updated 07:38 am EDT, Tue October 9, 2012
Apple seems to be leaning too heavily on the loyalty of its customers
Some recent experiences I have had with Apple on a personal level have started me questioning the direction that it is headed. From a financial perspective, the company has never been stronger – it has over $100 billion in cash and it is the most valuable company in the world based on its current market cap. However, I wonder how much of this success built on the incredible loyalty that Apple has created within its customers and whether the patience of Apple’s fans may eventually run out.
I was among the first batch of customers to pre-order the iPhone 5 when it went on sale and received it the day it shipped. This was a pleasant surprise as Apple has previously delivered pre-ordered products days after they officially went on sale. However, much less pleasant was the discovery that I had paid top-dollar for a black iPhone 5 64GB model only to discover that it had shipped out of the box with some (minor) damage; it is one thing for me to ‘break-in’ an iPhone, I just don’t accept that it should ship that way. It was a surprising issue that also affected other Apple customers, inconveniencing them when they should have been enjoying their new phone.
In addition to the three dings on the device, I was disappointed by the build-quality of the model I received. Sir Jony Ive placed a strong emphasis on the care with which Apple crafted the iPhone 5 saying that Apple had gone to “extraordinary levels of fit and finish.” At one point in the promotional video for the iPhone 5, Ive highlights how each of the two glass panels on the rear of the device is selected from 725 separate pieces from which the two best fitting parts are matched using two 29-megapixel cameras. The iPhone 5 that I received had a perfectly flush bottom glass panel (as promised), but the top panel was noticeably ill fitting. There was a distinct bump when running my finger from the aluminum panel across to the glass panel that clearly did not live up to Ive’s promise of a “seamless” fit, or a variance that could be “measured in microns.”
I took my iPhone 5 to the Apple Store at Broadway in Sydney to show the finishing flaws to an Apple ‘Genius.’ He advised that Apple would only replace the device on the spot if it had more significant damage. As I had bought it from the Apple Store online, I was however entitled to return the item for any reason within a 14-day period. On contacting Apple support, I was asked to send through photos of the iPhone (embedded below). However, I was concerned that the black model was more prone to scratches and asked for a white model instead. I was told that I couldn’t do that, but that my options were to have the black model exchanged, or to receive a refund.
I opted for the exchange. Initially, I was advised via an order notification that the replacement would ship in 3 – 4 weeks! I got back in touch with Apple and was advised that this was not the case and was reissued with a new notification and was promised that it would arrive by the end of the following week. I was at home over that period and agreed that this would be ok. At the end of the next week, I placed a call to Apple asking them where the replacement iPhone was – I was told that it would not arrive until the next week, on the Monday or Tuesday.
As I was going to be at the office on those days, I requested that my order be cancelled and my money refunded. However, I was told that this would only happen after Apple received notice of a failed delivery attempt, leaving me both without an iPhone 5 and about $1,000 out of pocket in the interim - hardly the epitome of customer service. Reluctantly, I decided to try reserve an iPhone 5 online. Despite getting online as soon as reservations opened over a period of three days, I was unsuccessfull in obtaining an iPhone 5.
Giving up on the online lottery, I headed into the flagship Apple Store, Sydney to pick one up. I arrived before the store opened and waited (while feeling foolish as people walked past me thanks to Samsung’s cheeky advertising). It turned out that, indeed, I was being played for a fool. Apple promises on its website that each day customers can either try to reserve an iPhone 5 or that ‘Limited quantities are also available for walk-in purchase on a first-come, first-served basis.” When I entered the door as the second customer through, I naturally expected to get an iPhone 5. Instead I was told that I could only purchase one on a contract, and that outright purchases could only be made through the reservation process.
When I pointed out that this information was not supplied on the Apple website, I was given the predictable excuse that this was because of “overwhelming demand.” Naturally, I asked why Apple makes a promise on its website, but the Apple staffer tried to explain to me that “limited” could also mean that I could reasonable expect to find “none at all.” You have to question the wisdom of being so critically low on stock for what is a key product. It might help increase the perceived desireability of the product, but it also leaves Apple at the real risk of losing customers when there are plenty of attractive alternatives on the market.
