Now that we've had the weekend to digest Apple's (Nasdaq: AAPL) response to Antennagate, let's play a game. I'm going to describe corporate events and you tell me if I'm talking about Apple or BP (NYSE: BP).
An image-tarnishing event creates a groundswell of consumer frustration and media fascination. After several weeks of working diligently on a solution, the company offers to bankroll a temporary fix. The stopgap effort will hurt the company financially, but it will buy it time until a permanent solution is feasibly available.
BP? Apple? Your guess is as good as mine.
Before I become the Mel Gibson of personal finance, I am fully aware that the two events vary dramatically in scope. BP's version of Antennagate led to what may be this country's worst environmental disaster -- costing lives and jobs and imposing countless other hardships. Apple iPhone owners are simply inconvenienced by dropped calls if they grip their smartphone the wrong way.
However, the media spotlight and the chain of corporate events do bear many striking resemblances.
"We've worked the last 22 days on this trying to solve the problem," Apple CEO Steve Jobs told attendees of Friday's conference, as retold by Engadget.com's live blog of the event. "And we think we've gotten to the heart of the problem."
Jobs made those comments as a "22 days - Working our butts off" graphic was projected in the background.
Surely someone at BP must have made a similar statement. After all, it was 22 days after the deepwater rig explosion that the first tar balls began to wash up on shore in Plaquemines, La.
The tar balls arrived earlier than previous studies had projected, leading The Wall Street Journal's European edition to go with, "BP Based Spill Plans on Faulty U.S. Data" as its headline.
Isn't blaming faulty data what Apple also did earlier this month, admitting that it has been exaggerating the reception bar strength on AT&T's (NYSE: T) network?
I digress, perhaps, so let's get back to Apple's proximity to the "heart of the problem."
Apple may be no closer to a solution today than BP was in May. After all, it's offering up free cases for iPhone 4s purchased through the end of September, and that's not a hard cutoff.
The public complained that BP wasn't doing enough, and Apple is following a path similar to BP’s, by offering up a near-term fix -- free cases for everybody -- that it could have dreamt up on Day One.
This isn't 22 days of engineered digging. It's a first-round concession that it will have to pay up for.
Yes, Apple will pay. Forget all of the analysts who argued over the weekend that the cases are cheap to make. During Friday's call, Apple conceded that 80% of its iPhone 3GS orders were paired with one of its cases. Apple simply had a shortage of the $29 bumpers this time around. If the attach rate is accurate, Apple will be leaving a lot of high-margin money on the table with this giveaway, even if its income statements will only record the subsidized freebies at cost.
So, here we are with BP and Apple still coping with black eyes that may very well linger. I think we'd all rather be in Apple's shoes, naturally, but if you thought that Verizon (NYSE: VZ) had a field day knocking AT&T's coverage maps, one can only imagine the attack ads waiting in the wings.
What did you think of Apple's performance during Friday's conference? Share your thoughts in the comments box below.
