iPod Nano and The Curse of Market Leader

35 Comments

Update: Apple is doing the “right thing” and kudos for that!

ipod nanoIf Bill Gates is letting out a cackle over the recent iPod Nano debacle, one can’t blame him. He has been on the receiving end of consumer ire for a decade now, many of whom (including myself) have experienced windows inspired rage many a few times. Apple is for the first time experiencing the ire of very angry customers. (Of course, there are others who have watched the love fest, and would like to sneak in a punch or two at Apple!)

Broken screens, scratches, and what not – this is a full scale PR disaster in the making. Steve Jobs and the gang have never enjoyed the market share, and the consumer glare like this ever before. The response from the company, even in its statements is less than adequate.

> “This is a real but minor issue involving a vendor quality problem in a small number of units,” said Schiller. “In fact, this issue has affected less than 1/10 of 1 percent of the total iPod nano units that we’ve shipped. It is not a design issue.”

Imagine, some drug company making an argument like that – oh only, 0.01% of our pills will cause violent vomiting… rest is all good. That won’t fly, and this one doesn’t. The coolness that made iPod a regular presence at the White House, Hip-Hop videos and Hipster clubs, and turned the shiny white thing into a cultural icon, has become the biggest engine of growth for Apple. The 80% or so market share is a testament to the importance of this product line to the company, given that every new upgrade brings millions of dollars in additional sales.

iPod Nano is not the only issue. There are people who have complained in the past about iTunes and how upgrades are causing havoc. All these recent complaints basically add-up to one thing: when you are the market leader, you have to try and keep everyone happy, all the time. If not, then be ready to bear the brunt of the hordes who will dismiss your product faster than the credit card swipe. Its as simple as that. Microsoft has learned to live with the downside of being a market leader. Apple is only getting a quick lesson.

35 Comments

Doxxic

By christmas everyone will have seen a well-working iPod nano, owned by a friend, in reality and want one.

Meanwhile, Joe iPod buyer is going to be totally unaware of this so-called “hype”.

ahsan

I think the point that the BBC is doing stories on this problem already certifies this as a PR disaster. I have had a mini for 15 months now and it is almost completely scratch-free. I have had it in my jeans pocket, backpack, laptop bag…everywhere. And it is fine. The Nano is yet another example of Apple being too clever/ cute by half. The mini was an excellent product with a sturdy brushed metal case. As a friend said, don’t be shocked to see a “new and improved mini” in stores in the next 6 months.

And to those of you who seem to think that carrying an iPod in your jeans pocket is a sacrilege, where the hell else are you going to carry it? I personally love the AAPL response of “Oh we designed a scratch-proof product that we are charging ridiculous markup. To protect it please buy a $40 sleeve.” Are they out of their minds?!?! There is nothing more infuriating than a company trying to up/cross sell you something based on their incompetence.

pwb

Josh is right on.

If you don’t own a nano, you really don’t have enough information. My nano is my fifth iPod and it most definitely is *way* more scratch prone than my others. I had it in my pocket with a several month old mini for about an hour and it is completely scratched front and back.

Jim, we’re whining because our experience is based on ownership of other iPods. It’s a simple fact that the nano is much, much more scratch prone than both other iPods and any cell phone.

This is a very real problem for Apple and a very poorly designed part of what is otherwise a fantastic product.

Del Miller

The point about the market leader accepting a disproportional burden for mistakes is certainly valid, but Apple is far from being a novice at this: Remember the Cube?

Here’s an article from 2000 about Apple getting killed for relatively small issues versus someone like Dell who is never even subjected to inquiry. [Shameless plug warning]

Article: Del Computer Cracks Up
http://www.macopinion.com/columns/engine/00/10/29/index.html

Jacqui

oh only, 0.01% of our pills will cause violent vomiting… rest is all good. That won’t fly, and this one doesn’t.

Actually, that kind of thing flies in the pharmaceudical industry all the time.

sjk

Re: Have you actually watched a drug commercial recently?

Ones for sleep medications with side effects that include drowsiness are particularly amusing.

Nitin Reddy Katkam

This certainly is a production issue and not necessarily a design issue. Perhaps the production team was forced to cut costs then they could’ve switched the kind of material.

I know what it feels like ‘cos I once had a plastic folder that got scratched by a sheet of paper that was printed on by a laser printer!

…and just this morning, a biker added a little scratch to my car :-(

moo

“1/10 of 1%” is sure getting a lot of attention :-)

Like Microsoft, Apple has to pay the price for being “dominant”.

