Apple's Rotten Response

Apple CEO Steve Jobs talks about problems with the iPhone 4 at a press conference July 16. David Paul Morris / Getty Images

I wonder if panic has started to set in at Apple yet. If not, it should. Because today's hastily called news conference—ostensibly to discuss problems with iPhone 4 and how Apple intends to fix them—only did further damage to Apple's reputation.

Apple called a small group of hand-picked journalists to the event to address mounting concerns about the antenna design in its new iPhone 4, which shipped in June. The problem is that because the phone's antenna is embedded in its frame, your hand touches the antenna when you make a call. That can interfere with reception, to the point that in some cases calls get dropped. Earlier this week Consumer Reports declared it could not recommend the phone until Apple comes up with a fix for this problem. The scandal even has its own nickname: "Antennagate."

Some expected Apple might announce a recall of the phone. Others speculated it might announce some kind of software update that would improve reception problems. Instead, Apple CEO Steve Jobs came up with a two-part solution. Part 1: There is no problem. Part 2: Even though there is no problem, we're going to give everyone a free case, which should insulate the antenna and prevent the interference that we just told you isn't actually occurring. But if you're still not happy, you can give back the phone for a full refund. Jobs's snotty tone made it clear that he was pretty fed up with all the whining about a problem that he says doesn't exist.

This is classic Apple behavior. No matter what the whole world can see with its own eyes, just keep saying that it isn't true, and maybe, eventually, everyone will believe you. By refusing to acknowledge the problem, Jobs just reinforced the image of Apple as a company that is in deep denial and unable to admit a mistake—a company that has for so long been able to bend reality to suit its needs that it now has lost touch with reality itself.

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Apple is so arrogant that it still won't admit the obvious truth—that the design of the phone itself is the problem. "No other phone has ever put an electrically active antenna on the exterior of the device," says Richard Gaywood, a wireless-networking engineer. Gaywood says that as an outsider he can't tell what the problem is, "but if I had to bet, I'd bet on it being a hardware problem they will never completely resolve for existing customers."

At the start of the event Jobs came out on stage and said that iPhone 4 is perhaps the best product Apple has ever made. Apple has sold 3 million units in just three weeks, he said.

Jobs said only 0.55 percent of iPhone 4 users report problems with their antenna or reception, and only 1.7 percent of customers are returning the new phone, compared to a 6 percent return rate on last year's iPhone 3GS. Most customers, Jobs said, say the new antenna gets better reception than any previous iPhones.

Jobs also said all other mobile phones suffer the same problems when you hold them in certain ways, and that "it's a challenge to the entire industry."

That's ridiculous. It's absurd. But that's nothing new. Apple has a history of making ridiculous claims and having them accepted by an adoring fan base and worshipful press. With the launch of iPhone 4, for example, Apple pretended it had invented video chat—something that has been around elsewhere for years.

Whether anyone will believe Jobs on this antenna issue remains to be seen. Apple would like to believe that it can just sweep the problem under the rug. But I'm not so sure.

The real issue here is how the product is perceived. If you need to put a rubber case on a phone to make it work correctly, there must be something wrong with it, don't you think?

Jobs clearly doesn't. He seems scornful of customers who have complained. Toward the end of the news conference, he blamed the media for blowing the problem out of proportion.

Apple's rivals will have a field day with this.Daniel Lyons is also the author of Options: The Secret Life of Steve Jobs and Dog Days: A Novel.