Apple: Impressive Earnings, Surprising PR Gaffe

While Apple (AAPL) had some impressive earnings Wednesday (this volatility play pre-earnings would have worked out nicely like it did last week for Google (GOOG)) given the current downturn slamming so many other stocks, Apple had the misfortune of falling prey to a PR gaffe on the same day. While this one will blow over quickly due to their rapid response and lack of resistance, this to me, is the epitome of poor judgment, a lack of adequate oversight/controls and a clear misstep from the company often viewed as above the fray and the white knight alternative to Microsoft's (MSFT) "evil empire".

As reported Wednesday here, Apple actually put up a a game on its iTunes store with a premise that by shaking the hell out of your phone, you can quiet a baby displayed on the screen. The name of the game is "Baby Shaker". Once one finishes shaking the device, the on-screen baby is shown with large red Xs over its eyes. This is just plain stupid. I realize that sometimes, you have Abercrombie & Fitch (ANF) courting controversy by putting nude teenagers together in erotic poses or you have Britney Spears showing her vagina; these are "seemingly outrageous gaffes" by companies and celebrities that are actually meant to generate buzz, and in the long term, these seemingly outrageous publicity stunts actually result in an increase to the bottom line (and were planned ALL the way back).

This gaffe resulted in no such "coolness factor buzz" or the like. The company that created the game is just plain stupid. The person or group of people responsible for approving and hosting the game at Apple demonstrated a lack of judgment and brought embarrassment to their company. You mean to tell me that not one person that signed off on this said, "You know, this is really tasteless and frankly, it's not going to be a positive for our company - this is going to offend a lot of people and be a net negative for us"? Aren't there review, controls and approvals in place before something like this hits the iTunes store? Was there a single parent or adult even, that's seen what happens to infants on the local news? The death or permanent brain damage imparted to a child as a result of vigorous shaking is somehow humorous or hip? I get that these artsy designers want to be edgy or whatever. What they ended up with was a moronic backfire. What's next? Noose and holocaust games? I mean come on.

Like I said, I think that given the fact that they pulled it down immediately and didn't try to retroactively turn this into some sort of "cause" or marginalize the outrage from organizations and parents alike by ignoring their concerns, Apple will soon get a pass on this. It's not characteristic of their organization over the long term. However, they really need to rethink their process for vetting what's hip versus what's tasteless and avoid similar missteps in the future that may derail their reputation.

Comments

[jmmx:]

Blah blah blah

Sure I agree the "game" never should have been listed. But I will bet dollars to doughnuts that it was not a decision by upper management or marketing to release the game. My guess is that some kid working in the app approval department thought it was funny and passed it through, never thinking of the negative aspects of it.

If they have 35000 apps in 9 months that is almost 4,000 apps per month that they need to review. I am sure they do not pass each one through a committee of 60 engineers and marketing types.

It was right for parents and organizations to complain, and right for Apple to remove it. But no need to get up on your high horse and rave about it like it was some devious plot!

Apr 23 02:46 AM

[mike hough:]

A pathetic attempt at a non story of a company acting responsibly .

If only SA would act against such articles on their site. In case you can't work it out I refer to the "Apple Shaker" games you host. Shake the stock until it declines when the real story is that it 'shines'. Or, as you put it:

"However, they really need to rethink their process for vetting what's hip versus what's tasteless and avoid similar missteps in the future that may derail their reputation."

Fat chance!

Apr 23 04:03 AM

[Moon Kil Woong:]

Baby Shaker is totally irrelevant to it's stock price, earnings, or reputation.

Apr 23 05:14 AM

[Yagottabe K...:]

Though the "Baby Shaker" app was kinda sick, it is of no small concern that applications that are available to us are determined by special interest groups rather than the marketplace.

Apr 23 08:15 AM

[Everyday Fi...:]

Regarding these comment:
But I will bet dollars to doughnuts that it was not a decision by upper management or marketing to release the game....But no need to get up on your high horse and rave about it like it was some devious plot!

...That was my point. I said a) they deserve a pass and b) it's probably some low level employee that rubber stamped it and they need to insert some prudence and an actual review into their process. If it is a 1 person rubber stamp, for a company of their stature (and as evidenced by this PR hit), it was imprudent for them to not have better controls.

I have no ulterior motives; I'm actually long AAPL (had disclosed via my volatility link imbedded, but forgot to at the bottom of my post, sorry) , just reporting my opinion on this minor PR gaffe.

Apr 23 08:31 AM

[jmmx:]

Look at the good side of things.

The the groups who advocate for the dangers of shaking a baby just got a tremendous amount of publicity. The problem is one of education. I am sure that most people who do shake their baby do so out of temporary frustration and do not realize that this may harm the child.

The issue has now been raised on a national level, and Apple responded responsibly by removing the app.

Apr 23 11:18 AM

[winindthedust:]

Irrelevant to the stock price.

Apple gets slammed for not putting Apps through fast enough, then slammed for letting some slip through that shouldn't!

I actually didn't hear about this until this story... but anyways, yes, it should have been obvious to not let this through.

However, the bigger picture, is that this WILL on occasion happen, no matter what the checks. Part of the checks is the PUBLIC. Apple responded promptly and did the right thing, in response to the public, and pulled the App. Apple doesn't need more bureaucracy, which is already complained about by developers! They need to keep doing what they are doing, by keeping things as effective and efficient as possible within reasonable guidelines. The Public is there to immediately review the rest, to correct mistakes.

Enough said, and I applaud Apple.

Apr 23 11:41 AM

[pk de cville:]

Left with a certain level of confusion on the author's strange reaction to the 'PR' snafu...

Does he really think that each and every one of the 2500 programs released each week is carefully reviewed and critiqued? Very strange to read someone who believes that.

At the end of the day Apple removed the app from the store AND ALL iPods/iPhones on which it already resided.

Pretty neat and efficient, heh?

Kudos to Apple and rotten tomatoes to the 'thoughtful' blogger.

Apr 23 12:58 PM