Apple's Corporate Miscues May Tarnish Its Image

Apple may have an iPhone coming, record financial results and Wall Street's good graces, but its corporate flubs of late make the company look arrogant. At some point–and we're not there yet–the Teflon may actually come off that Apple logo.

Until now, Apple has been a darling. The story is great. CEO Steve Jobs comes back to Apple, unleashes the iPod and the rest is history. Apple fans love the company and its products. They also treat Jobs like a rock star.

However, since Macworld earlier this month a series of corporate events have unfolded that make Apple look downright arrogant. At the least, Apple could risk alienating its customers–arguably the reason the company is so successful.

To wit, Apple…

–Institutes a Wi-Fi tax by charging $1.99 for a download that enables 802.11n technology. This technology is currently present in almost all MacBooks and MacBook Pros with Intel's Core 2 Duo processor. The kicker: Apple is blaming accounting rules for charging for the Wi-Fi software. At last check, generally accepted accounting practices didn't tell companies how to run their businesses.

–Charges for Boot Camp. MacScoop reports that Apple will charge current users of Mac OS X Tiger for the final version of Boot Camp that will be released at the same time as Mac OS X Leopard, this spring. Now this report may not turn out to be true, but it certainly doesn't foster oodles of goodwill on the heels of its Wi-Fi tax.

–Preannounces products. Apple has preannounced two key products–the iPhone and Apple TV–before the products were ready. This move traditionally has been a Microsoft staple used to freeze the market and control it. Without reading too much into preannouncing products, Apple's latest moves are curious.

–Potentially tramples a trademark. While Cisco's iPhone trademark may be "silly," Apple clearly forged ahead sans any agreement with the networking giant. Apple's legal ground can be debated, but on the surface it appears Jobs would rather forge ahead trademark questions be damned.

–Bullies bloggers. Apple sent out a cease and desist letter to a blogger who merely reported that someone created a skin for Windows Mobile phones that looks like the iPhone user interface.

–Deals with an options backdating issue. Apple has cleared its name in an internal investigation, but the Securities and Exchange Commission will ultimately decide.

–Locks its APIs. Apple is stingy with its APIs and that means developers can't create plug-ins for new products like the iPhone.

–Tries to make iTunes the dominant way to get video and audio. iTunes to Apple is what Windows is to Microsoft. And like Microsoft Apple is being sued for dominating digital music. Apple is undeterred. For instance, Apple TV proclaims that if it's on iTunes it's on your TV. In other words, any non-iTunes content won't make the cut. Meanwhile, Apple uses DRM to handcuff your digital library to its platform.

Perhaps these practices are just capitalism at work. Perhaps we shouldn't hold Apple to higher standards. Perhaps none of this matters to Apple fans. But take the remove "Apple" from this post and replace it with any other company. Then tell me your opinion. What if Microsoft had these flubs in the span of 3 weeks? 

Comments

[Julian Ivan...:]

Good lord.. being a "fanatical" AAPL investor (as the Street would have all AAPL holders labeled) normally I'd take far too much time responding to an article like this, but you're piece is so ill-informed, biased, and lacking in any sense of perspective that I really can't be bothered.
What a load of rubbish.

2007 Jan 23 11:37 AM

[Richard Alv...:]

Why bother posting a response? These articles are no different then old Apple is going to go bankrupt articles of days past. Apple is a great company and at the end of the day worth a whole lot more(at least 2x over if it can double its computer sales, and 2x more with the iphone), no hit job can take that away.

2007 Jan 23 11:47 AM

[Jon T:]

What a ridiculously stupid article.

"Let's all rubbish Apple, based on speculation, half-baked facts".

2007 Jan 23 12:36 PM

[David Lentz:]

So how is AAPL different from any other "Teflon-coated" company with a sterling reputation and enviable bottom line?

HP? Any major drug company? ExxonMobil? Any auto company? Dell? Microsoft? OK, so no domestic auto company has an enviable bottom line. And ExxonMobil, while certainly "Teflon-coated", cannot be said to have a sterling reputation -- except when it comes to making money.

Begging the author's pardon, but if he would wake up and smell the coffee, Microsoft actually DOES have a litany of stories like this constantly, as does any other major company with ongoing activity. Microsoft has a WEEKLY patch release cycle ("patch Tuesday"), for goodness' sakes! How can the author work for ZDNet and not be aware of this? Doesn't seem to have impacted the fortunes of Microsoft.

Let's try recasting this piece of digital fish-wrapping with a series of bullets like:
* Zune fails to make significant impact, other than that bug-on-windshield splash
* Vista sales may be weak due to customer resistance to expensive required hardware upgrades
* 6 more critical flaws revealed
* Microsoft covers up options backdating, hopes investigations end soon
* Microsoft changes Office UI, customers face learning curve
* Microsoft refuses to open source Vista
* Alchin "retired" due to pro-Macintosh email

Would such a piece alter any MSFT investor's opinions?

These are very similar to the list of charges this "journalist" from ZDNet has leveled against AAPL, a mixture of half-truths, distortions and outdated bits of obvious non-news (is it really surprising that a company that sells software and hardware keeps the designs private?). And just as worthless.

Nothing to read here -- move along, folks.

2007 Jan 24 12:17 PM

[carter bick:]

"Tries to make iTunes the dominant way to get video and audio." That's a horrible idea right? Isn't that what MSFT did with Windows on the OS side. That was a disaster right- 300 Bill. Mkt. cap? Your article is pointless.

2007 Jan 24 01:47 PM

[Julian Ivan...:]

The difference between Microsoft products and Apple products: most people are forced to use Microsoft products because its the only choice they're given, either at school, at work, orbecause they've just never used a Mac and don't realise there are alternatives.

However, people who use Apple products have chosen them. That goes for iPods, and Macs. Using an Apple product is a choice, a decisive act expressing your desire and personal preference to buy something different. Thus, it isn't Apple who are arrogant. It is Microsoft. Apple's customers are choosing to buy their products. Most Microsoft customers just don't know any better. With the iPod, the same holds true: there are hundreds of competing (often cheaper) personal media players. You don't have to buy an iPod, and you don't have to use iTunes. These things are choices. Apple are giving consumers what they want. Microsoft are just serving bad food to diners who don't know any better.

2007 Jan 24 07:59 PM