WHAT'S NEXT: INNOVATIONS IN NEWSPAPERS

Some of the questions & answers:

Steve, how’s your health? How are you doing?

Steve: I’m doing fine, I was doing better earlier in the week when I was on vacation in Hawaii.”

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Are you doing anything else to address the issue? Perhaps changing hardware?

Steve: You know, the 3GS has the same problem. We’re getting reports from customers that this is better than the 3GS. So I don’t know changing the antenna design would help — I don’t know what our next antenna design will look like.

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Were you told about the design before the phone was released?

Steve: Are you talking about the Bloomberg article? That’s a crock, and we’ve challenged them to show proof that that. If anyone had said this thing has problems, we would have dispatched people to deal with that issue.

The Blommberg report was “total bullshit.”

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Wait for Bloomberg’s response.

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Are you willing to make an apology to investors?

Steve: You know we hear from customers who love this phone and have a great experience with it, and we’re doing a lot to help them with any issues they’re seeing. To investors, you know, you invest in the company we are, so if the stock goes down $5… I don’t think I owe them an apology.

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Apple share went down after this response.

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Do you think you’re making users choose between form and function?

Steve: No, we strive to do both. For instance, we make the phone smaller, so it fits well in your pocket… the Retina Display… it’s like a fine printed book, it blows away other displays. It costs a little more, but we made it work. The iPhone 4 is an exterior antenna, so it doesn’t live inside the case, we have a larger battery for better battery life. We try to have our cake and eat it too, we try to have great design and great performance.

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Is there anything you could have said in the launch keynote to lower expectations?

Steve: Not really. We could have said “hey if you hold the phone in this certain way you might see some signal attenuation…” We’re human. We make mistakes, and we figure it out fast. That’s why we have the best and most loyal customers in the world.

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On the September 30th date, is that to let people know that you’ll have to buy a case?

Steve: Not really, we’ll reevaluate then. Maybe we’ll have a better idea. Maybe Eminem will come out with a band-aid that goes over the corner and everyone will want that.

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Will the refund include third party cases?

Well it’s interesting, there aren’t any cases out there, and it’s hard to get cases now. If the third party case buyers can produce a receipt, why not give them one?

Steve: It’s really simple, if we tell people what our next product is, they stop buying our current products. Sometimes websites buy stolen property and they get out there… and case makers have a history of showing off their new cases for our new products. The case vendors haven’t had a history of helping to keep our work under wraps.

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Do any of you use the cases? I don’t.

Steve: Well I don’t. And I get better reception, I hold it like this [death grip] and never see problems.

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Would you have done anything differently knowing what you know now?

Steve: Well, of course the Consumer Reports stuff was bad, and of course we would have liked to get on this sooner. We just got this data. We just learned what was going on. We’re an engineering company. We think like engineers. We love it, we think it’s the right way to solve real problems. I don’t think that’s going to change, and the way we love our customers isn’t going to change. Maybe it’s human nature — when you’re doing well, people want to tear you down. I see it happening with Google, people trying to tear them down. And I don’t understand it… what would you prefer? That we were a korean company, that we were here in America leading the world with these products… maybe it’s just that people want to get eyeballs on their sites. We’ve been around for 34 years… haven’t we earned the credibility and the trust of the press? I think we have that from our users. I didn’t see it exhibited by some of the press as this was blown so far out of proportion. I’m not saying we didn’t make a mistake — we didn’t know that it would have these issues, we didn’t know we were putting a bull’s eye on the phone… but this has been so overblown. But to see how we could do better is going to take some time.

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Is there a hardware redesign in this generation that could fix this problem?

A: You can go on the web and look at pictures of Nokia phones that ship with stickers on the back that say “don’t touch here” — you can go on YouTube and see these. We should you three phones today, all good phones. So right now the state of the art of the entire industry is that no one has solved this problem. Would I like Apple to be first? Yes. Can we make it better right now? Maybe, we’ll see.

Steve: But not everyone is seeing this — a small number encounter it. For those customers we’ll get them a case, and if that doesn’t work, we’ll get them a full refund. And we’ll continue to work on antennas that don’t have this problem. But I think we’re where the rest of industry is right now.

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Was a recall ever up for discussion?

