A Bad Couple of Weeks for Top Dogs

Carl Weinschenk

Nobody is perfect, of course. But the best looking and highest profile athlete on campus is judged by a different set of rules than a wallflower who tops out at intramural flag football. Likewise, huge companies making expansive claims and angling to dominate are going to be judged differently than small service providers or equipment vendors just trying to keeps their doors open.

So it will be interesting to see if there is any long-term impact to two pieces of news from the past couple of weeks: The revelation by The Wall Street Journal that iPhones and Android devices are transmitting subscriber location information back to Apple and Google, respectively, and the crashing of Verizon's LTE network.

It's fairly well understood that carriers and phone equipment companies collect data, but it is uncomfortable to read about how much, and how sensitive and real time some of it is. There may not be anything nefarious about the collection, but what is legal and makes sense from an operational viewpoint can be absolutely poisonous from the marketing and PR point of view.

Passages like this one from the WSJ are sure to chill the hearts of marketers employed by the two companies:

The Google and Apple developments follow the Journal's findings last year that some of the most popular smartphone apps use location data and other personal information even more aggressively than this-in some cases sharing it with third-party companies without the user's consent or knowledge.

The Verizon outage was an entirely different kettle of fish, of course. But it speaks to the same idea: When a big company makes a mistake or has a problem, it is by definition a big mistake or a big problem.

The outage impacted Verizon's LTE network late Tuesday until 11 AM Eastern time on Thursday. Computerworld said that one ramification may have been the launch of the Droid Charge, its second LTE phone. The launch was delayed and the speculation was that the decision was due to the inability to activate new phones with the network down.

Clearly, this wasn't a good week to be one of the big boys. Just as Google and Apple may essentially have been innocent, Verizon's quite possibly was reasonably explained. Technology is not infallible. That is why they put erasers on the ends of pencils and delete keys on keyboards.

It is possible that neither of these issues will have any long-term impact. Skype's crash just before Christmas last year is a distant memory, for instance. But, needless to say, politicians and regulators reflectively seek to please the public, whether with real policy initiatives or a bit of easy grandstanding. The general sense of unease generated by data collection overreaching and network crashes-when the owners of that network fight very hard to keep competitors weak-could cause problems for those companies down the road.

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