Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Apple's Dark Side: Five Reasons to Dislike the Iconic Brand


Apple Computer's future will depend on its ability to relinquish some control.

When Umberto Eco wrote his famous 1994 essay describing Apple (AAPL) as the Catholic Church of computer operating systems and Microsoft (MSFT) as Protestant, he was striking at a profound truth not just about the nature of the two companies' competing software in that MS-DOS era, but at something deep-seated in the nature of Apple itself. For all its branding as the rebellious, creative alternative to a world full of conformist PCs, Apple and their products have always been hierarchical, closed off and subject to oracular pronouncements from high priests.

The company was recently voted most admired by US CEOs for the sixth year in a row by a Fortune magazine survey , and expands its obsessively cultish fan-base every day with innovative products like the iPad and iPhone. But as Apple continues its transformation into a globe-straddling, master-of-paid-content "post-PC" company with a heaven-scraping market capitalization of $331 billion, those Vatican-esque tendencies are starting to rankle critics, and show, perhaps, the seeds of a future downfall. Herewith, some of the less than wonderful things associated with everybody's favorite tech company that may curtail its time at the top:

  • Click to enlarge the picture
1. A Design Monoculture
If there's one consistent, defining feature about Apple as it has moved from desktop PCs to laptops to mobile devices, it's the centrality of design to everything they make. Design gets in at the ground floor with every one of the its initiatives, rather than being slapped on as a final coat of paint near the end of the product's development process. There's a reason that Apple designer Jonathan Ive is the second best-known Apple bigwig after Steve Jobs.

But here's the rub: all that tastefully rounded, minimal Dieter Rams-inspired work is starting to have a suffocating effect on the world of tech consumer products. The iPod may have been a revolutionary device, and a master-class in less-is-more. But hear this: not everything needs to look or function like a one-button iPod. As designer Robert Brunner notes, "good work outside the Apple vernacular is routinely panned or criticized, especially if they are pushing the envelope and challenge. This creates a strange sort of conservatism. Companies are afraid to move too far beyond the ideal for fear of being trashed or not being accepted." As well, as anyone who's ever found themselves fruitlessly scrolling through an iPod menu looking for a function that just isn't there will tell you: sometimes less is less.
  • Click to enlarge the picture
2. Convenient Online Content – at a Cost
iTunes saved the music industry, claim its fans, rescuing it from Napster and Pirate Bay by providing a functional, safe and convenient way to purchase music. The iPad will save newspapers and magazines, and maybe even publishing in general, say desperate publishing insiders. Perhaps. And Apple certainly didn't instigate the digital revolution that nearly destroyed these cultural industries. But what is the cost of this salvation?

Unless you possess a level of tech savvy well beyond that of most consumers, your iPod, iPhone or iPad can only access content via Apple and its online content stores – giving it vast power over publishers and music companies. Apple gets a hefty chunk of the proceeds of anything sold over iTunes or any of its other portals, but it also has the ability to impose conditions of sale – like its recent decree that any publisher selling magazine apps through the App Store while offering digital subscriptions via its own website must also offer the same subscriptions at the same rate through its Apple App – while giving Apple a 30% cut. Don't like it? No choice.

It's behavior like this that will cause the company and its online retail operations – no matter how slick, convenient and market dominating they seem at the moment – to lose disciples in a hurry when a more open-minded competitor gets its act together.
  • Click to enlarge the picture

3. Changing Behavior and Imposing Morality

Again, Apple didn't create the digital content revolution – it just helped monetize it. But still, iTunes has forever changed the way we listen to music, fragmenting albums – remember them? – nearly out of existence, reducing cover art to a postage stamp on a Nano screen, and wiping out the livelihoods of thousands of snotty, over-educated slackers with better taste than you, who now have no bricks-and-mortar indie record store counters to slouch behind and stare at you witheringly as you put down that CD of J-Dilla instrumental-only tracks and flee in confusion.

As well, Steve Job's determination not to let his various portals sell anything porn-related is commendable – but worryingly. As the director Milos Forman has pointed out: "The first thing a totalitarian state goes after is pornography." As countless App developers have discovered in the last few years, the process of getting iPhone apps to market is puzzling, byzantine – and entirely up to the whims of Apple.

See: Apple Breaks No Porn Rule For Uncensored Playboy App?
  • Click to enlarge the picture
4. The Apple Tax
Every iPod, iPhone and similar Apple device now sports a proprietary authentication chip that means all third-party manufacturers of cables and other compatible peripherals have to deal directly with Apple to ensure that their products will work. This development, quietly introduced in 2007 with no publicity by Apple, costs third-party manufacturers serious coin – but only briefly, because they promptly pass that cost on to you. That "Made for iPod" sticker or slogan emblazoned on a new set of mini-speakers or earphones? It also represents a payment to Apple by the manufacturer – as much as 10% of the sticker price. This doesn't just affect the cost – it also affects quality: "If we didn't have to pay Apple for the dock and auth chip, we could have made a much better speaker for the same price," one electronics company told Popular Mechanics back in 2008.
  • Click to enlarge the picture
5. Control, Control, Control
Above all else – and key to every item on this list – is Apple's insatiable need for control: their closed-garden method of walling people into Apple-only technology is intrinsic to the company's culture and history, and a huge part of its incredible success story. Once you enter the Kingdom of Apple, why go anywhere else? Every year, the latest and greatest round of miracles is revealed, and every year, the ranks of its acolytes seem to swell.

But can this last? Already, the rapid growth of Android (GOOG)– a relatively open operating system that promises users far more flexibility -- challenges the company's current Smartphone market domination. Reaction to its latest laptop releases – once core to the company's very existence – was muted at best. The 2011 MacBook Pros, which feature a fancy high-speed Thunderport connection (that connects to future Apple-licensed products and as yet non-existent but sure-to-be-pricey Apple peripherals) but have no USB 3.0 ports, the new standard high-speed connection, highlight the one of the company's major flaws: it wants to make you do what it says even if it hasn't quite figured out what it's saying yet.

Apple's enviably cohesive, innovative company culture have taken it to the very top of the tech world at the moment, and given it incredible leverage and control over how we communicate with ourselves and our culture. Its continued success, though, will depend on whether it has the ability to relinquish some of that control. As Pope Jobs steps down and observers await signs of the new successor, let's hope there's some reform in the offing.

See also: Apple Still Leaves Warren Buffett Cold

Click here to return to "The Mythology of Apple" and our complete list of Apple stories.

Why is Apple so important to us? What's next for the iconic brand? Click here to continue reading from our series on the mythology of Apple. You'll also find a link to our video, "Is Apple a Religion?"

New! The TechStrat Report by Sean Udall. Sean provides in-depth analysis, strategies and trades across the technology sector. Take a FREE 14 day trial.

Lasting through April 15, 100% of the donations made to The Ruby Peck Foundation for Children's Education will be channeled to the children of Japan as they attempt to find their footing following this natural disaster; and to kick off this drive, we'll pledge $5000 to get it started. Please do what you can, as it will add up, and thanks.
< Previous
  • 1
Next >
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Featured Videos