a lot of good. The “near death experience” you speak of was Apple’s second near death experience. Apple fans often seem to forget that in 1984 and 1985, the Macintosh was a disaster; Jobs, then head of the Macintosh division, thought they would ship 80,000 units by the end of 1984 and had the machines produced ahead of time, To be fair, Sculley and Jobs thought much the same way at that time, and Jobs couldn’t have ordered the 80,000 machines without Sculley’s support, but ultimately the situation was Steve Jobs’ fault.

    Well, they shipped 20,000 units by the end of 1984, and orders were trending down. The Mac’s sales numbers weren’t so good at first mostly because there were few applications and few software developers writing applications. At that time, 70% of Apple’s sales were coming from the Apple II line, but most of the top Apple II engineers had left the company in disgust with Steve Jobs. These were the main reasons that Sculley fired Steve Jobs.

    Sculley did rescue Apple from collapse, performing a restructuring much like the one Gil Amelio would do later. Sculley was also responsible for finding Apple’s niche in desktop publishing. Sculley, I think, ultimately was poor at managing Apple’s product lines — the Macintosh lines in particular were schizophrenic.

    Herr Spindler presided over the shift from the 680×0 to the PowerPC chips, a project which was pretty successful for Apple. Unfortunately, he also presided over the Newton, and tried sell the company. ;)

  74. # Morgan Greywolf Says:
    > *blink* I said that.

    I’m sorry, I didn’t mean to imply that at all, but I can see why you would think that I did. I was making a broader point, not a specific point about what you said.

    > Gerry gets it right when he characterizes the stock
    > market as a game.

    That is ridiculous. A game is something played for amusement, or an arbitrary activity with arbitrary rules designed to facilitate competition for competition’s sake. The stock market is a mechanism to raise money for corporations, and to provide liquidity to that market. It is nothing like a game. It is the engine of growth, and it is a mechanism whereby large rewards can be made from making good judgments. It is not an amusement, it is not competition for competitions’ sake. It is the opposite of a game.

    > The stock market is a very fancy form of horse
    > track betting.

    And the analog of an IPO is? The analog of winning the race is? I’m not a gambler, so perhaps I don’t know enough to comment, but to me, betting on horses looks nothing like investing in the stock market.

    > I realize game theorists are going to jump in
    > and say that a count of the bets IS a collective
    > judgement, but they would be wrong.

    Way to dismiss the whole point.

    I find it disturbing that someone who I have a high regard for such as yourself, would jump on the whole anti Wall St. bandwagon, when in fact they provide a service to the economy of immeasurable worth.

  75. That is ridiculous. A game is something played for amusement, or an arbitrary activity with arbitrary rules designed to facilitate competition for competition’s sake.

    So you’ve never visited a casino? Most people there aren’t playing for amusement; for them it’s about the chance to win cash.Foolish, yes, but not really amusement. Baccarat is a game. 21 is a game. Baccarat is definitely not for amusement; it’s boring as hell, but it’s still a game. ;)

    And the analog of an IPO is?

    A horse’s racing debut.

    The analog of winning the race is?

    The analogy is imperfect, of course, but it’s about getting the most profit, both for investors (gamblers) and for the companies (horses). In a race, there’s a more definitive finish; it’s a bit more ill-defined in the stock market. But once the race is done at the track, there are still other races, so the analogy loosely holds here.

    Don’t get me wrong. I’m not anti-Wall Street at all. The stock market is a necessary component of our modern day economies. But it’s also horse betting.

  76. With all due respect, the only ridiculousness is the assumption that “analogizing the stock market to a game” = “anti-Wall St, anti- stock market, and I’ll guess anti-capitalism” at this point.

  77. # Gerry Says:
    > With all due respect, the only ridiculousness
    > is the assumption that “analogizing the stock
    > market to a game” = “anti-Wall St, anti- stock
    > market, and I’ll guess anti-capitalism” at this point.

    With an equal amount of respect reflected back, one wonders if you meant the expression “con game” in a complimentary way?

  78. # Morgan Greywolf Says:
    > So you’ve never visited a casino? Most
    > people there aren’t playing for amusement;

    I think this is an interesting question. I think for the most part the word “game” is used by casinos as a marketing ploy. But that statement is rather simplistic. Casino activities are games insofar as they are fun, and not games insofar as they are about winning, the latter being called gambling. For example, I don’t think most people would call horse betting a game, but perhaps I am wrong. Some people who play poker for fun are playing a game, some people who play poker for a living are not playing a game. In my opinion anyway. Like I say, it is an interesting question.

