Apple's Been iSued

Talk about bad reception.

Apple (AAPL) has been slapped with a lawsuit over service issues plaguing its new iPhone 3G.

Jessica Alena Smith, of Alabama, has sued Apple with breach of warranty and unjust enrichment, claiming that her new phone -- what she refers to as "Defective iPhone 3G" -- has much slower service than advertised.

Referring to the ubiquitous television ads touting the device, the lawsuit reads, "Defendant intended for customers to believe its statements and representations about the Defective iPhone 3Gs, and to trust that the device was 'twice as fast at half the price.'"

Smith, who is seeking class-action status for the suit, also complains of spotty 3G reception and dropped calls, something other iPhone users have taken issue with. On Monday, Apple released a software fix intended to troubleshoot the problems, but it seems the fix may have caused new issues with the phone.

The suit asks Apple to fix or replace all defective iPhones and pay for lawyers' fees.

Between the activation issues that hobbled Apple's iPhone's launch, the issues with its MobileMe Web services suite, and now the iPhone service problems, this is turning into a rocky summer for the company -- no matter how many handsets it has sold, or how big its market capitalization becomes.

What must be particularly galling to company chief executive Steve Jobs is that taken together, these developments threaten to tarnish Apple's sterling reputation for product design. Prominent tech watchers are already accusing Apple of slipping.

And in the hyper-competitive cell phone market, not even the lofty Apple can afford such bad publicity.

The company needs to get a handle on these issues -- and fast.

Comments

[mrtaxx]

Surprise, you forgot to mention the Barron's news article today where the new BlackBerry Bold is having 3g connection problems similar to the iPhone. Maybe it's not an IPhone problem. Are you short Apples stock? Here's the article:
"There are lots of people reporting on the spotty iPhone 3G reception issues and according to Barron’s it looks like the BlackBerry Bold may be experiencing those same 3G reception issues. The Bold is available only in a couple countries at the moment and isn’t yet available here in the U.S. so there is the possibility that the Bold’s software will be updated prior to the release.

According to the Citigroup analyst, the Bold does have an amazing display and updated BlackBerry software that adds HTML email and a better web browser. But the 4.5 software update (the Bold runs version 4.6) is available for some current devices and will be widely released for other devices and adds the HTML email, better browser, and video recording capability so there may not be a compelling reason to upgrade. I use my EDGE-enabled BlackBerry Curve and the Opera Mini browser and new BB 4.5 browser works quite well without 3G. In truth, I hardly notice that 3G is not supported on the device since email also seems very snappy. I tested the Sprint BlackBerry Curve and am not sold that 3G data is a compelling feature on a BlackBerry. 3G is a vital feature for phone calls though since you can answer a call even if you have an active data connection.

I haven’t seen a definite release date for the BlackBerry Curve on the AT&T network and the reported issues with the 3G radio may be delaying the release. There were reports that the Infineon chip was a possible cause of the problem. My search results indicate the BlackBerry Bold uses the Marvell Tavor platform for 3G so the problem with the iPhone may be on the software side, which means it can be fixed by Apple. ."

[Shorting Should be Banned]

I hope the Plaintiff and Lawyer(s) have done their homework. This is the sort of behavior (questionable lawsuits) that stifles innovation.

[Cho Cha]

It's also the type of action to get apple and att to fix their products. My 3g reception sucks, I leave it off. I would join the lawsuit.

[zoooomer]

....hmm 1 million iphones in the first week end and a woman in alabama has 3g connection problems, so what is that .0000001% with problems?

[waf76]

i am long apple and also have the iphone 3G. I never have 3G service in my house, its not like I live in the woods, I live out on Long Island, it is laggy but i still love the phone, i think the issue is really with ATT who's 3G service basically sucks...

[cutie]

Oil will be up tomorrow and next week on dollars' weakness. I like to see how stubborn the apples' bulls are

[KACER]

Isn't this Jessica Alena Smith, of Alabama the same person, which went after McDonald when she spilled the coffe on her .... It is stupid, stupid stupid stupid.
Are we going to go soon after PG&E delivering to us 122V electricity instead of 120V; stupid stupid stupid

[Shorting Should be Banned]

re "It's also the type of action to get apple and att to fix their products".
NO, if its an Apple problem it'll get fixed without a lawsuit; you obviously do not know Apple!

[was_fred]

Just goes to show that there are people who are willing to sue anybody for anything. The plaintiff probably doesn't even have an iPhone. (Or shouldn't I say that for fear of a slander suit?) Funny how my 3G iPhone gets great reception and is at least twice as fast in 3G mode than it is in Edge mode. Hey, maybe I could sue Apple because mine's more than twice as fast in 3G than in Edge. False advertising, right?
Come on. Get real. Stop the frivolous lawsuits.

I think if anyone should be faulted with performance issues, it should be AT&T. Coverage is spotty. But I get essentially the same 3G coverage on my iPhone as a friend does on his Nokia. Plus, the speeds are roughly equivalent on both phones. My friend, however, wishes he had waited a couple more weeks to get his iPhone (offered to trade - I said no...)

[Ms Cutie]

oil will be up tomorrow and next week on dollars' weakness. I want to see how the apples' bulls stubborn are?

[Ms Cutie]

It is now a bear market. How often you get good news about apple? All I get is problem with apples' product. Now oil is up on dollars weakness. Time to close my long position before it is too late.

[iPsycho]

Apple gets hit with frivolous lawsuits on a regular basis and none ever get off the ground. This is a non-story.