Will Jobs release an even smaller iPod in the near future? iPod Pico, maybe.

Jeremy Pepper

Om, you hit the nail on the head in one of your comments. For some reason – people loving the underdog, Apple having that Apply mystique – Apple always gets a free pass in blogs and the public, and then walks away smelling like roses with its PR.

If another company, say FedEx, went out to protect its information and trademark like Apple has, suing blogs and bloggers, they’d be vilified. The uproar over Apple’s strong arm legal tactics is more like a two-day yelp.

If another company, say Dell, had bad customer service and issues with its products, the blogosphere would start a DellHell meme and everyone would be up in arms that Michael should be lynched and that Dell was going down the drains. The uproar over this compared to Dell is negligble.

Apple always gets a free pass because people wear rose colored glasses. If I buy a Nano, why should there be no protection included already – it can’t be hard to throw that in to the box, can it? A failure rate is a failure rate, and yes, consumer electronics can be kludgy, but the “it’s just a small number” response seems lacking.

Jim Metsovas

This could all easily be fixed if everyone that bought an ipod nano bought an ipod protective kit or screen with it. I bought a protective kit before I even bought my ipod nano. Its called planning ahead instead of whinning about the product. You know it’s small and thin it is susceptible to scratches and smudges. Get a freaking protective kit for it , PROBLEM SOLVED! They are available on EBAY and elsewhere, get off your lazy asses and find a solution to your problems.

brandon

quick thoughts-

i am not sure how much a nightmare this will actually be… but if its an opportunity for Om to do a little apple trashing, then i’m all for it.

i think the real bad publicity should come from the fact that they pump these ipods out like its a software patch. i’ve seen colleagues go through 3 ipods in the past year… if i was an apple-die-hard, that is what i would have the problem with. their approach to innovation makes their customers look like chumps if they don’t have the pocketbook. sad/ and if i was moto, i would vow to never work with aapl again. got to love their stock though!

zen micro with YME is what should kick this co’s A**

lastly: wakeup call to gates… get your pc manufacturers to make some *hot* computers. somehow pocketpcs look pretty, but the last 3 laptops ive owned are hideous/

someone is asleep at the wheel here… they are losing a new generation of computer users who are indifferent about the OS. fact.

That’s all for now.

Total

“Imagine, some drug company making an argument like that – oh only, 0.01% of our pills will cause violent vomiting… rest is all good.”

Have you actually watched a drug commercial recently?

Marc

Om, Even adverse drug responses across the spectrum are about 1% due to preparation errors and everything that can be done to prevent this has not reduced this percentage significantly. It’s not OK but it is a reasonable number. It is rare that anything is 100% infallable. The inital blogs of people putting the nano through obstacle courses and trauma revealed a well built unit that seemed to withstand more than a normal amount of wear and tear. People need to cut Apple some slack and give them the opportunity to respond.

Tony E

Apple has to deal with this now, before the holiday shopping starts because this story is soon to make it up to mainstream press coverage, and Apple might not have such a jolly Christmas.

Om Malik

well the reason they are resistent to that kind of pr disasters is because people are no willing to call them. this is more than just the mac cult people the company is going after.

steven, the personal attack is way off by the way. my shit thinking – dude how about their shitty product.

Steven Frein

If you follow apple for any length of time they are resistent to these “so called” pr disasters. Om stick to wifi or somthing else your good at. Apple has had issues like ibook battery and the ipod battery which are bigger issues than this and they seem to keep selling those products. Apple will sell more nanos than the mini and you will be sitting in your shit thinking of other ways to debase Apple.

Deepak

The drug company analogy is way off. Faulty drugs are life threatening. Faulty electrical appliances are also life threatening. That is why those kind of products have to go through some kind of approval agency.

Scratches on an iPod is only a cosmetic defect and the pain is because it is costly. An analogy with scratches on a new car would have been more appropriate.

I agree with you that it is a lot of bad PR for apple as a result of the number of blogs and news agencies picking this up. But the amount of publicity in this case is probably two-fold: 1) Apple is a market leader in the case of MP3 players, and 2) it has always generated more publicity even in areas where it is not the market leader (computers).

