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Steve Jobs' Biggest Mistake: Not Selling Activated iPhones

post #1 of 56
Thread Starter 
I believe that one critical mistake was made with the iPhone that has catastrophically affected Apple and it's iPhone user community. Steve Jobs' feet need to be held to the fire on this one:

Apple should have NEVER sold unactivated iPhones. By removing the industry-wide standard of the phone leaving the store activated to the carrier -- especially when they're depending on revenues from monthly service fees -- it essentially said to the world, "Hey, come hack this phone and screw us over financially!" Bad move. I know they wouldn't have sold quite so many phones at the beginning, but it would have locked so many more iPhone purchasers into the AT&T contract, kick-starting an automatic stream of money each month to both companies.

By selling unactivated iPhones, Steve Jobs traded good long-term PR for a simpler setup experience, all the while risking the product's financial success. Now what we have are people (rightly) complaining that a product that they "own" is being maliciously bricked. If all those phones had been activated in the first place, what would AT&T or Apple care if they're hacked, so long as the $$$ is flowing in their direction each month?

This is unprecedented. If I buy a product from a manufacturer and NEVER use it for its original and intended purpose, the sale is still complete. The completion of the sale is NOT a contract that I'm going to then use it for what the manufacturer wants me to. At no point does the manufacturer have the right to come back and destroy my product because I never used it the way they wanted me to. Sure, they don't have to support it if I break it, or even provide updates that won't potentially mess things up, but INTENTIONALLY breaking it after saying they weren't trying to intentionally break it is pathetic. I know it hasn't been proven that Apple intentionally bricked all these phones, but I can't see how the other updates that they did apply necessitated the update that bricks an unlocked iPhone.

Apple has a really dark cloud hanging over it where I'm concerned... and I don't even own an iPhone.

The way to fix it: Start selling those things activated. Don't let people walk out of the store until those terms of service and service contract are understood, signed, and sealed. Then whine if these subscribers violate the terms of service and brick their unlocked phones if the TOS allows for it.
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post #2 of 56
Don't you know how to look up stock prices? The high today was $157.41 - as far as I can tell, the highest it's ever been.

http://money.cnn.com/quote/quote.html?symb=AAPL

I'm not sure how you can characterize performance that leads to those kind of results as a "mistake".
post #3 of 56
Yes today's price is a new high---

The price is anticipating super-duper earnings and if the earnings disappoint, watch out below.
post #4 of 56
Quote:
Originally Posted by sammick View Post

Yes today's price is a new high---

The price is anticipating super-duper earnings and if the earnings disappoint, watch out below.

Ah, so then you agree that the money is on Jobs being successful with the Mac, the iPhone and the iPod.

Nope - I don't see too many business analysts feeling that a mistake has been made. I DO see several who don't even own an iPhone talking smack.

I've never enjoyed a phone as much as I do my iPhone.
post #5 of 56
Thread Starter 
Well, whether the short term issues work themselves out in the long term or not, Apple's got some work to do to right this ship from a public relations standpoint.

It's just unreasonable to expect that every customer is going to buy an unactivated phone and run home to get set up on AT&T. It's just plain shady to intentionally brick the phones of those who do when no terms of service are in place to allow you to do so.
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post #6 of 56
OK... all together now... Buy on the rumor, sell on the news... buy on the rumors, sell on the news... one more time! Buy on the rumors, sell on the news!

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #7 of 56
Thread Starter 
Quote:
Originally Posted by Taskiss View Post

Don't you know how to look up stock prices?

*snip*

I'm not sure how you can characterize performance that leads to those kind of results as a "mistake".

Those results may be good for stockholders, but a company is more than just how high its stock price is. If Apple keeps pissing off its customers then people will stop buying.
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post #8 of 56
Quote:
Originally Posted by CosmoNut View Post

Well, whether the short term issues work themselves out in the long term or not, Apple's got some work to do to right this ship from a public relations standpoint.

