Apple: Is The Worm Turning?

Early this year, well, January 1, to be exact, I made this prediction about our friends at Apple: Apple will see a significant reversal of recent fortunes. I sense this will happen for a number of reasons … but I think the main one will be brand related – a…

apple pray.jpegEarly this year, well, January 1, to be exact, I made this prediction about our friends at Apple:

Apple will see a significant reversal of recent fortunes. I sense this will happen for a number of reasons … but I think the main one will be brand related – a brand based on being cooler than the other guy simply does not scale past a certain point. I sense Apple has hit that point.

Now, “brand” is a very tricky concept. A brand lives or dies by how others speak of it. And lately, in the circles of folks who I’d call “brand influencers” in the digital space, the conversation has turned negative.

Not only has Apple taken a major hit from both observers and the FCC for its hamhanded rejection of Google’s iPhone application (among others), the company’s ongoing refusal to engage in a dialog with its customers (no Twitter account, no participation in industry conferences) is starting to wear thin. For more than a few folks I talk to on a daily basis, the Apple brand means “great products, but the company really couldn’t care less about you as a person, and frankly, is smarter than you, better looking than you, and above your station.”

Call it a gut feeling, but my favorite maker of computer products is starting to feel, well, out of touch. Am I off here?

39 thoughts on “Apple: Is The Worm Turning?”

  1. John,

    Couldn’t agree more. Hubris will slowly kill Apple. Increasingly they seem to believe that they are a more important entity than their consumers.

  2. In the aftermath of upgrading my iPhone to 3.0 I spoke to Apple, AT&T and Yahoo!, trying to resolve multiple problems with the upgrade. The only rep who was evasive and unhelpful was the Apple rep. AT&T, for as much flack as they get (and largely deserve) was incredibly helpful. Yahoo! rep was amazed that Apple was blaming Yahoo! for a bug which was clearly the result of Apple’s code push.

    While obviously this incident is separate from the anti-competitive app store flack and the unsustainability of the cool club/scrappy underdog brand, for me there is a common thread: Apple has power that was once inconceivable and while their culture and communications may not yet reflect an acknowledgment of that power, their users do.

  3. John, With you all the way here. For some-time I used to hear my friends at xxxxxsoft say things like how do these guys get some much positive sentiment? Now many of the people who I speak to that are self confessed “Apple Lovers” are asking “Why don’t Apple join the conversation?” or “Why are Apple so restrictive?”

    Heres some comments from an email I just had from a friend:

    “i dont really understand Apple’s strategy here… a thought about this and I don’t really see the logic. Apple is really becoming evil and as I see, App Store is a huge bubbler, which will pop in a few a months/years. An emerge of trend is here: more and more app stores are opening, but the solo, independent app stores will become the hot spots in the future imho.”

    I love my iPhone, but I’m getting more an more suspicious about Apple and their motivations!

  4. Apple: making nice and engaging products with no great public communication/advertising (here in old South Europe, at least). Is it the opposite of today’s pervasive corporative presence, maybe, but good quality remains. Much has been said about Apple ruling Google Voice out of iPhone: why isn’t this outcry directed onto real obstacles (mobile carriers and their tariffs)?

  5. I think it’s a fascinating experiment to see whether ‘conversation’ irrespective of underlying action/reality has any lasting relevance to business performance. Apple makes cool things instead of sponsoring cool conversation; what it ‘does’ — products & services — dictates what people think and say about it. In this sense, the conclusion that it ‘doesn’t care about consumers’ because it doesn’t Twitter/etc. is somewhat laughable. Apple makes stuff that succeeds or fails in every day usage. It’s brand is what it makes, not how brilliantly it describes it.

    My personal bias is that this approach to branding is the only meaningful and sustainable way to go.

  6. Yes. Dead right. One thing you miss user’s reaction to “proprietary”.

    Its taken users a long time to realize that their iTunes on AAC locks them in completely to Apple’s platform. Want to run your existing library on an OEM MP3? BIG hassle.

