Apple

Apple asks judge to toss out iPhone 3G lawsuit

Phil Goldstein — Mon, 13 Oct 2008 15:53:12 -0400

Apple has asked a federal judge to throw out a lawsuit that iPhone 3G customers had brought against the company, saying that the customers did not ask the company to repair their iPhones or ask for a refund as part of their one-year warranty.

The suit, brought by Jessica Smith from Alabama in August, said that the iPhone 3G repeatedly dropped calls and that its connection to AT&T mobility's 3G HSPA network was not reliable, and that the service she received did not match what Apple claimed it would be in its marketing campaign. She was later joined in the suit by another iPhone customer, Wilton Triggs, and the suit was seeking class-action status.

"Plaintiffs' Amended Complaint conspicuously omits one critical condition precedent to all three causes of action: an allegation that they contacted Apple to seek a repair of the alleged defects or a replacement iPhone 3G under Apple's One (1) Year Limited Warranty," Apple's attorneys said.

A separate lawsuit was filed against Apple in California in September, with the bulk of that complaint focused on AT&T's network, which the lawsuit complains gets bogged down due to high volumes of usage.

As well, a U.S. District Court judge for the Northern District in California denied Apple's request last week to dismiss a $1.2 billion anti-trust suit, which claims that Apple violated anti-trust laws by tethering the iPhone to AT&T's network.

For more:
- see this article on the Alabama suit
- see this article on the anti-trust suit

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Walmart to sell iPhone 3G

Phil Goldstein — Mon, 13 Oct 2008 11:23:59 -0400

Best Buy became the first third party retailer to sell Apple's iPhone 3G in September, and the blog Boy Genius Report is now reporting that retail giant Walmart will follow suit in November. Report

AT&T sets up online accounts for iPhone 3G users

Phil Goldstein — Fri, 10 Oct 2008 10:55:05 -0400

AT&T Mobility announced it was offering online account setup for Apple's iPhone 3G customers so they can take care of necessary requirements before they enter a store to buy and activate the phone.

The online account will allow users to have a pre-qualifying credit check done and determine eligibility on whether or not they can port a phone number over to AT&T's service. The move is intended to save customers time waiting in line at stores as the holiday shopping season approaches.

The account setup will also allow current AT&T customers to determine whether or not they can add a new line for the iPhone.

For more:
-see this press release

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Five iPhone 3G myths explored

Phil Goldstein — Thu, 02 Oct 2008 11:10:24 -0400

With talk swirling around Apple's iPhone 3G of late--Will it have cut and paste functions in the future? Is Flash really going to be developed for it?--here is a look at five myths that have been demystified a little about the device. Article

Adobe confirms it: Flash being developed for iPhone 3G

Phil Goldstein — Wed, 01 Oct 2008 10:47:37 -0400

Adobe has confirmed that it will produce a version of its popular Flash player for the iPhone 3G, pending Apple's approval of the technology.

At the Flash On The Beach conference in Brighton, U.K., Paul Petiem, the senior director of engineering at Adobe, confirmed that the company was developing an application that would enable Flash for the iPhone, according to Wired.

It had long been speculated that the iPhone would become Flash-capable, and the fact that it was not was one of the major gripes against the hyper-hot device. Previously, Apple CEO Steve Jobs said that Adobe's Flash player was not optimal for mobile devices like the iPhone.

For more:
- see this article

Apple shares plunge, but may be saved by iPhone

Phil Goldstein — Tue, 30 Sep 2008 10:39:17 -0400

Apple saw its shares plunge more than 18 percent by the end of trading Monday, as two analysts downgraded the computer and consumer electronics maker in the face of worsening economic conditions and weak projected demand. However, some did say the iPhone 3G may be the company's saving grace.

It was the single biggest drop in Apple's shares in more than 16 months, and came on a day when the U.S. stock market got hammered because of the collapse of the financial bailout bill. Kathryn Huberty of Morgan Stanley changed her rating from overweight to equal-weight and RBC Capital Markets analyst Mike Abramsky cut his rating to sector perform from outperform.

However, the glimmer of good news in the company's misfortunes is that the iPhone 3G continues to be the hottest smartphone on the market, and may be the catalyst that drives growth at the end of the year for Apple.

"Market sales will slow, but I don't think that level of deterioration is likely for Apple," said Andy Hargreaves of Pacific Crest Securities. "Because of growth in the iPhone and stability with lower price points for iPods, Apple will continue to drive strong cash flow."

For more:
- see this article

Related Article:
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Apple releases unlocked iPhone 3G in Hong Kong

Phil Goldstein — Mon, 29 Sep 2008 10:25:00 -0400

Breaking with its preferred business model, Apple has released an unlocked version of the iPhone 3G in Hong Kong, allowing users to pick their preferred carrier.

