Mitch Joel, in my view, is a good guy. He’s smart and his written and intelligent and popular book. We seem to agree on many issues. But one place 
where we are not joined at the hip is on our current views of Apple Computer.
Mitch thinks that all this negative noise–the Gizmodo incident, Ellen DeJeneris, FCC antitrust investigation, John Stewart and the most recent “antennagate” has done nothing to hurt the company.
Mitch sends evidence almost daily. He reports record lines in front of the San Francisco Apple Store, record sales for the year, and so on and so forth. Mitch offered to bet me $1,000 that a year from now, Apple will emerge unscathed from the current avalanche of unfavorable coverage. The loser would give the money to a favorite charity.
I am in no position to be gambling $1,000. Besides, unlike Mitch, I am not so very sure how all this will come out.
Someone else tweeted me, “Apple may be doing bad PR, but people don’t care. I consider that an oxymoronic statement. PR, as I learned and practiced it, is about relationships with publics, not about hits from a press release or any such tactical nonsense.
Lately, Apple has been consistently doing a style of PR, that has surprised, angered and disappointed some people. I am one of them. At times I’ve considered them arrogant. At times they have played the part of the bully.
So long as they are the only ones making brilliant products, they can get away with such behavior. But the market is changing. Others have come out with very good phones and history suggests that those competitors will keep making better and better phones and with all that competition prices and margins are likely to slip.
This is where the PR gaffes come in. PR shapes how people feel about a company. They involve trust. On rare occasions PR, has a dramatic, sudden impact on a company’s market position. Usually the process is slower than that.
For a very large company the erosion can take a very long time. It took General Motors, for example, more than 20 years, to hit the rocks and they coupled bad PR with building shoddy products.
Apple still builds fine products. But now there is a wart on the nose of the Apple hero image. Now, people who have not yet purchased an iPhone for the first time, may look at other options. Now, people who have contracts with AT&T expiring may shop around.
There is already a trickle of erosion. I know that because a small handful of folks on Twitter have told me they’ve switched or will. I do not think the number will swell dramatically immediately.
But I think that if Apple does not change how it converses with its publics soon, there is an excellent chance that it will begin feeling a loss of repeat customers and see new customer stray. I think that it’s vendor-friendly service pricing [They get a share of AT&T's outrageous take] will go down and that impacts the bottom line.
In my view Apple needs to vastly upgrade the way it conducts conversations 
with customers. Currently, its demonstration of responsiveness is Steve Jobs reading cherry-picked emails sort of the way the late Perry Como used to read song requests on his TV show in the late 1950s.
What Jobs is doing is performance-oriented, not conversation-oriented. It wows a few people for a short period of time, but most folk understand that it’s hokey.
There are thousand, perhaps millions of people who now have fear, uncertainty and doubt about Apple. The best way to offset that is to join the popular social networks and to start using blogs and podcasts in a meaningful way.
We need to start seeing people who work at Apple, who are passionate about their work, who care about user concerns and who are not Steve Jobs.
I reduced my bet with Mitch Joel from $1,000 down to one drink, based on results of Apple sales/profit numbers one year from now. I am not extremely certain of winning. A large company is like a supertanker, running on an open throttle. It takes a lot of time and distance to change its direction. It takes a lot of time and distance also to change user perception.
What I am absolutely certain about is that Apple was in a much stronger market position six months ago than it is today. And if it does not alter course, the supertanker that is Apple Computer will eventually discover it is headed directly toward rocky shoals.
By then, it may be too late to alter course.
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I would say the issues raising technically for apple will not withstand from their brilliance technology. Today technology is dominating more, the technology that can make users more convenient will win more and I think apple has surpassed even in the price. So what-else should a tech company look after. Of course it might not opt in the best way of approaching its users but I don’t think it will hurt the brand from being the best on the world.
Probably Shel is right about that Apple has to improve its marketing and PR efforts. However, I think Mitch Joel is right about it not affecting sales, etc. This might be because Apple has such a tight brand community with very active evangelist. As long as they are satisfied with the superb products Apple delivers, they will not change there Word Of Mouth. I regard WOM the most important ‘PR weapon’ in Apple’s arsenal.
