In Depth: Has Apple sold out?

Buying Apple is as much about ideology as it is about technology. We buy Apple because we believe devices should delight, not disappoint. We buy Apple because details matter, from the clickability of a button to the curve of a corner or the positioning of a port. We buy Apple because we think perfection is worth striving for, and worth paying for. And we buy Apple because Apple isn't a heartless corporation whose only interest is the bottom line. Perhaps that was true in the early days, but is it still true now? The iPhone 4 signal issues and problematic 3G/iOS 4 upgrades suggested a very un-Apple lack of quality control, and the 22-day gap between the Antennagate story breaking and Apple offering free bumpers did serious damage to the iPhone's reputation. Lampooned on Letterman, joked about by Jeremy Clarkson and the butt of online gags, the iPhone was even compared to Windows Vista ? by Microsoft. That's got to hurt. It seems that Apple can't do anything right nowadays. It has been accused of censorship and bullying, and implicated in subcontractor suicides and heavyhanded policing. Despite creating the most impressive, most popular products in its entire history in the form of the iPad and the iPhone 4, Apple is seen by many as a company that's losing the plot. RSS inventor, Mac and iPhone user and Apple shareholder, Dave Winer, summed up the prevailing mood in July, when he wrote: "I don't think the problem is with the iPhone 4. What we're seeing is Apple's charm wearing off. The Reality Distortion Field bubble is about to burst. Their run as the Exceptional Company is about to end? "Apple is a company that desperately needs to grow up and wipe the smile off its face, roll its sleeves up and start to appreciate that it's no longer the upstart, the underdog, the Crazy One in the Richard Dreyfus ad. They are The Man, the Boss, the one who, from now on, everyone is going to be taking shots at." Is he right? Three takes Let's play devil's advocate and go with the 'Apple's Lost It' crowd. What's going wrong? Analyst Rob Enderle of the Enderle Group has three suggestions. One, it's become cocky, just as IBM, Microsoft and Google did when they became enormously successful. Two, Steve Jobs won't let Apple PR do its job ("Jobs owns the process and is so controlling that the relationships and early warning systems PR needs to address problems like the ones you list don't exist [at Apple]," says Enderle). And three, Apple has lost "a person or persons critical to their good decisionmaking process," such as the late Jerry York, who joined Apple's board in 1997 and helped Jobs wrest Apple from the jaws of defeat. There's no doubting Apple is hugely successful: if money's the root of all evil, Apple must be growing horns and a tail.RISE TO SUCCESS: Not even the sky's the limit (Source: Yahoo Finance) What's even more remarkable is that with very few interruptions, Apple's share price has been on a dramatic upwards trajectory since the return of Jobs in 1997. The big question is whether Steve Jobs has become cocky because Apple has become so successful, or if Apple has become so successful because Steve Jobs is cocky. We suspect it's the latter. He isn't exactly famous for his humility: in 1982 the father of the Macintosh, Jef Raskin, said that Jobs "would have made an excellent king of France". The Bono of bits In many ways, Jobs is the Bono of bits: both men genuinely believe that they can change the world, both men have enough charisma to make their egos bearable and both men inspire devotion and derision in equal measure ? not just from distant observers, but from the people who know them best. According to Andy Hertzfeld, one of the original members of the Macintosh development team, when Apple executive Jean-Louis Gassee saw Jobs' car parked in a handicapped space he commented that "I never realised that those spaces were for the emotionally handicapped." Another pivotal Apple figure, Macintosh project manager Bud Tribble, coined the term Reality Distortion Field back in 1981. As he explained to Hertzfeld, in Steve's presence "reality is malleable. He can convince anyone of practically anything. It wears off when he's not around? If you tell him a new idea, he'll usually tell you that he thinks it's stupid. But then, if he actually likes it, exactly one week later, he'll come back to you and propose your idea to you, as if he thought of it." ALL GROWN UP: There