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The iPhone 4's biggest problem is not its antenna

by Eric Benderoff

If Apple (AAPL) continues to sidestep the growing iPhone 4 antenna furor, it risks losing its grip as America's premiere tech company. Also in today's App Industry Roundup, experts are starting to talk about an iPhone 4 recall.

Get a grip, Apple

The biggest problem with the iPhone 4's antenna isn't whether it's faulty or fine, it's Apple.

Apple has so far avoided the serious issue of whether the iPhone 4 has a legitimate hardware problem and instead obfuscated the issue by first telling users how to hold the new iPhone and then blaming a software glitch. As a result, Apple now has a big PR headache on top of an obvious hardware flaw.

If Apple admitted the hardware flaw, its PR problem would start to go away. But it hasn't, and news organizations including Consumer Reports and Engadget continue to prove the antenna is faulty. Worse, countless consumers have weighed in on the matter ... and that's Apple's biggest problem.

The iconic computer maker is in danger of losing its grip on the public psyche, an incredible asset it has milked for the last decade to become one of America's most admired companies. Apple's CEO, Steve Jobs, is beloved because of his singular vision and insistence that good design and computing hardware go hand in hand. Jobs utters, we listen. It is a unique power Bill Gates could never muster.

Now Apple is on the cusp of throwing it away, much like it is apparently deleting discussion threads from its message boards about the Consumer Reports story. Apple's products have reached beyond the fanboys who tolerate the company's flaws and into the mainstream, where grandparents and in-laws are mad because when they finally buy a smartphone, they expect the phone portion to work properly.

Apple needs to address this problem head on, not blame software oddities. And the sooner it does so, the sooner it can move away from what has become a legitimate crisis for the company.

Is an iPhone 4 recall next?

Yes, the iPhone 4's antenna problem is fixable -- tape! -- but is that enough? Many people will use a case anyway to protect their iPhone and not care about the antenna issue, but there's a growing belief that Apple may need to consider a recall to fix the iPhone 4's antenna woes.

Interviews with several PR experts on the Cult of Mac website conclude that "the iPhone 4 reception issue presents a Toyota-style PR crisis for Apple, and the company must respond with a more meaningful fix than a software patch."

“Apple needs to put this fire out now,” Larry Barton, a crisis management expert, told the website. “There has to be a military-like response to this issue. And we have not seen this kind of urgency.”

Later in the same story, Chris Lehane, a crisis expert who earned his stripes managing public relations for President Bill Clinton, said Apple needs to acknowledge and address the problem. "You deal with it,” he said. “Apple must protect its brand image, its crown jewels, at all cost. Apple has enormous consumer loyalty but it depends on whether people believe it’s credible.”

AT&T not to blame, finally

If there's a "winner" in this antenna fiasco, it appears to be AT&T (T). Finally, there's a reception problem it can't be blamed for.

Nonetheless, the wireless carrier is still very much involved with fixing the dead spots and slow zones that impact many iPhone owners. At a VentureBeat conference Monday, AT&T Chief Technology Officer John Donovan said the company “will move heaven and Earth” to meet its customers’ growing data needs. Donovan noted that the wireless industry is in "phase 1" of data management and much work is still being done. Phase 3 will arrive in 2014, he noted, and that's where video will flow freely and without trouble over wireless networks.

But you can be sure that the complaints will return will before that.