Why Does "Consumer Reports" Hate iPhone 4?

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First, let me apologize. I really didn't think I'd be writing another story about the iPhone 4 antenna issue. But it's being dredged up again, and people actually seem to like reading about it.

It's also sort of weird for me to be slamming Consumer Reports over an issue with Apple (Nasdaq: AAPL  ) . I'm a huge CR fan and have been a subscriber for more than 20 years.

That out of the way, I believe CR is misleading its readers when it comes to the iPhone 4 -- and at this point it seems almost personal.

The anatomy of nothing
Just in case you were too engrossed with real life to notice, here's the quick background. Not long after the iPhone 4's smashing debut, reports surfaced that its signal strength might be dropping for some users when the phone was held in a certain way. There was no signal loss when the phones were wrapped in a case, which indicated it was a problem with the phone's outer antenna band and not an AT&T (NYSE: T  ) issue. As this fanned into a full-blown firestorm of media attention, CR tested the issue in a controlled laboratory setting. It found there was indeed a drop in signal strength with the three phones it tested. Noting that the iPhone was excellent in most other respects -- and that it would top its smartphone ratings otherwise -- it said it could not recommend the phone because of the antenna problem.

That was pretty much the straw that forced Apple to address the controversy, and it did so in full force. In a July 16 press conference, Steve Jobs said the company would give free cases to all iPhone 4 owners until Sept. 30, and offered full refunds to any who still weren't satisfied. But he also put on what was a quite remarkable demonstration, showing the same signal degradation issue in Research In Motion's (Nasdaq: RIMM  ) BlackBerry Bold 9700, Samsung's Omnia 2, and Google's (Nasdaq: GOOG  ) Android-based HTC Droid Eris from Verizon (NYSE: VZ  ) . Virtually all smartphones, Jobs said, suffer from some sort of signal degradation when held in certain ways. "You can see pictures of a Nokia (NYSE: NOK  ) phone with a sticker on it that says, 'Don't touch here.' No one has solved this problem," he said.

It was an eye-opening demonstration, and it couldn't have made rival manufacturers happy -- but there it was. (Intrigued, I ran my own unscientific experiment with readers, which agreed with Jobs' contention.)

After Apple offered a free remedy or full refund to anyone still dissatisfied, and also implicated all other smartphones in this issue -- antennagate died down and pretty much disappeared. It has since been exposed for the minor issue it really is. Today, nearly three months after launch, the iPhone 4 is so wildly popular that it's still hard to find in stores -- especially the $199 16GB model. There's still a three-week wait when ordering on Apple's website. Do you really think if there were a problem of any significance there would be this kind of backlog?

Apple announced a few days ago that because "the iPhone 4 antenna attenuation issue is even smaller than we originally thought," it would end the free case program on schedule. Anyone purchasing the device after Sept. 30 and still wanting a free case will have to call customer service. In other words, it's ending the "free cases for all" program, but anyone still wanting one needs only clear the lowest of hurdles to get it.

When "not acceptable" is not acceptable
It all sounds very sensible, but Consumer Reports doesn't think so. "[P]utting the onus on any owners of a product to obtain a remedy to a design flaw is not acceptable to us," it says. Thus, it still won't recommend the iPhone 4 and calls on Apple to "provide a permanent fix for the phone's reception issues."

Oh boy. Unlike last time when it made a reasonable decision based on the information it had, CR just looks silly and out of touch now. Here are the problems:

  • It's taking Apple to task for putting an "onus" on users to obtain satisfaction, when the marketplace is clearly and loudly telling us that users are satisfied. Beyond satisfied, actually. More like giddily exuberant.
  • CR is ignoring the same issue with other smartphones. It's quite apparent signal degradation exists when almost every other smartphone is held in a certain way. To what extent, and how much better or worse they are than iPhone 4 is unknown at this point. Why isn't CR testing and issuing non-recommendations for other phones?
  • Most of CR's other product ratings -- from gas grills to washing machines -- are extremely relevant to "real-life" use. But this "not acceptable" stance with iPhone 4 is not at all practical and in no way mirrors the vast majority of users' experiences, where this "issue" is no issue at all and makes no difference in their day-to-day use.
  • This is not a safety feature, like an SUV's tendency to roll over or a baby crib that can trap and harm children. It's a couple of bars on a phone for some people, and in a very few others a couple of dropped calls.