It's just unreasonable to expect that every customer is going to buy an unactivated phone and run home to get set up on AT&T. It's just plain shady to intentionally brick the phones of those who do.

Don't get me wrong - I'd love it if the phone was unlocked, if you could put it on any network you wanted, if it was unlocked and there was an SDK, etc.

I just don't confuse what I want with what the CEO of a company is responsible for - he must maximize the profits of the shareholders investment in the company. There's a lot of ways to do that, but in the end, that's the goal.

You and I buy Macs, we buy phones, but the shareholders invest in the company. They give Apple money and expect Apple to turn a profit. Jobs has done that. His biggest mistake... well, it's probably something like not being with his family enough or something like that, but it's sure not the direction he's charted for Apple.
post #9 of 56
So let me get this straight; 'fuck the customer'?
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post #10 of 56
Quote:
Originally Posted by Ireland View Post

So let me get this straight; 'fuck the customer'?

Well, if you want, but as CEO I'd think you'd want to please them to maximize the investment for the shareholders.

Apple has a very liberal return policy for the iPhone. You can return your iPhone to the original point of purchase within 14 days for a full refund, but there is a 10% restocking fee if the box has been opened. People that still have one that don't like it haven't been screwed, they're just stupid.
post #11 of 56
Bullshit libertarian crap like the stuff Taskiss is selling in this thread sucks--there's a lot more to any company than the stock price, and it is tiresome in the extreme to have people explaining that any criticism can be explained away by pointing dumbly at the share price and shrugging.
post #12 of 56
Quote:
Originally Posted by mrmister View Post

Bullshit libertarian crap like the stuff Taskiss is selling in this thread sucks--there's a lot more to any company than the stock price, and it is tiresome in the extreme to have people explaining that any criticism can be explained away by pointing dumbly at the share price and shrugging.

And you have what? Attitude? Brute force and ignorance?

I'm a businessman, not a libertarian. You're a .. what?

What do you have other than a bad attitude?
post #13 of 56
Quote:
Originally Posted by Taskiss View Post

Well, if you want, but as CEO I'd think you'd want to please them to maximize the investment for the shareholders.

Apple has a very liberal return policy for the iPhone. You can return your iPhone to the original point of purchase within 14 days for a full refund, but there is a 10% restocking fee if the box has been opened. People that still have one that don't like it haven't been screwed, they're just stupid.

This is Apple fanboy syndrome. Take the wax out of your ears Sunny Jim.
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post #14 of 56
Quote:
Originally Posted by Ireland View Post

This is Apple fanboy syndrome. Take the wax out of your ears Sunny Jim.

Actually he's one of the few talking sense. Pleasing the customer and maximizing profits are two sides of the same coin, as long as you're objective enough to look at customer as the 'majority of those buying' and not your own needs. The iPhone is only one product right now so it can't serve a hugely diverse customer base right now.

I have seen absolutely nothing factual that deals with how many 'customers' actually care about this issue or change their minds about the iPhone because of it. Apple is a GREAT hit generator these days for bloggers, etc. so any issue is going to be hit over and over in the new media. Apple does have to get a hold of the news cycle and damp out the wild oscillations but beyond that this is all caterwauling.

I want the phone to be opened up as much as the next guy. I've downgraded to 1.0.2 because of the lack of value in 1.1.1 FOR ME vs the 3rd party stuff, for the moment. That being said I just about bricked (not fully) my phone today with that third party stuff - the new App 'Services' which is supposed to allow you to turn off edge like 1.1.1. On my phone it didn't work. So there are very much tradeoffs. I managed to restore things to working order.

That said, what I've been trying to get all the winers to do is take a deep breath and organize their thoughts into a coherrent paragraph or two and put them here where, if there truly are a large number who want/need this and Apple actually hears from them (YOU) Apple might then truly realize where to maximize their profits. I've done my part and submitted my thoughts.

