Putting Profits Before People: Just How Much Bad News can Apple’s Brand Withstand?

The damaging news just keeps flowing out of Foxconn’s “employee barracks” in China, where Apple’s iconic products are made.

In August 2012, the Fair Labor Association released the results of an investigation it had conducted at Apple’s request after reports of employees rioting and committing suicide over excessive work hours, inadequate compensation and unsafe working conditions.

The FLA reported that Foxconn had addressed most of the problems regulators said must be fixed, including ergonomic breaks and equipment redesign to prevent repetitive stress injuries, cutting excessive overtime hours and updating safety and equipment-testing policies.

But new trouble at Foxconn is creating yet more bad publicity for the Taiwan-based manufacturer – and for Apple.

The Economic Policy Institute reported earlier this month that the FLA’s assessment of Foxconn’s progress was too “rosy,” that high demand for the much-hyped iPhone 5 has essentially undone what few improvements have been made and gave a sharp criticism of the most valuable company in history:

“The paramount issue remains whether Apple will ever choose to apply its legendary business prowess and spirit of innovation, and its enormous financial clout, to the goal of protecting the basic human rights of the people who make those products."

Ouch.

The news comes at a time when the gadget giant is dealing with several PR hits it has taken over the past few 

months.

• In early September 2012, during the run-up to the big announcement of the iPhone 5’s impending release, Forbes reported that Apple’s patent court battle with Samsung was drawing criticism even from its fans, many of whom felt Apple is filing frivolous patents and is afraid of Samsung’s competition.
• Shortly after that the Maps debacle that left many befuddled iOS 6 users “iLost” dominated tech media for several weeks.
• More recently, research firm Strategy Analytics released a report showing that iPhone owner loyalty is in decline, with 75% of Western European iPhone owners planning to buy their next phone from Apple, down from 88% last year. In the US, repeat purchase intentions have also declined since 2011, from 93% then to 88% now.
• On November 8, former Apple exec David Sobotta told CNet that Steve Jobs’ successor as CEO, Tim Cook, is a technological “lightweight.”

And now there’s the latest episode in the ongoing Foxconn saga. If human rights violations continue unchecked at Foxconn, it could mean a very serious hit for Apple notwithstanding the powerful halo effect I’ve written about that seems to protect the company’s reputation and bottom line.

So I am in full agreement with the sentiment the EPI investigators expressed in closing their report. If Apple were to use its huge economic and cultural clout to force Foxconn to truly improve conditions at its Chinese factories – and I mean improvements verifiable by independent investigators, not those acting at Apple’s behest – it would not only make worker’s lives better (the most important thing), it would have the side effect of being a great PR coup for the company.

Pushing to put people before profits could protect Apple’s halo and advance its once-untarnished reputation. Will the tech behemoth put aside shareholder pressure and have the guts to do it?  I don’t think Apple will, but in this case, I would love to be proven wrong.

What role do launch events play in a mobile device’s success?

The following article by Chantal Tode, Associate Editor of Mobile Marketer, originally appeared on Mobile Marketer on 10/23/12.

Apple is expected to launch the so-called iPad mini today at what will likely be a well-orchestrated event showcasing how the product impacts consumers’ lives. The company is the acknowledged expert at using such events to drum up excitement for its products although other manufacturers are increasingly copying the strategy.

Apple has nearly perfected the launch event, using them to drive anticipation and keep its name and the product in the news for months. More recently, the strategy has been adopted by Amazon, Samsung, Google, Nokia and Microsoft, among others, who are looking to drive product sales but have not yet perfected the strategy.

“Apple has been doing these events for many years – they were kind of a hallmark under Steve Jobs, who was a true impresario of these product introductions as theater,” said Noah Elkin, principal analyst at eMarketer, New York.

“Others have studied at the feet of the master and have begun to put on events of a similar caliber,” he said.

“The ones that we’ve seen in the past year from Amazon and Microsoft clearly read from a similar script in terms of how the product is being introduced, what the focus of the event has been and the similar cast of characters that appears at these events.”

The mobile experience

Apple’s events are successful for a variety of reasons, including that they focus on the mobile experience over the technology itself and they help build a feeling of community around the Apple brand.

The attraction of these events for manufacturers is that they can garner a lot of attention from analysts, the media and consumers and, hopefully, help drive sales.