This extreme (and highly publicized) stance on a minor issue seems petty and personal and harms CR's reputation.

Bottom line
There's a different issue for Apple shareholders, however, and it's the classic "good news, bad news" situation. The good news: The market has voted loud and clear that CR and any other antenna detractors are having virtually no effect on sales. The bad news: Why isn't Apple able to even come close to satisfying demand three months after launch? How many sales is it losing to Android phones among the less rabid who don't want to wait three weeks or more for a new device?

At first it seemed highly unlikely there would be any inventory problems when the holiday season rolled around, but now things are getting a tad uncomfortable. It's late September -- when the kids are back at school and retailers should be gearing up for their most profitable time of the year. If we don't see the backlog easing soon, Apple's holiday quarter may not be quite as big as Mr. Market is expecting.

Fool analyst Rex Moore finally found an iPhone 4 after days of searching. He owns no companies mentioned in this article. Google and Nokia are Motley Fool Inside Value recommendations. Google is a Motley Fool Rule Breakers pick. Apple is a Motley Fool Stock Advisor recommendation. The Fool owns shares of Apple and Google. Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Motley Fool has a disclosure policy.

Read/Post Comments (27) | Recommend This Article (25)

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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 September 22, 2010, at 9:02 PM, applefan1 wrote:

    I always thought of Consumer Reports as a way to check thing like washing machines and toasters, but not computer devices. I really think they have a ways to go before I only use "their" advice/suggestions/recommendations. They don't always factor things in the same as I would. people have different needs, likes, dislikes, and requirements and how they weight the various aspects of a product before making the buying decision. I for one, wouldn't consider an Android phone because Google is only into advertising as a method of making money and anything I can do to avoid advertisements is a plus. I wish we could have a brewer that would eliminate ALL advertisements from a web page. I am not talking just pop up blockers, I am talking about NO advertisements whatsoever. in using a device with a touch screen, it is too easy to accidentally touch an ad. It is frustrating.

  • Report this Comment On September 22, 2010, at 9:04 PM, applefan1 wrote:

    Oh, BTW, I don't own an iPhone at this time. Too expensive at this time and I just don't have the money to buy a new phone at any price.

  • Report this Comment On September 22, 2010, at 10:02 PM, jbelkin wrote:

    Yea, you hit the nail on the head. They seem really pissed that Apple & no one is listening to them in claiming that standing in a sound tunnel test, the iPhone can lose some reception (or in the real world, some .5% of users returning something - I'll bet that is one of the LOWEST %'s EVER for any consumer product). And as you point, it's NOT a dangerous thing - it's like saying the freezer light is not bright enough. AND when Apple will offer you either a FULL REFUND or a free case but then CR can't advertise they made Apple do something. I lost respect for CR a LONG TIME AGO. They seem like crotchety old geezers totally out of it with a lot of bizarre or outdated criterias in testing appliances. Yes, if it catches fire, I want to know but they will hate something because it ranks second in speed in toasting a bagel ... even if their first choice looks like it was hammered out of rusted metal 20 years ago ... same with the iphone, they don't really rank criterias in actual importance - they rank every feature with the same scale.

  • Report this Comment On September 22, 2010, at 10:10 PM, millsbob wrote:

    CR has long been a place for me to check things on which i really have no information. but only as one data point.

    and for anything where i have some expertise... i always find CR utterly clueless and simplistic.

    trusting them on tech? no thanks.

  • Report this Comment On September 22, 2010, at 10:40 PM, tipsman wrote:

    I agree with your article almost to the end, but as far availability goes, I purchased two iphone 4's in the past month. One from a local AT&T store that took 4 days to arrive and one from the Apple store in Las Vegas that was in stock when I walked in with no appt. It seems, at least here, there is no backlog. By the way, my wife and I both love this phone!

  • Report this Comment On September 22, 2010, at 11:15 PM, TerryShumway wrote:

    Just replaced Palm Treo with iphone and could not be happier. Went to local AT & T to look at options since my Treo was about to die but nothing to compare. Expected to wait a week or two but the phone was ready to pick up in 2 days. It does so much so easy and no learnin g curve. I am a Realtor and there is nothing else out there that does so much for so little money.

