Apple is famous
for being nuts about secrecy. So it was a pretty entertaining when Gizmodo, a
scrappy Silicon Valley tech blog, recently got hold of a top-secret,
fourth-generation iPhone, ripped it apart, and published photos and
descriptions of the device. Apple fumed and demanded Gizmodo return the phone,
which an Apple engineer had left behind in a beer garden where he was
celebrating his birthday.
Gizmodo gave back
the phone, and that might have been the end of the story, but Apple just
wouldn't let it drop. Four days later, police raided the Fremont, California,
home of the reporter who had written the piece--and that sent the story
spiraling out of control, with everyone from Rush Limbaugh to Keith Olbermann
commenting on it. Jon Stewart of The Daily Show lashed into Apple, saying Steve
Jobs and his team were behaving like "appholes."
It's the kind of
attention that Apple, long a media darling, isn't used to. Apple's
control-freak nature didn't matter as much when it was a plucky underdog. Yes,
Jobs was a demanding boss and a perfectionist--but he created great products.
Apple seemed like the anti-Microsoft, a company that was on our side. But this
year Apple will do nearly $60 billion in sales. So when police start breaking
down doors over a lost phone, it's a PR disaster. Lately Apple has started to
look like the big bully of the tech industry. Over the long haul, that can put
customers off.
The Gizmodo affair
is only the latest skirmish. Apple has fallen out with Google, a former ally,
because Google moved into the mobile-phone market and has blocked Google Voice,
a telephony app, from running on the iPhone. Apple is suing HTC, a Taiwanese
phone maker and big Google partner, claiming that HTC's handsets infringe on
Apple patents. Apple cracks down on its own engineers, and recently fired one
for showing an early 3G iPad to Apple cofounder Steve Wozniak. Apple bullies developers,
telling them which software tools they can use.
Finally there's an
ugly war with software maker Adobe, in which Apple refuses to support Adobe's
Flash program on its iPhone and iPad, even though most of the Web's videos
require Flash. Apple claims its rejection of Flash is based on technical
arguments, but it still comes off looking like the heavy, the big company
desperate to crush a smaller opponent.
Same goes for the
Gizmodo affair. On the day the blog ran the story, Jobs himself called Gizmodo
editorial director Brian Lam and demanded Gizmodo return the phone. After some
back-and-forth, an Apple laywer retrieved the phone. But then, Apple called the
San Mateo County district attorney to report that a phone had been stolen. Why
do that after the device had been returned? Apple won't say.
Ultimately Apple
seems to have realized that no matter who is right or wrong, having its brand
associated with the flap is probably not a great idea. So the company scrambled
to draw attention away from the Gizmodo story by having Jobs publish an essay
on the Apple Web site explaining Apple's reasons for shunning Flash. Will the
Gizmodo mess hurt Apple's business? Not immediately.
If anything, the buzz
could boost sales when the new phone ships, probably in June. Long term,
however, Apple's brand could suffer. "I think there's going to be a
backlash. It's all just dark and creepy," says Rob Frankel, a brand
consultant in Los Angeles. Call it the price of success.
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