Steve: We get email from people all over the world about issues. We’re really serious about this. We try to figure this out. We come out to their places with test equipment, we want to see logs. We try to get the info and figure it out…

Bob: For the record, we told them we were coming first.

Steve: And we didn’t break down any doors.

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Scott Forstall says that the statement in The New York Times about an inside source claiming there could be a fix of that type coming was “patently false.”

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Oh, boy, first Bloomberg, and now The New York Times…

This is open war.

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What kind of impact do you think this will have on sales?

Tim: We’ll hold financial stuff for our Q2 results call next week.

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You released a software update for the iPhone about two years ago which improved the signal. You say now you’ve got a long-standing bug that doesn’t show the right bar data. Can you square those two things?

Steve: Well let me say something about Apple. We didn’t want to get into any business where we didn’t own or control the primary tech, because if you don’t the people who do own it will beat you. Our big insight about 8 years ago, was that it was going to shift from big displays or optical pickup heads, or radios being the most important component, we thought it was going to be software. And we’re pretty good at making software, we showed that in the iPod… other people are good at it too, like Palm, but we brought great software to the smartphone space. We’ve been able to create and distribute major updates to this software since the iPhone was released, and we’ve made the product better and better for free. Everyone is copying us now, but we were the first ones to do it. To answer your question, the formula we use the calculate bars has been off since the beginning, and the new update fixes that for the iPhone 4, 3G, and 3GS… I don’t know if I understand the other part of your question?

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Well you fixed this bug two years ago, and now you say there’s always been a problem…

A: They’re probably unrelated. I honestly don’t remember what the issue was before, but they’re probably totally separate.

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You’ve been communicating with customers through email quite a bit — how is that impacting how you’re dealing with these issues.

Steve: I always have, and you know, the address is out there and I’ve always emailed people back. I try to reply to some of them because they’re our customers. But now people post them to the web… and some people just make things up. So don’t believe everything you read!

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Will the bumper offer extend outside of the US?
A: Yes.

Q: And beyond September 30th?
A: We’ll evaluate.

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“Okay so I think this is it. Has that helped? I wish we could have done it sooner, but then you wouldn’t have had anything to write about.”

Ended at 11:26 am (PT)

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Apple shares UP again in a day that Dow Jones lost more than 240 points and Nasdaq more than 60.

Thanks to Engadget and its brilliant live coverage.

What Steve Jobs said at the end of his 32-minute presentation before the questions:

“So what have we learned? Smartphones have weak spots — this isn’t just the iPhone 4, it’s all phones. Next, some really interesting data from AppleCare, we looked at the statistics, we asked what’s the percentage of all iPhone 4 users that have called AppleCare about the antenna or reception, or anything near reception problems. Because you would have thought ‘Jesus, it must be a lot of users complaining about this’ — So what percentage have called AppleCare? 0.55% Just one half of one percent.”

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“This is not a large number. This doesn’t jibe with what you read. Let’s keep going. So smartphones have weaknesses, and AppleCare data shows only 0.55% have called in about reception issues. The third, return rates… AT&T has a ‘buyer’s remorse’ clause, you can return a phone no questions asked. Apple has the same thing. So what are our return rates? Well we’re going to compare it to the iPhone 3GS…”

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“In the early days of the iPhone 3GS return rates were 6%… below the average, we were happy with that… so for the iPhone 4? You think half the people must be returning their phones with what you read online… well it’s 1.7% — less than a third of the 3GS returns.”

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“In the early days of the iPhone 3GS return rates were 6%… below the average, we were happy with that… so for the iPhone 4? You think half the people must be returning their phones with what you read online… well it’s 1.7% — less than a third of the 3GS returns.”

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“Pretty interesting… one more data point. AT&T has given us the early call drop information just a few days ago. They log call drops, it helps them improve their network. So we can’t give out the absolute call drop data… AT&T can’t release those numbers to their competitors, but we’re going to give you the delta.”

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“Even though we think the iPhone 4 is superior to the 3GS antenna… it drops more calls per 100 than the 3GS. We’re being transparent. So how many more does it drop than the 3GS?”

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“This is hard data… the iPhone 4 drops less than one additional call per 100 than the 3GS. Less than one.”