The phones will go on sale in Hong Kong at prices of $695 for the 8GB model and $798 for the 16GB version. If those numbers look strikingly high, it's only because Apple's business plan has been to pair the iPhone 3G with a carrier in a given market--for instance, AT&T Mobility in the United States--which subsidizes the cost of the phone because customers are required to sign a service contract and pay for data plans.

Previously, the iPhone was only available in Hong Kong paired with a two-year service contract from Hutchinson, and included a $25 (HK$188) monthly fee. Now customers will be able to put their old SIM card into the iPhone and activate it in iTunes. It's not clear whether this gamble will pay off, though it could put more pressure on Apple to unlock the phones in other markets.

For more:
- see this article

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Mark Lowenstein: Improving the Store Experience

Mark Lowenstein — Thu, 25 Sep 2008 10:28:41 -0400

A couple of times a year, I do some wireless mystery shopping. I walk into several wireless stores--a mix of carrier-owned (Verizon, AT&T), independent third party (Wireless Toys), and big box (Best Buy, RadioShack) stores--in a few different cities, and gauge how the store experience has evolved alongside the value proposition that the industry is trying to promote. My conclusion after the most recent set of site visits is that the operations side has improved significantly, but the overall customer experience still does not "delight." The objective of many customers walking into a wireless store is to get in and out of there as quickly and unscathed as possible--a mentality akin to visiting the Department of Motor Vehicles. This is a problem, because the store experience is not keeping pace with the evolution of how wireless is increasingly becoming a part of the digital life framework.

Before delving into what needs to be improved, it is important to recognize how wireless is different from other touch points in consumer electronics. First, the primary objective in wireless retail is still focused on selling services, rather than things. This takes longer, is more complex, and involves a different type of training and compensation structure for store employees. Second, more than 50 percent of all transactions in stores have nothing to do with selling anything. These are people who walk in to pay a bill, have a problem with their phone, or have some question about their service. This latter point means two important things--there is a needed focus on triage and traffic flow; and a need to carefully manage store costs.

A major focus over the past 2-3 years has been on improving the operational aspects of wireless stores. Customers were waiting in huge lines and were spending too much time in the store given what they were trying to accomplish. So there was a big focus on the basic blocking and tackling of the store experience. That focus centered around three key principles:

Streamlining processes. This is not sexy stuff, but includes things such as reducing the number of screens a store agent needs to plow through to sign up a new customer.
Automating certain functions. This automation includes such things as putting bill payment kiosks in the stores, and encouraging customers to use the Web for self-service.
Managing traffic flow. This mainly involves up-front triage when a customer walks into a store, pointing them in the right direction, and managing expectations of wait times.

While there is still much work to be done, I would say that significant progress has been made along many of the elements most frustrating to customers and store managers alike.

The next phase presents a different set of challenges. The focus on value-added services, more advanced devices, and greater role of the phone as part of the overall digital lifestyle will place greater stresses--and create new opportunities--for the wireless retail channel. I believe there are three essential priorities, all of which are inter-related. First, there is still a huge amount of work to do with respect to sales training. While store employees are more knowledgeable about data services than they were a couple of years ago, very few are able to successfully navigate the range of devices, operating systems, PC synchronization, etc., that is becoming part of the wireless territory. Whether the customer receives good (or even correct) advice or help varies widely. Of course, it would be tempting to benchmark against Apple store employees, but a more realistic comparison is the quality of training and expertise at Best Buy (good) compared to Circuit City (lousy).

The next priority is merchandising. It is still amazing to me how little delineation there is between the range of phones displayed in wireless stores, or why so few can be tried out. Accessories are another huge, largely under-tapped opportunity. Most wireless accessories are undifferentiated and unattractive, and you have to go through gyrations to figure out which charger goes with which phone, or why you should spend $79.99 on a Bluetooth headset that does the same thing as the $59.99 one next to it. By contrast, look at the exciting range of accessories that have been built for Apple products, or at the $100 Monster cables you buy to connect your DVD to your TV compared to the $6.99 RCA cables of yesteryear. Besides being cool and attractive, these accessories are hugely profitable. If wireless phones are also going to be media players, cameras and Internet devices, we need to build a better accessory ecosystem around them.

Third, we need to improve the look and feel of wireless stores. There have been some attempts to create higher-end stores or "experience" stores, but few have seen the volume increase needed to justify the higher cost. I think there's some reasonable room for incremental improvements, without having to be Apple or Bang & Olufsen. Less garish lighting, demonstration islands in the middle of the store, and more attractive displays for phones and accessories would be a good start. Think Starbucks vs. Dunkin' Donuts, or Panera Bread vs. Subway. Over time, this is going to be about selling a digital lifestyle, not just a phone or service plan.

