Peter Molloy investigates why Apple may finally have dropped the personal technology ballWhen Apple’s iPhone was finally officially launched in January 2007 after months of fevered tecchie speculation, it should have signalled the emergence of a new, albeit pocket-sized technological behemoth.

In one neat package, the new iPhone served to combine a standard mobile phone, portable Internet browser, and naturally, the ubiquitous iPod media player. On paper at least, its credentials were impressive.


Eighteen months on however, and things aren’t looking quite as rosy for Apple’s new kid on the block. After less-than-overwhelming sales once the initial hype over the product had died down, the iPhone 3G – ostensibly a new, improved version of the device – debuted this summer only to find itself almost immediately the target of significant consumer and industry criticism, centred around allegations of sub-par performance.

Last month Apple’s woes over the iPhone deepened with the news that a dissatisfied customer in the US has initiated legal action against the company based on claimed persistent deficiencies with the latest generation iPhone.

So where did it all go wrong?

The iPhone does come, after all, from impeccable stock. Since its foundation in 1976, Apple has slow but steadily established a proven record in the personal technology field.

That ascent suddenly verged on meteoric in 2001, with the introduction of perhaps the company’s most well known product to date – the iPod. That simple little device, combining aesthetics with functionality, was perhaps responsible more than anything for turning Apple into a global brand.

With the iPod, Apple were able to achieve the very same brand coup as the Hoover vacuum cleaner company in the mid 20th century, and deliver a product that rapidly became both a visual and virtual shorthand for its field – in this case the portable electronic media player.

The sales figures weren’t bad either. Various generations and updates of the basic iPod have seen the company sell over one billion units worldwide to date. Aside from the mass sales of this, almost celebrity of a product, the company’s staple product lines of consumer electronics like the Macintosh range of personal computers have remained extremely steady and highly regarded.

Cue the introduction of the iPhone, and things have begun to go slightly awry. Despite a surfeit of hype and public attention to go with the launch of the original product, actual solid sales figures failed to follow suit.

Take the iPhone 3G for example.

Since its launch in July of this year, Apple is estimated to have sold at least three million units. Not bad, but the figure tends to pale somewhat when analysed alongside the roughly forty million phones Nokia can expect to sell this year, or the one billion plus mobile phones that will be sold globally.

At least one factor behind these underwhelming sales figures is the relatively high price the iPhone initially commanded. When released worldwide in June 2007, the average price of the device was around €500, a somewhat princely sum by most standards.

In Ireland, sales were further hampered by a concerted attempt last summer by phone distributers to drastically slash prices on competing brands of multi-function mobile phones, thus enticing Irish consumers further away from Apple’s grasp.

The release in July 2008 of the next step iPhone 3G, or 3rd Generation, has seen little improvement in the fortunes of the project. A horribly inauspicious start to the new and improved iPhone occurred on July 11, when a network gridlock was caused by millions of customers trying to activate their new phones whilst owners of the original iPhone were simultaneously attempting to upgrade to new software – an event described by one industry analyst as failing the “acid test” for electronics companies.

From that poor beginning, things have seemed to go from bad to worse for Apple and its new product. On contract in Ireland with O2 for example, the iPhone 3G is priced at only €49– excellent news for those canny enough to hold off on purchasing the original model back in 2007, but a move unlikely to ingratiate Apple with consumers who did shell out a much higher sum only twelve months ago.

However, the principal allegations levelled at the new iPhone remain its apparent extensive performance failings. On Apple’s own online support forum, at least 5,000 topics relating to its 3G hardware have already been notched up.

Deviating significantly from Apple’s advertising slogan for the iPhone 3G as being “Twice as fast. Half the price”, the performance of the new phone has instead drawn the ire of consumers who claim that the device drops telephone calls, suffers from a weak phone signal, and fails to run as fast over 3G mobile networks as had been advertised.

The suit currently being brought against Apple in the US State of Alabama serves to highlight a distinct unhappiness with what should have been the company’s latest success story.

So what next for the beleaguered iPhone and its parent company? The news may not be all bad for Apple. O2, which remains the sole distributor of the iPhone in the Republic of Ireland, has indicated that Irish consumers do seem relatively satisfied with the new device, commenting, “feedback on the functionality of the new iPhone from O2 customers who have purchased it has been mostly positive so far”.

In the short term however, the encroaching legal action against the company remains a real threat. The fact that the plaintiff is, at the time of going to print, attempting to have her suit recognised as a class action – a procedure under US law, which allows for multiple aggrieved parties to participate in the law suit – is not good news.

This potentially means that a single prosecutor could be joined in her action by hundreds, if not thousands of similarly dissatisfied iPhone customers. This is an unsettling prospect even for a company with pockets as deep as Apple’s.

In the long run though, the reputations of the almost messianic Steve Jobs and his Apple Inc. have taken a dent from the iPhone’s spluttering start.

Even when any outstanding problems with the product are rectified, and they undoubtedly will be, the chapter will ultimately mark a rare reverse for a company so usually at the crest of the technology wave.