Apple, the iPhone 5 and A Case Study in Reputation Decline

Forbes

SAN FRANCISCO, CA - SEPTEMBER 12:  Apple Senio...
SAN FRANCISCO, CA - SEPTEMBER 12: Apple Senior Vice President of Worldwide product marketing Phil Schiller announces the new iPhone 5 during an Apple special event at the Yerba Buena Center for the Arts on September 12, 2012 in San Francisco, California. Apple announced the iPhone 5, the latest version of the popular smart phone. (Image credit: Getty Images via @daylife)

The iPhone 5 launch has not been kind to Apple. Business Insider today wrote that one of its big problems, and a source of consumer anger, is that fact that iPhone 5 contains hardware upgrades that already feature on Android phones. In other words, Apple, straight from its success in the patent courts, and its defense of what some believed were trivial innovations,  is a laggard. That story ran under the title: Why people hate the iPhone 5".

The BBC also featured a fairly extensive trashing of the iPhone 5 and Tim Cook’s Apple by Dan Lyons.

“is this really the best we can expect from an outfit that claims to be the most innovative company in the world? This is the sixth version of the iPhone, and the user interface still looks almost exactly like the original iPhone in 2007.

The hardware on the iPhone has been the same for two years, since the iPhone 4 and 4S were virtually identical.

Now, having had two years to plot and scheme, Apple's renowned designer Jonathan Ive has replaced the tiny 3.5in (8.9cm) screen with a slightly-less-tiny 4in (10.2cm) screen? Wow. Knock me over with a feather. What do you do with the rest of your time, Jony?”

A year ago that kind of hatchet job was unheard of. But things began to change this spring.

Back in April I asked whether online media, especially, had turned on Apple. I pointed out that the web is peculiar in attracting writers to similar topics.

“….we have (created) a new information infrastructure and its effects give reputation a whole new momentum.

Apple has been a major beneficiary of this new phenomenon around popularity. If you can win popularity, you rise above the noise and become even more popular. Recent studies have shown the best way to get an audience is to write about what other people write about. So in effect if you are a producer in the information market, you tend to write about what people are reading. You flock to hot topics.

Yet not much has changed in Apple’s business over the past two weeks. What’s changed is the information market around it, with a rash of negative viewpoints finding a channel and getting a hearing. We should be worried about how online information works – not because it is inherently wrong but because it is different.”

Indeed going forward the iPhone 5 is expected to add as much as 0.5% to US GDP. Nobody is talking here about a product flop. But Apple has lost control of the online mood, the reputation agenda. How long before that translates into a loss of sales? It could become the perfect case study in how reputation online relates to physical world success, or failure, as the case may be.

Follow me on Twitter @haydn1701

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