Is Apple losing some of its shine?

Los Angeles Times Staff Writer

Why can’t apple inc. stop ticking off the people who love it?

Some of the loyalists who have made Apple so successful lately have turned on the tech star. Even as Apple posts record financial results, they complain that the revolutionary company they supported has changed, showing signs of being wrong-headed, shortsighted, even greedy.

One week there’s hue and cry over Apple’s decision to slash the iPhone’s price only two months after it went on sale. The next, it’s sputtering anger over a software security update that wiped out programs iPhone owners installed so they could do such things as send instant messages or play games.


When they get really mad, they lob an M-bomb -- they say Apple is starting to remind them of historical rival Microsoft Corp., which in their world is the prototypical soulless, monopolistic machine.

“There is a rise in complaints about Apple’s policies and strategic decisions this year, and it seems to be accelerating,” said John Gruber, writer of the popular technology blog Daring Fireball.

Longtime Apple observers attribute the increased grousing to growing pains as Apple broadens its horizons. The company known until January as Apple Computer is now a major player in consumer electronics, digital music and cellphones.

That expansion has helped the Cupertino, Calif., company move into the top tier of technology companies.

Its shares gained $5.21 on Friday to a historic high of $161.45 for a market value of more than $140 billion.

It dominates in digital entertainment players with nearly 70% of the U.S. market. Its iTunes store has become the No. 3 U.S. music retailer. Macintosh computer sales are booming. And Apple has sold 1 million iPhones in less than three months.

But Apple’s continued push into the mainstream market has come at the cost of goodwill from some of its biggest fans. The recent drumbeat of complaints has come from Apple supporters, the people who stood in line for hours the day in June when the iPhone debuted and paid up to $600 to be among the first to own one.

Apple elicits passion like no other company. Enthusiasts acknowledge that it can make them so angry only because they love it so much.

“When I think Apple has strayed, I come down really hard,” said Wil Shipley, a software developer and blogger who says he has bought 19 iPhones. “It’s like someone you are married to. You hold them to a higher standard of morality than a random stranger on the street.”

The conflict between Apple and its fan base is mostly over control of new products’ uses and features. The iPhone, Apple’s first entry in the mobile phone market, has sparked the biggest complaints. An Apple spokeswoman declined to address many of the issues that have been topics of discussion among bloggers and customers.

Many Apple fans who coveted an iPhone fumed when Apple chose AT&T Inc. as the service provider, complaining that it dropped too many calls and offered a slow data network.

Others complained after Apple Chief Executive Steve Jobs delayed the launch of the new Leopard operating system from last spring to this month, saying engineers were needed to finish the iPhone.

Many waited in line for hours June 29 to buy an iPhone, then lashed out when Jobs sliced $200 off its price only two months later. Apple defused the revolt by giving $100 store credit to many people who had paid full price.

But it didn’t stop there.

The iTunes music store failed to complete downloads for some buyers the following week. The faithful again cried foul when iPod owners discovered they would have to repurchase their games to get them to work on Apple’s refreshed line of the device.

Another line was crossed, some say, with Apple’s new iPhone ring tone program. In early September, Apple started selling the right to use some songs from iTunes as ring tones for the iPhone at 99 cents a pop. In late September, iPhone customers who had created ring tones from other sources found they no longer worked. Nickel and diming, people cried.

Then, on Sept. 27, the wailing became a howl.

Apple’s fan base is used to being able to load programs created by outside software developers onto their Mac computers. When Apple billed the iPhone as a mini-computer capable of surfing the Web and playing music and videos, enthusiasts and developers figured the same approach would apply.

But Apple made the iPhone more like an iPod than a Mac. It barred owners from downloading new programs onto the device, saying doing so could damage it and void the warranty.

“Unfortunately, the unlocking and unauthorized software causes damage that is not reparable,” Apple spokeswoman Natalie Kerris said Friday. “Apple strongly discourages unauthorized unlocking programs on their iPhones. We can’t know all the unauthorized software out there.”

Especially at risk, Apple said, were those who used software hacking techniques to uncouple the iPhone from AT&T’s network. In addition to protecting the iPhone, Apple may have been trying to protect its profit. Analysts believe the company gets a cut of AT&T service fees.

Apple made good on its threat Sept. 27, when it issued a security update that made some iPhones freeze up and wiped out some programs that customers had put on their devices, such as games and voice-recording software. Some customers said they didn’t load any unauthorized software but their iPhones broke down anyway.

Apple “went out of their way to make useful applications like ours not work,” said Mexens Technology Inc. Chief Executive Cyril Houri, whose company’s navigation software was downloaded by 100,000 iPhone users. “People say Steve Jobs is always right. He has been right many times, that’s true. But I think he made a big mistake.”

Enjoying a tremendous run of success after struggling mightily in the mid-1990s, Apple is fighting battles on several fronts. It’s haggling with music labels and TV networks over iTunes pricing, it’s fending off new music competitors including Inc. and it’s trying to stave off antitrust investigations by the European Commission.

But the recent squabbles with its core supporters are more of a family affair.

“We were there when Apple was hurting, we stuck with it, we nursed her back to health,” Shipley, the Apple fan, wrote on his Call Me Fishmeal blog. “It’s our money she has now, and she’s turning on us now that she’s rich.”

Such sentiments might puzzle new Apple customers, who didn’t think they were signing up for a cause when they bought an iPod or iPhone.

And of course, not all Apple faithful feel the same way. Whenever someone gripes about Apple, others jump to the company’s defense, accusing detractors of being naive about technology or harboring a misguided sense of entitlement.

“Apple has to be the guy in charge of the platform to protect it for millions of customers,” said Steve Chazin, who writes the blog and worked in marketing at Apple for nearly 10 years until he left in 1999. “You are watching the transformation in real time.”

Jeremy Horwitz, editor in chief of iLounge, an online publication that covers Apple’s digital media products, said the company’s recent decisions had created a trust problem with its fans. The title of one of his recent columns: “Customers Ask: Is Apple Going Rotten?”

He called the recent iPhone upgrade and resulting disabling of non-Apple software a sign that the company was “looking at people who tamper with their products as hackers, not coders.”

“Apple wants to exert more control over the end user and its products, for better or worse,” he said.

But Shipley said customers needed to understand that the iPhone was new and urged them to give Apple time to work out technical issues.

Still, he said he hoped -- no, he expected -- the company to open the iPhone more to developers. The Apple spokeswoman said the company wouldn’t discuss future plans.

“I love the company with my soul,” Shipley said. “You get mad at someone for not doing what is best for them.”