the iPhone 5 is a failure at its heart. This is about pride, reputation and loyalty, not just money. The magic is over.
Rosa Chun, Irish Times, Friday 12th October.

Today’s opinion piece in the Irish Times seems to get away with a lot; a lot of mistakes in fact and a lot of wide of the mark opinion. We get the idea that opinion pieces tend to be less accurate than news reporting, but really Irish Times, how did you let this one slip through? And from someone who is a “professor of global leadership, reputation and responsibility [sic] at UCD Smurfit School of Business”?

The article begins by tipping its hat to the success of initial iPhone sales, at two million in the first 24 hours. This is disingenuous in itself, as Apple released a press statement nearly three weeks ago stating that it had sold 5 million iPhone 5 handsets in the first weekend, even higher than the figure given by Rosa Chun. But of course tis does not help the bias of her article.

Chun sets out her bias early on:

“Some cracks are already beginning to show in the idea that Apple can always sell expensive, under-featured hardware on the back of customer loyalty.”

There are lot of examples of why this is simply not true- the iPad is the best of these. To date no other manufacturer has been able to match Apple tablet in terms of spec and price. In fact the $499 introduction price, announced by Steve Jobs in 2010, was seen as daring and very low, when many people speculated that it would launch at a far higher price point. The MacBook Air at under $1000 is also a challenger to other compact laptops on the market, and the combination of the iPad and the MacBook Air have eaten up what was the ultra-portable market. iPod shuffle and nano? We rest our case.

It was a disappointment to consumers who expected another revolutionary and visionary product from Apple.

The point here is that the iPhone 5 was exactly what was expected. We say this for two reasons: firstly most of the details had leaked in advance of the announcement, something that is almost inevitable given the number of suppliers and the amount of handsets which need to be produced in advance. Secondly, the iPhone 5 carries on a step-by-step process, started with the first iPhone in 2007. Each year Apple improves on the technology of the iPhone, adding features, improving the iOS operating system, adding apps, and upping the processor. If you took an original iPhone and a new iPhone 5 and held them side by side, you would notice just how far Apple have travelled on this road, each year refining and improving the world’s number one selling smartphone. The iPhone 4 was an improvement on the 3GS, the 4S was an improvement on the 4 etc etc. It is possible that the iPhone 5S or 6 or whatever comes next will sport a brand new shape and external design, but so far Apple have built on the products’ reputation. Apple know the current shape and size sells and is hugely popular, and even in resizing the height of there iPhone 5, they have kept it within the boundaries of their previous models, choosing not to follow Samsung and their larger handset models. For proof of this watch one of the recent “thumb” advert (see below), which makes it clear that operating the phone with one hand is a virtue- a natural way to control a phone, and at the same time takes a swipe at Samsung.

In its heyday, Apple was a religion, Steve Jobs was God, and the iPhone was a status symbol. Religious faith requires no evidence. Trust does.

Over the years we have heard this junk plenty of times and it is no more true now that it was in the past. The religious metaphor tends to be used by people who know very little about Apple and its role in branding and the tech industry. It also shows a misunderstanding of lifestyle brands and the role they play in the mind of the consumer. Normally this mistake is made by a journalist with little grounding in business, but nonetheless it does make it clear about Chun’s lack of knowledge of Apple and brand identity.

For a loyal Apple fan, product choice was never about quality or price, but about an emotional association and pride. Today, Apple consumers are increasingly comparing technical specification and price, just as with any other commodity product. They might still trust but many have lost faith.

If there is one thing about an Apple buyer, it is that quality has always been at the top of their mind when considering an Apple product. Quality of the design, quality of the software, quality of the way the two integrate is so fundamentally built into each of Apple’s successes since the 90s, that we simply can’t let this mistake pass. Price does have an effect, but quality and design always comes first here. In terms of technical specification, we would say that this has never been a lower priority. Apple do not highlight the processor speed of their products anymore, instead focussing on quality of images on the screen (retina display), the software (iOS 6, 10.8), the shape and colours (new iPods). Only in Chun’s Apple-equals-religion world can she carry through on this mistaken example.

The Samsung Galaxy phone’s large screen led to increased market demand for larger phones and eventually forced Apple to make the iPhone 5 larger than it originally wanted to.