Cheers
post #15 of 56
physguy is totally right. Bitching about this situation won't help unless you and everybody else bitches to Apple. Apple responded pretty quickly to the price cut flap and they might to this too, but customers need to contact Apple not bloggers/reporters who just want site traffic.
post #16 of 56
The only indication to a company (at least for this aspect of the situation) that it's off track is the response from the consumer. The iPhone is an unqualified success which tells Apple that they're doing it right.

"Fan boys" are the ones who feel let down by Apple 'cause Steve isn't doing what they want. Fr whatever reason, they feel Apple owes them something. I have no idea why that is, unless they feel Apple should feel grateful for their support on some forum on the internet. Apple is a business. Buy Apple products, get their gratitude. Of course, they feel the gratitude is in the form of the insanely great products they provide, so when you buy, you and they are even.

At the moment, customers are buying Apple products in record numbers. Shareholders are happy, I'm sure the board of directors are happy, so Steve is happy. I don't see how whining about what the phone isn't amounts to a hill of beans.

If you'd really like to influence Jobs, start up a web site where people can voice their complaints and post their iPhone serial numbers. People that aren't buying aren't customers...they're potential customers, sure, but real customers are speaking louder at the moment, and they're speaking with their wallets. Whiners are ... well, just whiners.
post #17 of 56
Just what percentage of iPhones are you thinking have been unlocked. I'd guess less than 1%. On top of that Apple still sold those 1% an iPhone. If they'd forced activation, perhaps they would have lost that 1% of sales, perhaps not.

His "biggest mistake"?
Hyperbole much?
post #18 of 56
Quote:
Originally Posted by physguy View Post

That said, what I've been trying to get all the winers to do is take a deep breath and organize their thoughts into a coherrent paragraph or two and put them here where, if there truly are a large number who want/need this and Apple actually hears from them (YOU) Apple might then truly realize where to maximize their profits. I've done my part and submitted my thoughts.
Cheers

I have also done mine.... But what Apple needs to do more in my opinon is to post a list of what they plan to address based on the feedback provided to them through the link you provided, and also the time frame they are shooting for.

This would show the iPhone customers the feedback means something and also stop some of the winers on this board.
post #19 of 56
Fastest selling cell phone ever. Yeah, like it's actually effecting anything.
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post #20 of 56
Thread Starter 
Even though it's already sold over a million units and Apple's stock prices are pretty high, I really think this is taking a hit on Apple for the long term.

One thing I do wonder is this: What are the "terms of service" in the box of an unactivated iPhone? Does it say, "thou shalt not hacktivate this on another cell carrier or we'll brick your phone!"?

Americans are allowed to unlock their locked phones. Apple has damaged these people's property and gone against that nationwide permissible action. Not good, people.
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post #21 of 56
Quote:
Originally Posted by CosmoNut View Post

Even though it's already sold over a million units and Apple's stock prices are pretty high, I really think this is taking a hit on Apple for the long term.

Let me get this straight... what you're saying is:

"In spite of evidence that the iPhone is a success and the company is profiting from it's decisions by having stock prices at levels never before reached, I think it is a mistake".

Kinda makes it hard to defend a position when the evidence doesn't support it, doesn't it?
post #22 of 56
Quote:
Originally Posted by CosmoNut View Post

Even though it's already sold over a million units and Apple's stock prices are pretty high, I really think this is taking a hit on Apple for the long term.

One thing I do wonder is this: What are the "terms of service" in the box of an unactivated iPhone? Does it say, "thou shalt not hacktivate this on another cell carrier or we'll brick your phone!"?

Americans are allowed to unlock their locked phones. Apple has damaged these people's property and gone against that nationwide permissible action. Not good, people.

"Or we'll brick your phone"

Criticism of Apple is justified but "or we'll brick your phone" is complete bullshit and you should be ashamed for making such an argument.

Criticize Apple all you want for their update not working on hacked phones. That is justified. However, they don't force you to update so quit pretending to be a bigger victim than you actual are.
post #23 of 56
Apple made good sense partnering with ATT. Apple needed the knowledge of the orifice that they were about to penetrate. Once there they could make deals with other telcos.

