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Average corporate managers look at Apple and only seek success in being in touch with consumers and bringing out products they love, but the recent iPhone flap shows that the history of Apple is strewn with big mistakes. The difference between Apple and other companies is that it has learned how to deal with mistakes—quickly.
Steve Jobs moved instantly to recognize that Apple really angered its core constituency—early adapters—by cutting prices on its new iPhones by up to a third, leaving many consumers feeling like chumps. Jobs did it right—he apologized, gave an explanation and provided recourse ($200 cash refund for people who bought the $599 eight gig iPhone within two weeks of Wednesday’s announced price cut, full refund for the $499 model bought in that time and $100 store credit for the rest). Linguistically speaking, this is what people want in an apology and they got it.
But Jobs and Apple do have a serious business model problem. Cutting prices so quickly after the launch of the iPhone has Wall Street wondering about demand for the product. The cell phone space is very different from the computer/ipod space in terms of price point and demand and until Apple releases figues on sales, analysts will wonder about price and profits.
More importantly, Apple is enmeshed with Cingular in this product and that is proving problematic to the consumer experience. At least my consumer experience. I’ve been lusting after an iPhone since I had one in my hands months before the launch but couldn’t buy one because my company won’t support it. So I’m staying with my trusty TREO. OK, so I thought I’d get an iPhone for a family member who’s on my Cingular plan. Hmmm… Very hard, if not impossible to do. I just want to switch one old cell phone for the iPhone, but no. I have to set up new Cingular accounts for both myself and the other family member. That means much higher cell phone costs. Not good. So I haven’t done it and don’t have that iPhone.
Well, at least I avoided the pain of being an early adapter (and yes, the fun too).
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