iPhone Lawsuit: Woes Ahead for Apple, Carriers?
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An iPhone user is suing Apple over complaints that the device fails to meet connectivity expectations -- a move that illustrates consumers' growing frustration with their mobile device experiences, industry watchers say.
As a result, not only is Apple (NASDAQ: AAPL) a target, but that frustration could be a catalyst for future legal action against wireless carriers, according to a public advocacy consumer rights group.
Published reports have said the lawsuit, filed Wednesday by the Birmingham, Ala.-based Trimmier Law Firm on behalf of Alabama resident Jessica Alena Smith, names Apple as its sole defendant. The Smith complaint states the new 3G iPhone, which debuted to great fanfare last month, does not fulfill promised performance and network connectivity expectations.
But Joel Kelsey, policy analyst at the nonprofit Consumer Union, told InternetNews.com that carries may also be exposed to similar litigation as user complaints grow over problems with their ever-more-advanced devices.
"Right now, lawsuits [like these] are the steam valve representing the extreme frustration users are having with wireless carriers," Kelsey said, noting that consumers' anger over wireless carrier contract termination fees recently resulted in large judgments within the wireless carrier industry.
Last month, a California court ordered Sprint Nextel to return to former customers the fees they paid for terminating their contracts early, finding the carrier's fees violated state law. Sprint's (NYSE: S) payout is expected to amount to more than $18 million, according to published reports. Verizon Wireless settled a similar suit out of court.
"Wireless carriers have tremendous market power over devices and are the primary influence in manufacturing," Kelsey said. "There is no industry wireless phone standard and, because of their marketing power, the carriers have little incentive to make sure devices deliver on promises."
AT&T is the exclusive carrier for the new iPhone. Spokespeople for the carrier told InternetNews.com it will not comment on the iPhone legal action and declined to state how many complaints the carrier has received regarding connectivity issues with the new device.
Apple, which this week released a fix for the iPhone's performance, did not return calls for comment on the legal action.
Calls to Trimmier attorney Jonathan Kudulis, who is representing Smith, on whether he plans to expand the lawsuit to incorporate AT&T and whether he will push for class-action status on behalf of additional users, was not returned by press time.
Two industry pundits, however, do not believe the legal action will achieve much direct success, though it could further press carriers into delivering better services.
"This is not a harbinger of something new as it's a bit frivolous," Carmi Levy, an analyst at AR Communications, told InternetNews.com. "Unless we start putting cell towers every 20 feet we're not going to avoid drop calls but it could make carriers pay more attention to providing better services."
Telecom analyst Jeff Kagan said the attention-grabbing iPhone may be suffering adverse affects due to intense media scrutiny.
"I don't find [device connectivity] a problem and haven't heard of many people with a problem," Kagan told InternetNews.com. "I wonder if it's getting lots of attention because it is an Apple device. There is a different expectation from users expecting perfection."