Mark Ritson

Unparalleled genius

You don’t need me to tell you that Tim Cook’s battle with the US Government is masterful marketing. Apple is maturing fast and with no new knockout products on the horizon and a sharp decline in revenues forecast this year, Apple’s CEO needs something to maintain Apple’s predominance in the market. Why not a crusade?

His claim that Apple is determined to be “a staunch advocate for our customers’ privacy and personal safety,” should not be seen as a repositioning of the tech giant either. This new David vs Goliath confrontation is merely the latest skirmish in an ancient war that once saw Cook’s predecessor, Steve Jobs, attack IBM, Microsoft and even Apple when he was outside the organisation. “Being hard doesn’t scare us,” Cook told the audience at Apple’s annual meeting last week. He’s not bluffing. Bloody-mindedness is part of Apple’s DNA.

Apple’s refusal to comply with a court order asking it to unlock an encrypted iPhone owned by terrorist Rizwan Farook also provides a major example of a rare positioning tactic – taking an enemy. Most marketers attempt to convince consumers what they stand for by communicating that message directly. Smarter brands look for an organisation that stands opposed to what they represent and then deliberately pick a very public fight with them to bolster their position in the market. Ryanair fought the big airlines to emphasise its competitive, cheaper credentials. Ben & Jerry’s took on Häagen-Dazs in the 1980’s to communicate its independent spirit and authentic origins. Now Apple combats the US Government to emphasise its liberal, independent streak.

Consumer privacy is already a core competence of the company. The Electronic Frontier Foundation, which publishes an annual report on the big tech brands has consistently rated Apple as a “six star” operator, meaning the company adheres to all of the policies of transparency and privacy that the EFF considers best practice. That’s a significant competitive advantage over rivals like Google and Microsoft (three stars) and Twitter and Facebook (four stars). The fact that all of these brands have recently announced their support for the stance that Apple has taken merely strengthens Apple’s position and its perception as the market leader.

This is a smart attempt by Apple to bolster its brand and further maintain its competitive position in the market.

Mark Ritson

Pure madness

No-one could have predicted the anti-Government stance that Apple has adopted in recent months. First came Tim Cook’s bold rejection of standard tax payments on Apple’s profits. Now he goes toe to toe with the US Government over homeland security.

Whatever bold statement Apple might be making right now over privacy, until very recently it cooperated with US authorities whenever access to customer data was required. Thanks to Edward Snowden and WikiLeaks, for example, we know that Apple was part of the secret PRISM project in which US authorities accessed international exchanges taking place on Apple’s various platforms for security analysis and profiling. The real question isn’t why Apple has refused to cooperate with US authorities, but rather why it has suddenly decided to stop.

Apple’s position is proving deeply unpopular. A recent Pew survey shows that 51% of Americans support the US Government and only 38% favour Apple. The move is even unpopular among Apple owners, as 47% of iPhone users said Apple should work with the Government and only 43% said they should decline the request.

The move is particularly baffling given the current political climate in the USA. Apple quietly complies with any US Government data request for many years but then just as America goes into a brutal election cycle Tim Cook embarks on a self-appointed mission to defy Homeland Security. The reaction from all sides of the political spectrum has been unsurprisingly critical. “Apple doesn’t want to do it because they think it hurts their brand,” Marco Rubio explained at last week’s Republican Debate. “Well, let me tell you, their brand is not superior to the national security of the United States of America”. Cue violent applause.

Perhaps the most potent reason against Apple’s staunch refusal to allow the Government access to the iPhone in question is what will happen next: not much. Next week’s initial court case will provide merely the first salvo in what promises to be a war of litigious attrition. Privacy laws, the First and Fifth Amendment and the Supreme Court are all likely to eventually become embroiled. Why would Apple distract its senior management and devote resources to such an extended mission when there is so little marketing upside to be had?

This is a mad move that can only damage Apple’s much prized brand equity and create long term tension with the world’s most powerful government.

Which side of the fence do you fall on? Let us know in the comments below.

