Five Dumbest Things on Wall Street: Aug. 22

A Bug in Your Apple

The usually infallible Apple (AAPL Quote) finds its way onto our "Five Dumbest" list again this week, this time thanks to a "bug" in its iPhone 3G.

Apple suddenly became a master of understatement when it quietly slipped out a software update for the iPhone Monday, saying the new 2.0.2 firmware addressed "bug fixes."

No mention of reports about a rash of connection problems, which included losing the lightning-fast 3G connection and dropping a plethora of calls.

When pressed, Apple spokesperson Jennifer Bowcock confirmed by email that "the iPhone 2.0.2 software update improves communication with 3G networks."

Er, isn't communicating with 3G networks what the phone was built to do?

Well, thanks for being so open about the problem, Apple! If you consider losing 3G connections and dropping calls a "bug," we'd hate to see you encounter any major problems for the new iPhone.

Now, it's understandable that Apple doesn't want to look more bruised than it already is, especially after the embarrassment of the MobileMe launch (which Apple boss Steve Jobs called a "mistake" in a purported internal memo circulated around Apple's offices). Given the media's euphoria over the new iPhone 3G, it may have been better to simply admit the problem, address the 3G connection concerns and move on.

What really surprised us at the Five Dumbest lab is the sudden loss of PR prowess at a company that gave "hype" new meaning.

Apple did much better with past blunders, such as when it cut the price on the original iPhone and riled early adopters that shelled out big money for the fashionable device. Back then, Jobs wrote a letter to iPhone owners and offered a gift certificate to Apple retail stores. Problem solved.

On behalf of the next generation of iPhone users, we'd like to know when more gift cards will be coming.

-- Robert Holmes

Dumb-o-Meter score: 100. It's good to know the iPhone 3G's "Twice as Fast, Half the Price" tagline rings truer now.