For example, Samsung launched the Galaxy Note last year at the IFA in Berlin last year and sold 5 million units between the start of Q4 2011 and Q1 2012.

 Amazon held a launch event for the Kindle Fire HD in September

When well-executed, these events can play a key role in the success of a new product launch.

Some of the key characteristics of Apple’s events that can serve manufacturers well is dedicating a good amount of time to showing product details – more than is possible at a trade show – and bringing in guest speakers.

A key focus for Apple’s launch events is to focus on how a device will improve a consumer’s life over product specs.

“Other manufacturers are trying to follow Apple’s lead because they see how effective it is,” Mr. Elkin said. “Amazon at its recent Kindle Fire event listed relevant specs but really tried to emphasize its ecosystem of content, which is its key competitive advantage in the marketplace and probably the element that is most relevant and compelling for a consumer audience.”

Getting it right

Manufacturers are also following Apple’s lead when it comes to the script for these events and bringing on stage various members of the team who have been involved in some aspect of product development, who each have their own role in the event and who work well together.

For a successful launch event, it is also crucial to insure the presentation media are working perfectly and in sync.

“These things make for a great launch event – which not only garners attention for the product, it also boost the reputation of that company by making it look competent and efficient,” said Vanessa Horwell, chief visibility officer of ThinkInk PR, Miami Beach, FL. 

“Today’s tech bloggers and media are ruthless when it comes to imperfection or flaws,” she said. “Mobile companies should know this and must be prepared to deal with a media ‘assault’ if the launch of their product is premature.”

While manufacturers can reap many benefits from a big launch event, there are also some potential pitfalls.

For example, technical glitches during an event can undermine a brand’s attempt to present itself as a technology expert.

Companies can also run into trouble when they make claims that are not true.

For example, at an event in early September, Nokia showcased photos and a video that it said were captured by the brand-new Lumia 920 using its PureView camera.

However, bloggers quickly discovered that the video and photos were shot with other equipment. As a result, Nokia found itself forced to apologize and launch an internal probe to address the mishap.

“It is very difficult to conceal anything in today’s day and age,” eMarketer’s Mr. Elkin said. “Reporters and bloggers are going to turn the device inside out and are going to investigate every single claim about its superiority.

“In the case of Nokia, the images that were posted, which turned out not to have been shot with that particular smartphone camera, forced it to make an embarrassing retraction,” he said.

Maps mishap

In other cases, a feature talked up at launch event simply may not live up to expectations.

For example, at the recent launch event for the iPhone 5, Apple talked up its new Apple Maps, which is replacing Google Maps. When Apple Maps’ performance did not meet expectations, Apple CEO Tim Cook issued an apology.

“The one potential danger is that when you do one of these big launch events is that because you are bringing a lot of attention to your brand and the product, it sets the expectations of the audience at a very high level,” Mr. Elkin said. “If in the case the product fails to live up to expectations created at the launch event, it can put the brand in a very difficult position.”

Despite, the potential pitfalls, these launch events are likely to continue to proliferate because they can help a company make its executives seem more approachable.

The danger is to make sure the product represents a big enough advancement to warrant its own special event.

“It’s not easy or cheap to perfectly juggle all these elements and getting them to fall in the right place at the right time,” ThinkInk’s Ms. Horwell said. “Any part of this process going awry hurts the reputation of both product and company.

“And, of course, a company must make sure everything every function of the product – a complex process when you’re dealing with tech gadgets that have a thousand and one features – is absolutely ready for market,” she said.

The following article by Chantal Tode, Associate Editor of Mobile Marketer, originally appeared on Mobile Marketer on 10/23/12.

Attention Airlines and Airline Passengers: Muzzle Your Mobile And Keep Your Mouths Shut

Dear Airlines and Loud Mobile Phone Users,

On a recent flight home to Miami, I had the unpleasant experience of seeing the mobile phone future unfold in the seat right next to me. Suffice it to say, I didn’t like what I saw one bit, and even less what I heard. A thoroughly annoying git, who, for love nor money, would not put away his phone, despite complaints from his fellow passengers. Instead, he chose to pollute the cabin airwaves with his loud, inane jabber and nonsensical information – information that certainly could have been saved for a more appropriate location. Like his office. Or better still, underwater.

