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.