Mark Lowenstein is Managing Director of Mobile Ecosystem. Click here to subscribe to his Lens on Wireless newsletter, and to find out more about an exciting event planned for October, the New England Mobile Summit.

Apple recalls iPhone 3G charger

Phil Goldstein — Mon, 22 Sep 2008 09:48:10 -0400

Apple has recalled the A/C power adapter for the iPhone 3G, warning that some of the chargers are faulty and could be potentially dangerous. The chargers that are at issue were distributed with the iPhone 3G in the United States, Canada, Japan, Mexico and several Latin American countries.

The company said that the metal prongs on the charger can break off and lead to possible electric shock. The news comes as Apple is trying to get past the early problems that plagued the iPhone 3G and gave it negative publicity--most notably its alleged problems connecting to AT&T Mobility's HSPA 3G network.

Apple said replacement chargers will be available starting Oct. 10.

For more:
- see this article

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Storm clouds gathering around Verizon

Jim Barthold — Tue, 16 Sep 2008 09:57:53 -0400

The market is abuzz with the notion the BlackBerry Storm-the device formerly known as Thunder-will saturate Verizon Wireless' stores sometime very soon.

Verizon emailed a message hinting that the Storm was on its radar screen and delivering some talking points about the new device. While not necessarily announcing the launch, this seems to presage an official acknowledgement that Verizon Wireless will be the first North American carrier to market the touchscreen-equipped device from Research in Motion.

The Storm's attractions go beyond being a feature-loaded Apple killer--although there are few who will debate that's its primary reason to exist. It also importantly fills a gap that's been more painful than a tooth cavity for international travelers by incorporating quad-band GSM/EDGE technology to deliver world-wide roaming capabilities. Of course for non-international travelers--and there's a few out there--the Storm will feature all the latest must-haves such as a 3.2 megapixel camera, a full HTML browser and visual voicemail.

For more:
- see this article
- see this BlackBerry Thunder photo

Related:
- Verizon's launch of Blackberry Storm delayed until November. Article

Apple releases iPhone software patch

Phil Goldstein — Mon, 15 Sep 2008 10:19:03 -0400

Apple released its new software patch for the iPhone 3G, a move made in part in response to numerous user complaints about the reliability of AT&T's 3G wireless network the device was supposed to harness.

Apple said the software update, 2.1, is supposed to bring "improved accuracy of the 3G signal strength display," but this only means devices will show more bars, not that signal strength will automatically be improved. Apple said the patch will fix problems users had with dropped calls and reduced bandwidth, but it remains to be seen whether this fix will quell the frustrations of users who felt they were promised a solid 3G network and were unhappy with the result.

In a related piece of news, a well-known iPhone 3G hacker, Erica Sadun, has found a way to get the phone working on At&T's pay-as-you-go SIM service. Her trick? Simply putting the SIM card into the iPhone.

For more:
-see these articles

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U.S. smartphone market is tough to crack

Sue Marek — Wed, 03 Sep 2008 12:05:31 -0400

Top-ranked handset vendors such as Motorola, Nokia and Samsung control 80 percent of the cell phone device market but have struggled to sell smartphones in the U.S. This has caused an open door for vendors such as Research in Motion and Apple. Can the big handset makers regain their edge? Article (sub. req.)

iPhone 3G a top seller for AT&T

Sue Marek — Wed, 03 Sep 2008 12:01:52 -0400

Morgan Keegan analyst Tavis McCourt says that the iPhone 3G is the top-selling phone at most AT&T stores in North America and the United Kingdom. In a research note, McCourt said that Research in Motion's Blackberry Curve was AT&T's top-seller for more than a year, but the iPhone 3G "siphoned off sales from other smartphone vendors."

In fact, Research in Motion is adjusting pricing to better compete with Apple. RIM reduced the price of its Blackberry Curve from $149 to $99.

For more:
- read this article

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U.K. advertising authority bans iPhone ad

Sue Marek — Wed, 27 Aug 2008 11:11:34 -0400

The U.K.'s Advertising Standards Authority has banned an ad for the iPhone that promises users access to "all parts of the Internet" on their Apple device.

The TV ad shows a person surfing through holiday-related Web pages on the iPhone while a voice says, "You never know which part of the Internet you'll need ... which is why all parts of the Internet are on the iPhone."

The ad prompted two disputes with the ASA, both of which claimed the ad was misleading because the iPhone doesn't offer Flash or Java and not all Web sites can be seen in their entirety. Meanwhile, Apple says the ad is not misleading and instead refers to the iPhone's ability to offer "full" Internet access rather than WAP pages or the walled-garden approach.