  • James Brenchley

    This is a debate which divides people. I am one who doesn’t like the fact that innocent people are constantly spied on by the government and I support peoples freedom and privacy but in this case there is a real security risk and if the information on the locked iphone will help the case then that’s got to be a good thing. I must admit I wasn’t aware that Apple had helped the government in this way before although I am not surprised. In terms of damage brand limitation to Apple, the debate splits people so much that what ever the outcome, part of their target market will disagree whereas if they had kept quieter (like in the past) and let it happen no one would be any wiser and the brand would be safe.

  • Alexander Carter-Silk

    Mark, A thought provoking perceptive analysis of Apple’s brand position

    The fact that Apple chose to apply to the court to overturn what is effectively an ex-parte order is its right, so nothing turns on that. The FBI effectively got their order without Apple being able to argue the legality of that judgment.

    Perhaps the bigger picture in brand terms is; “not even the FBI can hack our encryption”… Not a bad message for anyone concerned about their personal security. After all the phone is the primary or only access to services for millions of people. The problem is that it also provides security and anonymity for the bad guys.

    There is of course a compelling argument that everyone should do everything they can to help the police to catch the bad guys. But the defeat of enemies has been the excuse of many governments to impose restrictions on its citizens, in the extremes to impose martial law and suspend civil liberties, this is why the US has a constitution.

    Whether Apple have this in mind, I don’t know, perhaps they do, perhaps they don’t, Which ever it is, the debate at a high judicial level as to how one strikes the balance between total surveillance and individual liberty, with all the risks that this entails is one which needs to be had.

    The House of Lords select commitee has recently reported on the draft “Investigatory Powers Bill”, for the UK. This draft legislation tackles this question. Many of the major technology providers gave evidence. The Report which runs to over 180 pages is a detailed, measured consideration of these issues and an explanation of all of the arguments and counter arguements.

    Part of the debate has been whether those that provide “cyber-security” and encryption should keep a back door. After considerable discussion, this provision has been dropped from the draft bill. Technology companies will not be required to provide hacks to their own encryption.

    Whether Apple’s position is driven by brand issues or by a deep concern as to the future of its relationship with government and the security services, who knows? Whatever the motive or the effect on Apple, this is a debate which is keenly watched and will if taken to the Supreme Court, will set the principles for many years to come.

  • Alexander Carter-Silk

    You just did so everything is right with the world!

  • Scouserphil

    I think this whole thing hangs on whether you believe the stance Apple has taken is due to a genuine concern over invasion of privacy, or a marketing tactic. Personally, I’m loathe to attempt to read Tim Cook’s mind and motivation as so many others have done, so my opinion is derived from the actions of both parties to this point.

    The government: Over the past, many years they have shown scant regard for privacy rights, period, and there are many examples of how they have consistently trampled on those rights. Moreover, in everything I’ve read about this I’ve yet to hear a compelling case for why the government believe there to be material information on that phone worthy of such drastic action.

    Apple: to your own point, and based on my own understanding of Apple’s past collusion with the government in everything from PRISM and beyond, how can anyone argue that this is a marketing tactic? That simply doesn’t hold water.

    What I think has happened is Apple has rightly decided to draw a line in the sand and say this far, but no further. To me that’s not a marketing tactic, it’s a smart way to handle a government that’s never been afraid to over-reach and justify that over-reaching in the name of “national security”.

  • Charles Fender

    After reading this I’m wondering what data Apple has relative to those customers who have strong opinions of this subject.

    If 43% agree with telling the FBI to “get off my lawn” but that 43% are highly unlikely to buy more Apple products if Apple doesn’t fight the good fight on this issue that’s highly relevant. If the 47% that want Apple to give in the the feds generally won’t make purchasing decisions based on this issue then Apple’s decision becomes more clear.

    I’ll bet on Apple having marketing data over them having principles. Their previous involvement on the other side of this issue (when they thought we were not watching) supports that assessment.

  • Leighton Jenkins

    An interesting view being discussed is that the argument is not ‘just’ about the iPhone. Its about the next set of Apple products, possibly the Apple Car. Imagine if any authority could hack into your car, take control etc through some backdoor is the argument.

  • Martin Hadek

    So I pickup the mag, go straight to the last page, as I do… and read top down: Opinion – Mark Ritson – headline – and get… none. So what is your opinion Professor?