Since the dawn of mobile technology, much has changed. “Brick” phones that looked like, well, bricks, morphed into wallet-sized flip phones. And thanks to RIM’s now almost extinct Blackberry (and later Apple, Android and Windows), our phones have grown “smart.” The mobile web is ubiquitous and whether you’re deep underground in some subways in Tokyo, or standing atop Mount Everest Base Camp at 17,598 feet, chances are you’re never far from a reliable cellular signal.

But one thing has remained unchanged. When you board any aircraft, you are reminded by the flight attendants to “please turn off your cell phones and other electronic devices as we prepare for takeoff.” Minus a few stragglers, the din of human voices soon settles and the thrum of engine turbines powers up. Wrapped in an auditory cocoon that shuts out the world, passengers have passed their inflight boredom by watching movies, playing video games, fiddling with their mostly-dormant phones, reading books, getting buzzed, catching up on emails, dozing off, or maybe doing a little shopping via the inflight store.

But if the Federal Aviation Administration has its way, as it hinted at in August 2012, passengers may soon be able to use their mobile phones to make calls during the flight. Before that fateful day arrives, I wanted to go on record loud and speakerphone clear, and say that I think this is a poor decision.

A very, very, poor decision.  

In the name of progress, convenience and peace to all humankind, turning on mobile phone capabilities inflight will undoubtedly turn one of the modern world’s last bastions of relative quiet into a place of chattering, annoying, and like the flights themselves, nonstop conversations. Make no mistake, I’m not a Luddite on the ground. But can’t we all just go on in ignorant bliss believing that mass mobile phone use would crash planes?

Sadly, no.

While a recent article haply pointed out that since 2008, passengers on United Arab Emirates flights have made approximately 625,000 inflight mobile calls with only two official airline complaints, somehow I’m not buying that “official reports” are an honest measure of p’d off passengers. So, please, to my fellow flyers, I beg of you, when the time finally comes when five-hour flights allow five-hour calls, consider this heart-felt plea: muzzle your mobile and keep your mouths shut!

And to the airlines: please, please, please don’t do it.

Signed,

Luddite in the Sky

News Flash: Mobile is the Future! Is the Marketing World Keeping Up?

Last week Wal-Mart’s CEO Joel Anderson announced, with the proper captain-of-industry gravitas, that mobile is the future.

“I can't overstate how mobile is changing how we interact with our consumers,” he proclaimed at the 2012 Internet Retailer Conference and Exhibition in Chicago.

Why are still having this conversation when I, and a lot of agencies and brand marketers I know, have been saying this since 2005?

Let’s start with going back to 2007. That was the year that hundreds of thousands of Americans camped outside Apple stores and stood for hours in queues that wrapped around the block to part with up to $599 for the much-coveted “Jesus Phone” (I think we all know what insanely popular gadget I’m talking about).

In 2008 researchers at the Pew Internet and American Life Project released a report wherein tech leaders and analysts predicted that mobile devices will be the primary way most of us access the Internet by 2020. That mobile is the future hasn’t been news for a while, but Anderson’s quote made me wonder if marketers are truly doing enough to tap the enormous potential of these mobile devices that spend increasing amounts of time in our hands – and in front of our eyes.

Let’s take North America, for example. Last year, North American marketers spent $40.2 billion on marketing content as a whole. By comparison, they spent about $1.6 billion on mobile ads and marketing during the same year. That means mobile represents only a tiny sliver of the overall marketing budget pie – just over 4%.

When you consider that in the US alone 88% of adults have a mobile phone (46% of those devices are smartphones), you realize that the amount of money being allocated for mobile marketing just isn’t enough. It’s barely a drop in the bucket.

We’re fortunate to work with a number of companies who understand there’s an untapped goldmine in mobile marketing and that its potential can only grow considering the rates of smartphone and tablet adoption – and what they can do to connect and engage with consumers, and ultimately sell more stuff.

I understand the reluctance of the companies who are hesitant to allocate big budgets to any one channel, mobile being the least “tested.” But the world – and consumers – aren’t waiting around for them to dig up the willingness to make that leap. They are losing out on the ability to target consumers with relevant and timely messages delivered at moments of maximum influence.