    But words have soft boundaries, and I’ll grant you that many people do call casino activities “games”. It seems to me more of an outlier in the semantic domain of the word, but I am not a gambling person, so I don’t really know. If by “game” you meant in your earlier statement, “gambling”, then I think there is more truth in that, though I am far from agreeing wholeheartedly.

    > And the analog of an IPO is?

    Not really a horse racing expert, but you really get to own the horse? :-)

    > But it’s also horse betting.

    Repetition does not make your case any more compelling.

  79. ‘Complimentary’ isn’t quite right … ‘respectful’ might be better … perhaps a strange combination of the two. I certainly wasn’t using it as a pejorative. The stock market, though a vital part of our economay, is a dangerous place- for fools and geniuses alike. It demands respect if one is going to be involved with it.

  80. Gerry Says:
    > ‘Complimentary’ isn’t quite right … ‘respectful’ might be better

    I see, so if I say you response is a big con job, you think I am being respectful? As I said above, words have soft edges, but they are not as squishy as candy floss.

  81. Well, taking my response in a general sense, my first thought is the metaphor (“a big con job”) doesn’t fit. Even if I grant that I’m trying to deceive (which I won’t because I’m not), what am I trying to gain through the deception? Certainly not money. To waste your time perhaps? Well, I’m not. At this point I’m fighting desperately to avoid having my words mischaracterized. Not very successfully, it would appear. Anyway, without my deliberate attempts at deception to try and take something from you, how can my response be characterized as a ‘con job’?

    In this particular case, my sense is you’re being insulting(I hope I’m wrong)- which I’ll say is unfortunate. When I stated “with all due respect” above, I meant it. Having been lurking here for awhile, you’re among a number of commenters here whose respect I’d like to earn. That still doesn’t prevent me from saying that this particular line of argument you’ve chosen is ridiculous (though it may not be the straightest line towards earning your respect). Why is it ridiculous?

    Because I’ve been doing my own investing in the stock market for close on 15 years. I’ve read many books and discussed trading methods and techniques on many a message board. I’ve educated myself a great deal on the subject. My experience has led me to characterize it as a ‘con game’- meaning I see a number of parallels between the act of investing and a con game. I didn’t arrive at it for shock value. Is it perfect? No. Is it immature? Possibly- even probably the more I think about (and yes- thanks to you for that). Will my characterization change in the future? Most definitely. I’m not done learning about investing by any means. I readily admit I am no expert on the subject.

    So at this point, I’ll be blunt and ask- are you a professional trader or investor; or do you have any other credible claim to being an expert regarding the stock market? If so, then I’ll admit to having been mistaken in defying your objection to the use of ‘con game’ as you would clearly be in a position to disabuse me of the notion. Failing that, I just don’t understand why you’re insisting that I’m not allowed to characterize the market as I see fit. Or Morgan, for that matter. Yes words have soft edges- but I don’t agree that I (or Morgan) have gone so far astray here that I’m rendering them meaningless.

  82. @JessicaBoxer:

    It seems to me more of an outlier in the semantic domain of the word…

    I don’t think so. The governmental regulatory body responsible for making sure Las Vegas casinos play by the rules is called the Nevada Gaming Commission; this is true in most states that have casinos. A game is not necessarily something that is frivolous; remember that your target when hunting is called the ‘game’; I doubt this is a coincidence as hunting is something of a game. But it’s not about frivolity or amusement unless you’re Uncle Ned.

    If by “game” you meant in your earlier statement, “gambling”, then I think there is more truth in that, though I am far from agreeing wholeheartedly.

    Why? You have to admit that when you’re buying a stock, you’re essentially betting that over some period of time that that stock will go up in price, similar to betting on a horse to win a race. The game is to buy low and sell high, but of course, there is always some amount uncertainty. In the market, you look at trends and patterns and buy or sell based on the inferences that you draw from those trends and patterns. This component is absolutely no different in serious horse betting: you look at a horse’s recent history, what races he’s won, what races he’s lost. You look at the spread. And then you draw inferences about whether or not you think that horse will win (or lose) that race — yes, like the stock market, you can bet on a horse to lose, rather than win. A bet to win (or place) is called a ‘back bet’ and a bet to lose (or not place) is called a ‘lay bet’. The stock market is quite a bit like horse betting, and stock market players are most certainly gambling. (See? They even call it ‘playing the market’! ;)

    Not really a horse racing expert, but you really get to own the horse? :-)

    Not usually, but you can use your earnings to buy a horse. ;)

  83. Morgan Greywolf Says:
    > Baccarat is definitely not for amusement;
    > it’s boring as hell, but it’s still a game. ;)

    I forgot to comment on this: my experience is certainly limited here, but the only person I have seen playing Baccarat is James Bond. He always seemed to have a really good time. Of course, he always won, and always ended up in bed with some hot Russian agent, so perhaps it was that rather than the cards that amused him.

