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July 12, 2021

Could Consumer Reports doom sales of the iPhone 4?

By now, you’ve no doubt heard of the iPhone 4 and its faulty antenna – the so-called “Death Grip” whereby the phone’s signal gets considerably lessened if you hold the device a certain way.

You also might’ve heard about Apple’s calling out by Consumer Reports, the watchdog agency that’s Blankspent the past few weeks investigating the iPhone 4’s antenna issues. Their verdict? A no sell. The consumer advocates announced Monday they would not recommend the latest gizmo from Apple.

And while one bad review may not sound like the apocalypse, consider that Consumer Reports has the industry rep to make a product sink or swim. In essence, their stamp of approval is the stamp of approval measured against all others.

So the question of the day becomes this: could Consumer Reports’ non-recommendation carry enough weight to actually hamper sales of the iPhone 4?

Surely, Apple fanatics will scoff at such a notion. Even accounting for its white hot colleague, the iPad, the iPhone 4 is simply the hottest gadget out there right now. It’s what people are talking about.

But peel back the curtain a little, and there’s at least cause for concern.

The iPhone 4 has sold around 2 million units thus far, but a closer look at those numbers doesn’t reveal them to be that remarkable.

According to a Piper Jaffray study, somewhere around 77 per cent of iPhone 4 adoptersbought the phone in an upgrade from previous iPhone models. This suggests that, against all else, those 77 per cent were likely to get the iPhone 4 anyway. For the bulk of its sales so far, Apple hasn’t exactly reached a new customer base.

And that’s where this Consumer Reports non-recommendation comes into play. The iPhone 4’s technical shortcomings won’t scare off the bulk of hardcore Apple fans, but the company’s stubbornness to address the antenna problem might be a deterrent for adopters new to the iPhone.

As ZDnet senior editor Sam Diaz notes, the rest of the general phone buying population isn't especially loyal to Apple and the iPhone. They want a product that works well, and is similarly reliable.

So when an agency as respected as Consumer Reports gives an item the thumbs down, this carries a lot of weight with the non-tech-savvy of the world, who could easily be scared off by a device that’s deemed all glitz and no function.

Add to the mix Apple’s reluctance to admit there is a significant design problem (the company has blamed it on shoddy software, suggesting users buy a $30 case to patch the screw-up), and you can start to see how people may turn on the iPhone 4.

In Canada, this issue is strictly speculative for now, seeing as the iPhone 4 isn’t yet available north of the border. But with rumours swirling that Apple’s latest touch-screen phone won’t be allowed here until the antenna problem is fixed, it’s fit to wonder when that day will actually be.

(Update, 07/13: Apple's stock has fallen four per cent as a result of its bad pub of late, a rare feat fueling speculation the iPhone 4 could be subject to something even rarer ... an Apple recall.)

By Jason Buckland, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...