Dave McClure

Om –

dude, this is Microsoft 101. if you have a monopoly, you don’t have to give a damn (that much anyway). your own comment that ‘personally – i don’t give a shit, i will still buy the Nano if I want to’ tells the tale.

apple might get a small black eye, and perhaps they could handle the PR matters better, but to paraphrase: in the land of the blind, the [however black-and-blue] one-eyed nano is still king.

so, anyway, back to 80% market share…

– dave mcclure
http://www.simplyhired.com

Josh Chaney

The only people who say this is a non-issue are those that do not own one of these Nano’s.. I bought one a week ago, it has NEVER seen my pocket, or any sharp objects, and has only been laid on it’s back very gently on the table. There are very small but easy to see scratches all around the scroll wheel, and a few on the screen. It’s disturbing to see a brand new expensive product look like an abused product so quickly. You feel like you’ve been cheated. I am desperately awaiting my “invisible shield” for the Nano. The iPod Nano definitely scratches way more easily than a cellphone or other similar device. I have owned 3 iPod’s previously and none of them did this. And my cellphone of a month old which visits my pocket frequently has no scratches. So please, unless you own one, keep your “non-issue” comments to yourself.

Suresh Kumar

it reeks luxury — perceived luxury for the masses, therefore there are always those that will make more noise than the rest…

all iPods scratch unless you take care of them…

the difference is that those kinds of issues are being mixed up with the faulty batch issue of the cracked screen…

what it does prove is the power of blogging and the internet to bring a company to its knees… companies do need to take heed and respond quickly, as i believe Apple has done.

the metalic exterior of the iPod mini didn’t suffer this problem.. but like i said its now been elevated to mass-market appeal… and we have the whingers who are crying because of a few scratches..

btw — i beleive that Apple will now have to release an even more expensive (*more exclusive) iPod so that it cannot be purchased by the mass-market… that distinction needs to exist.]

ron

no, not a non-issue. apple has to deal with it. when someone walks into their ritz carlton hotel room and it hasn’t been cleaned, they have housekeeping there in two minutes and complimentary fruit basket to smooth things over… and, yes, sometime even a ritz carlton room is left dirty. this should take the shine off apple if it’s handled properly, but apple must address the issue without spin.

Om Malik

its not a non issue – as i said, its all about the perceptions, and perceptions are well, bullocks. i think this is where smashing pr job would controlled the damage. one story begets another, and another. and another.

PS personally – i don’t give a shit, i will still buy the Nano if I want to. regardless of what others might say.

Suresh Kumar

Om,

i think this is a non-issue;

Its just an opportunity to feel to bash Apple, like they did with the battery problem.

check the response from Apple,

If its the cracked screen, they will replace it since its a faulty batch.

If its a scratched screen, well they need to wrap their nano in cellotape (re: my comments) — they need to get over it…

Om Malik

oh so you mean to say ron that i have gone overboard with this. look apple’s who shtick is that its better than the others…. premium pricing for premium products …. well, its time for them to deal with it.

ron

um, don’t you think you’ve gone a little overboard with this? first, you try to keep customers happy, but you can’t keep all customers happy all the time especially if you’re the market leader (think microsoft, cisco, dell, etc). second, apple is not a a drug company! it’s products don’t go through fda approval precisely because a person’s life does not depend on the reliability of an ipod. you seem to have gone overboard here.

i think apple’s biggest mistake in this *minor* debacle is that it didn’t apologize and offer new nanos to all affected devices without question. it needs to take responsibility, but i think you’ve gone too far.

Suresh Kumar

Your right its is a complete PR disaster; but seriously these wingers need to get over it.

But we need to be careful here… what we probably have is a lot of idiots (15 years olds) and mass-market consumers (not the early adopters)… who have finally saved (summoned up the courage) to fork out $200 for their first iPod.

It would have been fine if these were the types that listened to their iPods in their original plastic coverings (assuming that they came like that – weve seen how the Chinese treat their electronic items!)….

but they don’t do they? — these same idiots probably think they can place their iPod nano in their jeans pocket.. or in the back of their trouser pocket… and think that they can stress these devices and it wont crack?

c’mon — its friggin impossible small! of course its fragile!

and mass-market movers who are getting onto the scene aren’t too well happy that their iPod has a scratch or two… point them to the iPod accessories case section! :)

Om Malik

i say clearly a PR disaster. have you seen how much press this issue is getting. its even on BBC. most major european dailies and what not. its just one of those thing which is going to snowball. believe me, been in the business to know how these things escalate

PXLated

While I agree that they need to keep people happy, from what I’ve read (quite a few reports so far), the Nano doesn’t seem to suffer any more scratching than anything with a screen (from cells to Palms) for most. It’s just that the very minority raise holy hell. Remember the brothers with the bad battery. I think characterizing it as a “full scale PR disaster” is probably an overstatement at this point.

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