It is amazing to even consider that a Dublin lecturer got to see those original designs for the iPhone 5. Quite astonishing- almost unbelievable.
In fact if you watch the Apple advert above, it makes a very obvious statement about screen and handset size- Samsung is too large, and we are not going that way with the iPhone 5. The taller iPhone 5 does not change its width compared to the 4S, and overall Apple make a virtue of the fact that the volume of the 5 is less than previous models. Chun is completely mistaken if she thinks Apple are taking design cues from Samsung here. Quite the opposite.

The decision by Apple to ditch Google Maps in favour of its own Apple Maps was premature, and led to Apple chief executive Tim Cook formally apologising to customers, something Steve Jobs would never have done. This was followed by a 2 per cent drop in Apple’s share price.

Probably the low point of the article. Firstly Jobs would have been involved in this decision. Changing away from Google Maps to an Apple app would have taken at least one year to achieve. Apple previewed their Maps app at WWDC in June 2012, and so the development of this app would have begun well before Jobs’ death in October 2011. Plus, Apple bought Poly9, a vector mapping company, in 2010- a clear and obvious signal (to those who follow these things) that Apple was getting into Maps. Apple always follow this path- partner with a company at the start and then develop you own improved system. Look at how they bundled Internet Explorer on the Mac before making Safari, how they partnered with Sony Ericsson on phones until they launched the iPhone. Maps with Google was no different. It was no surprise to smart people at Google and no surprise to other technology journalists. The argument that Steve Jobs would not have done this is nonsense; he would have been central to this, if not the driving force behind this. If Chun believes that Jobs would not have apologised, then she is completely wrong here too. Check out Jobs’ apology in 2007, the apology when he was CEO in 2010, and the MobileMe problems from 2008.
As for the 2 percent price drop- really? Apple hit an all-time high share price after the launch of iPhone 5, so there really is no validity in this argument.

It is also worth noting that the iPhone 5’s keen price would not have been possible without Foxconn’s workforce in China.

The author begins to tie herself up in knots here as she previously stated that Apple’s products were over-priced? What happened the earlier statement: ”Apple can always sell expensive, under-featured hardware on the back of customer loyalty.”

Since the first iPhone was released in 2007, Apple’s share price has gone up by 650 per cent, whereas Foxconn’s share price has decreased by two-thirds. The assembly cost at Foxconn is already very low. Customers will not pay more for competing phones. And Apple may not have much choice other than to share some of its profits to improve working conditions in China, the earlier the better.

Never quite understood this one. We completely agree that working conditions are a concern and hope that something is done about this, but Apple does not own Foxconn, and does not exclusively pay them to build all of its products. Foxconn is one or a number of suppliers to Apple, and it is up to them to get their house in order. As for Apple sharing its profits with another company, good luck with that idea in the modern capitalist world. We are sure Apple shareholders would be delighted.

If the iPhone 5’s failure is repeated with iPhone 6, pre-order sales and long queues on launch day may be less visible.

Therefore she has reached the conclusion, based on a quote or two from two other commentators (Guy Kawasaki, ex-Apple employee, and Steve Wozniak, who apparently owns a Samsung phone), that the iPhone 5 is a failure? Despite the numbers, despite the waiting lists (try buying one in Ireland right now!). We do love the idea though that long queues may be “less visible”- invisible queues are the best!

Apple is a great brand created by a great leader who inspired many people. We would like to be reminded that the Apple way is about innovation, not greed.

In our view Apple has not changed. Apple is making the same quality of product that it has been since the late 90s after Steve Jobs’ return, and the high profits followed as a consequence, not serving as an aim. Chun’s article is a copy-and-paste article from other mistaken views which followed the iPhone 5 launch. Each of the views in this article have been repeated over a number of years, such as the tired religious analogy, and the recent “it-would-never-have-happend-under-Steve” cliches, as seen recently on an RTE news report. The idea that the iPhone 5 is a failure, stands completely against any released figures. If anything, Apple cannot produce them fast enough and may suffer by not meeting the huge demand, not due to a lack of interest.

Proof of innovation, or lack of, will come over the next few years when Apple moves to the next great idea. Right now it has been moving along a very predictable path for anyone who has been watching for long enough and understands the steps Apple takes.

Dr. Simon Spence/2012

Tags: Irish Times