In a few years I am sure, apple will sell unlocked phones. It will be when it suits them and not a moment before.
post #24 of 56
Yes but the contract with ATT runs for 5 years which is a loooong time
post #25 of 56
Quote:
Originally Posted by sammick View Post

Yes but the contract with ATT runs for 5 years which is a loooong time

They also sell the iphone outside the USA and deal with other firms then AT&T. The unlock market is going to be outside the US for Apple.
post #26 of 56
Thread Starter 
Quote:
Originally Posted by Taskiss View Post

Let me get this straight... what you're saying is:

"In spite of evidence that the iPhone is a success and the company is profiting from it's decisions by having stock prices at levels never before reached, I think it is a mistake".

Kinda makes it hard to defend a position when the evidence doesn't support it, doesn't it?

There's a difference between financial success now and financial success in the future. The difference? Public relations.

Apple has thoroughly f'ed themselves over with this one. And if 1.1.1 was the only mistake they've made in the past year then it'd be a whole different thing. But look how many decisions Apple's made lately that have pissed off more than one portion of their user base.

This was the straw that broke the camel's back. They made a deal with the devil so that iPhones can have Visual Voicemail when every other function of the phone would have worked on any GSM network with EDGE WORLDWIDE, they released a completely revamped and crippled version of iMovie, they kicked every early adopter in the rear by dropping the iPhone's price by 1/3 two months after its release, and then they intentionally tried to brick unlocked iPhones because some users decided not to activate their unactivated iPhones with the carrier that Apple teamed up with.

Apple's in the business to make money. Apple will make money when they sell products to their customers. Customers will buy products when they believe in the products being sold and the company selling them. Apple's customers are seriously starting to disbelieve as of Thursday, Sept. 27, 2007.

We have seen a lot of success on Apple's part, and if they don't shape up, the success we've seen up to now will not last. Chris Breen even thinks so.

To get back to my original point, Apple would have dodged all of this if they'd sold activated phones or just sold unlocked phones.
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post #27 of 56
Quote:
Originally Posted by CosmoNut View Post

There's a difference between financial success now and financial success in the future. The difference? Public relations.

The difference is not PR, it's achieving consumer satisfaction in the target demographic.

You're not the target demographic, obviously, while I am. I own an iPhone because of a whim of my wife to give me a gift (she knew I was interested in the device but also that I wasn't intending on purchasing one) and we consider the price of the phone and the contract a small subcategory of our discretionary income. We're the target Apple wanted to cater to. We're very happy with the device. It's worth every penny of what we paid for it.

The phone is what it is. It's a freaking PHONE! The sooner people accept that the device is exactly the product that Apple wants to deliver and NO, it's not the Newton II, it's not the Apple sub-notebook, it's not *fill in the blank with your particular dream device*, the sooner they'll reach maturity.
post #28 of 56
Thread Starter 
Quote:
Originally Posted by Taskiss View Post

You're not the target demographic, obviously, while I am. I own an iPhone because of a whim of my wife to give me a gift (she knew I was interested in the device but also that I wasn't intending on purchasing one) and we consider the price of the phone and the contract a small subcategory of our discretionary income.

Well aren't you lucky that you can drop $400 to $600 (depending on when you bought the phone) of your "discretionary income" to buy such a device. Us paycheck to paycheck folks quite honestly have lots of interest in the iPhone, too, however we can't just afford to stop feeding our kids or saving up for our baby that's on the way. I'm also not real interested in paying the fees for canceling my existing T-Mobile contract to gain the added benefit of Visual Voicemail.

The story would be different if Apple and AT&T subsidized the iPhone's cost through the service plan or sold an unlocked phone that I could use on T-Mobile. Since the companies are so greedy for money and profit that they can't do either, I guess I'll just have to wait a LONG time to get an iPhone and those companies will have to wait a LONG time to get my money.

I thought about replacing my existing Moto RAZR with an iPhone whenever the RAZR dies and save up between now and then. All I'd need is to unlock the iPhone and I'd be good to go. But no, Apple will have none of that and will insist on bricking MY equipment if I so much as dare install an update.