was a time when Apple played up to its status as underdog. No moreMany of Apple's biggest successes come from Jobs ignoring everybody else. When Apple engineers decreed in 1997 that the iMac simply wasn't possible, Jobs overruled them "because I'm the CEO, and I think it can be done." The iMac became the most successful personal computer in history. Then there was the iPod ? "No wireless. Less space than a Nomad. Lame", one Slashdot editor wrote ? and the iPhone. Analyst Todd Sullivan predicted that the iPhone would send Apple shares tumbling, Mobile Today said "iPhone flops despite hype" and author David Platt wrote: "the forthcoming release of the Apple iPhone is going to be a bigger marketing flop than Ishtar and Waterworld combined." Steve Ballmer could barely suppress his glee. "Five hundred dollars?" he spluttered. "Fully subsidised? With a plan? I said that is the most expensive phone in the world. And it doesn't appeal to business customers because it doesn't have a keyboard." Hindsight is a wonderful thing, of course, but Steve Jobs was right and everyone else was wrong. The lukewarm critical response to the iPad hasn't stopped it being a runaway success, and there will no doubt be similar criticisms of whatever iOS device Apple comes up with next. Rather than playing things safe, sitting back and letting the money roll in, Jobs has risked the company again and again. He doesn't always get it right, of course, but when he does the results are spectacular ? and spectacularly profitable. If you had his track record, you might be a bit cocky too. Of course, there's a difference between being a bit cocky and being dismissive of your customers. Antennagate, as the iPhone 4 controversy was dubbed, had many pundits suggesting that Apple was shipping a product it knew to be defective. Bloomberg alleged that Jobs overruled concerns about poor reception, while the New York Times quoted an unnamed insider who claimed that there was a long-standing weakness in the iPhone software. Jobs called the first story "a crock" and the latter "total bullshit". Apple making a PR mistake is one thing, but the idea that Steve Jobs overruled everyone at Apple to release a flawed iPhone seems a bit of a stretch. It might be possible if Jobs were running Apple single-handedly, but he isn't. Jobs is hands-on in the design, marketing and legal bits of Apple, but the job of actually running Apple falls on Tim Cook ? a man who, like Jobs, is famed for his attention to detail and has been hailed as a "genius" by the press. In that company, the idea of Steve Jobs as a loose cannon among yes-men, a CEO whose executives are letting him destroy the very firm he saved from near-death, doesn't make any sense. Another reason for incongruity is that, despite all the bad publicity, there's nothing seriously wrong with the iPhone. Even with signal issues, it has the best reception ? and customer satisfaction ? of any iPhone ever made and a lower return rate than the iPhone 3GS. As Guy Kawasaki, business guru, venture capitalist, co-founder of Alltop.com and former Apple Evangelist and Apple Fellow told us on the eve of Apple's news conference, "If I were Apple, I would give anyone who wanted one a free bumper. And let people return their phones if they don't like them because there are plenty of people who would love to buy a refurbished iPhone 4." And that's exactly what Apple did. "We're human," Steve Jobs says. "We make mistakes." He's right about that. Apple's chaotic and contradictory approach to App Store approvals generated yet more bad PR when swimsuit catalogues were blocked but Playboy wasn't, and when fart apps got through but Pulitzer prize-winning cartoonists didn't. DOUBLE STANDARDS?: Apple censors apps with too much flesh on show, but allows Playboy in ? how so?However, such issues appear to be the result of the strain of big numbers rather than bad faith: the App Store went from 500 apps to 65,000 in a year and 225,000 in two years. We can't imagine any firm handling that kind of growth without making the odd mis-step.