Motley Fool Money is a one-hour weekly business radio show hosted by Chris Hill and featuring Motley Fool analysts James Early, Seth Jayson, and Shannon Zimmerman. On our most recent Motley Fool Money Radio Show, Chris talked with our analysts about Apple's (Nasdaq: AAPL) iPhone problems and Google's (Nasdaq: GOOG) new Droids. You can catch this week's show online at motleyfoolmoney.com . What follows is a lightly edited transcript of this week's conversation.
Chris: Apple has been hit with a number of class-action lawsuits over antennae problems with the iPhone 4. At issue, reports that holding the phone with your fingers covering the three black lines on the phone's edge and the bottom left corner caused a big drop-off in reception. According to reports, the ever-helpful Steve Jobs told one disgruntled iPhone user to "avoid holding it that way." Jobs also called the reports "rumor hysteria." So Seth Jayson, let's add to the hysteria. What did you think?
Seth: Aren't you glad we have these law firms out there that care so much that they are engaging in these lawsuits? The best anyone can hope for here is that they will get you a discount on a vinyl glove to wear while you are using your iPhone. The important thing to me here isn't that Apple has screwed up -- and I think they probably have -- it is that it hasn't mattered. This is their record-setting product. I like to think of them right now in the position of somebody like Madonna. It doesn't matter how crummy her album is; people are going to buy it. Or think of the late Michelangelo, who never finished anything.
Shannon: Not only does it not matter that Apple screwed up, Steve Jobs seems to be enjoying it. It is a funny line.
James: The word is now that the signal has never been measured correctly in the first place, since the beginning of iPhones.
Seth: Yeah, that is a separate issue on the bars, I think. And they are saying that that explains all of the video and everything that we are seeing on the Internet, but I don't know that it does, because people are using applications to run download speed tests using data streaming. Unless these people are doctoring these videos, it is a pretty impressive drop.
Shannon: It is a head fake. It is an absolute head fake. It is a separate problem, and it is good that they are going to fix it, but it doesn't really address the real issue.
Chris: Bloomberg's reporting that Apple may release a Verizon (NYSE: VZ) iPhone sometime next year. Motorola's new DroidX is getting good reviews, so can the Droids compete with Apple if Apple teams up with Verizon?
Shannon: The Verizon thing is like the zombie hope that can never be killed. It keeps coming back again and again. Maybe it will happen. To me, the thing for Android is, what will the App Store do? That is the thing that has made iPhones such a transformative device, if and it seems to be burgeoning now, if that platform gets an App Store like Apple has, then sure, it can compete.
Seth: I don't know if it can, and first of all, this new Droid phone, I saw some pictures of it. Either the person had Hobbit hands or this thing is as big as, like, a piece of French toast. (Laughter.) It is enormous. But the problem Android is going to have is the same problem that Windows had with its mobile operating system that Apple doesn't have, which is [that] it has much tighter control of the quality of the apps that come through, and so it makes for a more seamless experience. What I have seen of Droid apps is that they look pretty snazzy and everything, but Droid phone makers are kind of putting a lot of what you might call or consider bloatware on these phones. That is going to hurt them when Apple seems to be giving everybody exactly what they want, even if they give them a half-busted iPhone.
Shannon: That is just the latest manifestation of what the real difference is between Google and Apple. It is sort of the open source versus the "boutiqued." Right now the "boutiqued" is winning.
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