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iPhone – Turning Off Fans

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No company in modern corporate history has developed a more cultlike, devoted customer base than Apple. I’ve often cited them as an example of what other firms strive for, or should strive for, in bonding with their customers.

Now, Apple seems intent on turning the iPhone, which began as a public relations coup, into a PR disaster. Even worse, their corporate bullying isn’t targeting the competition, but rather their loyal customers. Apple has been cited as a shining star in just about every book on corporate branding; now they are rewriting branding strategy themselves. Here are the first two chapters in Apple’s guide on how to turn fans into sullen, disaffected owners:

Punish Your Most Loyal and Enthusiastic Customers. Apple’s first miscue was the sudden and dramatic $200 price drop in the iPhone just a couple of months after its introduction. People expect electronic gear to decline in price over time. I’m in the market for an AT&T Tilt or Verizon XV6800 (if only either of these companies would actually pull the trigger and introduce their product!), and I’m confident that within a year, I’ll see better deals being offered. What sets the Apple price move apart is the timing, not to mention the magnitude, of the drop. Had I bought an iPhone, I know I’d feel like I’d been played for a sucker. More specifically, I’d feel like Apple took advantage of my loyalty, maximizing their revenue by selling to iFans at an inflated price and then swiftly dropping the price to a level that would appeal to the less committed. Their coupon program meant to compensate those who bought iPhones before the price drop was widely viewed as inadequate. They are now being sued for their pricing change.

Act More Paranoid and Controlling than Microsoft. The Apple ethos is rebellion against corporate control, right? Think back to their stunning 1984 commercial. Throughout its existence, Apple has cultivated a counter-corporate image; indeed, that has probably been a major element in its cultlike appeal. The firm wavered under the “corporate” management of John Sculley, and was eventually rescued when everyone’s favorite buccaneer, Steve Jobs, returned to raise the Jolly Roger over Apple headquarters. Well, forget that image… just a few days ago, Apple upgraded their iPhone software in a manner that turned any phone that had been unlocked, and some that hadn’t as well, into non-functional “iBricks.” I’m sure users messing with their phones worried Apple, but was rendering those phones useless really the best strategy? Even Microsoft wouldn’t push out an upgrade that intentionally disabled computers running legally purchased copies of their software.

I’m surprised a new version of the 1984 commercial showing a disaffected iPhone owner hurling her iBrick through a massive image of Steve Jobs hasn’t surfaced on YouTube yet. I bet we see one soon. We did find this one:

Apple has always had an arrogant streak in its corporate culture, but when it turns this tendency against its own best customers, that’s a problem. Can Apple recover from these miscues? If they recognize what they are doing soon enough, they can. Apple users have been tolerant of past mistakes – bad products, weird policies, and the like. Apple has to realize, though, that fandom may be enduring but it isn’t permanent. Fans have to be cultivated and kept happy. We’ll wait to see what Apple’s next chapter looks like.

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