Steve Jobs

There were significant challenges. In order to serve as an antenna, the steel rim had to have a tiny gap. But if a person covered that gap with a finger or sweaty palm, there could be some signal loss. The engineers suggested a clear coating over the metal to help prevent this, but again Ive felt that this would detract from the brushed-metal look. The issue was presented to Jobs at various meetings, but he thought the engineers were crying wolf. You can make this work, he said. And so they did.

And it worked, almost perfectly. But not totally perfectly. When the iPhone 4 was released in June 2010, it looked awesome, but a problem soon became evident: If you held the phone a certain way, especially using your left hand so your palm covered the tiny gap, you could lose your connection. It occurred with perhaps one in a hundred calls. Because Jobs insisted on keeping his unreleased products secret (even the phone that Gizmodo scored in a bar had a fake case around it), the iPhone 4 did not go through the live testing that most electronic devices get. So the flaw was not caught before the massive rush to buy it began. “The question is whether the twin policies of putting design in front of engineering and having a policy of supersecrecy surrounding unreleased products helped Apple,” Tony Fadell said later. “On the whole, yes, but unchecked power is a bad thing, and that’s what happened.”

Had it not been the Apple iPhone 4, a product that had everyone transfixed, the issue of a few extra dropped calls would not have made news. But it became known as “Antennagate,” and it boiled to a head in early July, when Consumer Reports did some rigorous tests and said that it could not recommend the iPhone 4 because of the antenna problem.

Jobs was in Kona Village, Hawaii, with his family when the issue arose. At first he was defensive. Art Levinson was in constant contact by phone, and Jobs insisted that the problem stemmed from Google and Motorola making mischief. “They want to shoot Apple down,” he said.

Levinson urged a little humility. “Let’s try to figure out if there’s something wrong,” he said. When he again mentioned the perception that Apple was arrogant, Jobs didn’t like it. It went against his black-white, right-wrong way of viewing the world. Apple was a company of principle, he felt. If others failed to see that, it was their fault, not a reason for Apple to play humble.

Jobs’s second reaction was to be hurt. He took the criticism personally and became emotionally anguished. “At his core, he doesn’t do things that he thinks are blatantly wrong, like some pure pragmatists in our business,” Levinson said. “So if he feels he’s right, he will just charge ahead rather than question himself.” Levinson urged him not to get depressed. But Jobs did. “Fuck this, it’s not worth it,” he told Levinson. Finally Tim Cook was able to shake him out of his lethargy. He quoted someone as saying that Apple was becoming the new Microsoft, complacent and arrogant. The next day Jobs changed his attitude. “Let’s get to the bottom of this,” he said.

When the data about dropped calls were assembled from AT&T, Jobs realized there was a problem, even if it was more minor than people were making it seem. So he flew back from Hawaii. But before he left, he made some phone calls. It was time to gather a couple of trusted old hands, wise men who had been with him during the original Macintosh days thirty years earlier.

His first call was to Regis McKenna, the public relations guru. “I’m coming back from Hawaii to deal with this antenna thing, and I need to bounce some stuff off of you,” Jobs told him. They agreed to meet at the Cupertino boardroom at 1:30 the next afternoon. The second call was to the adman Lee Clow. He had tried to retire from the Apple account, but Jobs liked having him around. His colleague James Vincent was summoned as well.

Jobs also decided to bring his son Reed, then a high school senior, back with him from Hawaii. “I’m going to be in meetings 24/7 for probably two days and I want you to be in every single one because you’ll learn more in those two days than you would in two years at business school,” he told him. “You’re going to be in the room with the best people in the world making really tough decisions and get to see how the sausage is made.” Jobs got a little misty-eyed when he recalled the experience. “I would go through that all again just for that opportunity to have him see me at work,” he said. “He got to see what his dad does.”

They were joined by Katie Cotton, the steady public relations chief at Apple, and seven other top executives. The meeting lasted all afternoon. “It was one of the greatest meetings of my life,” Jobs later said. He began by laying out all the data they had gathered. “Here are the facts. So what should we do about it?”

McKenna was the most calm and straightforward. “Just lay out the truth, the data,” he said. “Don’t appear arrogant, but appear firm and confident.” Others, including Vincent, pushed Jobs to be more apologetic, but McKenna said no. “Don’t go into the press conference with your tail between your legs,” he advised. “You should just say: ‘Phones aren’t perfect, and we’re not perfect. We’re human and doing the best we can, and here’s the data.’” That became the strategy. When the topic turned to the perception of arrogance, McKenna urged him not to worry too much. “I don’t think it would work to try to make Steve look humble,” McKenna explained later. “As Steve says about himself, ‘What you see is what you get.’”

At the press event that Friday, held in Apple’s auditorium, Jobs followed McKenna’s advice. He did not grovel or apologize, yet he was able to defuse the problem by showing that Apple understood it and would try to make it right. Then he changed the framework of the discussion, saying that all cell phones had some problems. Later he told me that he had sounded a bit “too annoyed” at the event, but in fact he was able to strike a tone that was unemotional and straightforward. He captured it in four short, declarative sentences: “We’re not perfect. Phones are not perfect. We all know that. But we want to make our users happy.”

If anyone was unhappy, he said, they could return the phone (the return rate turned out to be 1.7%, less than a third of the return rate for the iPhone 3GS or most other phones) or get a free bumper case from Apple. He went on to report data showing that other mobile phones had similar problems. That was not totally true. Apple’s antenna design made it slightly worse than most other phones, including earlier versions of the iPhone. But it was true that the media frenzy over the iPhone 4’s dropped calls was overblown. “This is blown so out of proportion that it’s incredible,” he said. Instead of being appalled that he didn’t grovel or order a recall, most customers realized that he was right.