Apple: From Hero to Zero

(MoneyWatch)  Apple may do little wrong from the view of the stock market, but in terms of strategy and tactics in a competitive industry, it has been pulling a series of blunders that must be putting smiles on the faces of CEOs at Microsoft, Google, RIM, Palm, Sony, and Motorola, just to mention a few companies.

There was a time when Apple could seem to do no wrong. Steve Jobs was back, consumers clamored for new stylish lines of products that redefined categories, and the money kept rolling in. As of late, the iPhone even seemed to offer the magic duality of a killer consumer product that happened to enroll a small army to push for an Apple resurgence in the enterprise.

But Apple seems to have a single-minded subconscious desire to undermine everything it has accomplished because, ironically, it wanted its goals too badly. Combine that with its penchant for cloak-and-dagger levels of secrecy and an unquenchable thirst for control, and you have a recipe for a business disaster that, at some point within the next five to seven years, will likely have people saying, "Where exactly did the company go wrong?"

I could go into the litany of covering up hardware overheating problems, the ridiculously cozy relationship with Google, the ridiculous contretemps with Google, or the lying to investors about the health of Steve Jobs, whose continued presence Apple itself points to as a critical issue for success. But, instead, let's look at what seems to be the company's latest lie, the pretense of a level of enterprise security support in iPhones, as my colleague Michael Hickins noted yesterday. Since 2008, the devices have acted as though they had a degree of encryption that, apparently, never existed until the 3GS model. As soon as the latest firmware upgrade hit, all the earlier units were locked out of Microsoft Exchange Server 2007, which only syncs with devices that have hardware encryption. This has the following ramifications:

• Apple has screwed everyone who didn't buy the upgrade and who depended on an iPhone for mobile computing.
• The company has effectively told every single enterprise CIO to disbelieve anything it says, even though it has been trying to position the iPhone as a business device.
• It has screwed every CIO that believed the company's marketing in the first place.
• Although unlikely, I will admit, it has at least potentially opened the door to critical data loss and theft at all companies allowing iPhones to sync with their Exchange servers.
• If any company did lose data, it has also opened itself to a dandy lawsuit that, win or lose, would force a good amount of embarrassing information out into the open.

For many Apple loyalists, the company can still do no wrong, but even among those with strong ties to the company's legacy there are signs of strain. As Jay Freeman puts it:

However, as time grew on, Apple's real stance on individual expression and "empowerment" in particular, became clear: they are staunchly against it. Apple's insistence on controlling the experience of their products sounds very similar to the "garden of pure ideology" expoused by the Big Brother in their own commercial.

This isn't a train wreck yet, but Apple management, from Jobs on down to anyone toeing the line, has the company pointed to a distant brick wall. I've seen far lesser amounts of hubris bring down one company after another over time. So have the CEOs of its competitors, and they must be factoring this into their plans even now.

Image via stock.xchng user sardinelly, site standard license.