For the past decade, Steve Jobs has dazzled us with dramatic keynote addresses, introducing revolutionary new technology products -- the iPod, iPhone and iPad, among others -- that have by all accounts changed they way we interact and consume media. But now, amid rumors of an iPhone 4 recall over well-publicized antenna problems, it appears the Apple CEO is in the midst of an emperor's-new-clothes moment. Except in this case, it's a black turtleneck and jeans.
Apple will hold a last-minute press conference on Friday -- very out of character for the notoriously controlled-message company -- to address the issue, following a litany of bad press and an announcement by Consumer Reports that it could not recommend the new iPhone 4.
Apple's newest iPhone, which was greeted with the usual fanfare and promised to be the best iPhone yet, has sold millions since being introduced on June 24. It's already a commercial success, and many users simply haven't encountered the dropped-call problem. But for a company that prides itself on innovation and wooing loyal first adopters with the wow-factor, it's a noticeable blemish -- and one the company clearly feels the need to address. Will Apple issue a recall, which could cost as much as $1.5 billion? Will it distribute free cases to all iPhone 4 owners? Or will it insist, as Jobs already has, that users are simply holding their phones wrong? With Apple, as usual, it's anybody's guess.
What, if anything, will be the long-term ramifications for Apple? Can the company, which has long been a media darling, get its mojo back? We asked the Board of Directors -- iPhone owners among them -- how they would handle the growing fiasco.
Bob ParsonsFounder And CEO, The Go Daddy Group
"I am back to using the iPhone 4 -- with a case! It's not without problems, but works for me. To me, the glaring mistake Apple made was failing to communicate with customers quickly. In fact, as I recall, Steve Jobs fell into the old trap that often bites the super successful, and that is he was cocky and smarted off early on to those who reported the first problems with the iPhone 4. Always the wrong thing to do. So Apple has a bit of a problem on its hands. But fortunately for them, it should be relatively easy for them to bounce back, this time."
Lexy FunkCo-Founder And CEO, Brooklyn Industries
"Admit their mistake quickly and concisely. Issue a recall, if necessary, and then keep inventing like Hell. The faster they give the consumer new products and new gadgets, the faster they will forget about poor reception."
Tate ChalkFounder And CEO, Nfinity
"How does Apple bounce back from this? Right now, Apple has a lot of emotional capital with its consumer. While Steve Jobs' resistance to do anything will certainly burn through most of that, they will be OK. What should they do? Even a small gesture from Apple would go a long way to keeping it's fans happy. People always want to forgive the darling -- just give them a reason."
Ken YanceyCEO, SCORE
"Apple is a good company with a loyal following. They have been arrogant in their response to the problem, and in some instances, blamed the user (the loyal following previously mentioned). Taking a higher road by recognizing the problem, doing a thorough evaluation, issuing a respectful statement with a resolution or resolution timeline would be my recommendation. Companies, particularly tech companies, have occasional issues. Being upfront with customers is always the best way. Apple will bounce back and can retain and improve loyalty in the process with a different approach."
Lawrence GelburdLecturer, The Wharton School
"Three steps: 1) Admit to the problem in a public forum. 2) Announce remedies, if any, such as replacements, recall, credits, in a public forum. 3) Analyze the source and restructure alpha and beta testing for future releases."
Phil TownInvestor And Author Of Rule #1 And Payback Time
"Apple will bounce back, but it should give a pause to investors who think the business can grow forever at 20 percent a year. Ain't gonna happen. Murphy is alive out there for all gigantic companies, including Apple. Major product problems like this occur because of size problems. Bigger isn't always better."
Rob AdamsDirector, Texas Venture Labs at the University of Texas
"They ignore it and wait out this tempest in a teapot. I suspect Steve Jobs is laughing his ass off."
Danielle And Jodie SnyderCo-Founders, DANNIJO
"Half the battle in business is about reactivity. Every brand makes mistakes -- it's how fast they react and how they react that defines good business. I'd think Apple would be quick to fix the problem by replacing the faulty phones. Let's hope they are because we want one (that doesn't drop calls)."
The original version of this article appeared on AOL Small Business on 7/15/10.
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