    Not only that but itunes is locking in a lot of developers to its stack. To date that’s not been much of a worry for developers, until of course the app also challenges the apple business model: Spotify will be a fascinating test case.

    There’s an amusing corollary with the operators who try as they might, couldn’t keep the walled garden.

    I too called this one some time back.

  7. Jonathan…was going to post more, but refrained. My sentiments exactly. Apple executes. No one else does. I love Apple products, but not because I love the company. I laugh when I see new laptops from Dell or phones from Samsung. Their effort to “keep up” is so obvious. What surprises me is how defensible good design and execution as a strategy can really be when selling what is more or less a commodity (CPUs and MP3players). In fact, it may be the only strategy.

  8. Hey John – I disagree with you here. Not because your wrong about apple. I think you’re right. But what does that change? Hasn’t apple always been like this? I don’t recall people swarming to their products because they’re a personable company. We like apple products because they’re really high quality and tend to be well polished.

    I do see issues with their brand and developers being strained by their policies with the app store. I’m not sure how they will resolve that but that’s something I’d pay more attention to over the next year.

    Anyway we’ll see where it goes but I don’t think that the company’s tight lipped and strangely cold perception (Steve Jobs was never viewed as a ‘nice guy’ from what I’ve ever read about him but neither is Simon Cowell) means they’re out of touch. I think that is their brand and it works for them. After all I have more friends who read sites like MacRumors than I know that are on twitter. (and a lot of my friends are on twitter!)

  9. I saw signs things were changes years ago. Things weren’t “just working” like they used to.
    Examples? Leopard was riddled with annoyances and bugs when it was first released. Same with iPhone, Time Machine, MacBooks, and the list goes on.
    Their secrecy comes at a cost of their beta program. Their beta program ends up being the general public that spends hard earned case on their products. I’m tired of new stuff not working right.
    They’ve gotten too big to do things right.

  10. Please be serious. Apple is certainly not reaching any negative place. People love the products and the company continues to innovate and lead.
    Look at the embarassing lengths the competition goes to in order to emulate Apple; Microsoft threaten’s to open Microsoft stores next to Apple stores. Very innovative. Palm threatens to use a counterfeit USB ID code to link to Apple’s iTunes. Brilliant.
    Apple builds it cool factor through brilliance and innovation. No other tech company even comes close.

  11. Apple is definitely raining on your parade if you ever wanted to get out of AT&T or use Google Voice, and that may hurt the brand. The way the company operates, I’m not even surprised that they’re not participating in conferences. Most companies who attend them usually end with some sort of a shameless plug/sales pitch of what’s to come next, etc. If Apple did attend, they’d be swarmed by questions of what’s next? and if your entire marketing strategy hinges on the fact that you’re keeping a tight lid on things virtually on anything, that would ruin the big surprise.

    As for (Fortune 100) company Twitter accounts, they’re a bit overrated in the first place. A lot of them will just tweet about “special deals” that aren’t that special or rehashed press releases that you can find on their websites. It’s become so impersonal that they read like promos/spam. And really, once — or if — Apple joins the Twitterverse, they probably wouldn’t be able to maintain a meaningful relationship with them. Microsoft has about a 80-90 market share, globally, and yet if you combined all of their followers together, they wouldn’t even crack six figures.

    I actually love the fact that Apple takes its sweet little time on everything and tries to hide the big news. It’s like watching a really, really good trailer only to find out the movie is due out the following year — you’re incredibly excited and you want more!

    As to some people thinking that Apple is smarter than you and above your station, maybe they’re right. Think about the OSX fish eye navigation, exposé, spotlight, time machine, ipod drilldown menu and click wheel, iphone. Now imagine you’re trying to push all those products/features by inviting a myriad of opinions — all your customers, competition’s customers, etc. It just wouldn’t fly. It’d become diluted. In that respect, I think they are smarter than us — individually, we’re all intelligent, but collectively we’re about as smart as a pimply-faced high school sophomore. And maybe they’ve already figured that out.

