Apple's 'Summer of Discontent' Takes Toll

Wednesday Jul 28th 2010 by Mike Elgan
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Although Apple’s fortunes have risen dramatically in the past few years, this summer is particularly challenging. Will it bounce back?

For a while there, it seemed that Apple could do no wrong. With the iPhone dominating, the iPad dazzling and Wall Street showering the company with so much love that its valuation exceeded even Microsoft's, Apple was the Golden Child of Spring (a fact reinforced by Apple's Spring-quarter earnings call).

But now that summer is here, Apple is being attacked from all sides. Suddenly, it seems, the company can do nothing right.

The most recent complaint in a long list involves charges of being far too heavy-handed with the nascent iPad publishing industry. Apple is being slammed by critics for not approving magazine apps that operate on a subscription model. Apple requires publications to charge for each issue as an app, rather than charging for or giving away an app that serves up an annual subscription.

Apple, which reportedly keeps as its "commission" nearly one-third of all iPad app payments, requires publishers to use iTunes as the "middle man" in all magazine transactions for apps served on the device.

Media columnist Peter Kafka pointed out that Apple's rejection of Time Inc.'s recent attempts to offer a subscription version of Sports Illustrated on iPad "is trouble for every magazine publisher."

Of course, Apple has long been characterized by some as greedy and controlling. But now critics are hitting the company in places where it used to shine -- security, for instance. A software security firm called Secunia criticized Apple in a recent report, saying the company has passed Microsoft as the greatest producer of security vulnerabilities.

Product quality is also being questioned. Three Californians filed a lawsuit against Apple this week, complaining that iPads overheat in the sun and that the iPad doesn't "live up to reasonable consumer's expectations created by Apple."

No, the lawsuit likely won’t harm Apple, but the case won't help iPad's reputation among would-be buyers.

Apple was forced to admit what critics had complained about for months, which is that some Time Capsule wireless backup devices sold by the company were faulty. Apple is now offering replacements for users who own devices with the right range of serial numbers. But even its handling of the issue is being harshly criticized.

A critical mass of former iPhone-loving "key influencers" in the tech press, most notably Leo Laporte, has publicly abandoned the iPhone in favor of alternative devices, especially the Motorola Droid X. Laporte's main beef is with dropped calls, which may be caused by poor AT&T coverage in the San Francisco Bay Area where he lives. Still, Apple is widely blamed for subjecting iPhone users to AT&T exclusivity.

Attacking the 'Faithful'

Even Apple customers are under attack these days. A company called MyType, which offers "rapid opinion profiles" and quick Facebook surveys claimed that users of Apple's iPad tend to be power-hungry, unkind and selfish elites.

And a new paper called "How the iPhone Became Divine: New Media, Religion and the Intertextual Circulation of Meaning" was published this summer. The paper was written by Heidi Campbell and Antonio La Pastina of Texas A&M University. It expands on previous research papers exploring Apple devotion as a cult or religion.

Apple's most loyal fans, the paper argues, have "appropriated into popular discourse" religious language and imagery, and view corporate competition as a battle between good and evil.

It points out that like all religions, the Apple religion has a creation myth (Steve Jobs and Steve Wozniak in a California garage), a hero myth (Steve Jobs saves the world from the corporate PC), a resurrection myth (Steve Jobs returns to save the company) and a Satan myth (Bill Gates and Microsoft are evil in the minds of Apple religious devotees).

And then there's 'Antennagate'

Apple's critics are having a field day with the "Antennagate" fiasco. Apple shipped its sleek new iPhone 4 with admittedly flawed software that misrepresented the number of wireless coverage "bars" shown to users. Adding to the problem was a controversial design decision to wrap the phone's antennae around the outside edge of the phone, which can result in reduced coverage when held a certain way.

Apple offered a software fix, plus free bumpers. However, many media observers disapproved of Jobs' handling of the press conference that announced the fix, slamming him for blaming the media, suggesting that the iPhone 4's reception issues were common in the industry and coming across as defensive and combative.

Competitors also took full advantage. Motorola, for example, purchased a full-page ad in the New York Times headlined "No Jacket Required," which bragged than the Droid X phone didn't need a bumper for good reception. RIM co-CEOs Mike Lazaridis and Jim Balsillie characterized Antennagate as "Apple's self-made debacle." And Microsoft COO Kevin Turner even suggested that the iPhone 4 might be Apple's own "Vista."

Ouch!

Apple's Antennagate fiasco was "recreated" in an absurdly imagined but incredibly harsh CGI video apparently created for a Taiwan news program. In the video, Steve Jobs is depicted as an evil Darth Vadar-like figure with an invincibility shield. In one scene, he slices off the fingers of a customer with his light saber in order to improve the customer's iPhone 4 reception.

There's absolutely no question that Apple is having a very difficult summer, at least from a public reputation perspective. The quality of the company's products are being questioned, its loyal fan base is being maligned and the company's leadership and CEO are being slammed as greedy, overbearing and arrogant.

Will Apple bounce back? Of course it will. Apple's reputation has risen in the past to absurd heights, and is now plummeting to conspicuous lows. But the company will rise again. That resurrection myth may yet come into play one more time.

The media darling of spring and whipping boy of summer are still the same company. Apple is and will remain what it has always been: A vaguely controversial company that makes great products, tightly controls its ecosystem and either thrills or enrages users depending on how they feel about Apple's approach to computers and gadgets.

The big picture is that millions of people love their iPhones, the iPad is transforming how people use and think about computers. And the publishing industry will soon have plenty of choice for publishing platforms.

ALSO SEE: Top 50 iPad Apps for Work and Play

AND: The 49 Best iPad Apps for News and Entertainment

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