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AntennaGate and the Future of Apple

A lot of people saw Jobs' tone at the press conference on the iPhone 4G's "AntennaGate" flap as contempt for his customers. His attitude seemed to be: look at all that I’ve done for you people — and now you quibble over some trifle?

by
Michael S. Malone

Bio

July 20, 2010 - 12:00 am

Steve Jobs may have publicly dismissed the recent iPhone 4G flap as “AntennaGate,” but this Silicon Valley veteran can’t help thinking that we may look back and see this moment as yet another point of inflection in the long and crazy story of Apple.

By coincidence, a few weeks ago I found myself in an online conversation with two old friends and long-time Valley players, one a major figure in the media world, the other a resident entrepreneur at one of the largest high-tech companies. As was often the case in recent years, the conversation came around to Apple and its amazing run of landmark products over the last decade — one of the most astonishing in modern business history.

What made this conversation so memorable, especially in light of subsequent events, was its change in tone.  Each of us, over the years, had suffered our run-ins with the mercurial Jobs, so, as always, there was a sardonic touch to most of our comments — our endless amazement at the stunning disconnect between the real-life Jobs and his cult image as the greatest business leader of our age.

At the same time, each of us, as regular Apple customers, were in awe of what Jobs’ company had accomplished since his return a decade ago.  The iMac, iPod, iPhone, iPad … no company in tech history — not even Hewlett-Packard, Sony or Intel at their peaks — had ever pulled off such a string of earthshaking new products.  If Steve Jobs is a superstar these days, it’s because he more than deserves the title.  Moreover, having survived what seemed like a death sentence from pancreatic cancer, Jobs now seems larger than life — his notorious solipsism and occasional cruelties transformed (at least in the eyes of true believers) into the understandable weariness of a demigod having to deal with the weaknesses of mere mortals.

But what I found most interesting, and perhaps prescient, in our conversation was a comment by one of my correspondents — who used to work at Apple. It was that there was a growing feeling by a number of his contacts that the iPad/iPhone 4G introductions, so close together and so eagerly awaited, might represent the last great peak in Apple’s amazing run.

Why? I’m not sure my friend could fully verbalize an explanation.  But if you live and work in high tech long enough, you begin to sense deeper patterns and forces that don’t always show up on the balance sheet … at least not for a while.  Six years ago, I got just such a sense about Microsoft. My subsequent ABC column suggesting that the company had begun a long, slow decline into inconsequence, was heavily disputed at the time — but I suspect few people today would disagree with my prediction.

Is the same thing about to happen to Apple?  I think it’s still too early to tell.  But my friend’s comment struck an odd resonance in me.  And here’s why:

A tarnished image — The Cult of Apple, like all such relationships between fanatical followers and idealized organizations, is built upon a social contract.  In the case of Apple, it is that the company will regularly provide its users with new products that are sufficiently innovative, beautiful, and “cool” that they will not only improve their lives, but also help them gain considerable social and cultural cachet in the process.  In exchange they will have to make sacrifices in terms of price, available applications software (such as games), and even hardware.

This process, which began with the Apple II, reached its initial zenith with the Macintosh and reached its fullest glory with the iMac and the iPod.  Apple, which had largely been dismissed as a niche company with a small army of acolytes, suddenly became a serious purchase consideration by every consumer.  Soon, this process became self-perpetuating, with millions of people putting in their orders for new products even before they appeared.  It’s hard to put a value on the feeling one got for being the first person in his or her office or group of friends or neighborhood to have the first of a new Apple product — an experience amplified by the general dreariness of offerings in the 21st century by the rest of the consumer electronics world.

But again, all of this is based upon that social contract — that Apple will deliver not just an innovative new product, but that the product will also feature all sorts of other intangible assets.

That’s what makes AntennaGate more than just — and Jobs is correct on this — a minor little design flaw. For the first time in a generation, it’s kind of embarrassing to own the latest Apple product.  Your friends, with their Androids and Blackberries, get to pity you — and ask with mock concern whether your calls are getting through. They ask you to demonstrate the proper way to hold the phone so you get a full signal.  And then, of course, there’s that rubber band you have to put around the phone … which not only compromises the sleek Apple look, but serves as a perpetual reminder of the company’s failure.