[Shorting Should be Banned]

The isuit will be iunsuccessful.

[BS Detector]

Money-grubbing at its worst. It will be quite a challenge for the lawye... I mean plaintiffs to achieve class action on this nonsense.

That said, the 3G network IS having problems. On a call today with both Apple and AT&T support, I was told that around where I am (downtown Washington DC) there was a lot of work going on. I don't remember the specific words she used, but she did mention "routers" or "router work," which would explain MUCH when it comes to my 3G reception problems.

This does not mean the phone does or doesn't have problems of its own.

By the way, I have terrible 3G reception at home, and I'm less than 10 miles from Washington. Of course, my non-3G reception is just as bad. It's just a hole shared by AT&T and T-Mobile in the middle of quite densely populated suburbia. Go figure.

[Been Watching]

Yeah, Just another frivolous bunch of CRA!. This will never hold as Apple practices due diligence and technologically they won't be able to prove anything as even the comments herein bear out. Too many variables and similarites across the board with other vendors' connections/speed issues that can vary. Class Actions only benefit the Scum Bag Lawyers looking for an easy buck. I hope and expect Apple to crush them. Apparently Miss Alababma thinks she's going to get rich and in addition to her welfare check. Word to Ms Cutie, if you're scared, please sell them Apple shares as us longs will be glad to buy them up. Apple is going to the moon. You have no influence over us.

[was_fred]

It's not all on Ms. Smith's shoulders. The lawyers who put together this sham suit should also be castigated. Hayden Trechsel esq. and Edward Reisinger esq. are the ones binging the suit. See the abstract here:
docs.justia.com/cases/.../

[Ms Cutie]

well time will tell, Mr Been Watching, and then who will laugh at who here

[Ms Cutie]

I shorted at 180, so far I make $6k for 1000 shares, so does that make me a dumb stubborn? I don't think so.
If I were you Mr Been Watching, I would appreciate for good advice, but relax, time will tell.
Stay confident, no one tries to influence anyone

[zenbillionaire]

For once it would be nice to see people buying new tech rollouts doing their homwork befre complaining about 'defective products'.

I don't own an iPhone, let alonea 3G iPhone. I do own at least two of every other product apple makes save only the Apple TV box, and I don't own one of those for the same reason I don't have an iPhone.

3G networks don't work yet in the US. In fact they're have serious problems in Europe even though that continent is about 2 years ahead of N. America in deploying the infrastructure. AT&T aren't even close to having a decent coverage map for the US and they make no secret of that.

Anyone who went out and bought an iPhone thinking it was going to outperform their EVDO solution is ignorant. For the next two years the 3G iPhone is going to be a cocktail party conversation piece, nothing more.

This is like suing Ferrari because the State won't let you drive your car past 75 mph. Dumb. Really, Really Dumb.

[Been Watching]

Well Ms Cutie, I will not slay you for the moment but I'm a long term buyer at $9.00/share and accumulating along the way. I've made alot and hold alot of shares. Nothing has changed except the opportunity has never been higher with Apple. I guarantee you I'm laughing all the way to the bank. I'm a technologist having designed and brought to market many hi-tech products and anyone not backing Apple at this time in Apple's greatest moments yet to come is foolish. Stop wasting your time shorting as you will lose all.

[Hayweed]

Go read the lawsuit which does not even know when she bought the phone. The suit says the immmediately noticed problems with 3G reception. There is no mention of returning the phone or demanding a refund. The iPhone return policy is 30 days. She failed to use her remedy and thus her case will be a flop. She claims monetary damages but none are listed. The suit is weak but filed in a class action friendly zone.

I would hate to be the attorney that called the phone defective if Apple shows the problem is with the AT&T network.

[TheBIGpic]

I don't know what the problem is but I have the original iPhone without the 3G and I'm on my second phone because of the same dropped calls problems (along with other issues as well) Apple replaced the phone for me and although it's been better I still don't have great reception. So call it whatever you want: iPhone problem, 3G problem, AT&T problem or a combination of all of the above. Either way there are definitely defective iPhones out there but Apple is willing to replace without a lawsuit from my experiences. It's just too bad there seems to be so many problems with what could be a great product.

[Larry Crow]

Yeah, this woman's an idiot. I mean, there's absolutely no history in the Western world of corporations misrepresenting products or services. All corporations only, only, only care about their consumers and not their own profits or market share, so the concept of suing a company for promising a service then not delivering is ridiculous. When we have house contractors not do what they promise, or auto mechanics not do what they charge us for, we should just graciously accept being ripped off and not complain. Same with corporations.

[Larry Crow]

@zenbillionaire

It would be nice to see corporations not misrepresent their products and effectively force the first round of purchasers to be conscripted beta testers. I *never* buy the firs wave of any technology, but someone who does has the right to not be mislead by a company.

Long aapl. They're as bad as any other corporation on earth, but I'm in it for the money, and they're going up...

[Larry Crow]

@was_fred

I've never been hurt in a car accident, so I think the people that complain about them are idiots, and I don't think they should have any recourse. *I've* never been in one, so I don't believe the people who say they have been.

[entmd]

If people in big cities are having 3G problems, it must be with the network and bandwidth limitations. Simply to many people trying to use limited access. I personally live in the boonies and although AT&T lit up 3G here only 3 weeks ago, I have great 3G speed on the iPhone day in and day out. Not many hicks have iPhones I guess. I'll be in Chicago in a few weeks and it will be interesting to see how the iPhone works out there.