Against the backdrop of my iPhone 5 saga, the home button on my third-generation iPad started to play up and become unresponsive at times. I booked it in at the Broadway Apple Store for a 12.40pm appointment a day ago so I could pop up there from my office during my lunch break. Apple will cancel an appointment if you are late, however, I arrived early at 12.32pm and was pointed to a spot to wait after checking in. At 1.00pm, 20 minutes after I was supposed to have been attended to I gave up after discovering that there were still people waiting in front of me to be served. From a casual count, I could see that there were at least three people waiting for each ‘Genius’ that was actually on hand to serve customers.
It was not quite the 45-minute Genius Bar waiting saga I had to endure about two years ago at the Sydney Apple Store when an Apple MacBook Pro trackpad failed on me. I wrote to the late great Steve Jobs about that episode. What prompted me to write directly to him about it was that Apple promises “Geniuses have extensive knowledge of our products…” While I waited on that occasion, two or three geniuses became free and could easily have seen that my trackpad was faulty. However, it turns out that they were only trained in iPhone support. In my letter to Steve I said that they weren’t really ‘Geniuses’ as promised, but more like ‘idiot savants’. I ended up getting a call from the Sydney Apple Store manager as a result, and not long after Apple instituted some changes to help address waiting times. Apparently, Apple still has some way to go on that front.
For all of Apple’s well-earned success, it has managed to achieve this despite the fact that they have had some high profile service and hardware-related failures in recent times. The iPhone 4, of course was plagued by a faulty antenna design, despite Apple’s claims to the contraryelectron. MobileMe had a disastrous roll out and was ultimately replaced by iCloud, which has had a patchy track record too, while it also removed service features. Recently I was one among over a million users who lost access to iCloud email in an outage that extended over 24 hours. This could explain why Apple again offered former MobileMe subscribers an additional 12 months on its upgraded storage plan for free. The iCloud team wrote to affected iCloud users acknowledging that such an outage was unacceptable.
Its social music sharing service Ping has flopped and been discontinued, and now a purple lens flare issue seems to be affecting the iPhone 5. And let’s not even get started on the new Apple Maps app; enough has been written about that, but it does typify what I perceive to be a serious problem at Apple. It is developing a reputation for over promising and under delivering on its services, its customer service, as well as its products as the many examples I have presented here testify to.
I have spent a good deal of money on Apple’s products over the years, even when Apple did not enjoy mass consumer appeal -- I actually miss that version of the company; it was still small enough to be responsive and was much less ‘corporate.’ I don’t feel that Apple ‘owes’ me anything for my loyalty, but I do believe that at the least I, or anyone, can expect is that it should make good on all the promises it makes. That it has apologized for its failures, or tried to rectify them on some level has been a positive. However, relying on my loyalty, or that of others, will not sustain Apple forever. For a company with over $100 billion in cash, and which makes substantial margins on most of its products, I expect better.
At the moment, the recent Apple failings outlined here do not appear to be hurting the company’s bottom line. Though, it has to be asked how long this can continue? As the competition continues to get closer and closer to Apple in terms of product design, content ecosystems and operating systems, potential Apple customers might start to take their business elsewhere. If Apple eventually stumbles, it may not be at the hands of its competition; it is quite possible that Apple could be responsible for its own undoing.
Underpromising and overdelivering would seem a better approach for Apple than its current tendency to overpromise and underdeliver – better to pleasantly surprise your customers than leave them open to potential disappointment. Tim Cook’s re-writing of its Maps app description downplaying its capabilities may force Apple into such a rethink.
I still don’t have an iPhone 5 and it doesn’t look like I will be getting one any time soon. The new Nokia, Samsung and HTC Windows Phone 8 smartphone are certainly worth a look and I await their arrival with keen interest – at least I won’t have a problem getting any one of them on release.
By Sanjiv Sathiah