    I’d like to liken them to Aston Martin… sleek, stylish, innovative, pedigreed, cohesive brand. Not a whole lot of people buy them, but the ones that do, love them. That’s probably whom they care most about and I don’t foresee this changing them or hurting them any time soon.

  12. In order to maintain its position, Apple will need to evolve within the new economy and the new consumer landscape that social media has transformed.

    Apple was an underdog brand for years, and people (especially Americans) cut underdogs a lot of slack. Conversely, industry leaders like Microsoft are under constant scrutiny. Apple’s transition from computers to devices has launched the brand into new territory and a new brand position. This has caused consumers to change their perspective. In other words, Apple hasn’t changed as much as our view of Apple has changed.

    While Apple’s exclusivity is waning (many believe that this alone will erode their margins) the company is brilliant at managing consumers’ expectations and monetizing user experience. If Apple “joins the conversation” it may eclipse whatever wrong-doing exists in consumers’ minds and will do fine as a business and a brand.

    In the interest of full disclosure, I am a Mac and iPhone user.

    Mark Gallagher
    Brand Expressionist®

  13. You’re not off JB. there are two companies in the valley that is going thru this phenomenon – 2 of the biggest brands.. Apple and the big “G”….

  14. “They lowered their prices recently on laptops. Isn’t that enough caring for their customer?”

    Dave, who said this was what their customers were actually asking for? How would they know in the first place?

    (Or perhaps you were being sarcastic?)

    Jim, I agree that Apple has always been like this, but does it really justify such an attitude to customers? Business may have been done this way in the 80’s, but now it just doesn’t seem to align with the open source ideal which is being fought for by many other big names.

    Personally, the only reason why I refrained from buying an iPhone was this Apple lock thing, which I just find way too arrogant and complacent.

  15. I think there’s another kind of limit they’re reaching: their ability to truly be smarter than everybody else.

    The iPod was a great success because they actually were smarter. For MP3 players, people wanted something that just worked, and the use case was simple enough that Apple really could nail it.

    Ditto the Mac. They had their small niche, so their my-way-or-the-highway attitude toward user needs was acceptable. For that self-selected set of users, they again really were smarter.

    But the iPhone has become the dominant general-purpose mobile computing platform, and nobody is smart enough to control every detail of that. That would be true even if Apple didn’t have monopolistic tendencies. I went to iPhone Dev Camp this weekend, which had circa 500 attendees. By far, the top gripes were about Apple’s insistence that every single app running on any iPhone anywhere be approved by them. Since understanding the needs of every mobile user and developer is an impossible task, they’ve just compromised on doing it poorly.

    As the Soviets eventually learned, for some problems well-designed marketplaces work much better than central human control. I hope Apple learns that lesson on the early side.

  16. Apple & social media/corporate transparency = the exception that proves the rule.

    Until this strategy doesn’t work for them anymore, I think we have to accept that is has worked well so far.

    And if/when Apple starts to falter, it will more likely be due to a signature product not meeting the incredibly high standards that have been set for the brand.

    The real danger is if other companies see look at Apple’s secrecy and lack of two way communication, and say, “See? We don’t need to use these tools either.” That can only be true if said companies create products that work as well, and inspire as much loyalty, as Apple’s have. Not an easy thing to do.

  17. Well, you know what Mr. Jobs says -“they don’t hire market researchers.” Does this equate to some form of arrogance, not listening unless pushed, having a high apology threshhold or what?

  18. May be. But there are a couple of other things going on here that may be strategically very sensible for Apple, users and developers.

    Other ‘phones provide a JVM to allow third party apps to be written – the trouble is they suck. They are slow because they are built in a sandbox which means you are doomed to running at a fraction of the speed of the underlying platform, and you cut yourself off from the cool features that are available to the main platform. I’ve still never seen a Java app for phones that’s integrated with the phone’s features e.g. the camera, contacts list, SMS etc. IMHO zippy widgets win hands down.

