Report details Apple's unusual veil of secrecy
With Apple again failing to advise shareholders that chief executive Steve Jobs underwent major surgery, the New York Times has published a profile of the company's unparalleled aura of secrecy, which stems from products to personnel and everything in between.
The newspaper cited Regis McKenna, a marketing veteran who advised Apple on its approach to dealing with the media back in the 80s, as saying the company's tight-lipped culture began to take shape in earnest around the release of the original Macintosh back in 1984.
"It really started around trying to keep the surprise aspect to product launches, which can have a lot of power," he said, noting that rivals like Microsoft and Sony were all too familiar with plans for the first Mac long before chief executive Steve Jobs pulled back the black cloth.
These days, Apple employees working on secret projects must "pass through a maze of security doors, swiping their badges again and again and finally entering a numeric code to reach their offices," a former employee who recently worked in one of these areas told the Times.
Once inside these top-secret areas, employees are often monitored by surveillance cameras as they work. And those testing the most sensitive projects are instructed "to cover up devices with black cloaks when they are working on them, and turn on a red warning light when devices are unmasked so that everyone knows to be extra-careful."
These measures often result in employees learning about new Apple products for the first time alongside the general public, like former systems engineer Edward Eigerman, who along with his co-workers, had no clue the company was about reinvent the music industry with the iPod until the day it launched.
"No one that I worked with saw that coming," he said.
According to the Times, Eigerman was fired from Apple four years ago for his role in an incident that saw one of his colleagues leak a pre-release copy of some unannounced software product to an Apple business customer as a favor. He notes that the company actively attempts to sniff out leakers and terminate their employment.
Apple marketing chief Phil Schiller is said to be among the members of Apple's top brass who play an integral role in helping to track down employees who disclose advance product information to members of the press. At times, it's reported, he has held internal product briefings in which he's disseminated inaccurate details of an upcoming product's prices or features, then attempts to track down the source of news reports that print the incorrect information.
The Times even recalls a widely publicized case five years ago in which Apple attempted to subpoenaed AppleInsider's Kasper Jade and the PowerPage's Jason O'Grady to force them to identify sources who provided accurate details of an unreleased hardware product code-named Asteroid. The journalists refused to cooperate and instead enlisted the services of the Electronic Frontier Foundation as their counsel.
Eventually, the case went to court with Apple arguing that online journalists shouldn't be afforded the same protections as print journalists. A three-judge panel in the California Court of Appeals ultimately sided unanimously in favor Jade and O'Grady, ruling that they were indeed entitled to the same protections as conventional reporters and would not have to identify their sources. During the proceedings, the court made it clear to Apple that it had no grounds to railroad online reporters into doing their dirty work of uncovering leakers.
Apple declined to appeal and EFF later sued the company for attorney's fees. The court, in an effort to deter Apple from filing future cases of little merit, awarded EFF more than two times the attorney's fees it had asked for, which resulted in Apple paying a $700,000 lump sum that went back into the firm to help defend others who may unjustly come under the heavy hand of big corporations.
For those interested, the development of Asteroid (pictured above) -- a FireWire jam box Apple intended to market alongside its Garage Band software -- was later terminated due to "poor initial execution," according to a person familiar with the matter.
Apple now employs alternative measures in its attempts to keep product plans secret, such as filtering out leakers internally through an in-house information securities division or intentionally misleading Wall Street analysts who, like journalists, attempt to predict the company's next moves in research notes to their paying clients.
Gene Munster, an analyst for Piper Jaffray frequently cited by AppleInsider, told the Times that he often "jokes with other colleagues covering the company about how Apple routinely 'jams the frequencies,' or gives them misinformation to deter them for zeroing in on details of future products or directions it hopes to keep confidential. For example, Munster said that four years ago he was told flat out by an Apple executive that the company saw no interest in developing a budget iPod that lacked a display screen. A few months later, the iPod shuffle was introduced at Macworld Expo.
But Apple's veil of secrecy covers more than just products. It extends to the company's executives, a matter which is now coming under increased scrutiny given recent reports that Steve Jobs underwent a second major surgery without disclosing such information to shareholders who believe he's vital to the continued success of the company and the strength of its share price.
At issue is whether Apple legally sidestepped the responsibility of having to disclose Jobs' recent liver transplant by placing him on leave and shifting the day-to-day responsibilities to chief operating officer Tim Cook.
Some governance experts cited by the Times say that while this may indeed by the case, the fact that Jobs required major surgery such as a liver transplant "now makes one of Apples assertions from January that Mr. Jobs was suffering only from a hormonal imbalance seem like a deliberate mistruth, unless Mr. Jobss health condition suddenly deteriorated."
