Apple’s Press Conference

I followed the Friday press conference via 3 live blogs (GDGT, Engadget and Wall Street Journal), since it wasn’t streamed live. What has been interesting is to watch the fall-out. There have been a few articles claiming Jobs never apologized to anyone (he did, at least twice, using the phrases “I’m sorry” and “I apologize” directly. No prevarication, no shading or sugar-coating the words). Others try to spin the conference as either condescending, or as Apple being completely open and honest. From what I read, Jobs and company were more open than they would normally be, and they seemed to present in a way that was a bit less polished. But they did hedge some of their statements and the data. Out of all of it, there were a couple of things that Apple did that stand out in my mind.

The first thing was the apologies. You rarely, if ever, hear the CEO of a company say “I’m sorry” or “I apologize” over a problem. Let’s face it, this seems to scare the investment community. It was entertaining to watch Apple’s stock price as it fluctuated in time with the press conference: dipping when Steve was apologizing or saying things like “we’re not perfect”, and then jumping up when showing similar problems in competing product or announcing free cases. As a sidenote, it was interesting that Steve didn’t apologize to his shareholders. It takes a brave (or foolish?) person to apologize to their customers but not to their owners. That Steve and company feel comfortable enough to do this can be a bit off-putting for some investors, but it also speaks to Apple’s willingness to do things for the long-term and not obsess about the latest or next quarter.

Another notable thing that occurred was Steve talking about, and showing video of, competing products. Normally, you won’t hear Apple say a word about other products (this is not unique to Apple, most companies never talk directly about competing product), let alone actually show them in action. Not only did Apple talk about their competitors, but they tried to paint them with the same tarnished brush as Apple has been hit with. This will, of course, be music to Apple supporters. But it also makes Apple a direct target for their competitors: up until now, companies like Nokia, HTC and RIM would be silent on the Apple antenna issue. Now, they have a reason to speak out, although it is defensively. The result is that Apple has now brought them into a conversation that these other companies would have otherwise stayed out of. Apple has basically forced them to join the fray, but in doing say, takes some of the focus off of Apple, even if only for a little while.

I didn’t expect this press conference to end the “antennagate” issue, but what Steve and his team have done is changed the focus and the conversation a bit. It isn’t as much about how the iPhone 4 has a problem (real or perceived), it’s now about how others are reacting to the demos by Apple showing similar “problems” in other product. For those venues that continue to try to beat the “iPhone 4 is broken” drum, Apple’s get-together can now make them sound shrill and desperate for a story. It’s hard to say “ah-hah, gotcha!” when the target says “yes, we have a problem, and your point is…”, admitting they know about the problem, and taking visible steps to try to address it. Apple did a bit of prevarication and hiding with the “we aren’t any worse than they other guys” statements. Saying they deserved more respect from the press struck me as pointless, verging on whining, because the press never gives respect to their subjects (it’s not technically their job). But having Steve say he was sorry, and “we’re going to give you a free case” to try to fix the problem (whether that fixes it or not) makes it harder to attack them. Apple hasn’t always done this, at least not this quickly (go back and look at how they’ve handled the first scratched iPod Nano issue, or the yellowing case issue for white iPhone 3 users. Apple wasn’t this forthcoming or contrite). That they did now is intriguing, and hopefully doesn’t mean they know they have a bigger problem waiting in the wings.

Despite a couple of missteps, overall the press conference was done well. By presenting data people can argue over, rather than squabbling about guesses, they change the tone of the conversation. By putting their competitors on the defensive by directly mentioning them, they shift the focus a bit. By apologizing, it makes them look “better” in the eyes of the general consumer. I don’t think it will quiet the noise, but it should have a positive effect on iPhone 4 sales, since most people will simply say “oh, they said they were sorry, it’s not that bad, and they’re giving me free stuff”. Overall, I think it helps Apple more than it hurts them, but either way, the iPhone 4 was going to continue to sell well. That being said, I wouldn’t be surprised to hear about an updated iPhone 4 sooner rather than later, though, and I expect most of the focus will be on revised antenna design.