For more:
- See this article

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Apple plans to make 40M iPhones in next year

Sue Marek — Mon, 25 Aug 2008 11:52:06 -0400

Business Week has learned Apple plans to build 40 million to 45 million iPhone 3Gs in the 12 months through August 2009. The company boosted its production plans when the initial sales proved stronger than the company expected. However, much of the company's ability to reach that 40-million-plus goal is hinged upon the successful introduction of the phone in several countries by year end. And, perhaps more important, its ability to address complaints over the phone's performance. Article

Apple slammed with lawsuit over iPhone 3G

Sue Marek — Thu, 21 Aug 2008 09:03:46 -0400

Apple may be wishing it had reacted faster to the reported connectivity issues with the iPhone 3G. A lawsuit has been filed against the company by Alabama resident Jessica Alena Smith claiming that the iPhone's 3G performance and reliability has not measured up to what the company claimed in its marketing campaign.

Smith purchased her iPhone 3G after seeing advertisements claiming the phone was twice as fast for half the price. But she immediately noticed that the iPhone's data connection, email and other communications were slower than expected and the phone appeared to only connect to AT&T's 3G network less than 25 percent of the time. She also experienced an "inordinate amount of dropped calls," according to the lawsuit.

Smith is hoping her lawsuit will become a class-action complaint. She's aware that others are having the same issues and is requesting that the suit be approved as a class action. Apple had no comment about the pending litigation.

Earlier this week Apple released an iPhone software update that it says improves communication between the iPhone 3G and wireless networks. However, the company has refused to provide specifics about what the software update fixes nor has it commented on what exactly is causing the iPhone 3G problems.

For more:
- see this article

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iPhone now available for online orders

Sue Marek — Mon, 18 Aug 2008 11:23:22 -0400

Enterprise users that don't have time to go to an Apple or AT&T store to pick up their iPhone 3G can now order it online. The moratorium on online orders has been lifted--but there is a catch. To order an iPhone 3G online you have to be employed by a company that is a member of AT&T's Premier Enterprise program.

Once you order the device, your iPhone 3G will arrive between seven and 10 business days.

The online channel is just another avenue for getting more iPhone 3G devices into user's hands. Just last week, Apple announced that Best Buy was going to start selling the iPhone 3G.

For more:
- see this story

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Report: AT&T, Apple to issue software fix for connection glitch

Lynnette Luna — Fri, 15 Aug 2008 10:01:35 -0400

AT&T and Apple are reportedly working on a software fix to correct the iPhone 3G connection failures that users worldwide are rampantly complaining about. According to USA Today, citing anonymous sources, the problem lies with a faulty chipset provided by German chip company Infineon Technologies. Users are complaining about connection failures that typically happen when the device tries to move from AT&T's 3G network to the EDGE network. The software fix could be available next week via iTunes.

For more:
- see USA Today

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Are design flaws plaguing the iPhone 3G?

Sue Marek — Thu, 14 Aug 2008 10:52:21 -0400

There have been a flurry of news reports recently about the iPhone 3G and its purported issues with 3G data connectivity. Specifically, people are unhappy with how slowly the iPhone downloads data over AT&T's wireless network. Some say the phone frequently switches from the faster UMTS/HSDPA network to the EDGE network without warning or drops the data signal entirely.

It's not clear why the data connectivity problems are occurring (if, in fact, they are). Some blame the chip set, other's blame AT&T's network. One well-regarded technical magazine, Sweden's Ny Teknik, says that tests conducted on the 3G iPhone show that its sensitivity to 3G network signals is below the level specified by the 3G standard. In other words, the adjustment between the amplifier and the antenna is defective and that's causing the amplifier in the phone to capture very weak signals from the antenna and that leads to poor 3G connectivity.

AT&T and Apple have both denied any problems with the phone. But that hasn't stopped the word from spreading--thanks, in part, to AT&T competitors (read: Verizon) that would like nothing more than the iPhone 3G to fail in the market. I suspect the negative press may soon have an impact on iPhone 3G sales, particularly if the connectivity issues persist without any explanation or remedy. If there really is a problem with the iPhone 3G and data connectivity, AT&T and Apple need to step up and address the problem before this turns into a customer relations disaster. --Sue

Best Buy will sell iPhone 3G

Sue Marek — Wed, 13 Aug 2008 10:41:04 -0400

Starting Sept. 7 consumers will be able to pick up an iPhone 3G at their local Best Buy store. The retailer will be the first to sell the popular device in the U.S. outside of Apple and AT&T stores.

The iPhone 3G will be available at all Best Buy stores except a few which are located in areas where AT&T's wireless service isn't available.

Best Buy has been trying to establish itself as a leader in wireless retail sales by expanding its wireless product lines and establishing cell phone departments in its U.S. stores. The retailer's iPhone price will match that of AT&T and Apple: $199 for the eight-gigabyte model and $299 for the 16-gigabyte model with a two-year contract.

For more:
- read this article (sub. req.)

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