(Apple has since relaxed its App Store rules.)Not all Apple censorship is accidental, of course. Jobs has gone on the record saying that he doesn't want to see pornography on iOS devices, and Adobe could tell you a thing or two about falling out of favour with Apple. However, while the anti-flesh bans in the App Store haven't been consistent and some of Apple's behaviour towards Adobe has seemed a bit playground, Apple isn't locking down Safari or installing chips to prevent you jailbreaking your phone, as Motorola seems to have done with its latest Droid phone. Apple's row with Adobe over Flash does appear to be based largely on Flash's woeful performance and Apple's fear of losing control, rather than Apple trying to bully another firm. "We didn't want to get into any business where we didn't own or control the primary technology ? because if someone else owns it, they're going to beat you in the end," Jobs says. Put simply, Apple doesn't want to lose control of apps. Demoralising jobs Could Apple's use of Foxconn, the subcontractor whose factories have seen unusual suicide patterns, be another mistake? Despite Steve Jobs' comments that it can't be a sweatshop (because "they've got restaurants and movie theatres and hospitals and swimming pools. For a factory, it's pretty nice"), there's clearly something unpleasant going on. According to advocacy group SACOM, in May Foxconn employee Yan Li died of exhaustion after a 34-hour shift; a recent Bloomberg report describes demoralised employees breathing in dangerous fumes, banned from talking and made to stand for 12-hour shifts with bathroom breaks limited to 10 minutes every two hours; and Foxconn security guards have beaten up journalists and have been filmed beating up employees. Jobs' comments suggest that, at least in this instance, the Reality Distortion Field is in full effect ? Foxconn is regularly accused of bad things, and Apple promised to investigate it in 2006 after allegations that Foxconn broke Chinese labour laws by forcing employees to work 80+ extra hours per week ? but Apple's probably being picked on unfairly too. Foxconn's client list reads like a who's who of technology, so why aren't people asking why Microsoft, Dell, Sony, Amazon and Nokia aren't stopping the suicides? Foxconn makes their stuff too. But then, none of those companies generate the newspaper sales and website hits Apple does. A STEP TOO FAR?: Gizmodo's Jason Chen had his apartment raided in the iPhone 4 prototype scandalThe most dramatic allegation levelled at Apple involves Gizmodo, which paid thousands of dollars for a stolen iPhone 4 prototype. When the site went public and published photos, police turned up at writer Jason Chen's door, smashed it down and confiscated his computers and gadgets. Apple didn't break down the door ? the Rapid Enforcement Allied Computer Team (REACT) did that ? but Apple is on REACT's steering committee. Not only that, journalists are supposed to be exempt from the kind of warrant REACH used to enter Chen's house. Indeed, the Electronic Frontier Foundation thinks something stinks, suggesting that REACT members were "putting the presumed interests of an important local company before the rights guaranteed by law". Speaking of newspeak If Apple had a tame police force smashing down doors and confiscating journalists' computers on command then that would be worrying, to say the least. However, Gizmodo's Chen isn't a journalist in the officially accepted, accredited sense, therefore the search warrant may have been entirely legal ? and let's not forget that Apple is just one of 25 different companies on the REACT committee including the likes of Symantec, Microsoft and Adobe. We don't recall anyone accusing Symantec of having a tame police force when REACT broke up a Norton Antivirus counterfeiting ring four years ago, or of anyone calling Adobe and Microsoft Big Brother when they asked REACT to investigate Craigslist software sellers just last year. "We're not perfect," Steve Jobs says. The truth is, Apple never has been: today it's being criticised over the iPhone 4, and 10 years ago it was being criticised over the G4 Cube. What has changed, though, is Apple's profile. When Apple was an underdog, Steve Jobs could have gone around kicking puppies and nobody would have cared. Now that Apple is the king of column inches, more valuable than Microsoft and the most talked-about technology firm on the planet, minor criticisms make major stories. That's just the way it works. Has Apple lost it? A few seconds with an iPad suggests not only that Apple still has it, but that it's the only firm in technology that even knows what 'it' is. We think Guy Kawasaki put it best when he told us: "When you're the biggest, best-looking gorilla, the target on your back is the biggest too. This comes with the territory."Cruise Ships