Blowing trust means no $300 stock price for AAPL

Posted by Antonio 1 month, 1 week ago (July 24, 2010)

This iPhone antenna thing is insane, both because of how much airtime it has gotten (this is my last iPhone/Apple post for a long while) and because of how ridiculously careless Apple has been about wasting all of the accumulated trust it has collected with its customers over the years. The whole thing makes me remember Phil Schiller who claimed that Apple's comeback strategy was predicated on their becoming the "Sony of personal computers" while he was trying to recruit a bunch of us out of grad school in 1999.

Back in the 1980s, I (and just about everyone I knew) bought Sony stuff just because it was Sony. VCRs, walkmen, headphones, and even totally commodity products like media. Then Sony bought content companies and got its head completely turned around on how its devices would relate to digital content. But in a much worse move, to justify their own stupid strategies, they started lying to their customers. They lied about the superiority of the DRMed formats, the performance of their proprietary flash storage, even about the relatively high costs of repairing one of their VAIO laptops (which were built with mostly standard components).

The result? They destroyed all of the accumulated trust that allowed them to charge a premium to their customers, even on products like blank CDs. A child of the 1970s when the Sony brand stood for the pinnacle of consumer electronics, there is almost nothing that they could sell me these days that didn't have a rock bottom price attached to it.

Apple is getting dangerously close to the edge of the same mistake. The press conference last week was a joke, and having their PR department grinding out videos to knock the better radios Motorola is shipping in the Droid phones just looks desperate. We may all keep buying their products, but increasingly it will be only in categories where the competitors are so weak (i.e., HP/Dell craptops running Windows). And once that trust is gone, they will be forever sailing against the wind with every new product introduction.

If I were them, I'd think hard about that before letting this get papered over via free rubber cases and attack videos aimed at the competition.

Tags:
blog comments powered by Disqus