Does Apple Bite?

Apple and the 'closed model'
Now, with the iPhone 3G introduction, you are seeing cracks in a "closed" execution model. We expect buggy software from our PCs; we expect an occasional blue screen of death on a laptop; we expect early models of new technologies to have bad battery life. But we don’t expect what is happening with the iPhone 3G to happen. (See Apple Issues iPhone 2.0.1 Firmware Update.)

As an owner of lots of Apple products, there was always an unstated contract. I bought Apple products primarily because it was a closed system. The design was great, the products worked, and although they were expensive, there was always an expectation and delivery of value. Sure, if you got an early version of a new Apple OS, you expected issues -- that was part of the unwritten contract between Apple and its dedicated customer base.

In this case, however, Apple is getting it terribly wrong. They did not deeply understand that people do not expect the same types of headaches from their mobile devices, especially since the universe of iPhone users are not typically users of Mac computers -- particularly outside of the United States!

If they were, Apple’s share of the desktop market would be much larger. In my opinion, Apple’s world view was that they would deliver a “closed” environment to their customers, and in return the customers expected that Apple would get things right, and definitely not use them as a large scale public beta test.

All this changed with the launch of the iPhone 3G. The unwritten contract has been violated. A few weeks after the iPhone 3G launch, my wife and I were having dinner with some friends. My friend Deb had just bought her iPhone 3G. She liked it, but when she was showing it around the dinner table, she described how the salesperson recommended that she not leave the phone in 3G mode, as the battery drain was too high. One of the first things the sales guy demonstrated was not the cool and unique features of the phone, but how to turn off 3G to make the phone usable.

We hear tons of issues with the App store, with buggy software getting out to users. We read about how Apple can kill applications at its discretion, as well as about performance issues. (See Steve Jobs Confirms Apple Can Kill Apps on iPhones and 3G iPhone Connection Complaints Arise.) We hear issues with Mobile Me, and Apple recently extended the free trial period for users.

What’s interesting to me is not the vocal grief that Apple is getting from the press and its customers, but the deafening silence from the operator community. If this had been a launch of a Nokia Corp. (NYSE: NOK) or Samsung Electronics Co. Ltd. (Korea: SEC) phone, the carrier outcry would be tremendous -- press releases would be issued.

When I headed marketing for Qualcomm’s phone group in the late 90s, I had to live through the carrier certification process many, many times. I witnessed what a lot of manufacturers had to go through if there was a goof. If there was something wrong, if something was known to impact the carrier’s customer base, a product launch would be pulled. If any handset vendor got through an operator’s certification process then had other problems in the field, device performance, interop, or application performance, there was hell to pay. The handset vendor would be flogged, both publicly and privately, and the punishment would be swift.

Short battery life, poor 3G performance, Apple service, problems with the Apps Store, lack of clarity around what sort of control that Apple maintains over the applications flow... It’s not pretty right now. And it surely isn't open.

My belief is that it could get worse before it gets better. (And as an Apple aficionado I’m sure it will get better. Remember time, money, and smart people in the tech world fix most things, and Apple has all of that.) So, why will it get worse? Where will it get worse? And how much worse will it get?

I don’t own the iPhone 3G yet. Although I have an iPod Touch as part of our iPod stable, I’ve downloaded apps from the Apps Store to the iPhone touch, and I’ve played with several 3G iPhones, I’m not a field engineer, so I’m just going to lay out some general cases for what I’ll call a fully fictitious “Handset X."

As I’m discussing “Handset X” on the next page, and not the Apple 3G iPhone, I’ll leave it to Apple to explain (or not) whether these issues are applicable to the iPhone 3G. However, 14 years at Qualcomm Inc. (Nasdaq: QCOM) taught me a bit about how things work in the phone world.

Page 3: The story of Handset X

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miar70 12/5/2012 | 3:33:48 PM
re: Does Apple Bite? As an Apple shareholder (full disclosure). I have been very happy with AAPL's ability to perform the illusion of being open yet maintaining one of the most closed and tightly controlled platforms ever. The marketing is a work of art :)

I have worked for a well known infrastructure and handset vendor for more than 15 years an you're absolutely right about developing 3G devices. I suspect that the carriers have taken a back seat when it comes to testing as AAPL has chosen to put it's brand in control and as a result it is the AAPL brand that is taking the hit on the device shortcomings, rather than the carriers. There are probably some very smug operators out there now saying quietly under their breath 'told you so', but no matter what, AAPL has changed the landscape of what a mobile device should be capable of and raised the bar in terms of style and usability.
Absolutely agree that an HSDPA enabled iTouch would be a huge seller, now if only they would make it possible via a plug-in or card slot of some description... oh right not likely, new iTouch for everyone please :)
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