Oh, and if it's just a phone, I guess my RAZR is working just great for me and I'd have no reason to ever buy an iPhone and fill Apple and AT&T's coffers. Maybe I'll find an unlocked RAZR 2 to replace this one. Thanks for helping me on my decision.
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post #29 of 56
Quote:
Originally Posted by CosmoNut View Post

Thanks for helping me on my decision.

You're welcome.
post #30 of 56
Quote:
Originally Posted by mrmister View Post

... it is tiresome in the extreme to have people explaining that any criticism can be explained away by pointing dumbly at the share price and shrugging.

Thats right... there's more going on here than the regular buying/selling on rumors and news. Its emotional. Evidence of that is how AAPL rises even when there have been no new rumors in weeks. People buy/sell in volumes large enough to move the market in anticipation of rumors leaking!

Quote:
Originally Posted by Taskiss View Post

You're not the target demographic, obviously, while I am... We're the target Apple wanted to cater to. We're very happy with the device. It's worth every penny of what we paid for it.

You are a sheep. Thats so ridiculous I just vomited in my mouth. So... if BMW decided that they would only allow you to put BP gasoline in their car (otherwise they would remotely disable the starter), and you didn't agree to that stipulation, you would be OK because you have a crapload of discretionary income and you're the 'target audience'?

F*&k that, my friend. Its not about target audience. And its not about allowing people to hack their phones. Its about doing what's right. Bricking a hacked phone is not right, because when you buy an iPhone, there is no explicit agreement to sign an AT&T contract. And its ridiculous that you are criticizing someone for bringing up an extremely valid point and instead defending Apple, which by the way, doesn't need your defense.

CosmoNut is right, and Chris Breen is right. The little stuff Apple does to piss off customers (even a small portion of them) will eventually add up. I'm personally not ready to say 'screw apple' at this point. I've been a fan and user for too long for that. But i will say that they better stop screwing around with their base supporters and start responding to criticism now before it gets out of hand.
post #31 of 56
Quote:
Yes but the contract with ATT runs for 5 years which is a loooong time

I'm dubious of this five year lock. Even if its true I'm sure Apple has a back door out of it. Apple hasn't partnered with ATT as much as using them.

Quote:
it is tiresome in the extreme to have people explaining that any criticism can be explained away by pointing dumbly at the share price and shrugging.

Profit and stock price are a very good indicator that a companies strategy is working. Its a really good indicator if the stock mostly goes up and only dips. Their will always be a dip.

Quote:
You are a sheep. Thats so ridiculous I just vomited in my mouth

You are a sheep because you bought a product fully understanding its capability and limitation and are happy with it?

Not a sheep is a person who bought a product fully understanding its capabilities and limitations but complains because they want it to do something else?

Quote:
Its about doing what's right. Bricking a hacked phone is not right,

Apple doesn't just brick your phone. You download unsupported software at your own risk.

Quote:
because when you buy an iPhone, there is no explicit agreement to sign an AT&T contract.

Yes there is.

Quote:
The little stuff Apple does to piss off customers (even a small portion of them) will eventually add up

These people are pissed off simply because Apple won't do what they want it to do.
post #32 of 56
Quote:
Originally Posted by TenoBell View Post

Profit and stock price are a very good indicator that a companies strategy is working. Its a really good indicator if the stock mostly goes up and only dips. Their will always be a dip.

Tell that to the former Enron and Tyco employees and shareholders.
post #33 of 56
Quote:
Originally Posted by bg_nyc View Post

You are a sheep. Thats so ridiculous I just vomited in my mouth.

You sweet talker! I bet you get all the girls!

You and Heny Woodward should get together. I think you two have a lot in common.
post #34 of 56
Quote:
Originally Posted by Taskiss View Post

You sweet talker! I bet you get all the girls!