"Of course, no one knows enough to say definitively," the Times said.
The newspaper cited Regis McKenna, a marketing veteran who advised Apple on its approach to dealing with the media back in the 80s, as saying the company's tight-lipped culture began to take shape in earnest around the release of the original Macintosh back in 1984.
"It really started around trying to keep the surprise aspect to product launches, which can have a lot of power," he said, noting that rivals like Microsoft and Sony were all too familiar with plans for the first Mac long before chief executive Steve Jobs pulled back the black cloth.
These days, Apple employees working on secret projects must "pass through a maze of security doors, swiping their badges again and again and finally entering a numeric code to reach their offices," a former employee who recently worked in one of these areas told the Times.
Once inside these top-secret areas, employees are often monitored by surveillance cameras as they work. And those testing the most sensitive projects are instructed "to cover up devices with black cloaks when they are working on them, and turn on a red warning light when devices are unmasked so that everyone knows to be extra-careful."
These measures often result in employees learning about new Apple products for the first time alongside the general public, like former systems engineer Edward Eigerman, who along with his co-workers, had no clue the company was about reinvent the music industry with the iPod until the day it launched.
"No one that I worked with saw that coming," he said.
According to the Times, Eigerman was fired from Apple four years ago for his role in an incident that saw one of his colleagues leak a pre-release copy of some unannounced software product to an Apple business customer as a favor. He notes that the company actively attempts to sniff out leakers and terminate their employment.
Apple marketing chief Phil Schiller is said to be among the members of Apple's top brass who play an integral role in helping to track down employees who disclose advance product information to members of the press. At times, it's reported, he has held internal product briefings in which he's disseminated inaccurate details of an upcoming product's prices or features, then attempts to track down the source of news reports that print the incorrect information.
The Times even recalls a widely publicized case five years ago in which Apple attempted to subpoenaed AppleInsider's Kasper Jade and the PowerPage's Jason O'Grady to force them to identify sources who provided accurate details of an unreleased hardware product code-named Asteroid. The journalists refused to cooperate and instead enlisted the services of the Electronic Frontier Foundation as their counsel.
Eventually, the case went to court with Apple arguing that online journalists shouldn't be afforded the same protections as print journalists. A three-judge panel in the California Court of Appeals ultimately sided unanimously in favor Jade and O'Grady, ruling that they were indeed entitled to the same protections as conventional reporters and would not have to identify their sources. During the proceedings, the court made it clear to Apple that it had no grounds to railroad online reporters into doing their dirty work of uncovering leakers.
Apple declined to appeal and EFF later sued the company for attorney's fees. The court, in an effort to deter Apple from filing future cases of little merit, awarded EFF more than two times the attorney's fees it had asked for, which resulted in Apple paying a $700,000 lump sum that went back into the firm to help defend others who may unjustly come under the heavy hand of big corporations.
For those interested, the development of Asteroid (pictured above) -- a FireWire jam box Apple intended to market alongside its Garage Band software -- was later terminated due to "poor initial execution," according to a person familiar with the matter.
Apple now employs alternative measures in its attempts to keep product plans secret, such as filtering out leakers internally through an in-house information securities division or intentionally misleading Wall Street analysts who, like journalists, attempt to predict the company's next moves in research notes to their paying clients.
Gene Munster, an analyst for Piper Jaffray frequently cited by AppleInsider, told the Times that he often "jokes with other colleagues covering the company about how Apple routinely 'jams the frequencies,' or gives them misinformation to deter them for zeroing in on details of future products or directions it hopes to keep confidential. For example, Munster said that four years ago he was told flat out by an Apple executive that the company saw no interest in developing a budget iPod that lacked a display screen. A few months later, the iPod shuffle was introduced at Macworld Expo.
But Apple's veil of secrecy covers more than just products. It extends to the company's executives, a matter which is now coming under increased scrutiny given recent reports that Steve Jobs underwent a second major surgery without disclosing such information to shareholders who believe he's vital to the continued success of the company and the strength of its share price.
At issue is whether Apple legally sidestepped the responsibility of having to disclose Jobs' recent liver transplant by placing him on leave and shifting the day-to-day responsibilities to chief operating officer Tim Cook.
Some governance experts cited by the Times say that while this may indeed by the case, the fact that Jobs required major surgery such as a liver transplant "now makes one of Apples assertions from January that Mr. Jobs was suffering only from a hormonal imbalance seem like a deliberate mistruth, unless Mr. Jobss health condition suddenly deteriorated."
