The Undefeated, Undisputed King of Smartphones

The saga of Steve Jobs and the Apple IPhone 4 gives warning to any strategic smartphone marketer who attempts to intrude on Apple’s turf.

The facts of the case are most interesting.  Apple introduces the IPhone at a price of $199 or $299 and promptly sells something like 4 million of them.  All of sudden a flaw is uncovered.  The antenna configuration, which surrounds the phone, has a gap that causes calls to be lost.

Despite the boffo sales of the IPhone 4, Wall Street get cold feet and the price of Apple shares falls 7 percent.  Apple and Steve Jobs deny the problem but CONSUMER REPORTS does not and give Steve Jobs and Apple a big-time wake-up call by saying they cannot recommend the IPhone 4.

What it all comes down to is a $29 accessory or “bumper.”  News articles reported that duct tape is also just as effective in solving the problem.  However, the image is not right.  A state-of-the art high-tech cell phone needing duct tape?  Just doesn’t play well.

So, on Friday, July 16, Steve Jobs clad in his faded blue jeans solved the problem at Apple’s expense.  Apple will provide the bumper for FREE.  If people are still unsatisfied they can return the phone for a full refund.  No questions asked.

So what’s the damage to Apple?  The $29 bumper (at retail) costs Apple all of $3.  Distributing them for FREE will result in a 2 cent drop in Apple’s 3^rd quarter earnings.  (For the record, Apple’s 2^nd Quarter earnings were up 90% over the same period a year ago and totaled $3.33 per share.

So, “Antennagate” comes to a close.  What was believed to be a problem that would jeopardize the Apple money machine simply vaporized for a miniscule cost of 2 cents a share. Apple’s IPhone 4 once again sits on the throne of the smartphone industry.  Not even a design glitch that gave Apple a black eye from CONSUMER REPORTS can stop Apple’s momentum.

Any competitor who thinks they can make money in the smartphone business ought to be fully aware that Steve Jobs and Apple are clearly the undefeated undisputed king of the smartphone business.