OMG! iPhone Leak Shows Apple Makes Mistakes Too

So, Gizmodo got its hands on a prototype of the Apple (AAPL) iPhone 4G. The story is convoluted, but the upshot is that an iPhone 4G left Apple's corporate headquarters and wound up in the hands of Gawker Media head Nick Denton, who paid $5,000 for it. So much for Apple's reputation as a flawless control freak and master of well-orchestrated media events. The incident offers an additional lesson: any company that uses celebrity as a marketing technique shouldn't be surprised when the paparazzi arrive. There is no such thing as complete control in marketing, and the more you rely on perfection, the more likely it is that you will eventually stumble.

No other tech company has the same cachet as Apple. Most corporations in the industry come across as one of three things: geeky, arrogant, or overly earnest. I don't mean it as a slam, as I grew up in the culture.

Apple is different. Steve Jobs branded the company with his personality and turned it into an unlikely cross between a New York hipster artist and tech fiend. In what other large computer company does the CEO dress in black mock turtlenecks and get listed as an inventor on more than 10 percent of the company's patents?

Apple discovered that appearance is as important as technology. The company brings to mind Zen and the Art of Motorcycle Maintenance, when Robert Pirsig writes of making some handlebar shims for a married couple who are artists. They were crestfallen when he mentioned that the shim stock came from a discarded beer can. At that moment, he realized that had he described the aluminum strips as specially machined and imported, they would have been delighted.

Apple manages its appearance so hard and successfully that it did something that no other technology business had done before: It turned itself into a celebrity. Apple fans -- and apologies in advance to those who don't fall into the fanboy category -- have the same reaction to the company as many people do to well-known celebrities, or even to cult entertainment brands like Star Trek. They want to feel part of the nurturing whole and yearn in particular for the leader -- whether Steve Jobs or Captain Kirk -- to love them.

Apple and Jobs made great use of this mechanism. Like other celebrities and their PR brigade, the company and its leader protect the image to keep the magnetic force flowing. That means Apple completely controls news about its plans, which is the reason management became obsessed with secrecy. That's why, in 2005, Apple sued a student blogger who was good at obtaining and reporting new product information in advance of its official release.

Secrecy is a necessary part of Apple's marketing. Apple is an old Hollywood studio that sells glamour and mystery as much as it is sells product. Let information out early, and someone might criticize a product before its introduction. Have details slip and you could set expectations that the product won't satisfy on launch, like the iPad not having a camera.

However, as happens with celebrities, the public's demand for information becomes virtually insatiable, hanging on every tidbit. That creates a market opportunity for organizations like The National Enquirer or Gawker -- which makes no bones about being in the gossip business -- to make money by satisfying the consumer need. Such organizations will pay people to get the juicy details, whether that means funding photographers with lenses as long as your leg to stake out someone in an unflattering setting or offering a reward for an advance look at an iPhone.

The story of how Denton and Gizmodo got the phone is amusing. An Apple software engineer was testing a unit that was concealed in a fake case to make it look like an (older) 3G model. He went to a bar to celebrate his birthday, and supposedly found himself a bit too happy and off guard. He left the phone, someone else found it, and that person then sold it to Denton. Jokes on the finder, as Denton had offered a bounty of up to $100,000 for an advance look at the iPad. You'd think that an iPhone 4G could have commanded at least $10,000 or $15,000.

Apple has indulged in cloak and dagger tactics to better hype itself and trade on celebrity. But the degree of control that requires is always an illusion. It was only a matter of time before someone at the company slipped, and because Apple emphasized secrecy to enhance celebrity, it actually created the atmosphere that make Gawker willing to pay for the news people craved. Apple's marketing strategy has been masterful and effective, but it's not perfect. After all, Steve Jobs is human too.