So while Wal-Mart’s CEO may be a tad late to the party, I’m hoping that those words from the head of the world’s largest retailer will reassure gun-shy marketers enough for them to take some necessary risks.  Let’s see.

Two Weeks On, Apple Endures

Two weeks may not sound like a lot of time, but for a company that’s just lost one of the world’s most influential technological and social innovators, it is.

That’s why in the huge wake left by the passing of Steve Jobs, tech writers, bloggers and PR professionals, continue to hang on almost every word the company says, and look for signs, no matter how small, that suggest the company is foundering.

On Wednesday, 14 days after Jobs’ death, the naysayers may have found one.

For only the third time in nearly a decade, (cue the foreboding music) the financially conservative tech giant missed its quarterly earnings estimate – a fact that sent the stocks spiraling downwards by some 22 points before today’s Nasdaq opening. As of 10 o’clock this morning, Apple’s stock was down 5.4 percent.

I don’t know about you, but this latest sign of the purported apocalypse hasn’t caused any iPhone 4 or 4s, or any of my iOS devices to suddenly crash. (My Blackberry, however, is another story) Over the last few weeks, both before and after Steve Jobs’ death, I’ve written about Apple’s long-term vision, its ability to manage its message, and its resilience going forward. So lets set the record straight – a missed earnings call by any other company, like Goldman Sachs and Google, generates news, for sure, but few people start questioning the company’s future. Miss a few more earnings estimates, however, and legitimate concerns mount. Apple Q4 sales still rose 39 percent to $28.3 billion and the company ended its fiscal year with $108 billion in sales.

Only Apple has the bragging rights to call this a “poor performance.”

The Street writer, James Rogers, rightly points out three reasons why the bite into Apple’s profits won’t last: An already better-than-expected Q1 outlook, an expected uptick in iPhone 4s sales, offsetting sales declines in older models, and the staggering $81.6 billion the company has in on-hand cash.

Apple’s aim high and shoot low forecasting approach should serve as an important reminder for PR professionals. No matter how groundbreaking and dare we say media controlling Apple can sometimes be, the company often underestimates its projected performance to its own advantage. (Yesterday’s miss aside) Clients, especially young startups, run the risk of being overzealous when it comes to the type of messaging and marketing campaign they seek to launch. Reigning in those expectations sounds like a good idea to me.

Two weeks without Jobs and Apple’s message still bears fruit. And it will for a long time to come.

IPhone 4s-teve: There Was No App For That

The following article by Vanessa Horwell, Chief Visibility Officer of Thinkink, originally appeared on Marketing Daily on 10/12/11.

It’s unfortunate that for all the hype, “The Jesus Phone” -- or its latest upgrade -- couldn’t do more to help its creator.

Billed as the device that could almost turn water into wine (at least in app form), Apple’s muted unveiling of its iPhone 4s, and not the much-ballyhooed fifth-generation earlier, was met with a chorus of naysayers that a Jobs-less Apple, (a reference then only to his departure as CEO) might mean bad tidings ahead. Apple, it was said, in a rare fumble, mismanaged the hype express, failing to mitigate and control the Internet rumor mill.

In fact, so under-woven were supporters after the initial announcement that Apple stock tumbled an iOS-crashing $20 to $355 a share a day when both the Dow Jones and tech-heavy Nasdaq enjoyed 1.4% and 3% gains, respectively, before a robust recovery stopped the bleeding. Apple ended the trading day down some $2 or 0.6%.

To be sure, now that the technological shock has passed (the human one is just beginning), Apple’s electronic awe is flooding back. Model number aside, the specs are impressive: a new processor seven times faster than the iPhone 4, an 8-megapixel camera, better battery life, and an almost artificially intelligent talking personal assistant called Siri.

Some 48 hours late --, the time it nearly once took to download several DVDs to bulky desktop computers -- and we are stunned by how much has changed. Last Wednesday Steve Jobs, who had been battling pancreatic cancer, died. He was 56. Looking back to Tuesday, it's very likely some of Apple's less-than-shiny rollout was due in part to the behind-the-scenes building tragedy. The fact that would-be tech insiders, bloggers, journalists and PR leaders didn't report any of this -- clearly being kept out of the proverbial loop -- reinforces how shortsighted we may have been in Apple's negative critique.

