Analyzing the latest Apple lawsuit

Wed, Sep 24, 2008

Analysis, Finance, Legal, News

Apple is the target of yet another lawsuit seeking class-action status and damages for iPhone cracks and slow 3G browsing speeds. The lawsuit is available for review online, and after reading through it, I was surprised to find that the basis for many of its arguments rely upon blogs, anonymous message boards, and what can only be described as misleading and incomplete factual allegations. Without touching upon every allegation, I will instead focus on the most conspicuously questionable portions of the suit.

Software Updates Didn’t Help Reception Issues

On p.6 of the lawsuit, the plaintiff asserts that he and others experienced poor 3G reception, and were often bumped down to the lower speed 2G Edge network. The plaintiff also asserts that subsequent software upgrades from Apple, including the September 12th 2.1 update, did nothing to alleviate network reception problems. In attempting to substantiate this claim, the plaintiff asserts that he was not the only one who failed to notice any improvements, and states on p.9 of the suit

“..there have been postings by customers on the Internet that, like Plaintiff, have installed the new iPhone firmware, as recommended by Defendants, and have not had the iPhones’ problems fixed. In fact, it appears that, like Plaintiff, the iPhones’ “bugs” have gotten worse with the upgrades.”

The Internet posting relied upon for this argument comes from an August 19th article from InformationWeek blogger Eric Zeman. However, on the date of the September 12th iPhone 2.1 update, Eric Zeman wrote a post exclaiming that the update had drastically improved his iPhone and had essentially fixed it of previous bugs. Essentially, the plaintiff uses an article from August to show that other iPhone users were not helped by subsequent software upgrades, when the same author wrote less than a month later that an iPhone software did, in fact, alleviate the problems plaguing his iPhone.

Cracked iPhones

The Plaintiff in this case also asserts that his iPhone experienced a hairline crack, which was also noted by a multitude of other iPhone users. Cracked iPhones were well documented in the weeks following the iPhone 3G’s release, and many believe the cracks to be the result of an initial manufacturing error. In the weeks following the iPhones release, many owners of cracked iPhones were able to exchange their cracked models for new ones. The plaintiff, however, does not seem to have attempted a return or exchange of his cracked iPhone at all.

Apple products are known to be sleek and robust, and indeed, this is often a selling point for consumers. So while some might scoff at the cracks and claim that they are merely cosmetic in nature, one should keep in mind that the cosmetic appearance of Apple products is often the key to the sale of its products. That said, owners of cracked iPhones should, without a doubt, be allowed a replacement. There is no basis, however, for an individual to purchase a cracked iPhone, and subsequently initiate a lawsuit claiming an implied breach of warranty when there is no evidence that that individual made any attempt to exchange his defective model.

Should Apple be a party to this lawsuit?

Also, and has been mentioned elsewhere, the addition of Apple as a defendant in a case like this seems questionable. Recently, AT&T’s chief technology officer John Donovan confirmed that AT&T was not expecting the iPhone 3G to sell so well, and that as a result, its networks were ill prepared for the onslaught of devices on its 3G network. The lawsuit, however, claims that Apple should have been aware of how many iPhones it was going to sell and that it was therefore foreseeable that the phones would strain AT&T’s network. This is a flawed argument because there was no way for Apple to accurately gauge just how many 3G iPhones it was going to sell right off the bat. It of course has internal projections, but the number of iPhones that were sold even in the first weekend of its release surpassed all expectations, including investment analysts who are paid to monitor such things.

Why this lawsuit should raise some eyebrows

In today’s lawsuit-happy society, individuals too often feel that they are owed something more that what should reasonably be required. If an individual purchases an iPhone and it’s 3G features don’t work properly, then that user should be remedied. But if that same individual claims that subsequent software upgrades haven’t helped his situation, or the situation of others, and if the basis of that claim is an outdated blogpost from August 19th, eyebrows should be raised.

Similarly, if an individual purchases an iPhone that soon develops a crack, that user too should be remedied. But if that individual seemingly makes no attempt to return or exchange that iPhone, should his cracked iPhone be the basis for a lawsuit? Even companies with the strictest of product quality testing bring to market products that develop unforeseen defects and problems. In such a scenario, customers should absolutely be given the right to either receive a new product, or return the product for a refund. In this case, however, the Plaintiff appears to have attempted neither. Moreover, there is no evidence that the cracks affect functionality, and in terms of wear and tear, the iPhone seems as resilient as any other phone on the market.

