Apple should squash its brand-dissonance bugs
If Apple Inc is one of the globe’s most successful enterprises ever, put a big byte of it down to its brand appeal. By envisioning “computers for the rest of us” at the dawn of the Information Age, Steve Jobs’ startup of the 1970s led a reversal of centralized power, a digital revolution that took almost three decades to give us a handy gizmo with the world wide web at our fingertips. Apple’s first crack at fame was 1984, an ad campaign in defiance of a fictional Orwellian dystopia, and its core values as a brand were broadly defined by that. Its ‘Think Different’ outreach, which featured Mahatma Gandhi among others, kept innovation for the empowerment of people at the core of its brand promise. Exposure to a mass market after the iPhone’s success has not just mellowed its message, however, but also exposed Apple to a dark irony that Jobs’ successor Tim Cook could chew on. If Apple is anti-monopoly and pro-privacy in the perception of its core loyalists, why brook any dissonance on these?
With net profits of $57 billion on sales of $274 billion last year and a market value of over $2.5 trillion, up from about $350 billion when Cook took over as its chief 10 years ago, this US-based megacorp may figure it can afford antitrust run-ins here and there. But can it? Last week, its risk of a brush with the Competition Commission of India (CCI) rose after a curiously-named non-profit, Together We Fight Society, sought to have Apple Store’s service levies—of 15-30% on payments by app buyers and users—put under a scanner. By raising entry barriers and costs for app developers, Apple’s thick slice for itself and clamp on payment alternatives are alleged to have cramped app-market rivalry and denied us the benefits thereof. This echoed charges levelled last year against Google’s Android Play Store that are currently under a CCI probe. While most Indian handsets run on Android, whose dominance is clear, iPhone users form such a valuable segment that almost every app must have an Apple version. Not only are these two app gateways a virtual duopoly, which impacts app-makers jointly, their pricing is similar. Moreover, Google and Apple have a search-tool deal that speaks of a mutual interest in non-app web access as well. While Apple may cite the security burden of its app ecosystem to justify its fees, a CCI look-in could follow the rejection of its policy by South Korea and Japan. Pushed by the latter, Apple has relented only on ‘reader apps’ so far, letting media apps on its store hawk their content freely, but not interactive games, utilities and other stuff classed apart. Thanks largely to an app boom, services now account for a fifth of its business. This revenue stream, though, has also made Apple look like ‘Big Brother’ to many.
Back in California, Apple appears to be in a dilemma over a tricky trade-off on human rights. On Friday, it delayed the roll-out of its NeuralHash system to police all iPhones by scanning them for sexually-explicit images of the under-aged. It is reportedly turning an ear to protests by advocates of liberty like the Electronic Frontier Foundation, which pointed out how badly decryption could endanger privacy. If its cyber-cop turn exposes iPhone users to malign surveillance as collateral damage, as critics fear, then it could backfire. It also jars with its stance on our safety from prying eyes. With spyware like Pegasus on the prowl, which side to err on should not be such a tough call for Cook. Beware brand dissonance.
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