Shame on us.

Rather, Apple’s performance over the last few days was message control at its finest. While we don’t know what time Jobs passed away, we do know the announcement came around 7:40 p.m. Eastern time -- some three hours after the close of business and nearly four after the close of the Nasdaq, where Apple’s stock is traded. Whether this was by chance or design, we’ll never know.

Unlike media outlets like CNN that had plastered Jobs’ picture across its homepage as it began its homage, Apple relied on its Jobs-honed, simple, sleek, approach. Apple’s homepage featured a black-and-white portrait of their leader, circular glasses rimming his eyes, a piercing look that jumps off the monitor (or smartphone screen) as he inquisitively pinches the salt and pepper scruff of his beard. Click on the image and visitors are brought to a concise, three-sentence tribute, along with a link to email one’s memories of Steve to the company.

At the end of the day, whether the iPhone 4s is derisively called the “Peter phone” and not the “Jesus phone” doesn’t much matter. In retrospect, CEO Tim Cook’s gray tenor Tuesday and iPhone4’s stuttering launch, was more appropriate than ever, and a clear sign that an Apple without Jobs, whether it wants to or not, must continue updating its message. Like Apple so often successfully does: The public was once again misdirected over what was truly unfolding.

Robert Mead-Green, in his TechRadar blog, rightly points out Cook’s southern drawl, his somewhat muted style, and his desire to share the mic and limelight with fellow Apple executives -- a far cry from the one-man-band hoopla that Jobs was famed for delivering. The point: Managing your message means updating it too. That’s exactly what they’re doing. Kudos to them.

Or try this analogy: Companies -- and ballplayers -- can’t always hit home runs, even when they want to leave the crowd whooping and hollering. Sometimes a well-placed bunt does just as well or better.

Apple’s “bunt” Tuesday and press redirection in no way suggests the tech giant is heading to the Minor League -- with or without Jobs. What’s more likely is that a quieter launch gives the company healthy breathing room from now until next summer (or sooner) when the iPhone 5 arrives.

Looking ahead, while uploading some perspective, Apple has had numerous product hits in the last decades, and few duds -- think Apple’s original “hockey puck” mouse or the $7,500 20^th anniversary Macintosh, released in 1997. Thanks to his commitment and total dedication to the company, Jobs’ ideas and inspirations, like spare parts for a classic car, are poised to keep Apple well stocked with his genius and vision for at least the next decade.

Until now, there has been a belief on tech blogs and in PR circles that whatever Apple touches turns to gold (I actually wrote that in another column last week). The iPhone 4s product launch and our metaphysical recall in no way diminish that mystique.

Jobs wasn’t Jesus. Nor are his phones. But the way Jobs and Apple handle its stardom in even the darkest of hours is almost religious.

When it comes to the tragic passing of a great visionary like Steve, and all the surgeries and efforts to save him, it’s too bad there wasn’t an app for that.

If given a little more time, perhaps he would have designed it.

The following article by Vanessa Horwell, Chief Visibility Officer of Thinkink, originally appeared on Marketing Daily on 10/12/11.

Why almost everything that Apple’s PR machine does turns to gold

The following article originally appeared on Mobile Marketer on October 3rd, 2011.

I started writing this article the morning after the media vultures started picking over Steve Jobs' resignation carcass. Why add more fuel to the Apple fire, I thought.

It has been “Apple this” and “Apple that” for longer than I care to remember. So I put down my notes.

Now, more than five weeks later, the world has not ended with Steve Job no longer at Apple’s helm. Its shares have not plummeted. The iPhone 5 will likely dominate 2011 holiday sales. And, in the process, Apple became the most valuable company on the stock market.

Life continues, and so I write.

Give an apple to the teacher, as the cliché goes, and you stand a better chance of getting in their good books.

But in a very real sense, for the better part of its existence, Apple has been the company that has given us the apple and kept the public relations spinmeisters and media industry singing the company’s praises – right down to its very core.

So how has Apple kept us plugged in?
Consider this: Twenty-five years ago tech was geek. Majorly geek.

Tech was for nerds who were shunned by the masses. They were the ones who rode bikes or skateboards when we bought our first shiny BMW. They discovered iPods while we were still ooohing at clunky MP3 players. We got hammered at parties while they wrote code wired on Mountain Dew.