"Of course, no one knows enough to say definitively," the Times said.
Comments
Apple just takes this to an extreme and is more marketing savy than MS
everyone copies everyone, been like this for thousands of years. windows has copied Apple and the iPhone has features originally lifted from PDA's that i've seen 10 years ago. they are just implemented better. it used to piss me off so much that mobile IE of all apps used to not shut down when i told it to on my iPaq and my wife's Axim that we had almost 10 years ago. those were the days, AvantGo was the bomb
Some governance experts cited by the Times say that while this may indeed by the case, the fact that Jobs required major surgery such as a liver transplant "now makes one of Apple?s assertions from January ? that Mr. Jobs was suffering only from a hormonal imbalance ? seem like a deliberate mistruth, unless Mr. Jobs?s health condition suddenly deteriorated."
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[ View this article at AppleInsider.com ]
I was disappointed to read this in the NY Times, and even more here in AI. Please, somebody correct me if I'm wrong, but my recollection is that first, Apple said Jobs' weight loss was due to a "hormone imbalance". Then, a few weeks later, they elaborated only a tiny bit and said the problem was "more complex" (than the hormone imbalance). I have no reason to believe that when they said "hormone imbalance" that they knew it was more complex. That sort of confusion followed by more illumination is common for medical problems.
When they realized the problem was more serious, my attitude was that "more complex" was all the detail I needed. At the time I realized it might mean metastasized cancer or something equally serious. Apple also told us it would require six months leave of absence, so it was obviously serious. They told us the truth at the high level, but they didn't tell us any low level details, which we never needed.
... the fact that Jobs required major surgery such as a liver transplant "now makes one of Apple’s assertions from January — that Mr. Jobs was suffering only from a hormonal imbalance — seem like a deliberate mistruth, unless Mr. Jobs’s health condition suddenly deteriorated."...
I think this part is inaccurate. It's already been pointed out by some medical professionals that the liver transplant is one way of treating the hormonal after affects of the whipple procedure he had done. It's another misdirection but it's not technically a mistruth.
Apple may be crazy, but they are not dumb.
Edit: and what delreyjones says also. (probably I should have read the thread before commenting)
The advantages far outweigh the costs.
And as for Steve Jobs' health, Apple is not required by law to disclose sweet f**k all to anyone. Those who are critical of Apple about this are either morally reprehensible themselves or just plain stupid.
It would be boring if they lay down their product roadmap like many other companies do.
Thats just too far out. I don't believe that at all.
The reporters are obviously ticked-off that Apple doesn't spoon-feed them.
And those testing the most sensitive projects are instructed "to cover up devices with black cloaks when they are working on them, and turn on a red warning light when devices are unmasked so that everyone knows to be extra-careful."
Thats just too far out. I don't believe that at all.
It would make sense if it was a red light *outside* the lab similar to what is used on a sound stage. The worst case scenario for something like this is a person walking through the door while the product is uncovered and a red light of that type would be an excellent indicator.
Anyone notice any suspicious looking light fixtures by doorways in those pictures that were released of Jonny Ive's lab?
And those testing the most sensitive projects are instructed "to cover up devices with black cloaks when they are working on them, and turn on a red warning light when devices are unmasked so that everyone knows to be extra-careful."
Thats just too far out. I don't believe that at all.
I can attest that this is true.
K
This "veil of secrecy" at Apple has proven to be remarkably effective, particularly with respect to product development and marketing.
That is exactly right. Apple plays us all like Pavlov's dogs, and makes billions off of the free buzz and advertising. Money couldn't buy the kind of publicity that Apple generates with its products, esp. product launches.
People also don't realize that this is all closely related to reasons why we don't see thriving fan sites named "MicrosoftSecret" or "DellInsider" or "HPRumors" or "ThinkSony." The kind of ecosystem Apple has around it, exemplified by forums like these, is priceless.
They gotta do, what they gotta do.....ya know.
I was disappointed to read this in the NY Times, and even more here in AI. Please, somebody correct me if I'm wrong, but my recollection is that first, Apple said Jobs' weight loss was due to a "hormone imbalance". Then, a few weeks later, they elaborated only a tiny bit and said the problem was "more complex" (than the hormone imbalance). I have no reason to believe that when they said "hormone imbalance" that they knew it was more complex.
there are three issues at play here.
