updated 12:00 pm EDT, Tue July 13, 2010
Situation said to mirror Toyota's defect problems
With the iPhone 4's reception problems now out in the open, as a result of a Consumer Reports test, Apple will be forced to do a recall, says Wayne State University's Prof. Matthew Seeger. A specialist in crisis communications, Seeger argues that Apple's reputation is at stake. "It's critically important. The brand image is the most important thing Apple has. This is potentially devastating," he remarks.
That view is echoed by several other experts, including Chris Lehane, best known for his work in handling political scandals for the Clinton administration. The situation is compared to that of Toyota, which was slow to admit problems with its vehicles and ultimately scarred its reputation before ordering a massive recall. Apple has insisted that any issues will be corrected with a software update.
The company needs to act quickly and take one of two approaches, says Dr. Larry Barton, a crisis management specialist. He argues that Apple must either strongly refute the Consumer Reports article, or simply admit that a hardware flaw exists, and provide a hardware solution. "Their response has been lackluster," Barton comments. "It's been borderline irresponsible. They are in danger of betraying customers' trust and hurting the brand, which is infinitely more valuable than any one product."
Lehane suggests that Apple took a better approach after the backlash of first-gen iPhone buyers when prices were lowered just months after launch. The company published an apology and issued a refund in short order. "Apple lives and dies by its reputation," Lehane notes. "We pay a premium for its products. We expect them to operate on a premium level. It's very unfortunate, but they will have no choice but to mount a recall."