    Yeah sure Apple could expose their API – but in doing so they may be doing a deal with the devil. Just check out what happens with Palm and third party apps – they are – all too often – nasty, unstable rubbish that crash the whole OS. Apple appear to have traded stability and speed for third party apps. This is more or less what they did with the Mac.

    Now this may not be a problem. In the medium term, there is a clear move to deliver applications over the web, there is also a move towards ubiquitous, high bandwidth mobile access.

    What this means for developers is they can build their apps once – on the server – and deliver it via the browser/widget to the desktop and mobile (this is why Apple released Safari for Windows). This is much better, for developers, than having to support a separate code base for Windows, OSX, Linux, Palm etc. etc

  19. While I wish Apple would be more open in general, I am not convinced that this particular move is as awful (or unexpected) as folks are making it out to be. This is a service that will compete directly with Apple/ATT’s profit model in terms of cell plans (and if ATT isn’t making the expected money on this, there are consequences for Apple). Clearly it is a very sticky situation. It’s not like apps are being randomly rejected for no reason. Just because Apple is not stating the reason doesn’t mean we should turn a blind eye to the motivations behind this…which happen to be monetary. As an Apple shareholder I would be cautiously optimistic about this move by Apple.

    But, to reiterate, Apple should be more open to its customers and the public. They can still keep upcoming products secret but have a better dialogue about existing products and practices.

    That’s my opinion.

  20. I disagree with you. Apple has great customer service for its products via the Apple stores and its service policies. How many consumer technology companies even have service – and I don’t mean an outsourced call to India.

    Through its stores and email, Apple does a fantastic job of meeting customer needs and designing features that meet those needs.

    What the heck do you get from industry events? Just a bunch of fat executives trying to sell their lousy products.

    Also, Apple was the company that cracked open the carriers, forcing them to offer a real browser on the phones. How many people wanted that? Everyone. Yet all the other tech companies stood on the sidelines and kept shoveling all the crappy technology at consumers.

    Instead of talking, Apple listens to, and observes, customers better than any other tech firm. It doesn’t need to do all the stupid industry adevertising and promotion that other companies (like yours) does.

    Apple is just different. Thank Buddha.

  21. The worm is turning. At least for me. I don’t need/want them to have a Twitter account or to get social.

    What I do need is for them to stop controlling how I use their products.

    Breaking the iTunes/Palm Pre connection struck me as anti-competitive and anti-me.

    Preventing me from installing what I want on my iPod/iPhone is infuriating.

    Forcing devs to pay for refunds beyond their 70% share is unfair.

    Their opaque approval requirements/process is unprofessional.

    Rating of a dictionary as 17+ reminds me of book banning.

    Banning of Google Voice is only one example of many that shows the companies desire to maintain an iron tight grip over customer access to new tools.

    As someone who owns a lot of Apple products these practices have really caused me to shift my focus to alternatives.

    While there is a lot going for the company in terms of products, customer support and design, these draconian, anti-competitive practices all add up to me as one big red flag that Apple, going forward, may become a more dangerous and restricted platform to rely on.

  22. Hi there,

    I think we’re out of touch, and forgetting that Apple is a public company, focused on growth.

    Sure, Apple used to represent the cool kids… or the kids trying desperately to be cool… they were the influencer and there were enough of them (along with their association to the design community) to be profitable and build a mystique.

    But our cool (along with our original iPods and iPod Classics) is old, and the new cool is to be affluent. The market is different.

    They were the challenger brand (some might say they still are), but they have been so successful in certain areas (music, hype, etc.) that they can afford not to act like it anymore. I’d say that it was their goal. There’s more money in it.

