Spoiling the Surprise

Apple sold around $8.3 billion worth of products in 2004. It turned a $276 million profit. You can buy and sell shares of its stock (which recently split) on the NASDAQ exchange. Its products are available around the world.

I point out these things to remind myself that Apple is, by any definition you care to associate with the phrase, a big business with a global reach. I was a little confused after reading Peter Burrows’ recent commentary for BusinessWeek Online about Apple’s legal wrangling with online rumor sites, since Burrows gives the impression that Apple is some not-for-profit organization that should be more interested in spreading peace, love, and soul than it is in selling computers.

There are a whole mess of issues swirling around the rumor site lawsuit: Should online Web sites enjoy the same First Amendment protections as journalists? Do products under development constitute trade secrets? Is a lawsuit by Apple a smart strategic move, a baseless claim, or a public-relations blunder? And we could probably line up experts to make compelling cases for and against any of those arguments.

What you can’t do, however, is make the argument that’s central to Burrows’ analysis: that leaked product news shouldn’t trouble Apple one bit. Or as Burrows writes:

And how do the leaks hurt Apple? Certainly, it shouldn’t be concerned about [rumors] stealing the thunder from Jobs’s famous product introductions. Jobs can fill a room whenever he pleases, because Apple customers and the media know it will be a good show—not just because of his keynote, but because of the sheer coolness of Apple’s products. The increasing frequency and accuracy of the leaks out of Apple…haven’t made a dent in Apple’s ability to get publicity for its new products.

There’s not a scale large enough to measure the head-slapping nonsense contained in that excerpt. Leaked product news doesn’t hurt Apple ? In what up-is-down-day-is-night universe can that statement possibly be true?

Burrows is right about one thing—Apple gets publicity for its product release, no matter the volume or accuracy of the rumors that surface. But suggesting that the excitement of Jobs’ show isn’t dampened even a little bit by the complete, accurate release of product information more than a week before the show starts is a bit like saying that peeking under the wrapping paper and seeing exactly what you’re getting for Christmas doesn’t make the actual present-opening any less exciting.

Which is to say, it’s crazy.

Then there’s the concept that the spoiling of stories doesn’t make a dent in Apple’s publicity-making power. I don’t deny that even a rumored-out Steve Jobs keynote is going to get coverage in the mainstream media. But it seems to me that our nation’s newspapers and glossy newsweekly magazines are more likely to give major play to product announcements if they’re actually surprises, rather than mere confirmations of previously-reported rumors. And if you’re running the show at Newsweek , doesn’t the fact that everybody already knows what Apple’s doing take the shine off of that exclusive cover-story deal you’re working out with Apple?

And while product rumors may not affect the amount of coverage Apple can expect, they certainly have an impact on the tone of the coverage. Let’s pretend for a moment that Apple is planning to release a new product, whose every feature is previewed in grandiose detail on the Internet. Then, the big day arrives, and Apple unveils this mystery product—only it’s missing some of the nicities promised by rumor-mongers. The story then mutates from Apple has this great new product to Why did Apple skimp on features ?

This isn’t some theoretical construct, either. When the iPod mini debuted back in 2004, the first question people had wasn’t about its slim design, cool features, or eye-catching colors. Instead, Apple spent the days following the iPod mini’s debut defending its decision to slap a $249 price tag on the music player instead of the sub-$200 price that had been rumored.

None of that initial grumbling wound up hurting the iPod mini’s sales, other than the time and energy Apple spent deflecting the criticism. But that’s probably of little comfort to Apple, which likely fears the day when disappointment over a product failing to live up to rumored-fueled hype actually does hurt its bottom line.

You can criticize the way Apple is going about defending its product secrets. But you can’t really fault why a company would want to do so. Unless you write for a business weekly, apparently.

  
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