  • Report this Comment On September 23, 2010, at 12:13 AM, WileEConsumer wrote:

    The writer of this blog clearly does not understand the difference between the cause of degradation in signal strength caused by the exposed antenna conductor on the outer bezel of iphone4 and the covered/sealed antennas of the other phones. By exposing the antenna conductor as on the iphone4's, when the antenna is touched by bare skin could/would cause an impedance mismatch resulting in degradation of signal at the receiver. This is different from other phones for which the drop in signal is due to absorption.

    WRT to the Jobs demo, what was interesting and strange was that the Bold did not show the familiar BB icon on the top indicating that it's not connected to a BES/BIS. So was Jobs doing the demo with a cell tower basestation used by internal Apple testing or a carrier operated cell tower basestation?

  • Report this Comment On September 23, 2010, at 1:41 AM, xmmj wrote:

    "This extreme (and highly publicized) stance on a minor issue seems petty and personal and harms CR's reputation"

    I think that hits the nail on the head.

    I too have been a longtime fan of CR. But I have to wonder what has gotten into them here. Not only do they adamantly stick to their guns against Apple, even after Apple provides a solution, but they refuse to even investigate the problem with other phones.

    I am sorry to say, but it appears to me that they have become very defensive on the issue. The mentality seems to me to be "WE are the official high-priests of consumer protection and we are above all possibility of error."

    Talk about arrogance!!

  • Report this Comment On September 23, 2010, at 6:39 AM, Henry3Dogg wrote:

    Superficially it looks like CR got swept along in the iPhone 4 bashing by those with a vested interest and those just wanting a story.

    But then when the vapour was dispelled, CR just wasn't grown up enough to admit that it had screwed up.

  • Report this Comment On September 23, 2010, at 8:36 AM, Morgana wrote:

    CR is not what it used to be. I long ago found out it does not always recommend the BEST product but the BEST for the PRICE. They also nitpick. What is important to them is not necessarily important in terms of a functioning product . . . they would probably not recommend the world's best, most efficiently performing vacuum cleaner if the handle were curved slightly wrong. THey seem to delight in finding that one wrong thing and making it a criteria.

  • Report this Comment On September 23, 2010, at 9:38 AM, sk8ertor wrote:

    I cannot believe the author of this article is so incompetent.

    First, why is it hard for you to see why they cannot recommend the phone? Think of it this way: in an emergency, do you want your phone to be able to make a phone call reliably? YES or NO?

    Second, this problem does NOT happen on other phones. The problem with the Apple antenna is that if you simply touch it, when your holding the phone in a NORMAL manner, it will drop the call. The same can't be said about other manufacturers. What Apple demonstrated in their nonsense video was that if you squeezed other phones (aka death grip), then the signal fades. But why is Apple trying to confuse the issue?

    The iPhone is a good device but how do you expect a company like CR to recommend it when it has a higher probability than other cell phones to drop the call in case of an emergency?

  • Report this Comment On September 23, 2010, at 9:43 AM, sk8ertor wrote:

    InfoThatHelp: You are an absolute liar. You had a picnic and invited your friends. Ha! Nice fake picnic. Also, love how almost half your "friends" had an iPhone even though BlackBerry is the number 1 smartphone brand in North America. If their number 1 complaint was screen resolution, it's probably because most of your "friends" have an iPhone 3Gs - terrible resolution. Anyhow, you're a FOOL if you think we believe your story.

  • Report this Comment On September 23, 2010, at 9:44 AM, wkeboarder21 wrote:

    Sorry but I have to disagree with you - GOOD for CR!!! Their job is not to determine if a product is popular (which the iPhone certainly is!). Their job is to tell people about product flaws - which they are doing! Good for CR to maintain that the iPhone 4 is flawed even if all the other features more then make up for the flaw in the public's eye. I'm proud of CR to not just base their recommendations on public opinion.

    Fact is the iPhone4 has a flaw which has NOT been fixed. CR would lose credibility if they changed their stance when the problem is not fixed. (okay now I'm just repeating my stance from a different angle =)

  • Report this Comment On September 23, 2010, at 9:48 AM, TMFFischer wrote:

    Owning an iPhone 4 for just a month or so, there's no question in my mind that something is wrong with it. It drops calls far more frequently than the 3G ever did, even with a case on it, and wherever you're using it. (My wife and I both have one. She wanted to go back to her old Motorola phone the first few weeks.) But I also wonder how many of the problems may be related to the network. Speaking to my sister who is on a 3G iPhone, the called dropped simultaneously on both of us four times within five minutes, and it didn't say "call failed" or anything on the screen; the screen, on both phones, just went to the Contacts page for some reason. That was the clearest indication of some strange bug that I've seen (I was in DC, she was in Chicago, and both phones did the same thing 4 times in a row.) Apple is far from perfect. Nor is AT&T. But the good outweighs the bad, so most people are happy to stick with the iPhone. That said, I would consider Android next time, because I keep hearing more good things about it.

