Today Apple did something momentous — the iPhone maker held a press conference for the first time that was not meant for a new product launch. Instead, CEO Steve Jobs took the stage to announce that Apple would be sending all iPhone 4 owners cases to fix a problem with the phone. But if you look at the company's own metrics, you wouldn't know anything was wrong at all.
Apple's internal customer service platform may be good for a lot of things. But gauging consumer outrage is not one of them.
A company like Apple spends a lot of time working on customer service initiatives. And Apple's in house Applecare department is a one stop shop for all product problems. But it is not designed to suss out consumer angst. And today's announcement proves that if Apple had only been using internal metrics, it would have ignored reception complaints.
That's not what happened. Apple will be providing free cases to all iPhone 4 owners who purchase the product before September 30. And those that already purchased cases will receive refunds.
But Steve Jobs is adamant about the iPhone 4's product quality. As he said today:
"There is no Antennagate... there is a challenge for the entire smartphone industry to improve its antenna technology so there are no weak spots. So today we're going to try and take care of our customers."
Jobs would like to paint "Antennagate" as an overblown issue created by blogs. And Apple's internal metrics seem to help with that effort.
Both AT&T and Apple have a "buyer's remorse" clause that allows customers to return phones they are dissatisfied with. But people aren't doing that. Return rates for the newest iPhone are lower (1.7%) than return rates for iPhone 3GS (6%).
And AppleCare has not been slammed with complaints coming in. The company's data shows that only 0.55% of iPhone 4 owners have called in about reception issues.
Furthermore, Jobs notes that iPhone 4 has better reception than any prior phone the company has made. It only drops "less than 1" call per 100 more than the 3GS.
And yet, today Apple announced that it will be trying to rectify the reception issue at great expense. Why?
Because there would be consumer repurcussions if the company were to ignore this problem. Consumers aren't necessarily going to phone up and tell a company when they are unhappy with a product. Instead, they often go to the internet. Jobs would like to claim that blogs are out to get him. He said today:
"We've been around for 34 years... haven't we earned the credibility and the trust of the press? I think we have that from our users. I didn't see it exhibited by some of the press as this was blown so far out of proportion. I'm not saying we didn't make a mistake -- we didn't know that it would have these issues, we didn't know we were putting a bull's eye on the phone... but this has been so overblown. But to see how we could do better is going to take some time."
But the fact is that the iPhone does have reception issues. And when Consumer Reports proclaimed that it could not recommend the iPhone this week, it really started to be a problem for Apple. At the least, the bad press would not going away.
There are plenty of reasons that consumers might not call Apple to let them know of the problems they're having. For starters, if it's a known issue, what is a customer service rep going to do?
Today, information is so readily available that customers don't need to go to a company to learn about problems with their product. Often, they don't even need to go there to get the solution. In the case of iPhone 4's antenna problems, there would be no need. They just had to wait for this press conference and read a few blogs to find out what to do.
Apple is usually incredibly reticent to respond to critics, letting its impressive sales figures and customer satisfaction speak for itself. But today they did the right thing. As Jobs said:
"We do this because we love our users, and if we screw up, we pick ourselves up and we try harder. And when we succeed, they reward us by staying our users. We take this really personally. Maybe we should have a wall of PR people keeping us away from this stuff, but we don't, we take it really personally. So we've worked the last 22 days on this trying to solve the problem. And we think we've gotten to the heart of the problem."