Is this enough to drive users away from Apple? Of course not. But make no mistake:  it has wounded the relationship between Apple and its loyal users — though to what extent is as yet unknown. But you only have to surf the Web and look at the comments about AntennaGate. Apple competitors and haters are, of course, piling on. But what’s new and surprising is that Apple users, famously arrogant and protective of their company — and willing to attack any doubters in the most vehement terms — are remarkably silent this time.

Innovation Exhaustion — History honors the winners, so it is easy to forget that Apple neither invented the MP3 player, the smartphone, or the tablet computer.  What the company did do was to brilliantly improve on those technologies, add its massive army of dedicated customers willing to buy any new offering from the company, and turn a new niche market into a cultural phenomenon and a new mass market.

The question now is: What is still out there awaiting the Apple treatment?  Internet radio?  Television?  Personal biometrics?  The answer isn’t clear.  That, in fact, is the main reason my friend raised his doubts about the continuation of Apple’s Golden Age.  Indeed, when you think about it, the iPhone 4G is essentially just an upgrade from the original model.  And the iPad is mainly a great, big iPod Touch — and have you noticed how quickly the buzz faded on it?

And there is another factor as well:  with the iPod and iPhone, Apple caught the rest of the electronics industry off-guard — and gave it a well-deserved smackdown.  But the industry has awakened, learned some of Apple’s tricks … and if it still can’t match the Wizards of Cupertino, it can stay very close behind.  Look at how quickly iPad clones and Android 4G phones have hit the market.  This strategy won’t catch Apple, but it will strip the company of some of the future profits it will need both to innovate and, as is Jobs’ way, to serve as the sole provider of all its customers’ needs.

Needless to say, Apple can continue to upgrade and further slick-up its current products almost forever — and make a lot of money in the process.  But in the end, that isn’t what its followers are in the game for:  the world isn’t going to notice your new iPhone 5G or iPad II when you whip it out at Starbucks.

The Burden of Jobs — Steve Jobs’ behavior at last Friday’s hurriedly called news conference was, to us old-timers, most reminiscent of another, similar event more than twenty years ago:  the Intel Pentium Bug.  Then, as now, a tiny flaw blew hugely out of proportion and threatened the image of a giant electronics company.

Then too, the company CEO, Andy Grove, dismissed the problem as inconsequential and all but described his complaining users as foolish and hysterical — and the media and government as “piling on.”

But Grove, a better businessman than Jobs, quickly realized his error, swallowed his pride, and made amends to the public.  There is no indication that Jobs will, or even can, do the same.

The compliant press described Jobs’ tone at the press conference as feisty and fearless. But a lot of people saw something else:  contempt.  His attitude seemed to be:  Look at all that I’ve done for you people — and now you quibble about some trifle? Even his announcement of a giveaway of a free case to fix the antennae problem was presented almost as a dismissal.

I would hardly be the first person to point out the authoritarian nature of Steve Jobs. Crushing clone makers, leaning on retailers, and forcing strange hardware and software decisions (Remember optical? No mouse on the first Mac?  No Adobe Flash on the iPad?  No adult content in the Apple Store? etc. ) on users, Jobs’ attitude has always been “my way or the highway.”  So, even if you agree with these choices, there is always the sense that in joining the Apple family you are not only surrendering some of your personal liberty, but also putting yourself to some degree at the mercy and whims of the mercurial Steven P. Jobs.

That relationship goes both ways:  Jobs too needs his army of true believers to cheer him on and buy his latest products, both good and not-so-good.  So now, in light of recent events, what might happen if that army, and the social contract on which it was built, suddenly finds that it is both a little embarrassing to own the Apple products they have — and that there are no “unbelievably cool” new products coming down the pipeline?

And, at the same time, what happens to Steve Jobs?  He’s already a billionaire, he has a large family waiting at home, and he’s already made history as the Rockefeller or Carnegie of his era.  He also knows that for health reasons he may not see a long life.  So, what if he begins to look ahead and see only years of endless product upgrades and a once-worshiping, but now increasingly restive and ugly, user base?

Michael S. Malone is one of the nation's best-known technology writers. He has covered Silicon Valley and high-tech for more than 25 years.
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