How the iPhone 4 could be Apple's Waterloo

A return to blind arrogance is a greater threat than Android or Windows Phone 7

What is Apple hiding? That's the question Apple shouldn't want people asking. But the company seems to be going out of its way to force customers to ask it, assuming that the passion many users have for Apple products will overcome any doubt, as the faithful continue to buy the iPhone 4 in droves. After all, Apple has gotten away with such behavior before.

But I don't think that particular cat has many more lives left.

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As soon as the iPhone 4 shipped last month, reports streamed in about unexpected signal drops, which apparently occur when the user places his or her fingers over one corner of the iPhone's case -- coincidentally, also its antenna. Apple CEO Steve Jobs told a customer via email to not hold it that way -- an unhelpful response, to say the least. Then Apple announced the problem wasn't its phone after all, but a bad 3G signal display algorithm that overstated the AT&T signal strength; in other words, you didn't have the signal you thought you did and would have lost the signal anyhow. Few were convinced about this explanation.

Now, Consumer Reports has taken the extraordinary step of withdrawing its recommendation for the iPhone 4, after its controlled testing revealed that the iPhone 4's case antenna does in fact lose signal receptivity when held in certain places; a person's fingers disrupt the radio waves enough to cause AT&Ts already-weak signals to be blocked at that location. If true -- and I don't doubt the testing -- Apple has shipped a flawed or defective product that should be recalled for repair or replacement.

Consumer Reports noted that, in every other respect, the iPhone is by far the best smartphone available. But let's be honest: A smartphone that can't connect reliably to the cellular network is a failure, and no respectable product watchdog could let that fatal flaw slide.

Whatever the cause of this technical issue, the real problem concerns Apple's handling of the matter. Like Napoleon fighting one battle too many in his quest to conquer Europe and getting unexpectedly beaten at Waterloo, the iPhone 4 incident could be where Apple's arrogance leads it to a stinging defeat from which it may never recover.

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