Apple's Lying to You

What do Apple (Nasdaq: AAPL  ) and a drunk pulled over by the cops have in common? They're both lying about bars.

After all of the brouhaha over the correct way to hold an iPhone 4 so one doesn't cover the antenna, Apple is sheepishly admitting that it's overstated the number of bars that indicate the phone's signal strength. The smartphone giant is promising a software update to fix the bug in the coming weeks, adopting AT&T's (NYSE: T  ) more accurate formula for calculating the number of bars it should display. 

"We were stunned to find that the formula we use to calculate how many bars of signal strength to display is totally wrong," Apple concedes in this morning's press release. "Users observing a drop of several bars when they grip their iPhone in a certain way are most likely in an area with very weak signal strength, but they don't know it because we are erroneously displaying 4 or 5 bars. Their big drop in bars is because their high bars were never real in the first place." 

Apple isn't perfect, and it's definitely earned some good karma by openly admitting this embarrassing episode. Still, Apple -- and AT&T, this time surprisingly solely by association -- just heaved a softball at the competition. Motorola (NYSE: MOT  ) and Verizon (NYSE: VZ  ) were already taking out ads for Motorola's Droid X, mocking Apple's iffy antenna. Now, hunting season is officially open.

I'm reminded of AT&T's latest commercial -- the one boasting about its 97% coverage, where orange drapes that seem to resemble coverage bars blanket the Hoover Dam and the Gateway Arch. How are those blankets flapping now?

This should have been a good week for Apple. It began with a press release celebrating the 1.7 million iPhone 4 smartphones sold in its first three days on the market. Then came news that Microsoft (Nasdaq: MSFT  ) was pulling the plug on its Kin.   

AT&T has failed Apple plenty in the past, so it's high time for an Apple faux pas to make AT&T look bad. It's easy to imagine an uptick in iPhone returns in the future, once folks kick the tires on their new phones and find weak signal strength in their routine haunts. But if and when the iPhone becomes available through other carriers, users will forgive and forget Apple for this blunder as they move on to steadier providers, leaving AT&T holding the bag.

One day, Apple will lose its stylish halo. It won't be today, but a few more days like this one will get it there.  

What do you think of Apple's signal strength admission? Share your thoughts in the comment box below.

Microsoft is a Motley Fool Inside Value pick. Apple is a Motley Fool Stock Advisor recommendation. Motley Fool Options has recommended a diagonal call position on Microsoft. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz has several iPhones in his household, including his wife's well-gripped iPhone 4. He does not own shares in any of the companies mentioned here. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 02, 2010, at 12:17 PM, demodave wrote:

    So if Apple is going to "take away a few superfluous bars" (see Apple 2.0), does that mean that the original R&D iPhone 4 was never really lost and Gozmodo's Jason Chen gets out of jail free?

    Stay tuned folks, I'll be here all weekend. :p

  • Report this Comment On July 02, 2010, at 2:56 PM, hartwigs wrote:

    If you pay close attention, the extra bars shown were never there in the first place. If anything, this just shows ever more clearly how bad AT&T's network is. I don't think too many die-hard apple fans really care about a software bug. The bug just pointed out what everyone already knew.

  • Report this Comment On July 02, 2010, at 3:43 PM, Casey4147 wrote:

    Perhaps not lying, perhaps just not fully explaining. A 3G phone will fall back to EDGE when the 3G signal isn't strong enough - which we now know is being overstated by the iPhone's signal meter and has been since the 3Gs and 3G models. The fallback isn't smooth and will result in - ready for it? - a dropped call, should you be making one at the time of the switchover. And isn't that what a lot of people were complaining about - more dropped calls on iPhones than anywhere else? Could this be why? Now, I'm not saying anything against the Grip Of Death here - it certainly makes sense to me, although I haven't seen it happen (me and my iPhone 3G are contractually a pair until January, when I will most certainly be looking at the iPhone 4 seriously) I have seen my wife touch a laser printer and have it print solid black pages and light a small Coleman Lantern florescent bulb by gripping both ends in her hands. Shorting separate antennas by bridging them with your hand does not sound too far fetched to me. But serious testing shows that Apple's new antenna design markedly improves its reception. My belief is that fringe reception (be it where you're standing or as a result of shorting antennas) isn't being handled the way it should be - by switching to the older EDGE network - because of the bad calculating of signal strength. Time will undoubtedly tell.

  • Report this Comment On July 02, 2010, at 6:16 PM, rollzone wrote:

    hello. i have been loyal to AT&T and patient as they piggyback other network service providers for wireless service, but the more coffee i drink, the more neglected i feel. many years have now passed that AT&T is not stepping up to solve the American service market [(awaiting more fiber optic cable deployment or whatever) what are they doing with my money?] and they really perform second rate with network service, while usage has been multiplying. my loyalty is beginning to embarrass me, when all i can say is they have excellant professional support for technical difficulties. i need stronger bars. now they are losing iPhone4 customers for the same reason. entice them with better products, and never upgrade the network....a losing business strategy.

