Is Apple’s Halo Tarnishing?

Over the last few weeks we’ve had reports of brand new iPhone 3G handsets developing minor cracks, of 3G handsets offering poor 3G reception (without 3G, why bother with an iPhone 3G?) and of massive outages of Apple’s latest online venture, MobileMe.

Is this a sign that Apple is beginning to reach too far in order to bring customers the Next Big Thing? Will these very public stumbles tarnish Apple’s previously shiny halo?

There’s little doubt in my mind that Apple is now under more pressure than any other tech company to continually deliver new and innovative products and services. As we’ve seen in recent months, Apple’s stock price is closely tied to new product releases (so much so that record quarter profits seem to do little more than dampen investor enthusiasm for the company). Apple is seen as an innovator, and investors want to see the fruits of innovation hitting shelves and tempting customers to part with their cash on a regular basis.

So why is Apple stumbling? Well, I think that there’s little doubt that the company has come to the point where it’s reaching too far. Steve Jobs, Apple’s CEO, said that the MobileMe launch was “not our finest hour” and in an internal email he outlined how the company could have done better. Specifically:

• MobileMe needed more testing.

• MobileMe did not need to be launched as a monolithic service.

• MobileMe should not have been launched at the same time as the iPhone 3G, iPhone 2.0 software and the App Store.

That’s an admission right from the top that Apple is trying to do too much in too little time and that things are screwing up much more than normal. Whether this is driven internally by a desire to roll out new products and services, or externally by investors hounding the company for the yet another product hit isn’t clear, but whatever the reason, this is a perfect embodiment of the old adage “more haste, less speed.”

Another aspect of Apple that is having an adverse effect on the company is addiction to secrecy. The company treats every product as though it was a life-or-death secret, and as such, this leaves no room for those essentials such as beta testing.

I’m not going to pretend that beta testing irons out every wrinkle (just look at Vista – I’ve never seen an OS go through so much beta testing yet it was released containing some serious bugs). But it does help catch some of the more embarrassing gaffs. Apple’s confidentiality leave no room for any serious pre-release testing, testing which could have helped the company avoid black eyes such as the one it received from releasing MobileMe before it was ready.

When it comes to hardware, Apple is a victim of its own success. There’s no way to carry out widespread beta testing of hardware (it’s expensive to carry out and blows any and all secrecy out of the water) so most companies are stuck relying of early adopters to beta test new products and put up with a few issues in exchange for being the first to own a product. Apple does things differently and builds up considerable amounts of hype and publicity around every launch, which means that those early adopters consist of a large number of regular users who aren’t aware of the pitfalls of being an early adopter.

Something else that’s affecting Apple is a changing customer demographic. Traditionally Apple enjoyed a small but loyal fan base that would buy products and put up with any bugs until they were fixed.

Nowadays, Apple’s customer base has expanded significantly and is now made up of a large percentage of people who aren’t interested in demonstrating mechanical devotion to the company. To them, buying an Apple product is a transaction, and they expect a decent product in exchange for the cash.

But there is another side to Apple. One thing that has to be said about the company is that it does do a very good job of keeping customers happy. In fact, Apple is one of the best companies when it comes to giving customers a no-quibble replacement product when things go wrong.

While I’ve come into contact with numerous customers who have had problems with their Apple products, in almost all cases those people have had their problem dealt with and gone away with positive feelings about both the product they bought and the company they bought it from. There’s not one other company that I can think of that comes close to Apple in this regard. If there’s one thing keeping Apple’s halo shiny, it is excellent customer services.