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“Now, even less than one is too much for us. We want to find out why. But this does put it in perspective. So I have my own pet theory. We have no proof of it, but I’m going to give it to you.”

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“When the 3GS came out, we didn’t change the design from the 3G. So there were already lots of cases out there for the phone. And more than 80% of new buyers left the store with a case. Now the new phone doesn’t fit those cases, and we can’t make these bumpers fast enough, so only 20% leave the store with a case… but we’re going to figure it out.”

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“Now when we look at this data, it’s hard to escape the conclusion that there is a problem, but that problem is affecting a very small number of users. I get emails saying the phone works perfectly, and they can’t understand what this is all about. So we think it’s affecting a small batch, but it has to do with inherent problems in smartphones. But we want all of our users to be happy.”

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“We think this has been so blown out of proportion… it’s fun to have a story, but it’s not fun on the other side. So here’s what we’re going to do to make our users happy. The first part is the software update, that fixes the way the bars report and other bugs, that’s out now. Second, people said the bumper fixes everything… ‘why don’t you give everybody a case’? Okay — we’ll give you a free case.”

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“We’re going to send you a free case. We can’t make enough bumpers. No way we can make enough in the quarter. So we’re going to source some cases and give you a choice.”

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“And if you’re not happy, you can bring the phone back. We’ll give you a full refund within 30 days. No restocking fee. We want to make everyone happy, and if we can’t make you happy we’ll give you a full refund.”

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“So I have some other updates. We’re tracking some problems with the proximity sensor and we’re working on it. White iPhone, we’re going to start shipping at the end of the month.”

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“Also on July 30th, we’re going to bring the iPhone to 17 more countries, with the omission of South Korea. So that’s the update on iPhone 4.”

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“In ending, I’d like to talk about how we make decisions. We love our users, we love them. We try to surprise and delight them… and we work our asses off. We have a lot of products that are pretty great for them, Macs, iPhones, iPods, iPads… So we love our users. We also connect users with great apps and developers, and great content through iTunes, and really bring content creation and our users together. We love our users so much that we built 300 Apple retails stores for them to give them the best buying experience in the world… with Genius bars, and seminars. We had 60m people through our doors last quarter.”

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“We do this because we love our users, and if we screw up, we pick ourselves up and we try harder. And when we succeed, they reward us by staying our users. We take this really personally. Maybe we should have a wall of PR people keeping us away from this stuff, but we don’t, we take it really personally. So we’ve worked the last 22 days on this trying to solve the problem. And we think we’ve gotten to the heart of the problem.”

As soon as he ended, the Apple shares were going UP.

Steve Jobs leading the press conference.

“We want to make all of our users happy. If you don’t know that about Apple, you don’t know Apple. We love making our users happy.”

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“We started getting reports about issues with the antenna system, and, the problems they were saying… Gizmodo put their video on the web, touching the corner, and people were seeing a large drop in bars.”

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“This was 22 days ago… we haven’t had out head in the sand. We’ve been working on this for just 22 days. We are an engineering company, and we want to find out what the real problem is. We’ve been working our butts off so we can come up with real solutions. And we want to share what we’ve learned.”

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“Antennagate — that doesn’t seem like a good thing if you can make the bars go down by touching the phone. Well we first learned that this doesn’t just happen to the iPhone, Nokia, Motorola… other phones have this issue. But we didn’t trust the videos on YouTube, we started doing our own testing… here’s what we discovered.”

Waiting for the by-invitation press conference outside and inside the building in Cupertino at Apple headquarters.

(Pictures by Engadget)

WIRED is right:

“Apple historically has never held a press conference amid a flurry of negative press.”

So expect the unexpected.

Stay tuned.

Follow live the conference here or here.

California: 10 AM

New York: 1 PM

London: 6 PM

Paris: 5 PM

Moscow: 9 PM

Tokyo: 2 AM (July 17)

Apple shares?

Down as expected.

Time to buy them.

Here it is.

The real and secret editorial ingredients of one of the most successful (and disgusting) newspapers of the world.

Click here to see the full map.

Brilliant!

From a story about the prospects of today’s iPhone 4 press conference:

Nine paragraphs, yes nine!, ending with the same “music” written by YUKARI IWATANI KANE and NIRAJ SHETH.

