Analysts not reporting the iPhone 4 antenna as a “problem for Apple” or “crisis” stand to lose fees, report purchases, stock opportunities, and ads linked to Web traffic — to the tune of at least $18M per day. Hoodwinking the public about Apple has turned into a lucrative business for analysts, bloggers, and now Consumer Reports.
CNET: “Analyst: iPhone 4 recall would cost $1.5 billion“. This is a report that was practically written by the quoted analyst — Bernstein Research analyst Toni Sacconaghi.
The key sentence in that report: “Perhaps the bigger, longer-term concern for Apple investors is the emerging pattern of hubris…” and then the analyst lists five reasons in his own pattern of hubris. Steve Jobs’ health, Apple’s cash balance, it’s “attack” on Flash, the investigation into the lost prototype, its restrictions on app development, and its dismissive characterizations of the iPhone’s antenna issues.
The problem with this analysis is (1) the health scare was Steve Jobs’ mistake, not the company’s; (2) the cash balance has been explained, and as a stockholder (though puny, with a few shares), I’m all for having it on hand; (3) the “attack” (on Flash) was actually Apple’s defense against a gang-attack by Adobe and the press; (4) the lost prototype investigation was by the police; and (5) Apple has responded to the antenna issue with facts.
Let’s examine another, this one from AppleInsider: “Every week Apple doesn’t act on iPhone 4 antenna could cost $200M“.
Another story written by the quoted analyst. Most of it is a rehash of all the potential fixes that others have suggested: providing free bumpers (or cases), repairing the units, or recalling them. But the key sentence in that report leaves no doubt where this analyst stands: “Despite the issues, [Mike Abramsky with RBC Capital Markets] said he views the situation as a potential buying opportunity for investors.” So, go out there and buy Apple, he seems to day, because we just took advantage of that huge dip in stock price and want the stock to climb again, and quickly.
Let’s go to the source, the Consumer Reports Electronics Blog: “Why Apple–and not its customers–should fix the iPhone 4“.
Consumer Reports is getting feisty to draw attention. The stunt with duct tape did the trick. Here’s a telling comment from a reader of that report: “Invariably the product models you report on are no longer available in stores, because of your delays in testing and reporting… Yet you had to rush to insult Apple (in real time this time) with that duct-tape-on-the-iPhone-4 deal, even after first lauding the phone for the tour-de-force it is. This was not objective reporting… You rate them tops on quality and service, yet immediately demean them with duct tape before there is time for any resolution. Makes me question how objective CU now is?”
But here’s the key sentence in the report demonstrating real hubris on the part of Consumer Reports: “We’ve called on Apple to do something about it.” I can just imagine that phone call. Was it from the publisher to Steve Jobs? Did they shoot from the hip?
Did they make a similar call to Toyota when its cars were putting people’s lives at risk? When Consumer Reports labelled Toyota’s Lexus GX sport-utility vehicle a “safety risk” due to its rear end sliding out, potentially causing a “rollover accident, which could cause serious injury or death,” nowhere did it say that Consumer Reports called on Toyota to recall them — it was only reported that Consumer Reports urged people not to buy them. The Consumer Reports blog about the Lexus maintained a quieter tone throughout its report and buried its response at toward the end of the report: “We urge the company to develop a remedy as quickly as possible and implement it in new vehicles produced at the assembly plant and those already purchased.”
That’s more in keeping with the style of Consumer Reports — not the grandstanding of its duct-tape solution and “call on Apple” rhetoric. Meanwhile, the testers at Consumer Reports gave the iPhone 4 the highest rating as the best mobile device, even though they can’t recommend the device.
Fortunately there are bloggers and journalists responding to this issue honestly (such as MG Siegler in “Total Recall Or Total Bull? Some Perspective On The iPhone 4 Antenna Frenzy” in Techcrunch). I urge you to read that, and my previous post, and give your support to those who tell the facts.