Steve Jobs Attack on Rivals - Not 'Insanely Great' Strategy

Last Updated Oct 19, 2010 11:29 PM EDT

Steve Jobs Attacks CompetitorsSteve Jobs surprised everyone by showing up on Apple's quarterly earnings call yesterday. And while he said he "couldn't help dropping by for our first $20 billion quarter," that's not exactly why he "dropped by."

Jobs showed up on the call to swipe at Apple's competitors, particularly archrival Google and its Android operating system, which competes head-on with Apple's iPhone. Now, before every CEO in America starts hopping on their earnings calls and bashing their competitors, stop for a second and ask yourself, "Is that a good strategy?"

While I do think Jobs is a great leader, CEO, marketer, and speaker, I do think he makes some big mistakes in terms of what he chooses to say publicly. You might recall that I gave Jobs a big fat 'F' in crisis management for the way he handled the iPhone 4 reception issue. Likewise, I think yesterday's competitor bashing was a mistake.

We'll get to why in a minute, but first, here are some excerpts from a Wall Street Journal report on the Jobs rant on Apple's earnings call. First, he took a swipe at Research In Motion's Blackberry:

"We've now passed RIM and I don't see them catching up" -- it's going to be "a challenge for them to create a competitive platform and to convince developers to create apps for yet a third software platform."
Then came about a five-minute rant aimed at archrival Google, starting with a rhetorical question:
"Well what about Google?"

"Last week Eric [Schmidt, Google's CEO] reiterated they are activating 200,000 Android devices per day-- For comparison Apple has activated around 275,000 devices per day," said Jobs.

"Even if Google were right and the real issue is closed versus open, it's worthwhile to remember that open systems don't always win," Jobs said, adding that the real issue was "what's best for the customer, fragmented versus integrated."

First, I have to say that I agree with Jobs on all counts. RIM is the "odd man out," the number three smartphone maker in a two-company market, the Sprint to Verizon and AT&T, for example. Not a great competitive position to be in. And not only is it true that "open systems don't always win," they rarely do, historically speaking.

That said, here are three reasons why I think Jobs attacking his rivals was a bad strategy:

  1. There was essentially no benefit. Yes, he got some points across and we are all writing about them, but if he's right, and consumers only care about what's best for them, it's all immaterial. His competitive posturing will have no effect on product sales.
  2. What Jobs clearly broadcasted is that he's feeling pressure from Google Android and that's making him nervous. That extraordinary move, to show up on the earnings call essentially to bash Google, shows that he was reacting out of fear. This was a huge strategic error, IMO.
  3. Market leaders should always take the high road. If indeed Apple has the best product for consumers, the right strategy would have been to take the high road, to not show up on the earnings call at all and certainly not to show up and criticize competitors.
Bottom line: A market leader shouldn't publicly attack competitors; it weakens their position. Period. If you're the leader, let your salespeople fight your competitive battles in hand-to-hand combat in the trenches. Sure, when a CEO is asked a direct question, he should answer. But the sort of wholesale attack we saw from Jobs yesterday was so transparent it clearly broadcasted weakness and fear to the whole world. Not a good strategy.

Image courtesy CNET, Credit: Josh Lowensoh