Is Apple Rotting from the Inside Out?

Rob Enderle

I started this week thinking about Apple killing off Think Secret and actually threatening the income and family -- during the Christmas season, mind you -- of the highly visible Forbes reporter who pens the very popular Fake Steve Jobs blog. This changed the whole tone of my piece, which was to focus on products and now will question Steve Jobs' sanity; I wonder if people on his staff are setting him up for the kind of coup that could get him removed, much like he removed his predecessors.

 

We'll get to the battle of Apple vs. CES in a few days but first let's ask if Apple is rotten at the core.

 

Is Apple Rotting from the Inside Out?

 

In my mind, Apple's greatest asset isn't its products, software, employees, or even CEO. It's the incredibly loyal customer base. These people, many of whom are reporters, have stuck with the company through thick and thin. Some of the "thin" parts have been really bad, with products like the Mac Cube, which, while pretty and inovative, were horribly engineered.

 

It was so bad at one point that I've been told that when Steve Jobs rejoined as interim CEO, he refused to use an Apple and had his own NeXT machine installed at headquarters. Even he thought the Apple machines at the time were crap and he moved to fix that.


 

A lot has changed over the last five or so years and now Apple is riding high. The company can seem to do no wrong, but on the eve of what is likely to be the biggest and most highly funded fight in Apple's history, Apple seems to be setting up for failure by putting down one of its most loyal fan sites, Think Secret, and by going after a highly visible reporter like an organized crime lord might. In short, it is pushing the envelope on evil, during a time of year when there often is incredibly little tolerance for that behavior.

 

Background

 

By now, you should know that Apple took one of its leading fan sites, Think Secret, to court to get it to disclose a contact inside Apple who leaked a product that Apple later decided not to bring to market. It is not an uncommon practice for executives who believe their management is stupidly releasing a product to "leak" it, giving the thing visibility. This extra visibility allows the market to weigh in on the merits, or lack thereof, of the offering and often, as in this case, the ill-advised product is killed.

 

Getting caught doing this can get a person fired; Think Secret protected, with its life, the anonymity of the executive who released the information (he may write for Wired). Apple basically gave the publisher of that site an offer he could not refuse (reminiscent of the Godfather) and the publication ceased to exist. We haven't seen that kind of a misuse of power since the Standard Oil days and it is a chilling reminder of what can happen if a firm gets too much power.

 

With this success firmly in hand, Apple next went after Dan Lyons, who is one of the top journalists at Forbes. First it offered him money. When he disclosed this bribe, it threatened his income and his family. The evidence it had was so incredibly lame that if it weren't for the fact that this kind of thing in my world is deadly serious, it would be funny. Thanks to SlashDot for bringing this to our attention.

 

Impact

 

Journalists are part of the loyal Apple base and have been for some time. In fact, I would argue they may be the most powerful part of this base. Folks like Walt Mossberg have historically followed Apple almost blindly, praising everything the company brings to market. They do so not because they are bribed, but because they honestly like what Apple brings to the table. But shutting down a blog because the site was protecting a source, and trying to pay off, and then blackmail, a highly visible senior journalist likely won't sit well with this audience. They might start to wonder if they are next.

 

Apple is going to want positive coverage for the news that will likely start coming out about the options scandal, which is likely to come off the back burner as election time starts getting closer. In the fight with every high-tech company on the planet, it'll need its greatest asset, journalist fans, to step up to its defense.

 

But I'll bet a lot of folks are now starting to look at Apple like it's full of rotting zombie worms and that will make the help Apple needs much harder to come by.

 

Is Steve Jobs Being Tricked?

 

Rumor is that there are people on the Apple board who have had enough of Steve's shenanigans and would like to distance the company from him once again. However, as long as he is popular, this is simply not going to happen, and the options scandal, so far, just hasn't created the needed support for Jobs' removal.

 

However, going after fan sites in this way, coupled with the fallout from threatening a reporter's family and income, could be enough to tip the balance, particularly if the company missed a quarter or two. You may want to hit the stores and see just how much unsold iPod and iPhone inventory there is this year. From what I can see, there is a lot of stuff sitting on shelves that isn't moving. Not scientific by a long shot -- but it does suggest that Apple may have an inventory problem next quarter.

 

So I wonder if somehow Steve Jobs is being tricked into making these decisions so that he can be easily removed when the options problem once again makes the front page.

 

Wrapping Up

 

"Power corrupts, absolute power corrupts absolutely" is a saying folks seem to recall but often, once they get into power, forget. Just because you have the right to do something doesn't mean it is right that you do it. Harming others, particularly fans, and particulaly over the holidays just feels evil (click through on this link and wonder like I did what happened to the source for this comment). This time, it is Apple that has strayed far over the line and I think it will hurt the company a lot as it tries to fight off the CES mob next year.

 

There is clearly something rotten at Apple and we'll know in a few months whether is it is a coup in the making. Until then, our hearts go out to Dan Lyons and his family, as nobody should have to deal with this any time -- particularly not at Christmas. Folks are clearly thinking differently about Apple in 2007, which is why I'm thinking Apple is rotting at the core.

