Media Overreacting to Reports of Exploding iPhones
Media attention to product safety is understandable, especially when the product in question comes from Apple (AAPL), maker of some of the most popular computers, music players, and cell phones on the market. But coverage of recent reports of iPhones and iPods allegedly gone awry verges on overkill.
In case you've been subject to a media blackout, European officials are looking into reports of two exploding iPhones in France. Apple calls these isolated incidents and says it wants to analyze the products. "We are aware of these reports and we are waiting to receive the iPhones from the customers," an Apple spokeswoman says. "Until we have the full details, we don't have anything further to add."
The reports in France follow an account of an iPod in the U.K. that, after being dropped, made a "hissing noise," became very hot, and suffered an explosion that sent it 10 feet into the air. There, too, Apple wants to examine the device before commenting further.
But some in the British press focused less on the event itself and more on Apple's request that the customers in question sign a nondisclosure form. That's standard procedure any time a company settles with a customer for anything more than a refund. The Times of London referred to the document as a "gagging order," which in blogs morphed into a "gag order," which is something only a court can issue.
On this side of the pond, a local TV station in Seattle carried out an "exclusive investigation" by filing a Freedom of Information Act request for complaints about iPods to the U.S. Consumer Product Safety Commission. The result: 800 pages detailing 15 incidents where iPods reportedly overheated, sparked, or burst into flame. The TV reporter called it an "alarming number."
Too Few Incidents to Warrant a Recall Really? I wouldn't wish to downplay anything truly alarming. But come on. Since 2001, Apple has sold 218 million iPods worldwide. Let's say there were 1,500 documented cases of these incidents—100 times the number cited in the news report. That would still amount to only 0.000007% of the devices sold.
Fifteen cases amounts to a minute fraction of 1% of the devices in circulation. And it's certainly not enough of a problem to warrant a recall by the CPSC.
The Seattle TV station's request for information related specifically to iPods. Why not look at MP3 players generally? Market researcher iSuppli reports there were 200 million MP3 players sold worldwide in 2008. Of those, only 55 million were iPods. And while Apple's market share is north of 70% in the U.S., why not ask the CPSC for data on reports regarding players from SanDisk (SNDK), Toshiba, Samsung, or even Microsoft (MSFT), maker of the Zune? I'm just sayin'.
Problems associated with overheating electronics are usually traced to the battery. And there have been plenty of CPSC recalls of consumer electronic products using lithium ion batteries similar to those used in the iPod and the iPhone. Digital cameras from companies such as Olympus, Nikon, and Fujifilm (FUJI) have been subjected to recalls in recent years because of batteries that overheated, melted, or in a few cases reportedly burst into flame.
And while the CPSC hasn't addressed the issue of batteries in MP3 players generally, in 2005 it did issue a statement on batteries in wireless phones. At the time, the commission said it was aware of certain cases where injuries had occurred involving cell-phone batteries in certain environments. The CPSC promised to issue recalls when it considered them necessary.
Consumer Electronics vs. Electrical Fires But the only such recalls I can find in CPSC archives are from 2004, pertaining to counterfeit batteries sold for use in an LG phone that operated on the Verizon Wireless network. Another from that same year relates to a phone made by Kyocera (KYO) that reportedly overheated in four cases, with one minor injury.
Generally, recalls are issued when there are several instances of potential harm related to a specific model. But in the case of the iPod, there have been several models. So the number of incidents reported concerning a specific model has been in the low single-digit range—generally not enough to prompt a recall.
Clearly the record shows that batteries in consumer electronics can and do overheat. But do these incidents cause more injuries than other defective modern conveniences? Let's look at the facts.
In a typical year, U.S. residential buildings will suffer 28,300 fires due to electrical causes such as faulty wiring, overheated appliances, and the like. In these fires, 360 will die and 1,000 will be injured. Between 2003 and 2005, nearly half of the electrical fires were ignited by wiring, nearly a quarter by lamps and lighting equipment, and nearly a tenth by heaters.
By comparison the number of consumer cameras, cell phones, and iPods that have been documented to overheat and at most cause a small fire is substantially smaller than the number of fires caused by lamps. When's the last time you heard media outrage about lamps?