It’s been a tough year for me as an Apple power user. As an industry analyst, I play with lots of great toys from across the tech spectrum, but for the last decade or so, Apple has been a big part of my world: My home desk has had an iMac on it. My travel bag has a Mac Book Pro in it. Dig into my pocket and you will find an iPhone. Like millions of people looking for simplicity, performance, and style, I bought into the Apple ecosystem. For a long time, I even bought into what I believe Apple stood for. Apple seemed like a conscious brand that thought differently. After all, wasn’t that the slogan?
The thing is, I think I fell in love with a different Apple, from a different time. Sure, Steve Jobs had his flaws. He was a workaholic, perhaps slightly tyrannical and obsessive about perfection, but his Apple was the Apple that called to me. His Apple embodied ingenuity, boundless innovation, and a dimension of integrity between the brand and its users that deserved the affection and near unconditional loyalty that Apple enjoyed in spades. For Jobs, Apple products needed to work flawlessly. Apple engineers worked overtime to make sure that when a new product hit the market, it didn’t just work, it also solved a problem that no other company thought of, and did so more elegantly than consumers could have imagined. Steve Jobs didn’t just put music in our pocket, he created a world without friction between a person’s music and their location. Everything Apple did was meant to tear down barriers, make life easier and cooler, make good design part of our everyday lives. This was his M.O. When he died, many of us wondered if that Apple would die with him. With every passing year, the answer seems to lean increasingly towards yes. This week, as news broke that Apple had yet again strayed from the customer-centric path Jobs had set it on, I found myself mourning a little more for the company Apple used to be.
I feel it’s important to note that as an entrepreneur, I appreciate a company’s right to make a profit. Apple makes over a thousand dollars in profit per second, making it by a large margin the most profitable tech company on the planet. Apple’s most popular product, and the source of the greatest volume of these profits, is the iPhone. Over the past several years Apple has released a new phone every year, along with a series of mid-term upgrade devices. With each of these launches comes a wave of sales that spikes company revenues and profits, and usually raises stock value. From a supply and demand standpoint, Apple is doing the right thing: if Apple customers want to continue to upgrade a device that is just nominally better every six months, then let them. “When the music plays, let them dance,” as the saying goes. But apparently, Apple may have had us dancing to a very different tune than the one we had bargained for.
After years of speculation and rumor, just yesterday, Apple finally confirmed that it does, in fact, deliberately “throttle down” its legacy iPhone devices with software upgrades. This “feature,” as Apple embarrassingly calls it, cuts the device’s processing power by almost half in order, we are told, to preserve battery life. This, of course, makes the performance of the phones noticeably worse, and often much worse. There are already plenty of good articles about the technical ins and outs of this “feature,” along with a treasure trove of pundit viewpoints to browse through if you want to dig deeper into this, so here are a few links you may find useful:
The short of it is that only after the media shone a light on its long-speculated practice of slowing down its legacy devices did Apple finally come clean about it. Well… not really. Rather than acknowledge that they had messed up, the folks at Apple called it a “feature.” If I take them to their word, I can rationalize that this “feature” may be okay for some users, but here’s the problem: if this “feature” is triggered automatically on older devices by a software upgrade, and there is no warning or clear option for a user to opt-out of it, then does throttling down device performance not seem like just a back-handed ploy to push users to shorten their refresh cycle and buy new devices sooner?
Taking a step back, I can identify three potential lies:
Lie 1: We don’t slow down our phones.
Lie 2: Oh, we were caught, so let us represent this as a “feature” and blow smoke on the stupid public that buys our phones for $1,000.00
Lie 3: We didn’t incorporate this feature to drive planned obsolescence of our older devices and encourage the purchase of new ones on a more regular basis.
This does not make me happy.
So, what do we have here? Apparently, a company that has exploited the hard-earned trust and loyalty of the very group of customers that helped establish it as the most profitable company in the world. That is no small thing. Perhaps worse, Apple doesn’t seem to care. This brings us back to my original point about Jobs’ Apple, versus today’s Apple: Under Jobs, Apple used to care about loyalty. Treating customers well mattered. Rewarding customers’ trust, faith, and loyalty with amazing devices and best-in class customer-centric business practices were core Apple values. Like most great consumer goods companies, Apple understood that a customer’s trust was the lifeblood of loyalty. Apple even understood that the quality of its devices was at the heart of the Apple user’s experience, not just the form factor. That was how Apple differentiated itself from the rest of the market. Looking at Apple today, can I say that this is the way the company Steve Jobs built still operates?
Let’s ask that question another way: If Samsung can suggest 95% battery life on their devices after a year, then why would Apple need to cut performance by more than half just to keep a one-year-old device running? Are Samsung’s engineers that much better than Apple’s? Of course not. We know they aren’t, not to mention that Apple has more billions in cash than it knows what to do with. Jobs’ Apple would have solved this through the lens of creating a better customer experience, because he understood that is what Apple was built on. Today’s Apple seems far more cynical and exploitative, and worse, willing to break a cardinal business rule that even Apple cannot afford to ignore: Never give your customers a good reason to stop trusting you.
Sure, Tim Cook has made a few Wall Street investors rich in recent years. That’s true. So what? And, more importantly, at what cost? Steve Ballmer made Microsoft investors rich too, while somehow managing to miss just about every major technology trend that surfaced on his watch. (Didn’t he predict that the iPhone would fail because people wouldn’t email without a keyboard?) Today isn’t tomorrow. Next year isn’t last year. Investors are a fickle bunch. Unlike Apple’s fans and power users, investor loyalty can’t be taken for granted or mapped along a decades-long arc. It’s only performance-deep. Steve Jobs understood that as long as users were happy, investors would be happy, and so he focused on users first. The strategy that Apple appears to be engaged in today, however - focusing on making investors happy at the expense of users – is the exact opposite of what made Apple so successful, and it both worries and disappoints me a great deal. Perhaps the saddest thing about all of this has been watching Apple choose the banal expediency of greed over the enduring plenitude of customer loyalty.
Apple used to stand for something. It used to be about better products, outside the box thinking, trust; an immeasurable amount of weight used to be placed on creating customer experiences that delighted and wowed. How much of that has already eroded in the last couple of years? How much do we still not know about Apple’s questionable decisions since Jobs’ passing? Apple seems a very different company today, a shadow of what it once was. And while healthy profits allow Apple to build impressive headquarters and buy all the marketing it wants, the loyal community that built Jobs’ company into the powerhouse it is today is starting to notice the change, and it doesn’t bode well. Not in a world where so many other great alternatives to Apple are readily available. Unless Apple makes a course correction, it doesn’t take an expert industry analyst to see the writing on the wall. I, for one, hope that course correction happens before it’s too late. I really do.