Whatever, Mr. 'I'm the iPhone Target Demographic'. That comment alone reeks of privilege. How about this: Grab some of your discretionary income, drive your wife's bimmer to the local Apple store where she bought your iphone, and buy a clue. Its already been pointed out that you seriously lack one.

All who are willing should follow the advice of physguy and post their complaints / suggestions on the apple discussion boards, no matter how small. I have already done so regarding that keypad-less imac wireless keyboard for example. I think Jobs will listen eventually.
post #35 of 56
Quote:
Originally Posted by bg_nyc View Post

I think Jobs will listen eventually.

With the message being delivered as smoothly as you deliver it, I can't see how you can fail to impress.

I bet that in addition to getting all the girls, you have a loyal following of intellectuals who want to be you when they grow up.

You should throw up in your mouth for them. I bet they love that!
post #36 of 56
Quote:
Originally Posted by Taskiss View Post

With the message being delivered as smoothly as you deliver it, I can't see how you can fail to impress.

I bet that in addition to getting all the girls, you have a loyal following of intellectuals who want to be you when they grow up.

You should throw up in your mouth for them. I bet they love that!

My Goodness!!! Is that all you have to say?

Ok then... I admit I have a potty mouth. You win! But I bet the things going in your mouth are alot nastier than the things coming out of mine.

Time out for me! Can we be friends now, Taskiss?
post #37 of 56
Quote:
Tell that to the former Enron and Tyco employees and shareholders.

Enron and Tyco are extreme and unusual circumstances of abusing the system. Those examples are not the norm and Apple certainly is not in that situation.
post #38 of 56
Quote:
Originally Posted by TenoBell View Post

Enron and Tyco are extreme and unusual circumstances of abusing the system. Those examples are not the norm and Apple certainly is not in that situation.

As you said, "Profit and stock price are a very good indicator that a companies strategy is working". Had Enron and Tyco used legal accounting practices the stock would have been a true reflection of the worth of the companies.
post #39 of 56
Quote:
Originally Posted by TenoBell View Post

Enron and Tyco are extreme and unusual circumstances of abusing the system. Those examples are not the norm and Apple certainly is not in that situation.

Enron and Tyco are examples of how the market had imperfect information and as soon as accurate information was released, the market corrected and the share price dropped 95% in a matter of weeks. The lesson there, and I think the point of some earlier posts, is that the market does not always have all the information required to properly value a given stock at any given time.

I'm not saying that AAPL should be 10% lower than current. I'm saying that actions that Jobs takes now may have a negative effect on future earnings, and these actions are not accurately reflected in the stock price. AAPL survived for many years because of diehard supporters. Now, maybe some of those supporters want the iphone but not an AT&T contract. OK... make it difficult to hack the phone. Release an update to nullify hacks. Put warnings up, threaten owners of hacked iphones. Even brick hacked phones. But that wont help Apple get their share of the monthly usage fees. If Jobs wants to guarantee the income stream, he needs to sell them with 2-year AT&T contracts.

People will not stop hacking. The only reasonable outcome is that Apple stops trying to stop them. Otherwise this will be in headlines for the next 5 years, leading to a PR mess for Jobs, and eventually lower sales as their public image weakens.
post #40 of 56
Quote:
Originally Posted by CosmoNut View Post

and then they intentionally tried to brick unlocked iPhones because some users decided not to activate their unactivated iPhones with the carrier that Apple teamed up with.

I don't care what you say. It says it in your terms of use and if you don't like it don't buy it. It's doing fine regardless. And AFAIAC If you violate your terms your on your own. Apple didn't sell this product with any SDK available because it was too much work for them to start supporting every developer from here to china's software and applications with this being their first run at a telephone. Some idiot decides to start soldering inside their iPhone and you think Apple needs to put their development team behind to support this idiots hack or something? Pull your fucking head out of your ass. They supported their software and not everybbodys fucked up hack. It's also their job to try and stop people from ripping off their partners in this. And furthermore, Apple gave advanced warning for those people to remove their hacks before the update. It's their own fault they decided to tempt fate.
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