Why PR is so vital: Apple's next move is a lose-lose

Rumors have started to fly around the internet about an iPhone 4 recall, and this got us thinking… while we think a mandatory recall is very unlikely (as the iPhone 4 isn’t much of a safety concern), this is now a no win-situation for Apple.

When accounts of the iPhone 4′s reception woes first began to surface — shortly after the device’s release — Apple instantly denied the problem. We heard things like, “There is no issue,” and “All phones have some signal degradation depending on how you hold them,” and so on. Apple’s initial strategy seemed to be to deny the existence of an issue.

After the initial wave of consumer complaints came some expert testimony. People with RF engineering backgrounds and fancy degrees began stating that due to the way the iPhone’s antenna is engineered, grasping the phone “incorrectly” could cause the RF emission from the antenna to convert into heat, thus losing or diminishing the signal. To this Apple’s response was the admission of a “shocking” software error that causes your iPhone 4 (and presumably all other iPhones) to display the wrong number of “bars” in your signal meter.

Now, onto the latest — and perhaps most damning — round of critiques. Consumer Reports, a highly respected company in the United States, has confirmed through laboratory tests that the root issue with the iPhone 4 is a design problem with the antenna. The findings have resulted in the iPhone 4 receiving a “not recommended” rating from Consumer Reports, even though it otherwise tested as one of the best smartphones on the market. This morning, a member of the Consumer Reports team was on CBS’ The Early Show, demonstrating to Harry Smith how to “fix” your iPhone with a piece of duct tape. Ouch.

So here Apple sits. The Cupertino company first denied the antenna problems then admitted to there being some sort of software problem that had to do with reception perception. Meanwhile, the rest of the iPhone universe – lovers and haters alike, as well as Consumer Reports – has come to the conclusion that the issue with the iPhone 4 is definitively hardware and design related. So what about some sort of voluntary recall?

Occasionally, if done properly, a voluntary recall can earn a company some good will with its customer base. However, for Apple, that ship has long since sailed. Apple is going to release some sort of software patch for the iPhone 4, and if that doesn’t remedy the issue, here are Apple’s options.

1. Do nothing. Stick with the stance that there is no antenna issue with the iPhone 4, remind users that holding all smartphones a certain way will cause signal degradation, and deal with the impending lawsuits. Refute the concrete evidence and try to ride out the public relations nightmare.
2. Do some sort of voluntary recall of the first wave of iPhone 4′s. By doing this it would be admitting that, at best, the company was wrong and did not fully understand its own product, or at worst, it lied to its customer base. Deal with the backlash, and still potential lawsuit, and move on.

These are the choices that Apple has left itself through its management (read: mismanagement) of this situation. Neither option is all that appealing, and it leaves Apple with a pretty unenviable decision.