The nine “familiar” endings:

1. Apple Inc. released its newest iPhone despite internal concerns about its antenna reception, and gave wireless carriers far less time to test the phone than is typical, according to people familiar with the matter.

2. The Cupertino, Calif., company has called a news conference at its headquarters to discuss the issue Friday. Apple doesn’t plan to recall the phone, a person familiar with the matter said.

3. Apple engineers were aware of the risks associated with the new antenna design as early as a year ago, but Chief Executive Steve Jobs liked the design so much that Apple went ahead with its development, said another person familiar with the matter.

4. The electronics giant kept such a shroud of secrecy over the iPhone 4′s development that the device didn’t get the kind of real-world testing that would have exposed such problems in phones by other manufacturers, said people familiar with the matter.

5. The iPhones Apple sends to its carrier partners for testing are “stealth” phones that disguise a new device’s shape and some of its functions, people familiar with the matter said.

6. Apple gave its carrier partners far less time to test the iPhone 4 before its launch and gave them significantly fewer devices to test than other handset makers, people familiar with the matter said.

7. As development on the iPhone 4 proceeded, field testing would have been limited because of Apple’s emphasis on secrecy, said people familiar with the matter.

8. The testing process usually takes a minimum of 14 weeks. However, Apple flies in the face of this norm, handing over iPhone prototypes to carriers with much less time, people familiar with the matter said.

9. Later versions, including the iPhone 3G that was launched in 2008 and the iPhone 3GS last year, also didn’t hold a signal as well as other phones and experienced more dropped calls, people familiar with the matter said.”

Oh, by, that’s a world record.

Editors and real sources needed!

I subscribe to iCurrent.

It’s excellent “daily me” personalized news aggregator.

What you get is all your news in one location according to your interests from over 27,000 sources

My question is why The Washington Post, a newspaper company with thousands of journalists, IT people, web producers and the best managers of the industry cannot develop a service like this.

Why?

A very interesting analysis about Apple shares from Mark Riddix.

In summary:

“Shares of Apple Inc. dropped to $250 today. Apple’s stock has been in a steady freefall over the past 3 weeks. Shares have fallen from the $270’s and the stock has trimmed over $15 billion dollars off of its market cap…

I think that the drop in Apple’s shares is not totally due to the glitch. Apple’s shares have followed a similar pattern after the introduction of the iPad, and previous generation iPhones. Investors bid the stock up ahead of the introduction of a new product and then dump the shares after the product launch. This strategy is creating a buying opportunity for smart investors.

While Apple may have to modify existing phones or give free bumper cases to iPhone users, the fundamental growth story at Apple still remains unchanged. Consumer demand is still extremely high for the iPhone 4G and the iPad. Apple is still on pace to earn over $16 per share next year. Apple is currently trading at a significantly discounted multiple to the company’s historical P/E of 32.

If the rumors are true about Verizon getting the iPhone, that would open up a whole new market for Apple. Analysts estimate that Apple could easily sell an additional 12 to 15 million iPhones in the first year alone…

Apple may be a $230 billion dollar company but the growth is alive and well. The P/E ratio at 15 is actually lower than the company’s projected growth rate of 16.5%. Apple deserves to trade at a premium valuation not a discounted one. Even if you attached the industry average P/E and multiply it by the average earnings estimate, Apple is worth at least $350 per share.

At $250 or below, Apple is definitely a buy.

Disclosure: I do not own shares of Apple.”

He is right.

(Picture by Andrew Harrer / Bloomberg)

It was in the front page of the Berliner Morgenpost, but now you can have a copy.

The fantastic graphic, updated with the final winner, is on kickstarter, the website where readers fund brilliant ideas and projects.

Deroy Peraza, his author, was asking for $3,000 but he got more money than he expected.

If you pledge $25 or more you will receive a limited edition, 5 color, 18″ x 24″ print on heavy uncoated stock.

If you pledge for $40 or more you will get a limited edition, 5 color, 24″ x 36″ print on heavy uncoated stock.

Deroy Peraza, principal and creative director of Hyperakt in New York, was born in Havana, Cuba, and  founded the company  in 2001 after studying Illustration at Parsons The New School for Design.

Deroy is now working in a new poster that includes brackets for all the 19 World Cups.

Here is the work in progress.