1. Steve Jobs is a Cancer survivor. In particular a very harsh form that can reck havoc on the body for years to come in ways not always predictable. At the time they made that statement yes he probably was suffering an imbalance which was affecting his weight etc. So they told the truth. what might have happened later (if the transplant tales are even true) is that he went on leave to deal with it and deal with the stress the press was putting on him and discovered the cause of the imbalance.
2. Steve Jobs is not the end all and be all of Apple. there are other brains at play. this misbelief is part of why he's not the only face at the Keynotes anymore. To try to show the world that there's more chefs in the kitchen. He might be the guy that wrote the recipes but he's not a one man show. Also, technology is not an overnight thing. you can bet that anything they are working on right now is at least 3 years old and they probably have the next 5 years of projects already underway. And everyone knows Steve's vision and what direction he's aiming for. given the success of that vision I can't see them doing a 180 when he leaves
3. Steve Jobs is a person and despite claims otherwise it is possible that Apple is not legally required to tell all about his life. Even with the SEC rules. they do allow for some privacy. Shareholders and Media need to remember this and stop demanding to know all and stop claiming they have a right to it unless they are 100% certain of that claim. And stop destroying the company's stock value over this issue. Focus, as Jobs has clearly been trying to get you to do, on the company's products. The stock going down two dollars cause the new laptops don't have firewire is one thing. Stock going down cause Jobs coughed is just stupid.
It would make sense if it was a red light *outside* the lab similar to what is used on a sound stage. The worst case scenario for something like this is a person walking through the door while the product is uncovered and a red light of that type would be an excellent indicator.
that is very likely what it is. the light would tell someone "don't bring that visitor into this room" as well as in certain areas "exposed electronics -- don't come in" if it was an area that needed clean room protocols.
The Times even recalls a widely publicized case five years ago in which Apple attempted to subpoenaed AppleInsider's Kasper Jade and the PowerPage's Jason O'Grady to force them to identify sources who provided accurate details of an unreleased hardware product code-named Asteroid.
Wait a minute . . . Kaspar Jade is a real person? I always thought that was a
super-secret alias borrowed from an exotic dancer of some kind.
Just kidding. All of you at AI do a fine job, and this is a great article.
The dance of secrecy is one of the main ingredients of "life with Apple" that keeps
us all intrigued and coming back for more. Apple try to keep things secret, little
bits slip out -- some of it's spurious, but there's always just enough real data involved
to keep us on the edge of our seats for the real announcement without ruining
anything.
Apple should pay you a salary for enhancing their launches and making them
that much more exciting!
MS has it's own fan websites, Windows Supersite is probably the most famous one.....
If that's their most "famous" fan website, it's a bit sad, really. (Half of their stories seem to be about Apple and Google.)
Btw, a warning if you go to Windows Supersite: Somehow, Bing mysteriusly ends up loading in the background! Typical Microsoft....
I GET the fascination with the company, posts like this that show the dark underbelly of what goes on at Apple are really interesting. I'm just shocked that if I ran a site, say, for I dunno, a band I liked, and then the band tried to sue me. I would probably continue the blog, especially if it brought in cash, but I would have a hard time being so blindly postive and, I dunno a better word for it, but I wouldn't be quite as ball-sucking as Apple Insider is at times with it's articles, particularly with reviews and any news having to do with microsoft...
while I expect a favortism toward mac products here, sometimes the apple blinders are up in full force, and it's hard to find an objective point of view.
No big story here... Steve Jobs will eventually die.
Yeah, but when he does there will be those that say "Shit, I didn't see this coming. Why didn't someone tell us - we have been misled again"
while I see the financial reasons for maintaining this site, I'm shocked that after being treated so rudely by apple's legal department, this site still refuses to report negatively toward anything about apple.
I GET the fascination with the company, posts like this that show the dark underbelly of what goes on at Apple are really interesting. I'm just shocked that if I ran a site, say, for I dunno, a band I liked, and then the band tried to sue me. I would probably continue the blog, especially if it brought in cash, but I would have a hard time being so blindly postive and, I dunno a better word for it, but I wouldn't be quite as ball-sucking as Apple Insider is at times with it's articles, particularly with reviews and any news having to do with microsoft...
while I expect a favortism toward mac products here, sometimes the apple blinders are up in full force, and it's hard to find an objective point of view.
We have no interest in holding a grudge. That's Apple's MO. But that's also why you'll see Palm Pre ads flanking our articles and not iPhone ads -- Apple refuses to allow us to promote their products through advertisements and has at times intimidated third parties into not placing their ads on AppleInsider as well. While this is an incredible disservice to Apple shareholders, it is what it is.
K