  • Report this Comment On September 23, 2010, at 9:52 AM, DanKnows wrote:

    I have the iPhone 4, love it.

    Had Consumer Reports, the love is gone.

  • Report this Comment On September 23, 2010, at 10:12 AM, lukiczar wrote:

    I have the I-phone 4, and antenna issue or not - it is not functional as a phone. All the other features are great - but I have never had a cell phone that had as much trouble keeping a connection. I hear AT&T being blamed, and that may be true - but I've had AT&T longer than I-phone and never had as much trouble as when I got my 4. I've thought about switching back to my 3gs, even thought about getting another line as a cellphone and keeping the iphone for the things it's good at. It is really beyond frustrating, even with the magic case.

  • Report this Comment On September 23, 2010, at 10:38 AM, Aeoran wrote:

    I find this article puzzling.

    What is so hard to understand about CR's refusal to recommend a product where

    * the manufacturer refuses to acknowledge a fundamental flaw, obvious to any and all with skill in the art, and not present in any other manufacturers' products;

    * the manufacturer refuses to detail a fix for the flaw (no, a prophylactic is not a fix, and no, they have not discussed what they're doing to fix this);

    * there is a significant impairment in performance;

    * the manufacturer attempts to misdirect fault to other manufacturers - analogous to Hummer claiming that it's not Hummer's fault that they suck on gas, because every other car out there sucks on gas too. If you drive with a lead foot in stop-and-go conditions and have the A/C running with the windows open.

    It amazes me to see Apple and its iFanboi apologists claim that this is overblown. Everything above happened. Public acceptance of Apple's rambling and weird explanations will merely lead to Apple producing more bad products in the future, safe in the knowledge that you don't care about the quality of Apple's products. Apple fans should be the most vocal and demanding of the company that they are fans of, and hold them to the standards which they imagine for the company. This will lead to better Apple products in the future. Isn't that what you want?

  • Report this Comment On September 23, 2010, at 11:47 AM, BR14 wrote:

    CR take a methodical approach to comparing devices, and the iPhone clearly has a problem with signal strength.

    What you seem to miss is that Apple deliberately made a design compromise in order to shoe horn more function into its device.

    All manufacturers make these compromises and therefore their devices have differing features and strengths.

    The problem for Apple is that the iPhone is supposed to be a phone. As such it should operate without additional components.

    Apples problem is that they cannot truly fix the issue without a major redesign of their device, and at present that would mean removing some other function.

    Don't think for a second they didn't know about this before they started selling the phones.

    For those people who want a PDA that can also act as a phone, the iPhone may be the answer. If you want to be sure of making a phone call - better get something else.

    Either way, being emotive about the issue helps no one. Get over it, it's only a device.

  • Report this Comment On September 23, 2010, at 12:18 PM, MaxTheTerrible wrote:

    I always find it humorous that people get sooo defensive when somebody points out an issue (no matter how serious or how small) with the product they own and I always laugh when someone get genuinely upset over the stuff not getting the perfect rating or review...

  • Report this Comment On September 23, 2010, at 12:29 PM, Guitarbrain wrote:

    Despite all the criticism, the IP4 continues to sell millions, all over the world. This is because the IP4 has been a great device for the large majority of consumers. For those who claim that Apple has failed to acknowledge the problem, that's just wrong. At the much publicized press conference, Jobs said their research showed it affected a few users, very few had actually returned the IP4, and for those who are impacted by the antenna design, they get a free case. Whatever the cause of the antenna degradation, Jobs demonstrated other competing brands have their own antenna problems that are caused by the manner in which the phone is held. He wasn't blaming anyone else or criticizing other manufactures. He even said the other phones tested were great phones. He simply demonstrated this is not a technological flaw of just the IP4.

    I have an IP4, I bought a case, like I have for all my other phones, and I have no issues with dropped calls or cell reception. Buying a case was just a no-brainer for me and presto! antenna issues. As for CR, well, they've always been unreliable for me and all this hoopla has just confirmed my opinion of them. They are just out of touch with the consumers.

