On iPhone 3G Lawsuits: Why They Happen, and How Apple Can Stop Them

Rather than publishing a full editorial on the lawsuits that have continued to be filed against AT&T and Apple regarding the network performance of and physical issues with the iPhone 3G, I wanted to write something shorter and gather some reader opinions on Backstage, instead. The crux of the issue is that seven months have passed since the iPhone 3G’s launch, and yet AT&T is still having network issues, and people who bought iPhone 3Gs are still finding cracks in their plastic casings.

To be clear up front, we don’t like to see Apple either sued, or suing other people. Lawsuits are generally crappy ways of solving problems. I say this as a former attorney and current member of the Bar: if you think that most lawyers or companies love to file lawsuits, think again. Professionals know that lawsuits should be a recourse only when reasonable, individual requests to fix unlawful or inequitable practices are unable to achieve just results.

Having said that, the situations that consumers have found themselves in with the iPhone 3G are—regrettably—ones that appear to be beyond the ability of such reasonable, individual requests to resolve. A single iPhone 3G purchaser has little if any ability to get AT&T to update its cellular towers to improve network performance; instead, the consumer will continue to receive bills every month for two years regardless of whether data services go down on certain days, stay slow on others, or perform comparatively poorly for months in one area while offering faster, more reliable performance elsewhere; it’s up to the consumer to call over and over again for service credits. (Note: iPhone 3G users in some areas are still seeing average transfer speeds much higher than in others; simply changing locations with the same phone can make a huge difference.) Similarly, individual consumers have to request and then hope that a iPhone 3G’s naturally occurring hairline-cracked casing will be replaced by Apple rather than argued over or denied. We’ve heard stories on both sides: some people see their iPhone 3Gs replaced without argument, others have to struggle—or fail—to achieve the same results.

Certainly, Apple has become a hundred or perhaps a thousand times better about handling warranty iPod and iPhone repairs than it was a few years ago. Our editors have noticed a sharp drop in reader complaints on this topic, and our own anecdotal experiences suggest that Apple’s Geniuses and Genius Bars have become exactly what they should be: actively helpful advocates for quick repairs and replacements, rather than barriers to solving common, widely understood but Apple-denied hardware problems. My personal feeling is that an Apple product deserving repair or replacement has a better chance right now of being remedied by the company than at any time in the past, and however that happened, it’s a tremendous credit to Apple’s management. Even if products have issues, which too many products did in 2008, great service builds brand loyalty, and after a bad spell, Apple seems to be getting this again.

But still, there are issues that pop up from time to time and don’t get dealt with properly. Whether these issues are due to overaggressive marketing, improper manufacturing, or under-performing services related to Apple’s hardware (AT&T, MobileMe, etc.), they create unhappy customers. Most unhappy customers complain, and some take the next step and file lawsuits. The ways to stop lawsuits, as Apple has learned—but not always followed—are (1) to build highly reliable products, (2) underpromise and overdeliver on new features, (3) quickly address and apologize for issues that pop up, and (4) fix them quickly and fully. There would be far fewer lawsuits, far less expensive damages or settlements, and far more universally satisfied customers if these lessons were more consistently followed. Until that happens, Apple may find itself hiring more new lawyers than network and manufacturing engineers, and as everyone knows, no one will be better off if that happens.

Any thoughts, readers? Are you supportive of these sorts of lawsuits? Do you oppose them? In either case, why?

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