Monday, August 3, 2009

Rotten Apple

Editor's Note: WB has had a brief stretch without updated posts due to staff vacations. We're back to the grind now.

Editorial disclosure: We own iPhones and are locked in to AT&T service. But this post is only partially a personal rant; mostly it's a warning to a company whose products have been very good to us.

Apple Computer, now known as just Apple, should have learned its lesson the first time. After becoming the leading computer brand by placing its machines in classrooms across America, the company stubbornly refused to let other companies make hardware to run the Macintosh operating system. Meanwhile, MS-DOS, and then Windows, were running on dozens of brands of hardware. By the time Apple permitted — and then quickly retracted — "clones" of the Mac, it was too late. The once-dominant market share it had originally held had shriveled to an embarrassing two to five percent.

The climb back up since then has been slow but steady, and today the company has returned to a double-digit market share. This is largely due to a string of products that start with the letter "I" — iTunes, iLife, iPod, and iPhone. The level of desire Apple has created in consumers for these products is off the charts.

So, what did Apple do with that incredible amount of goodwill and buyer lust? It chose AT&T, the oldest, stodgiest, most Scrooge-like brand of cell carrier service possible, as its exclusive iPhone service provider. Instantly, this decision prevented millions of people from buying the iPhone, because they weren't willing to trade superior service from Verizon just to have the flashy phone.

And now, Apple is bowing to AT&T's corporate wishes to prevent Google — an Apple ally! — from running voice apps on the iPhone. Once again, Apple is foolishly, stubbornly, refusing to catch up with the times, refusing to face the realities of the market, and refusing to give its customers what they want. Just as it did in the 1990s when the brand took its first nose dive.

Rumors are flying that the iPhone will finally be coming to Verizon in 2010. But 2010, at the time of this writing, is still five months away. In the world of brand loyalty and product innovation, five months may as well be five centuries. Apple has everything to lose, and nothing to gain, by continuing to ban Google voice apps from the iPhone, and by continuing to be a tool of AT&T. It will ruin its relationship with Google, destroy its goodwill with current iPhone owners, and erase the desire of those who would like to own an iPhone when it finally sheds the exclusivity agreement with AT&T. From having a clear majority portion of the "smart phone" market share, Apple is in danger of watching that share shrivel and die just as the Mac did 20 years ago.

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