    Whatever antenna issues exist for the few consumers out there, in my opinion, the issue is fixed, except for those who simply insist on carrying their phone with no protective cover. For those who purchased the IP4 who insist on keeping it naked, you have two options, 1) don't touch the left corner of the antenna band, or 2) return the phone. Go ahead and buy a droid....the next best thing.

  • Report this Comment On September 23, 2010, at 12:38 PM, Guitarbrain wrote:

    One last thing...this is all personal preference. Buy what you like and what works for you. Why should I care if YOU buy an IP4 or not. I will buy what I want and I'm not heartbroken if you chose a droid.

    Get over it people.

    Also, I've never purchased anything on the recommendation of CR, so why should I care now? Whatever!

  • Report this Comment On September 24, 2010, at 12:15 PM, dlchase24 wrote:

    I won't disagree that Consumer Report's stance on the iPhone 4 is awkward since it's approval is dependent on a case included, but I'm not sure I share the same disapproval for their stance of taking Apple to task.

    It's worth noting that while a death grip produced attenuation issues in a number of smart phones, there have been documented instances where a small finger touch has produced the effect on the iPhone 4. I have not seen evidence of such small touches producing the same results on other phones. My personal unscientific tests with my Nokia phone didn't produce anything regardless of how I touched it or grabbed it.

    As this design "flaw" can apparently be easily reproduced with small touches, I can understand Consumer Reports balking at approval. But as with anything, it's just a source of information and shouldn't be considered gospel. They've made consumers aware of the issue AND pointed out a fix.

    Considering the demand for these phones, continuing the "case for all" program would seem to be a cheap insurance policy for Apple to address the "flaw." I can personally say it's rare that I see an iPhone 4 without a case. If I were Apple, why would I even want to risk the possibility of a new flood of complaints? More importantly, from a consumer stand point, why should I have to call to address a "flaw" they are aware of?

  • Report this Comment On September 24, 2010, at 9:46 PM, JCoeur100 wrote:

    CR did not say the phone was a piece of junk. They just said they would not recommend it. Get over it. They explained why. If you don't care about that, just buy the damn thing and shut up.

  • Report this Comment On September 24, 2010, at 9:51 PM, JCoeur100 wrote:

    Having said the above, as a stockholder, I am worried about Apple's (read Steve Jobs') heightened arrogance of late. In my case, getting screwed on the iPad data plan was a big bummer and complaints to Apple were dismissed out of hand. Sooner or later, if unacknowledged problems reach a critical mass, there could be a huge backlash and Apple's 'coolness' factor could disappear overnight.

  • Report this Comment On September 24, 2010, at 10:06 PM, Alwayzwrong wrote:

    I'm also surprised about how personal people are taking this. If CR didn't recommend a particular vacuum cleaner, would people be as upset?

    I always use CR as a resource when I make a large purchase. Their automobile reports are second-to-none. That doesn't mean I'll be offended if I disagree with them, because the ultimate decision to make a purchase lies with me.

  • Report this Comment On September 28, 2010, at 5:49 PM, Hobo42 wrote:

    I stopped reading CR when they labeled microwave ovens unsafe because the door safety switches could be by-passed; furthermore, CR felt that the ability to see the food being cooked indicated that radiation could escape through the tiny holes.

    Several professional societies sent formal letters to CR pointing out the errors. These societies were accused of being apologists for the microwave manufacturers. The facts are that none of the societies have accepted advertising or funds from any manufacturer.

  • Report this Comment On September 29, 2010, at 7:12 AM, sgidwani wrote:

    I live in the Middle East and travel often all around the world. Strangely, only in North America have I had to suffer dropped calls on my iPhone 4. Perhaps it is the weather, the telecom systems, overburden on infrastructure... I simply do not know what the answer is. Still, it remains true for me that nowhere else on the planet have I ever had a dropped call, with or without a case.

    In Dubai, Bahrain, Kuwait, China, Portugal and Amsterdam this past month, I have tested the "death grip" on my phone and yes, the signal bars do drop, but only by a single bar. But then again, in all these places, my phone rarely (if ever) shows anything less than full signal strength.

    The US, being globally the first in cell-telecom infrastructure investment, likely also has some of the oldest running systems along with the new. It is quite possible that newer economies in Asia and Europe also enjoy (border-to-border) the latest technologies, while in the US the new is offered with the old and service availability and quality is more inconsistent.

    Just a guess.

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