 

If you feel like like making a statement about this, think of buying Dan Lyons' book, "Options: The Secret Life of Steve Jobs." It's an easy and fun read and you'll be making a statement about how this kind of behavior is ill advised by any company. It's only $16 on Amazon.



Add Comment      Leave a comment on this blog post
Dec 28, 2007 9:51 AM Eric Eric  says:
Enderle, head of the "Enderle Group" (which is Enderle and his wife, and maybe their pet guinea pig) bloviates once more. Twists facts to levels unrecognizable and does everything he can to destroy Apple's reputation.ThinkSecret was not a Mac fan site. It was a rumor site. Apple was wrong to attack them the way they did, but to call it an abuse on the level of Standard Oil - all the while Enderle being the biggest sycophant for Microsoft on the planet - is laughable.Never, EVER take anything Enderle says with anything but a grain of salt. He has zero credibility. I say that as a journalist who has spent years in the regular news business - not the tech press - and who can spot a phony from a mile away. In stead of solid research he uses hyperbole, innuendo and outright lies to do everything he can to damage Apple.He claims he likes Apple and appreciates their products. Yeah, like the man who doesn't hate Jews. Why, some of his best friends are Jews. We all know what that means. Reply
Dec 28, 2007 9:55 AM SnowLprd SnowLprd  says:
Duped? "Delusional" would be much more accurate. The fact that Rob fell for an obvious joke is the least of the problems here. There are so many factual inaccuracies, exaggerations, half-truths, and outright fabrications in this article that it renders all of Rob's "analyses" completely devoid of credibility. That any respectable publication would even deign to quote him just shows the unstoppable power of the bell curve. Mediocrity reigns. Reply
Dec 28, 2007 10:09 AM WH WH  says:
My goodness! That was the strongest come back ever! That was a powerful knockout to my senses and it sent me reeling! You're amazing, Mr. Enderle! I had begun to miss your fantastic ravings which have saved many a good day for me, aye, Sir! You're like the sun on my horizon:)I don't know about analysis, but it takes a certain level of creativity to write down such a... such a... well, I am in loss for words, it seems, but what with the strike going on in Hollywood, I think you have an opening here. Gag-writer for Jay Leno, perhaps? Rob Enderle, the principle gagscriptwriter at the Rob Enderly Jokes-R-US Group? But it was a bit scary, though. I was a becoming a bit worried as I read through the article. Is the dear old Robbie going a bit nuts here? Is he actually losing the grip? Do we see a poor soul tormented in the spasms of a growing psychosis? But then, you admitted that you probably had had a few too many eggnogs, you drinker, you! Oh, all forgiven and welcome back and I am sure I have many with me when I say that we look forward to hear more of the kind from you. I know you won't disappoint your most avid fans:) Reply
Dec 28, 2007 10:15 AM Dee Dee Warren Dee Dee Warren  says:
I notice there is no apology in his follow-up to Jobs and Apple. Why not? That is the right thing to do after he trashed them based on a joke. Heck he should Jobs a personal apology note. Somehow I don't think that is going to happen.It seems the follow-up is duck and cover - he doesn't admit he didn't followup or do any confirmation - just he was "duped" - when in the comments readily available even the two days before when he said he wrote the piece, there was a LARGE QUESTION whether it was a joke or not. Considering that, he should have contacted Lyons first. It isn't as if there wasn't huge honking hints that it was a fact.Everyone screws up. It happens. But the mea culpa has to be a bit more than covering one's behind. Reply
Dec 28, 2007 10:19 AM Justin Reese Justin Reese  says:
@Mark:"When Apple bought NeXT and got Jobs back, their stock was hovering around $3 to $4 dollars/share. Now its around $200/share and this is after 3 splits."Almost right. At Apple's lowest point (December 1997), the stock was trading for 12.75. The 3.28 price is after it's been adjusted for the splits. The fact remains that Apple's stock has increased 60x in value, which is astonishing... and makes my other investments at the time seem utterly foolish. Reply
Dec 28, 2007 10:44 AM Pedro Moreira Pedro Moreira  says:
Seems like Mr. Enderle was aiming for a late entry into Daring Fireball's Jack-Ass Of The Year awards with this piece.It stuns me that a professional analyst could produce such an ill-research piece of work.... Reply
Dec 28, 2007 10:55 AM Rip Ragged Rip Ragged  says:
Great Stuff, Rob.I write a humor blog in which I announce in the header that I'm full of shit. It isn't fair that you should be able to do a caricature of an idiot without some kind of disclaimer.I mean, play fair. Damn.I can't believe that you're the principal analyst of anything while being so clueless that you can't even get a joke days after it is announced, so it has to be a gag. Right?Either that or April 1 is really a rough day for you. Reply
Dec 28, 2007 11:00 AM Tom Reeves Tom Reeves  says:
For more amusement, recall that Tony Clifton was FSJ's lawyer. Look up Tony Clifton on wikipedia. It's all explained on my blog (pwnership.com) Reply
