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What's Really Going On At Apple?

This article is more than 10 years old.

Tim Cook, Apple CEO

Is there a more observed, written about or argued over company than Apple?  I doubt it. Given Apple's level of success though why is the company increasingly associated with angst? Why is Apple coming in for criticism everyday now?

Aside from the fact that a lot of investors are sitting on tidy gains from long term Apple investments, the answer lies in how information and popularity work on the World Wide Web. It's not as straightforward as you think.

Apple is driven by public sentiment. So are all brands you might argue. True - so if you are the most successful brand, you are more driven by it.

The challenge for executives is that sentiment is increasingly blurred with true information. And Apple has been king of this cloudy territory for a long time.

Let me explain.

Until recently, Apple had good control of "the information layer" around mobile computing.

Two studies that I did in the early days of the iPhone illustrate the extent and importance of this.

In one, just as the Android ecosystem was gearing up for the release of the first Android phone, Apple was far and away more popular. In the three months around the first Android phone launch, online references to the iPhone were 12 times higher than its competitor, even though there was no Apple launch of any kind.

That lead has narrowed since, naturally. A second study, after Android began its charge, showed the gap had narrowed to 3:1 but that is strong by any standard.

And there was another large piece of evidence at the time. When the iPhone was young, global mobile leader Nokia could do absolutely nothing to prevent its advance at the expense of the Nokia brand. Apple didn't just sell iPhones, it annihilated Nokia's brand power, and in fact exposed Nokia as a company without a competitive brand strategy.

Apple forced Nokia into launching its app store, Ovi, at very short notice and Ovi was an unmitigated disaster when set alongside iTunes.

This information layer advantage has been coupled to strong positive sentiment around Apple. That's what's changing.

From then to now. There are five points that explain Apple's successes and problems that are entirely down to how the Web functions.

1. Apple was first to the information layer. Companies used to do a lot of marketing to create awareness. However, the information layer - that critical body of opinion that makes or breaks a product has always been important too. A CNET or a ZD Net are essential pieces of the corporate marketing mix but they represented what became known as pull marketing - real, informed opinion and not just hype. Their endorsement would pull customers to a company that got good reviews or mentions. Now every company wants to do PULL.

Today companies compete to get their people onto the platform at conferences, to create websites, to cultivate influencers. Apple, however, was one of the first to anticipate sentiment and pull marketing with its evangelist programs. From a very early stage it was able to blur the pull vs push boundary, particularly with is David and Goliath stand against IBM and Microsoft.

2. American ignorance of global mobile markets. Think back to 2008. The USA was a backwater for mobile. Ironically, that meant Nokia had no support in the US market, precisely where the global information layer for computing resides. Going back to 2007/8, American commentators had very little grasp of the global mobile market. For example, they had very little idea of scale or that big data was already integral to mobile, or the pace of teen adoption of messaging.

In fact European companies like Nokia and Vodafone dominated the field. But that turned out to be an advantage for Apple. When Apple refocused mobile around computing, American commentators were jut coming on board. And what they really, really knew was computing. They were a ready-made pull strategy for Apple.

3. The rise of write what they read. Over the lifespan of the iPhone the information layer has changed. No longer does it have the appearance of objectivity in the way a CNET tried to create for the WINTEL era. A new information dynamic is taking hold. Increasingly writers will write what they see people read about. Every writer needs an audience and it is useless to write on topics that have low appeal. That is a big booster for a company like Apple. Or it was. But now Apple is a magnet for writers with a wider variety of opinions, negative as well as positive.

4. The news worm worm began to turn. However, that system began to turn on Apple about six months back. I have covered it here and here. We are seeing the transformation of Apple's legacy evangelism into a free-for-all of praise and criticism, often at a very high pitched tone.

5. Can Tim Cook manage this? The big question is how a manager like Cook regains control of mood. Criticisms of Apple's performance are preposterous but they are in good supply. Do you just see this as the price of success, as Bill Gates did, or do you reignite evangelism in a new way? I think the latter and that Apple needs evangelism for a more open era.

That does not mean apologies,which Cook offered over MAPs. That apology had no positive impact on Apple sentiment. What it does mean is reaching back out to the Apple ecosystem, listening to it and showing some flexibility in direction as a result of feedback.

Apple's reputation is public property. It is parlayed among peers. And those peers look to Cook to be a good version of them.

In The Elastic Enterprise, Nick Vitalari and I suggested this was key to Jobs success in the final part of his career. He became less omnipotent and more open to other opinions. We called this sapient leadership - being first among equals. Being the peer that smart people look to. Cook needs to think on that.

Follow me on Twitter @haydn1701