In the end, Apple is a company just like any other. Sometimes its products don’t work as expected, but that’s not to say that every lawsuit against them is warranted. Frivlous lawsuits ultimately result in higher prices for consumers, and only serve to put money in the pockets of lawyers. Again, this latest lawsuit against Apple seems to largely be based on a number of outdated blogposts, the majority of which were written in July of 2008, just 2-3 weeks after the iPhone 3G was launched. By skirting around the fact that the latest iPhone firmware update seems to have overwhelmingly fixed any remaining iPhone 3G reception problems, and by seemingly making no effort to return or exchange his iPhone, the Plaintiff in this case seems to have filed what can only be described as a frivolous lawsuit.


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7 Comments For This Post

  1. Marissa Says:

    How can you question the authenticity of informative blog articles when you yourself are writing for a blog. A blog dedicated to Apple nonetheless. The claims made in this suit aren’t questionable. Cracks and inaccurate service descriptions are a reality. Apple should be aware of how many units they expect to sell based on how many units they actually shipped.

    I know it must be difficult for you personally as a dedicated Apple supporter to see the breast of which you suckle from being sued, but please wake up and recognize when the end user is suffering due to cut corners by a company that frankly, has been dropping the ball way too often in recent times.

  2. EdibleApple Says:

    That’s the whole point. It’s not that I question the authenticity of the blogs, it’s the fact that it’s a blog in the first place. It’s an opinion. Sometimes the opinions on blogs are straight out of left field.

    We write about Apple, but never in a million years would we presume to think that our take on things, our perspective, should be the basis for a legal action. Using a blog as a cause of action is the equivalent of asking a man on the street what he thinks, and using his opinion to formulate your case. It’s bad practice, and makes for a frivolous lawsuit. Similarly, it’d be bad practice for Apple to defend itself by using excerpts from blogposts that mention how much people love the iphone and couldn’t live without it.

    Lastly, how can Apple be aware of how many units they expect to sell based on how many they ship? That would be based on their internal projections which are by no means 100% accurate. The number of items they ship is in no way indicative how many items they sell.

  3. Marissa Says:

    “Lastly, how can Apple be aware of how many units they expect to sell based on how many they ship? That would be based on their internal projections which are by no means 100% accurate. The number of items they ship is in no way indicative how many items they sell.”

    Come on, stop being an idiot. If a company ships 20 millions units of a product and sells them all, they can not, or should not then have the nerve to say “We weren’t ready to support that many units sold”. Apple shipped X amount of units because they intended to sell them all, not just a quarter of them. So if they weren’t ready to support all the units they intended to sell, then they are misleading the public, by having them believe the product they are buying will work as advertised, which we all know, does not.

  4. EdibleApple Says:

    Isn’t that AT&T’s job? Why/how should Apple be held accountable for that unless AT&T expressly told them that their 3G system could only support so many iPhones? If AT&T assured Apple that they could handle it, why would Apple assume otherwise?

  5. Marissa Says:

    You do realize that it’s Apple’s software that’s the main cause of issues right? AT&T aren’t dropping the signals, the iPhones are. Do all your blog readers a favor and wake up to reality. It’s great that you support Apple, but your blatant bias obviously affects the quality and accuracy of your articles.

  6. EdibleApple Says:

    First of all, AT&T’s service is well-known to be the worst of all the phone companies, so it has that going for it. Also, keep in mind that other 3G phones have experienced lots of problems on AT&T’s network.

    Second, the iPhone 3G’s were requesting too strong of a 3G signal initially. That might not be a problem in and of itself, but given how well they sold, it became a huge problem. So in that respect, sure, blame Apple. I could easily go ahead and blame AT&T for not being prepared for the onslaught of 3G devices, and for not having a mature enough 3G network. Basically we could go back and forth, and you do have a valid point of view, that’s not disputed.

    What is disturbing, however, is that a phone doesn’t work as well as expected for a month and a half, and all of a sudden a guy wants to sue for a lot of money. He could have returned the phone, he could have exchanged it. There is no evidence that he did either.

    We support Apple, but try and be objective as possible. The thrust of the article isn’t that Apple can do no wrong, that it’s not too blame at all for the 3G woes, and that no one should ever sue it. Rather, the point of the article was to show that this lawsuit in particular was frivolous and a money grab. This determination wasn’t made because Apple was being charged with wrongdoing, but rather because we read the actual lawsuit and found the substance to be somewhat lacking.

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