  84. # Gerry Says:
    > Well, taking my response in a general sense,

    The argument is not over the content of your response but the pejorative implication of the expression “con job.” To be honest, to argue that “con job” is respectful and not pejorative is so silly that I have to leave you to stew in your own insanity.

    > So at this point, I’ll be blunt and ask- are you
    > a professional trader or investor;

    And if I’m not black I can’t understand what black people go through, and if I’m not male I can’t understand what men go through? What fatuous nonsense. Arguments stand on their own merits not the authority of the one making them.

    > If so, then I’ll admit to having been mistaken in
    > defying your objection to the use of ‘con game’

    Ah, and here we have the opposite fallacy. If I were a professional trader you would genuflect before my opinion, regardless of the merits. Again, fatuous nonsense.

    > I just don’t understand why you’re insisting that
    > I’m not allowed to characterize the market as I
    > see fit.

    I’m not insisting you do or don’t do anything. It is a free country. However, when you make silly claims like “con game” don’t expect to go unanswered. Of course the market has some bad actors, but it is far from a con game.

  85. Alright…

    When you invest in the stock market, the goal is to make money. To accomplish the goal, you’re going to choose companies with a good/great story. You’ll research and look at the details of the story (P/E, EPS growth, ROE, sales growth, product lines, competitors, the market it’s in, and on and on). You’ll probably look at a chart to determine how the market views the company and, more importantly, the stock. You come to a decision based on all that information that this is a company that you want to invest in. You pick a buy point and the next thing you know, you’re in.

    Let’s say the stock goes down. It doesn’t crater, but it drops enough to sting. Well, someone else has your money now. To claim it’s only a “paper loss” doesn’t change that fact. You could claim that the stock will bounce back, but now it has to bounce back just for you to break even, let alone make a profit. Plus- you don’t know that it’s going to come back. You certainly didn’t buy it with the expectation that it would drop the way it did. Why should it necessarily come back? How long were you willing to wait for it to come back? Even if it does, will it be related to all the research and reasons for your initial buy? All bets are off now. Despite all your research and thought, the market sent if down from your buy point. You decide to sell and cut your losses.

    Does this not bare any resemblance at all to a con game? You’ve been deceived by a story about the company and how it relates to the stock price and you’ve lost money as a result.

    What if the stock goes up? Well, now you have the potential to take someone else’s money. If it rises enough that you choose to sell at a profit, that is in fact what you’ll do- take someone else’s money. They, in turn, are left with the hope that someone else is willing to buy and continue to push the stock up. You yourself haven’t been conned, but someone else will be, eventually.

    Is the analogy perfect? As I said before, no. But I think enough elements are there to justify the use of the term, sans pejorative implications. The market is the con artist, luring you in as you further convince yourself to buy in, making you the mark. When the money is lost, well, you’ve been conned- for the purposes of the analogy at least.

    At this point, if you’re absolutely unwilling to see that I’m separating the mechanics of a con game from the pejorative implications, then fine. Or if you’re absolutely unwilling to abide the use of “con game” without the pejorative implications, again fine. You’re right. The stock market has nothing whatsoever in common with a con game and the mistake is mine for first, using a term that is interpreted primarily as a pejorative and second, not recognizing that fact.

  86. Sculley did rescue Apple from collapse… Sculley was also responsible for finding Apple’s niche in desktop publishing.

    Bullshit. Paul Brainerd saved Apple by inventing desktop publishing. Sculley was just taking up space and pretending to know what he was talking about.

    Spindler presided over the shift from the 680×0 to the PowerPC chips, a project which was pretty successful for Apple. Unfortunately, he also presided over the Newton, and tried sell the company. ;)

    Spindler was unable to get a lid on the chaos that Sculley left behind. Under Sculley, the people at Apple did whatever the hell they wanted, and Spindler nearly died from the stress of knowing what needed to happen, telling people what he wanted them to do, and then seeing them completely ignore his direction.

    As for calling him “Herr Spindler”, he’s German: what’s your point? Are you trying to make some kind of an ethnic slur?

  87. Does anyone know if Apple has full control over that connector form factor?

    Molex built it to Apple’s spec, and they’ll only sell it to you with Apple’s approval in writing. There are design patents on it.

  88. In the future, the Apple fanboys trumpeting the “superior user experience” among my commenters will be pointed to this post and mocked without mercy. Your god has failed you, even in the terms it set itself as the criteria of excellence. The iPhone 4 now stands for lies and incompetence.

    I see that Doc Searls is having great luck with his Android phone (the same one you have) in France.

