Steve Jobs Is Houdini [telecom]

Leadership Steve Jobs Is Houdini

Richard S. Levick, 07.22.10, 12:06 PM ET

On Friday, July 16, Apple's chief executive, Steve Jobs, found himself in a kind of situation many public figures have faced before him. A crisis had built and wouldn't go away. As the world waited in hyped expectancy, the spotlight fell on the central player to step onto the dais and deal with it. In this case, Jobs' handling of the iPhone 4 situation generated an unusually wide variety of immediate reactions, from lavish praise to widespread criticism.

Then on Tuesday, July 20, Apple reported earnings that put both the positives and negatives of his performance in a new perspective. The company had exceeded expectations, reporting $3.51 earnings per share on revenue of $15.7 billion. Analysts had projected $3.12 a share on sales of $14.75 billion. The numbers represent a significant annual surge, up from $9.7 billion in revenues and $1.8 billion in earnings this quarter last year.

With shareholders presumably happy, it's fair to say that any lasting impact of the July 16 press conference involves longer-term consumer perception. In that context, Apple certainly waited too long to bring out Jobs as spokesman, nearly three weeks after the media, the Internet and the consumer marketplace began to buzz about the antenna problem that appeared to be threatening the iPhone 4's launch. Who more than Jobs should know that in the digital age you must control the narrative from the very start?

When he finally did seize the moment, he did so with a strategic mixture of conciliatory giveaway and spirited defense. Blithely dubbing the crisis "antennagate," he said Apple would provide free cases for all iPhone 4 users to mitigate the effect of the "death grip" that caused dropped or weakened signals.

That was a relatively cost-effective way to satisfy a public that wanted a tangible sacrifice from an offending party, but it was a shrewd best-of-both worlds approach as well. If nothing else, the giveaway affirms that any problems with the phone are eminently fixable. (A product recall would have been the worst-case scenario.)

At the same time, Jobs went on the offense, averring that the situation was "blown so out of proportion, it's incredible." During the question period that followed, he declined to apologize to investors. (The current earnings report shows there was no need.) Importantly, he also spent a full five minutes pointing out how commonplace wireless signal problems are among other companies.


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Monty Solomon
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