• BRAZIL

A Bad Week for Apple

2007-09-08

Think Different
We weren't surprised to hear Steve Jobs announced a new WiFi iPod that will connect to a chain of coffee shops with songs for sale, but not to your home wireless network. Such closed system thinking at Apple (AAPL) is all co-branding and ROI thinking. It's quick and easy retail - a fast food mentality perfect for shareholders and convenient, if limiting, for customers.

Here’s to the crazy ones. The misfits. The rebels.
The troublemakers.

- "Think Different" campaign

Speaking of Apple customers, those well-heeled early adopters of the iPhone, some of whom stood in line for hours to spend $599 plus tax were surprised at a $200 price drop two months after the device went on sale. The 33% drop fired up an electronic hailstorm of complaints which overshadowed the new iPod announcement and quickly prodded a mea culpa of sorts and a $100 Apple store credit for The Troublemakers from Jobs:

even though we are making the right decision to lower the price of iPhone, and even though the technology road is bumpy, we need to do a better job taking care of our early iPhone customers as we aggressively go after new ones with a lower price. Our early customers trusted us, and we must live up to that trust with our actions in moments like these.

Good Will
Last month, technology writer-videographer David Pogue complained about how iMovie '08 had removed important audio and video editing functions as well as the plug-in capability that earlier versions contain. Different code, inferior product. Same name, new version. Proprietary, of course.

Good will is the one and only asset that competition cannot undersell or destroy.

Despite a dip this week, shares in AAPL have skyrocketed (Chart) since the company started selling its iProducts. If customer relationships with users take a backseat in Cupertino, the company will be hardpressed to extend their market postion, particularly in a declining economic climate.