Apple Deceiving Customers Is Bad Business [Updated]

Apple has a reputation for being focused on its customers. But given recent history, you might wonder whether the reputation should be for lying to customers. As Apple goes after a bigger market, it is going to face an enormous challenge of appealing over the long haul to people who are not inculcated in the partisan culture surrounding the company. If it doesn't change its ways, a few years down the line, people will start walking away.

As I and others have written before, there's no doubt that Apple is smart in its marketing. And as Lindsay Blakely noted, the company pulled off an especially effective negative advertising campaign in its attacks on Microsoft.

Microsoft had certainly left itself open with Vista, which managed to create an ocean of disapproving buzz on its own. But you have to wonder whether in the long run Apple is starting to set itself up for a fall. Yes, the company has a fiercely powerful brand built over decades by catering to an audience that became self-reinforcing. Apple would come out with products aimed at its audience, which then became more ever more biased toward the company. If you want evidence, write something less than flattering about Apple and see how quickly the faithful can line up to hurl invectives.

It's a business model that has undoubtedly worked in the past. But things change, and Apple's underlying strategy has been one of them. Instead of preaching to the choir, it has opened its arms, wanting to embrace all consumers with iPhones, iPods, and more. Perhaps the hope is that if the company can entice people lower-priced goods, it can eventually move them up to computers, continuing its market share growth in the PC market.

There's only one problem: Most of these new customers may be enthralled by the products, but they are not Apple loyalists. In other words, whether purchases are rational choices for feature sets and admittedly great user interfaces or are unconscious emotional bids to get some cool, they are opportunistic in nature. People are buying the products, not buying the brand.

The two are not exactly synonymous, and consumers outside the fold are most likely buying the products, not the company. That opens a huge vulnerability for Apple, because its business operations and corporate culture -- including the well-known inclinations toward arrogance and a need to control communications and its image -- work when it would have to work hard to alienate customers. But the cracks are showing because Apple seems willing to sacrifice them for its own image. For example, last week, Apple suggested on its own site that Mac users should run security software:

Apple goes further than just recommending the use of one scanner to advise the use of multiple tools. "Apple encourages the widespread use of multiple anti-virus utilities so that virus programmers have more than one application to circumvent, thus making the whole virus writing process more difficult," it said.

And then, in the same week, Apple took down the page:

"We have removed the KnowledgeBase article because it was old and inaccurate," Apple spokesperson Bill Evans said."The Mac is designed with built-in technologies that provide protection against malicious software and security threats right out of the box," he said. "However, since no system can be 100 percent immune from every threat, running antivirus software may offer additional protection."

• Hey, we've got security features and we update.
• Open source means more people beat on it and find problems, so if we screwed up, someone will figure it out.
• Our technologies screen downloads.
• We can encrypt your hard drive.
• We offer a VPN client that is compatible with "the most widely used VPN servers on the Internet," just in case your corporate IT department hasn't figured out that it needs to install a client on your mobile or home system.
• You don't have to share all your folders.
• "Helper applications" (whatever that means) run in sandboxes, so a hijack is isolated, and the sandboxing restricts what resources a program can use and what actions it can take. Of course, no hacker could possibly get around security software.

[UPDATE: Those who have emailed to say that I'm obviously clueless as to how "safe" the Mac inherently is clearly haven't looked at what security experts have said about Unix over the years -- and Apple itself provides confirmation by having to push out "critical" security fixes for "for several Mac OS libraries, the operating system kernel, and system utilities such as the BOM (Bill of Materials) archiving software," as well as the Adobe Flash player. Sandboxing, or isolating applications in their own operating space, only goes so far.]

Now look at another, even more egregious, example from last week. As Wired reported, Apple's response to a lawsuit from September alleging that Apple and AT&T were misleading in their advertising about improved online performance for the new generation of iPhones was telling:

"Plaintiff's claims, and those of the purported class, are barred by the fact that the alleged deceptive statements were such that no reasonable person in Plaintiff's position could have reasonably relied on or misunderstood Apple's statements as claims of fact," Apple said in its answer.

The loyalists have generally been willing to grant amnesty to Apple for any transgressions in the past. That isn't going to keep happening, because the company is dealing with an entirely different set of people who aren't afraid to make a lot of noise and to sue. Any time a company seeks new markets, it has to recreate its brand, because there is little to no experience with the company on the part of the buyers.

But the amount of customer dissatisfaction that is starting to build -- whether over advertising claims or a host of problems that have crept up with the iPhone -- is becoming part of the new brand. Unchanged, the direction it is taking will eventually take a toll. It may not be today or tomorrow or next week or next month. But over the next few years, Apple would face a crisis of consumer confidence. And blaming customers, or trying to cover up problems, will only make it worse.

Crossed fingers image via stock.xchng user CraigPJ, standard site license.