Verizon iPhone flaw, sales debated

Feb 28, 2011
Finance

Bloggers and journos have been buzzing this weekend about a technical flaw Consumer Reports reported in the Verizon Wireless (VZ) iPhone 4, and also about sales of the new smartphone. Consumer Reports had been hard on the quality of the network over at AT&T (T), which until Feb. 10, had an exclusive on the iPhone. […]

Bloggers and journos have been buzzing this weekend about a technical flaw Consumer Reports reported in the Verizon Wireless (VZ) iPhone 4, and also about sales of the new smartphone.

Consumer Reports had been hard on the quality of the network over at AT&T (T), which until Feb. 10, had an exclusive on the iPhone.

Now CR is taking shots at the Verizon iPhone.

Paul Reynolds reported in Consumer Reports the Verizon iPhone 4 has an engineering issue that can cause the phone to drop calls or be unable to put calls through when signals are weak.

He noted that the problem is similar to one that occurred in the AT&T version. Consumers complained widely about the AT&T phone, but complaints have not been widespread with the Verizon version.

Placing a finger across a metal band on the lower left side can cause performance to decline, engineers found.

Bad news from the Consumer Reports lab: The problem can occur with either version of the phone if the phone is held in a way in which a gap in the phone’s external casing is covered.

Good news: “The phone performs superbly in most other respects, and using the iPhone 4 with a case can alleviate the problem.”

Verizon Chief Executive Daniel Mead told Sinead Carew at Reuters that the dropped call rate for iPhone was only 0.5 percent.

Mead also said, even though crowds were sparse when Verizon released the iPhone on Feb. 10, that sales are just fine. The exec said Verizon sold more of the smartphones online than it did in stores, a 60/40 ratio.

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“This is the largest retail launch we’ve seen,” he said. “When I look over the last three weeks or so it (sold) much more than we’ve seen in any previous device.”

Philip Elmer-DeWitt said in Fortune that Mead was dissembling. Of the claim for record sales, he said: “This is a classic unanchored statistic. Without knowing what the previous record was, you can’t pin down the new one.”

He cited Verizon’s partner Steve Jobs, Apple (AAPL) CEO and co-founder, as saying in 2009 re. Amazon (AMZN) not disclosing specifics on Kindle sales: “Usually, if they sell a lot of something, you want to tell everybody.”

Verizon did not disclose actual sales numbers, and won’t until quarterly earnings.

Fortune said that by then, the numbers will be old news.

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