This does not mean that Apple does not have to change this unlucky PR streak. Its consumers deserve better PR about their favorite brand. Every consumer wants to hear good news about the products they buy (cognitive dissonance). Apple should only have a real problem if they start producing inferior products which evoke dissonance anyway.
I think one of the biggest lessons in this is that a “bigger than life” CEO can be both a huge asset and liability. Apple accepts that, but for as long as Steve Jobs is the only face associated with Apple, perception of the company and its products will always track with the public’s perception of Jobs as a person.
Apple also suffers from a phenomenon shared by companies like VW and Harley-Davidson. These companies and their assocaited brands have extremely loyal and dedicated followers. The downside of this dedication is that fans of those brands take things VERY personally. Parents experience this. They love their kids but are often harder on them than others, since their expectations are higher.
I also think that as Apple fans or fans of technology in general, we have to accept a certain degree of arrogance from Apple. If not for that aspect of their culture, we might not have products like the original iPod or services such as iTunes, which love or hate, really were game changers.
Getting past the 2nd sentence was dicey … Aside from this minor scramble, I agree with Shel, Apple’s arrogance (or frustration or egotism or whatever adjective you select) will result in the company losing customers.
From the joke, “How did you lose $10 million?” Answer, “Slowly at first; then suddenly.” Apple’s customer drain will be slow until the tipping point of “suddenly” is reached when it will be too late to turn the flow.
The issue is not a small (or medium or large or huge or imaginary) issue with the iPhone’s antenna. The issue is Apple’s attitude. For years Apple has been the worthy beneficiary of accolades and repeat business by a hard core fan base. Apple’s exciting products helped drive the fan base which helped drive new products. The symbiotic relationship added hard core fans to the “it just works” universe.
Apple’s in-your-face approach was entertaining when focused on Microsoft, Intel, Google, etc. Apple’s “watch this” was a great response to the industry’s disbelief in building a network of retail stores, selling tunes on-line, or ….. Now it seems that attitude has been focused on their customers, and the results may be detrimental to Apple. Without the hard core fan base Apple will not be able to challenge the industry’s leaders.
In-your-face works when focused on corporations or product challenges. Not so much when focused on customers. No manner how hard core, fans will take their loyalty to a brand that appreciates them, gives them a product or service to believe in, and listens to them. In return, fans will overlook minor product glitches. Heck, they carry glitches as badges of honor.
Treat your fans shabbily and you lose your fan base slowly at first; then suddenly. In today’s world, suddenly can be sooner rather than later.
Shel, you are on target. I hope Apple changes ….so that you will be wrong.
Apple is the public’s favorite marketer. It has been the most consistently innovative producer of products that people like in the technology arena for consumers. Apple is also the envy of most PR types as it has been able to use its product introductions and Job’s Keynotes to generate free PR beyond the imagination. Apple customers are generally very evangelistic about their products. Who else has that kind of customer power. It is not wise to bet against Steve Jobs and @mitchjoel.. Every “I” product that Apple has introduced has had a “wow” & “neat” factor beyond other consumer product introductions. Who cares about the odd “wart”.. on an otherwise pretty face. Shel, I believe you protest too much
Agree that Apple has suffered a bit recently. The antenna issue IS enough to dissuade some who are deciding between and iPhone and others.
Don’t believe that Apple could have handled things much better. They were walking a tight rope. The appeal of the device remains, the “elegance” is unmatched. Giving too much of a nod to the problem would gives it more legs and validate detractors. Those already put off by the closed world of apple perhaps have more reason to avoid them but the fans remain.
The challenge to Apple is to stay ahead of the competition and continue to design beautiful and user seductive product.
@ShelIsrael You’re using Thesis…could you please activate “replies” in comments? Unless your philosophy is like Sonia Simone at CopyBlogger, it would be really nice here. Something I don’t quite understand is, why are all of these HTML pages? You probably imported your blog from Naked Copnversations or something, so those pages being HTML makes sense. But why these?
