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Apple has been catching some bad breaks with its latest iPhone release. And while early leaks of the iPhone prototype on Gizmodo don't seem to have eroded sales of the company's latest device, a small antenna issue is quickly becoming a big issue. And today, Consumer Reports reneged its positive ratings of iPhone 4.

Apple customers may not be the most likely readers of Consumer Reports, but it's not an organization that you want to be on the wrong side of. Why? Because negative ratings from Consumer Reports make headlines.

Consumer Reports was once the golden seal of product quality in America. In many retail categories, it still is. The company spends about $21 million a year testing products and is a huge factor in the decision making process for many purchases, most especially in automotives. (An interesting fact I just learned: ConsumerReports.org has more paid subscribers than any other publication-based website.)

And while many of Apple's target customers may not be readers, the proclamation is getting a good deal of press today. The company initially had positive things to say about iPhone 4. But after extensive testing, CR found reception issues were persistent. What's more, they dispute the company's claims that it is a software bug:

"Our findings call into question the recent claim by Apple that the iPhone 4’s signal-strength issues were largely an optical illusion caused by faulty software that 'mistakenly displays 2 more bars than it should for a given signal strength.'"

Actually, they found the problem to be a flaw in the phone’s antenna design, and thought it was an issue for which the company should take responsibility. As it stands, CR said they could not recommend purchasing the phone.

Apple has already gotten plenty of grief after CEO Steve Jobs instructed people complaining about dropped calls to "just avoid holding it in that way." Additionally, techies weren't pleased when Apple suggested that purchasing a cover would fix the issue. Consumer Reports also does not think the burden should be on the consumer to fix the problem:

"Apple needs to come up with a permanent—and free—fix for the antenna problem before we can recommend the iPhone 4."

Of course, tech junkies who are lining up to purchase Apple's latest product are not likely to check Consumer Reports before making a purchase. However, the ratings adds to Apple's troubles regarding the glitch.

Why? Because while no one may read CR's positive tech reports, a negative rating is big news. Everyone who covers tech has picked up the Consumer Reports story today. That's a lot of bad press.

In addition, companies work really hard to avoid negative ratings from CR for a reason: it's terrible PR. And so easy to cite when trying to critique a product (just ask Toyota). Not to mention the fodder it gives to competitors.

The rating by Consumer Reports might get Apple one step closer to fixing its antenna issue, using this solution that Gizmodo suggests:

"Apple issues a recall, allows customers to swap their old phones for ones with a fixed antenna, and lets those who don't feel the issue affects them too much to get a free "bumper" case instead. Apple shows they still have industry-leading customer service and are a brand that can be trusted for quality."

Until that happens, there's always the answer to so many of life's problems: duct tape.

Meghan Keane

Published 12 July, 2010 by Meghan Keane

Based in New York, Meghan Keane is US Editor of Econsultancy. You can follow her on Twitter: @keanesian.

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