    Meanwhile, Doc’s iPhone “just works”. In France, too.

    > No, but the particular timing was kind of indicative that they knew they had a problem with the iPhone 4 before launch.

    Maybe they fired the last guy…

  89. esr wrote:

    “Apple’s single-carrier, single-platform strategy leaves it exposed to single-point failures that Android can recover from more easily because it’s got other carriers and hardware to fall back on. If, say, my Nexus One were to have a problem when you grip it a certain way (and there are reports it does) consumers would correctly identify this as an HTC problem rather than a Google problem. Apple, having elected to own everything, gets to own every failure”

    I believe that this line of thinking is highly questionable. Windows PCs have the reputation of being generally lower quality than Macs. In fact, I’m being generous. Everyone I know who has switched to Macs have been amazed at the lack of problems they’ve experienced after years in Windows land.

    I was talking to a friend at Microsoft about this who blamed the hardware providers. Whether true or not, it is Microsoft who licenses to the hardware providers. And frequently, customers are likely to identify their problems with the OS.

    If Android is to have any power of branding at all, it too must deal with these same issues. If someone is used to using some apps on the iPhone and tries out those some apps on an Android model, he’s likely to come to the conclusion: “wow, Android sucks.” Same for battery life. And since every Android manufacturer has to cut corners and has lower margins, these types of issues are likely to become more paramount.

    Another great example: a few weeks ago I walked into some of mobile providers at the mall and fiddled with the Androids. Had I only experienced the first three, I could easily come to the conclusion “wow, Androids really suck. These buttons are terrible, this device is ugly, there’s such a small collection of cases for this particular phone…”

    Far some a single-platform being a strategic disadvantage, I believe it will be the very opposite. Android, in the aggregate, will develop a reputation for lower quality. The faster Android tries to lock-up market share, the worse this problem will become. Race to the bottom.

  90. Everyone I know who has switched to Macs have been amazed at the lack of problems they’ve experienced after years in Windows land.

    Yes, that must be because Apple only allows authorized software on Macs and uses criminal law to prevent users from gaining root access.

    The faster Android tries to lock-up market share, the worse this problem will become. Race to the bottom.

    So if Android’s market share is low then customers are choosing the superior iPhone, and if it’s high, that’s because the market is flooded with cheap crap. How convenient…

  91. @Some Guy:

    Does anyone know if Apple has full control over that connector form factor?

    Molex built it to Apple’s spec, and they’ll only sell it to you with Apple’s approval in writing. There are design patents on it.

    If there are only design patents (no utility patents) on it, then, if anybody cared, they could certainly make an interoperating connector. You cannot use a design patent to cover a functional element.

  92. Um, aren’t the people who’ve actually tested reception found that the iPhone 4 has better reception (that is, better actual ability to make calls and do data transfer) than the 3G/3GS?

    (More attenuation, unless it’s in a case, but better SNR, and thus, in Anandtech’s testing, “… I couldn’t make calls drop driving around an entire day cupping the phone, despite being at -113 dBm (1 bar) most of the time.”)

    And, Jay? The antenna’s at the bottom of the phone, like nearly every smartphone, because the FCC has paranoid SAR requirements because of “zomg phones cause cancer” idiots pestering them. Thus, the radio goes away from the head, because that’s what the FCC tests measure – at least, that’s what I’m told about it, and it’d explain why everyone does it.

    (cf the Nokia 2320.)

    (And a search for “droid reception problems” reveals a lot of those, too. It’s almost like every smartphone has problems with data reception or something…

    While Morgan is right that some people don’t have problems, some people obviously do. Just like some people don’t have problems with the iPhone 4 antenna! But you don’t get page views trolling Nokia fans, and no other phone sold, what, over a million and a half units in the first three days?

    It’s almost like there’s some sort of double standard going on!

    And of course any problems with a Droid or Eris can’t possibly be “egg on Android’s face”, because implementations aren’t “Android”! Convenient when you’re comparing a platform against a specific product line, huh?

    Anything wrong with any iPhone dooms Apple, however, and has since the first iPhone didn’t have copy/paste.

    Apple sure is good at not being killed by all this doom, huh?)

  93. > Molex built it to Apple’s spec, and they’ll only sell it to you with Apple’s approval in writing. There are
    > design patents on it.

    Shit. Then the real question is how tightly Apple is going to hold on that. It’s in their interest to be close-fisted in a way that prevents any other phone/media player from accessing the hordes of devices built for iPhone/Pod.

    Possible avenue for an anti-trust, I suppose, if one could show evidence of collusion with audio device manufacturers. Not sure how I’d feel about that, though, and I doubt it’s the case anyway.

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