  23. apple’s products might appeal to those who don’t own them as cooler but once you own them you see them as simply better.

    as long as they have the best phone, mp3 player, and os on the market, they will do fine.

    is there a single person out there that is so incensed about google voice’s rejection that they will give up their iphone and switch to a winmo phone? doubt it.

  24. The reason that Apple enjoy more empathy from the customer base is the fact that their computer products are much better than the shoddy PC. I’ve never had a PC that does not crash and burn before eventually dying.

    Apple is a business that makes products that people want to use. So their interaction with Apple is a customer /business one. if Apple get these products right – they’re ahead of the game. Microsoft and machines using Microsoft are way behind already.

  25. “smarter than you, better looking than you, and above your station”

    That’s exactly what the Mac vs. PC ads told people in the surveys. People liked PC more than Mac.

    However, lots of people I know who resisted the iPhone are finally getting one.

  26. john, i don’t disagree w/ you, (apple’s closed philosophy is reaching tipping point), but their ability to create ‘insanely great’ products is still (and always will be) the best business model in the world – this X10 counters anything they’re not doing in conversational media.

    re. brand analogy…lets not forget that a big part of brand value in today’s world is the rate at which you ‘innovate’ or as John Gerzema ‘energized differentiation’ – or direction. do apple have that? heaps…

    will this counter what you’re talking about? i have no idea…

  27. Seems like they’re following the same strategy of Apple’s birth of the personal computer market. Make a damn good product but overly protect their garden leading to defections to a more commons friendly platform of Microsoft (by friendly i mean relative to the market at the time). History is rhyming here, though Google is playing Microsoft this time around.

  28. Great post – I identify with the principles of what you’re saying, but I’m not sure if events will transpire to be that simple. Although the arrogance of Apple irritates many, there’s no escaping the fact that their products really are great. Producing products of this high standard that are consistently ahead of the rest of the market will always be a good brand strategy.

  29. I believe the main reason why apple is locking its systems (both macosx and iphone) is software consistency and side effects.

    The basic idea is that if you give away too much control over the core of your system, then you end-up with myriads of unsecure applications. If you need examples – see how windows looks like these days.

    Instead, apple was always allowing only limited integration with its systems. Of course – you can still write some applications for mac, and communicate with the system core through provided API, but you don’t have possibility to really change the core itself. Thats why Apple used to be so much more stable than windows.

    In case of iphone its the same case – they just don’t want every kid on the block to write sh*#ty apps, they want to have control over what people are writing and how secure it is – in order to be able to say: yes, its stable, we guarantee that.

    There’s no evil in this, its just customer service. Just like when you go to the restaurant you want someone (chef) to have control over what all the cooks are cooking.

  30. Apple makes great products but their arrogance (nice list of examples up in Caleb’s post) repulses me. Missing one or two sales a year to me of course doesn’t make any difference to them. But I feel like if I did make the purchases, I would be rewarding their “bad behavior” like a parent who buys candy for their kid who throws a tantrum.

  31. Are you serious, or is this a ploy to create controversy? I switched to Mac’s for my business and personal uses a couple of years ago and I would never go back to Windows or PC’s. In fact, I would just stop using computers all together if I had to go back to using Microsoft products. It’s not just that Apple products are better because they work, it’s that Microsoft every Microsoft product I have ever used has eventually failed.

  32. I could not agree more. On top of that, Apple products were once very high qualtity and superior machines. Now I see new apple products (including my own) freezing, slowing, and breaking left and right. Thought the bugs may not be the same as PCs they are certainly as plentiful. To boot, Apple does not seem to give a damn about their customers. They say that they stand by their products by offering the repairs, but quite frankly I PAID for those repairs already when I bought apple care. Apple doesn’t care about their customers, unless those customers are other millionaire corporations. If apple did care about their customers they would not be losing loyalty on a egular basis.

  33. Great Post, I’d like to refer to it in my next post. Here is a link to a series of articles describing IBM, Microsoft, Apple and Google. This is the main article with links to the related articles that have been published. the first one is Here, overview and description of market position.

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