@MitchJoel You’re tapping into something I’ve been thinking since my first comment: The nerds, geeks, and technos that hang around Mashable and Engadget all day are not in touch with average Joe six pack. The layman’s Apple experience is, he goes into Apple, sees amazing prodcuts, and buys them. If the products break within warranty, he returns them and Apple treats him nice. That’s been my experience.
@DannyStarr I’ve owned a 2 gen. iPod for nearly a year and a half now. I’ve used it most every day, sometimes hours each day. It still works like new.
I’d also add that the PR professional perspective of how Apple is doing and perceived is still not aligned with the true public perception of Apple. I wonder if the general public cares that the PR industry is not impressed with how they conduct themselves at that level?
Shel, I agree with you that Apple’s PR practices could preclude a downward slope.
I also agree with Mitch that what’s going on now is not going to harm Apple’s year end sales. I think that right now their sales are more strongly connected to the user experience associated with their products and the word of mouth that follows, than with the user experience associated with their PR practices.
As long as Apple’s closed platforms for iPhone and iPad is good for the user, and right now it is, their mobile sales won’t decline.
And the more people that are buying iPads, iPhones, iPods and these other smaller ticket items, the more people there are who will buy their computers.
Like Karim said, the last straw has yet to be dropped.
It may take a few years before sales become more strongly connected to the public perception of the company itself and their practices than with the products.
Right now Apple has the best products, but this will not always be the case. They were the first ones in the market for touch smartphone and tablets, but there are plenty of new players, that are not there yet I agree, but that will become better. Once there are products that compete with Apple strongholds, trust and PR will become more meaningful. Right now, Apple is acting like they are always going to be the best…
I think what is more important is that Apple makes products that people lust after. They do it through a variety of ways but the end is that something inside our brains goes “I want it” and that is really all the matters.
Sure, their attitude and PR gaffes are terrible but because they make products that we want more than anything else, they will be ok in the end.
What makes people want Apple products so badly is a whole other discussion but I believe a big part of that is that they make technology that is intuitive and it actually works (or works more often than the competition).
I am not an Apple fanboy by any means. Owned a Gen 2 iPod. It worked great – for a year. Had an HTC Touch Diamond a few years ago and it was crap. Got an iPhone 3GS now and it is my only Apple product but compared to my old HTC, the 3GS is what I always wanted in a smartphone. Why? It just works.
I am very confident that I’ll win this bet. Just look out on to the street. People are not frustrated with Apple (and no, I’m no fanboi). They love Apple. People love the design, they love the products. All techy stuff has its glitches and I think people are used to tech (computers, especially) not being perfect. In one year’s time there will simply be more innovation and more new product lines and sales will be up, up and up.
Did they handle the negative PR well? As Shel Holtz (the other Shel ;) says, Apple gets a pass… for whatever reason. The basis of our bet was started because you felt that “antennagate” was going to sink them and your subsequent tweets around Apple.
This stuff won’t affect profitability and even after press conferences, free bumpers, etc… you still can’t buy an iPad or iPhone and sales are brisk with more demand than they can supply.
Regardless, I look forward to sharing a drink with you again – regardless of who pays ;)
I’m more with Mitch on this Shel. What that tweeter said is partly true. If Apple has the best products, we’ll put up with bad – even horrible – PR in order to enjoy those products. Saying people don’t care at all is going a bit far, but I understand where the Tweeter’s coming from.
And Apple does have the best products. Robert Scoble flushed all the other phones down the drain in his recent conversation from his iPhone4. And I know people that are ready to go with the iPhone4 once Verizon becomes a carrier.
Meanwhile, I’m applying at Apple, so I’ll be able to give you the inside scoop. If you want good PR from Apple, come to the Woodland Hills mall. :)
Shel,
Very interesting blog post. Apple has indeed been caught in a PR gaffe. Yet Mitch correctly points out that Apple has yet to suffer. I don’t know whether he is an Apple booster or not. I do know he has a keen insight into the market.
What Apple continues to do is create cool products that people WANT to use in order to consume the content they want.
I am of the opinion that we are in a wait and see position when it comes to Apple. The last straw has yet to be dropped on this camel.
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