  • Report this Comment On July 03, 2010, at 2:24 PM, exileonmainst wrote:

    Why would AT & T spend the money to make their networks work when they have plenty of subscribers willing to pay a lot for what they already have out there?

  • Report this Comment On July 03, 2010, at 5:29 PM, WaltFrench wrote:

    Lying about bars?

    What does your contract say about bars? Even in the fine print?

    Nothing.

    You are meant to infer that more bars means a stronger signal, which is apparently absolutely correct. I've seen some independent testing that correlated them to actual signal strength, and it was perfectly in agreement with what Apple subsequently said.

    And my interpretation of which is, "5 bars means no problem with the signal strength; 4 maybe some slight interference, etc." That's consumer friendly, if not precise enough for engineering field tests (which, by definition, customers don't do), and agrees with my experience with Apple phones.

    Apple phones don't work miracles. There are areas I'd like to make calls from that I can't. The number of bars sometimes jumps unpredictably. But what phone/network wouldn't have to confess to the same? In our family, we have recent/current experience with the Big 4 cell networks. And every one drops calls, has jumpy bars, has dead zones where they shouldn't, and delivers voice mail hours after your phone never rang while you were in a good signal area. Every one.

    I only partially understand everybody's motives here -- bloggers have to get eyeballs;

    -- buyers want to be sure they understand what they got, especially that they weren't cheated;

    -- recent buyers of competitive products, or the many others who regularly post negatively about ANYTHING Apple does, may want to keep Apple users from feeling good. It's called schadenfreude.

    But that last reason seems to be the biggest part of it. I've been on lots of forums where absolute bilge is spewed against Apple by people whom I have seen post similar trash a lot. And if you look at the raw meat presentations at the recent Android "I/O" marketing meeting, you can see how the corporate sponsors have encouraged their unpaid attack dogs, for whom they of course take no responsibility. Or look at the Adobe blogger, who kicked off the public "discussion" of the Flash/iPhone issue public with a post concluding, "Screw you, Apple." A declaration of war on a business partner that was only the most prominent of their failure to deliver stable Flash outside of high-powered Windows machines.

    The context is left totally unsaid, too: there is not a singe piece of hardware as complicated as a hammer that doesn't fail when used the "wrong" way. There is not a single significant software project that doesn't have bugs, including all that so-called six-sigma NASA mission stuff. No, Apple is NOT claiming that they are incapable of tradeoffs that others don't like. Here, they chose compact, attractive, _capable_ of great reception, over the risk that a bad choice tanks it.

    And there's not a single competitive phone that hasn't exhibited plenty of the same types of glitches. You can find gripes on the Nokia, EVO and Nexus support forums about antenna coverage, all of which predates the iPhone 4. You cannot look at a single independent, in-depth review of an Android phone that doesn't mention far worse software glitches.

    This will be an interesting one for the books.

  • Report this Comment On July 04, 2010, at 3:55 PM, rookie2009 wrote:

    Can we just stop calling them phones? Growing up in the 60's, a phone was a cool communication device you could slam, and the person at the other end knew you were angry. Very cool! Nowdays, if you slam a Steve, you're probably getting sued by some phone device rights group.I propose a foolish contest to rename these devices, since they're not really phones anymore. I'm sure the Gardners could come with acool foolish prize......

  • Report this Comment On July 04, 2010, at 8:40 PM, ConstableOdo wrote:

    I say you'd be dead wrong about there going to be an uptick in iPhone 4 returns. It's not going to happen. The iPhone 4 will continue to be in high demand for the rest of the year. Just because a few ignorant or indignant iPhone 4 users don't want to adjust their grip or get a case or happen to live in a poor coverage area? Hardly. The combination of all three reasons is going to be a very rare thing to cause users to return their iPhones. Guaranteed, this iPhone 4 antenna reception glitch will be totally forgotten in a month when iPhone sales hit an all-time high and attention-grabbing bloggers move on to some other hot topic.

  • Report this Comment On July 23, 2010, at 4:08 PM, sfhowell wrote:

    I have a Motorola Droid and I tried multiple grips and did not lose a single bar. The Motorola Droid was not featured in the video as exhibiting the problem. I noticed Steve Jobs said the problem happens with "most" smart-phones. Apparently, he didn't want to identify which ones do work. Every company that designs antennas must have an anechoic chamber to eliminate RF interference, that's not very impressive. I'm guessing Apple needs better test engineers and not so many chambers since they didn't do much good.

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