APPLE, INC.
A Case Study in External Communication
Written by:
Jenny Lee
Ian McCarthy
Andrew Nguyen
Robbie Reid
Dr. Robyn Walker
Faculty Advisor
Center for Management Communication

Prepared for:
Case Study Initiative
Center for Management Communication

2013

INTRODUCTION
As soon as the news of the Apple iPhone surfaced, David and Mary Jones eagerly bought two and switched their wireless phone carrier to AT&T Wireless, the iPhone’s exclusive wireless carrier in the United States.
Several weeks later, after a hectic morning in the office, David Jones drove home to meet his wife, Mary, during his lunch break. “Hey, David, I wasn’t expecting you to be home for lunch today. How’s work?” Mary warmly greeted her husband and proceeded to set the dining table.
“It’s fine—mundane as usual,” David replied. “It’s not the project Mr. Owens just assigned that’s stressing me out; my iPhone keeps dropping calls. My calls have dropped multiple times during important conference calls,” David sighed as he immediately went to the couch and took his shoes off to relax.
Mary had not experienced any problems with her own iPhone and wondered if David had somehow received a defective phone. She placed a plate of pasta on the dining table and responded, “I’m sorry to hear that; we should take care of that. I haven’t had any problems with my iPhone. You should give AT&T a call and we’ll get it figured out.”
David called AT&T and was connected to a customer service representative who said, “We have been receiving a large number of calls regarding the reception issue with the iPhone. The problem is with the iPhone and not AT&T, but I apologize for the inconvenience.”
David called Apple Customer Service next. “Hello, I am having problems with my new iPhone.
My calls keep dropping and I keep getting disconnected. This is a recurrent problem.” Bill, a customer service representative, responded, “Hello Mr. Jones, the problem you are experiencing with your iPhone is also being experienced by other customers with smart phones. However, you can prevent calls from dropping by getting a case for your iPhone.”
Astonished by the customer service representative’s comment, David asked, “How would a phone case prevent my calls from being dropped?” Bill continued, “Like all phones, iPhones have antennas. The antenna is located on the lower left corner of the iPhone. It is sensitive when tightly gripped, and a case prevents that area from being grasped. You may also return the phone, but there will be a 10% restocking fee.”
David couldn’t contain himself. “So, my phone will drop calls when I hold it like any normal wireless phone? The iPhone has a defective design. You sold me this defective phone. And, now you expect me to pay a restocking fee? This is ridiculous! Apple intentionally misrepresented the iPhone. Why would I want a phone that drops my calls unless it is held in an awkward manner?”

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DISCUSSION OF THE PROBLEM
Apple experienced retaliation from the public once the iPhone 4 was released. Shortly after the product launch on June 25, 2010, customers reported antenna issues with the phone. They said that if they touched the antenna located on the outside of the phone in two places when in use, the phone’s reception would drop significantly.1
They also reported that the phone would drop four or five signal bars when tightly held in a particular way: covering the back strip in the lower left corner of the metal band. Although smart phone antennas have proven to fluctuate in signal strength, it is evident that hardware designers at Apple failed to take this into consideration when drafting design plans for the iPhone 4.
The problem was featured on many blogs and on proprietary iPhone online forums.1 Given that the bottom-line purpose of a phone is to make calls, Apple was faced with a communication challenge moving forward. To further understand the weight of Apple’s situation, the demand for the iPhone 4 prior to and after its release must be