Who’s laughing now?

They are, all the way to their tech-stock engorged portfolios. Today, tech is très, très chic, and much of that chic transformation goes to Apple.

It is not every day that a balding, lanky, somewhat geeky man can command the stage, holding a twinkling device that promises the universe but is only a phone/music player/tablet attain rock star status.

Yet, Steve Jobs and Apple have done just that, launching hit, after hit. As Kool and The Gang sang back in the ’80s, “He’s got the Midas Touch.”

In the PR trade, it is usually us who are the ones drawing the lines and making the rules – or we like to think so anyway.

In the case of Apple, however, we have been entranced – or is it enchanted? – right along with consumers. I cannot image doing our work without an iSomething to hand and it is hard to imagine a world without Apple.

The Apple R&D folks create what often kicks off long and gushing reviews of the company’s line of firsts, but it is the marketing department which really goes to town on the behind-the-scenes work – even though it goes out of its way to appear not to.

Not all about what’s under the tech hood
While we sell our well-honed communications skills – skills that are supposed to help our clients develop strategies that communicate their messages with pinpoint accuracy – Apple’s PR strategy has been the opposite. Obfuscate, block, and say nothing.

Mix that in with lots of hype, cult-like adoration and oodles of staging, and you have the only brand that is globally tolerated for its “magic of misdirection.” Any other brand would be excommunicated from the journalism world, but not Apple.

Take the iPhone 5 prototype “accident” from a few weeks ago. Left at a bar, the only prototype available. Just like that.

A similar watering hole mishap occurred last year with the iPhone 4.

Although Apple says nothing, the publicity rumor mill speeds away at over four megabits a second. Did Apple deliberately lose a new phone to generate buzz? Was it to lap Android in a sort of subtle way, “We’ve done it again, you suckers?”

Even if the iPhone 5’s loss was a five-alarm fire of genuine concern does not much matter. Nineteenth-century showman P.T. Barnum is often credited with the expression, “There’s no such thing as bad publicity.”

Mr. Jobs and Apple have polished that phrase to an all new sheen.

Apple, truly, has broken all conventions when it comes to media and PR strategy, from allegedly misleading the press – Electronic Games, 2007; the delayed Korea launch – to letting its fanatics have a free-for-all without saying much to deflate some, at times, far-fetched theories.

As someone with a vested professional interest in damage control, I have to admit that Apple is a PR treat to devour.

Instead of taming the media beast with a crisis strategy or even strategically controlled messaging, it has let the media beast feed on itself by strategically saying nothing at all.

Think about for that a couple of minutes.

For all the talk of CEOs and corporate communications teams stepping up and commenting the second a negative tweet or blog post appears, Apple has done the opposite. Its lack of response when it comes to conjecture only makes any actual responses all the more poignant.

Company that talks little but says much
Since Apple is regularly seen as observers in the melee, when it does speak, we listen.

Notable instances include the company’s denial of tracking iPhone and iPad users – which we know is a lie; we are tracked and yet we still do not much care – or when Steve Jobs' illness was finally clarified (way more serious than we thought).

Both instances could have been far more damaging for any other brand.

But Apple's product launch rumors and news kept us magically distracted.

In late April, we were talking about the tracking rumors. By mid-May, we were discussing a new product launch – a 180-degree turnaround in just 15 business days.

When we were talking about Mr. Jobs' health issues – for the third time – in January 2011, we were also knee-deep in iPad 2 news. His health, it seemed, played second fiddled to the life-changing promise of the iPad 2.

Humility: Great for philosophers, the religious, and repentant politicians during an election cycle; bad for Mr. Jobs and Apple.

Perhaps I am being too harsh: the media industry is human, after all, and we are suckers for strong personalities, bravado or otherwise.

In 1983, Apple, still a seedling of its present self, launched the ambitious Lisa computer.

With a staggering near-$10,000 price tag – $21,589 in today’s dollars – Mr. Jobs and Apple aggressively marketed their product.

Confidence may not have helped sell Lisa to a price-conscious consumer – Lisa was pretty much dead on arrival – but similar stances on a myriad of Apple products since have ultimately turned it from a computer company to an icon.

To continue reading this article, please click here to go to Mobile Marketer.