Editorial A conciliatory Apple would be real innovation

There are signs of a new attitude emanating from Cupertino, extending across Apple's relationship management of customers and competitors.

One of the two most important things you can say in English is "I'm sorry." (The other is "Thank you.") Failure to get the apology right brands a person as arrogant. As with people, so with companies -- to whatever extent they have personal relationships with their customers. In Apple's case, its best customers definitely feel personally involved with the company's ethos, products and leaders.

Apple's main personifying force is its CEO. That individual manages both the connection with customers and the competitive relationship with other industry players. Now, following an unusual apology to users, Apple startlingly unplugs one of its Android lawsuits against a competitor, and a profound personality change seems to be in progress. Apple is not apologizing for its historical Android rage. But the brand's official temperament might be changing at the core, with the company possibly becoming a more conciliatory actor in the field.

Apple's historical personality, as an extension of Steve Jobs, exhibited several aspects. In that complex corporate identity, arrogance was an inescapable descriptor. Promoting an aura of superiority is good branding for most companies (notwithstanding the celebrated "We are only #2 so we try harder" Avis tagline that was coined in 1962 and dropped just a few months ago). In Apple's case, the sheen of eminence certainly matched the CEO's attitude, and extended from it.

Steve Jobs' apology style was egocentric, at least insofar as it was a personal expression comfortably centered in the first person. He famously delayed apologizing for the iPhone 4 antenna by deploying defensiveness, scorn and even blame -- resulting in the enduring "You're holding it wrong" meme, a testimony of Apple hubris if there ever was one.

One of Jobs' most revealingly explicit "I'm sorry" moments was a crusty throwdown after cutting the price of original iPhone by a third, just two months after product launch in 2007. The whole thing is worth tripping down memory lane for. A few observations:

  • The statement was an argumentative screed that laid out three philosophical planks as in a closing argument of a trial lawyer. The overriding message was that Apple's customers were wrong.
  • The word "sorry" was not inserted anywhere, but "apologize" did appear in the sixth and final paragraph.
  • Most audaciously, Jobs lectured that the ill-received price cut was good for iPhone customers. (He had a point, but it probably wasn't wise to make it.)
  • Jobs used the first-person "I" for the arguments, and backed into the less personal "we" when describing a forthcoming rebate. The impression? The rebate wasn't his offer, dammit. (Side note: If you think language use reveals true personality and intent, you might like "The Secret Life of Pronouns," by James W. Pennebaker.)

(Another side note: Bloomberg BusinessWeek has a deeper analysis of the iPhone price apology, and compares it point-by-point with Tim Cook's recent MappleGate atonement.)

Is it good strategy for a company to apologize, ever? In some cases it represents necessary damage control. With Apple, the conceit of perfection has market value. Acknowledging dents in the gleaming chrome (maybe that's the wrong word) can draw attention to flaws unnecessarily. Plenty of pundits reacted askance to Tim Cook's bent knee, with one partisan observer launching a rampaging assertion that Jobs would fire Cook if he could.

Editorial A conciliatory Apple would be real innovation

Cook didn't need to apologize over the Apple Maps turmoil, or magnanimously recommend competing map products, as he did, and maybe Jobs wouldn't have done it. I can imagine Jobs accusing users of driving to the wrong destinations if Apple Maps failed them. But Cook did apologize, and he used the S-word ("extremely sorry"), and it was in the first paragraph, and he didn't charge his customers with ineptitude, or rebuke them in any way. So, that was different. And then he fired two of his executives -- one of them, reportedly, because he didn't cooperate with the apology. That's what I call doubling down on saying you're sorry.

If Steve Jobs was majestic and pitiless to his end users, he was incendiary to his competitors, famously pledging "thermonuclear war" on Google Android. The guy had anger issues. But his fury had a basis, considering the parallel between Android's open licensing model and Microsoft's identical strategy years earlier, both cases involving an arguable Apple derivative. Jobs' biographer, Walter Isaacson, believed categorically that Jobs was dedicated to destroying Android, denying Larry Page's assertion that Jobs' fissionable rhetoric was for troop morale. By the way, back in April, Isaacson predicted that Tim Cook would settle Jobs' legacy lawsuits.

Annnd...that brings us to the present. Apple vs. HTC: Settled. If anyone is bragging that they expected this seemingly peaceful resolution of a thermonuclear skirmish, I haven't heard it. The formal announcement could hardly be more crisp, decorated with a combined 39 quoted words from the CEOs. Those quotes are nearly identical promises of renewed innovation. The two men sound like exhausted combatants, but I bet Peter Chou, HTC's chief exec, is the more drained. Apple can dance all night. And even in settlement (as Ansel Halliburton proposes) HTC is presumably paying the heavier portion of what is framed as a mutual licensing agreement.

Apple's settlement strategy is unclear, but it seems like a shift from hell-bent vindictiveness to productive infliction of ongoing pain. Stacked-up patent obligations inhibit a competitor's operations, either by forcing additional licensing cost and reducing margins, or by inducing new development cost to escape via original invention. (UPDATE: The per-unit licensing fee to Apple is estimated here to be six to eight dollars. Also noted: HTC is already paying Microsoft an estimated five dollars per smartphone that uses patented IP.)

Could a Samsung resolution be next? Apple might be having too much fun experimenting with the apology genre in that arena, flaunting a certain brand of playful post-Jobs defiance before a European judge. But if Tim Cook's overarching strategy is to stand down from the promised Android annihilation he inherited, save us all from the grinding weariness of arcane patent disputes and dishearten lawyers around the world, and if he executes a new strategic exchange of legal fees for licensing revenue, he will have truly taken the mantle of innovation -- boardroom innovation, at least -- and changed Apple forever.



Brad Hill is a former Vice President at AOL, and the former Director and General Manager of Weblogs, Inc.