Dec 28, 2007 11:23 AM M. Douglas Wray M. Douglas Wray  says:
Thanks for another fun read Rob! Your 'pieces' are terrifically amusing. You and JDvorak crack me up. Reply
Dec 28, 2007 11:49 AM Aprel Aprel  says:
OMGIs there enough thought in your brain to keep your heart beating? Reply
Dec 29, 2007 1:03 AM pebkac pebkac  says:
Has anyone noticed that Think Secret is still publishing? Reply
Dec 29, 2007 1:15 AM Vladimir Vladimir  says:
Man, Mac fans are so goddamn high and mighty that can't even take criticism.Funny thing, cause I think Apple makes some alright computers, but I'll never use one out of fear of becoming one of you guys. Reply
Dec 29, 2007 1:21 AM Oskar L-B Oskar L-B  says:
Dear Mr. Enderle,It has finally come, the time when you should lay down your pen and take a long look back on all the things you've written over the years. No "journalist" in the history of the computer industry can be said to have spread more misinformation (plainly speaking it's pure FUD) than you; a feat that few people believe is ideologically driven, and more probably is backed by respectable sums of money from interest groups on the other side of the Apple/Google divide. Even the likes of John C. Dvorak doesn't come close to this kind of venom-spewing crusade.This article crowns your achievements like a turd on the top of a pile of garbage, and you would be better of halting right here. Reply
Dec 29, 2007 1:33 AM Ben Ben  says:
Well, "Vladimir", you and Mr Enderle both, are jackasses. Reply
Dec 29, 2007 2:04 AM Mike Mike  says:
Man you are such a moron. The FSJ post was a joke and you must have used all your brainpower in coming up with this article or else you'd have a bit leftover to actually read FSJ's blog and notice where he says it was a joke.I hope Dan Lyons comes to your house and beats your ass for being such a terrible cold sore on the tech industry. Reply
Dec 29, 2007 3:22 AM Jack Daniels Jack Daniels  says:
OK folks, OK. Let's stop beating a dead horse here.The thing that *really* scares me is that other yellow journalists like the SJ Murky-Sleaze's Troy Wolverton (who also writes for the yellowest of the yellow - TheStreet.com) will pick this up and do more of their own Apple-trashing. Wolverton regularly cites The Enderle "group" in his articles (which are often anti-Apple and/or pro-M$) and no doubt we'll see this post cited as a source for Troy's next piece on why Apple is falling apart.Next in line after Troy Woofinton is well-known M$ shill George Ou of ZDnet, who depends on his daily dose of reality by reading the latest crapola from the so-called anal-ists at Enderle Grope. Reply
Dec 29, 2007 3:47 AM DBL DBL  says:
I really, really enjoyed watching you do this to yourself, Mr. Enderle. In fact, I would have to say that this is pretty much the only article you've ever written that is worth reading for any reason. Congratulations! You finally did it. Reply
Dec 29, 2007 4:35 AM Jarad Jarad  says:
You are the reason our news and information sector sucks ass. No fact checking along side the fact that people of your nature are so out of tune with America you actually go full circle into thinking you in the mix.Insanity sir. Retire. Reply
Dec 29, 2007 7:05 AM frumius frumius  says:
Well, I sure won't be coming here for any news! I never have before, either. Lol. Reply
Dec 29, 2007 12:12 PM Ron Ron  says:
Jackass Reply
Dec 29, 2007 12:19 PM Ulf Dahlen Ulf Dahlen  says:
Er, Mr Enderle, are you totally insane or is this the "Fake Enderle" weblog? The Fake Steve Jobs story about Apple is FAKE. Reply
Dec 29, 2007 12:30 PM SuperMatt SuperMatt  says:
You have destroyed your credibility completely with this piece. If there's ever been clearer evidence of your irrational hatred of Apple and Steve Jobs, I don't know where it is... Reply
Dec 29, 2007 12:37 PM chrisw357 chrisw357  says:
OMG. I just had to come here to see this for myself. Mr. Rob, you actually thought something on FSJ was real!!?This just begs the question: is it true that you write these sensationalist, bulls*&t pieces just for the sake of lots of hits? Or is it something much darker and more sinister than I could possibly imagine?Meh... probably the first one. Cheers! Reply
Dec 29, 2007 12:45 PM chichi from texas chichi from texas  says:
Let's see, write an ignorant, vitriolic slam on Apple and Steve Jobs. Check. (I can bang these out in my sleep.) Now that prick Dan Lyons turns out to have made up the whole thing. God damn it, I don't want to have to rewrite this fucker. Fuck it, I'll go ahead and post it. Who gives a shit? The business is all click-driven now, anyway. Some of those flaming asshole Apple-loving fascists will click on them. I'll get a lot of page count. Make news. No such thing as bad publicity, right boys?And it's kind of like Saddam and the WMD. Just keep telling the big lie. Doesn't matter if 6% of the people know it's a lie, it's the conversations they don't even know about where my propaganda really makes a difference. Come on, Microsoft customer, you don't want to use Apple, they're rotting from the inside. Come on, you don't want to use Linux, it's still under a legal cloud -- infrringes on more than 230 of our patents, etc. Reply

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