Apple has agreed to pay $113 million to settle with iPhone users whose smartphone clockspeed was artificially slowed to boost hardware sales, a stupid move on Apple’s part that’s worth examining.
The company has cleverly built a strategy based on trust and prestige, creating an environment where loyal customers are more than willing to pay for the Apple brand. Its best trust effort has been its position on password access. This is where Apple stands firm to law enforcement at the state, municipal and federal levels, saying it won’t help reveal a password because, simply, it’s engineered the devices so that it has no easy way to do so.
The marketing goal is to get people thinking that Apple is on their side and will protect their private data no matter what. As I said, clever.
The prestige is obvious, where Apple rolls out every new iPhone like it’s a telephonic version of a Mercedes-Benz S-Class or a Rolex watch.
Given that Apple is built on top of these kinds of perceptions, why would it deliberately slow down phones to push sales? Yes, Apple has maintained that it was really just an effort to extend battery life. Had that been true (hint: it never was), Apple would have announced it when they began.
The silence makes Apple’s denials laughable.
Based on state attorney general investigations involving 34 states and Washington, D.C., “Apple discovered that battery issues were leading to unexpected shutdowns in iPhones. Rather than disclosing these issues or replacing batteries, however, Apple concealed the issues from consumers. Apple’s concealment ultimately led to a software update in December 2016 that reduced iPhone performance to keep the phones from unexpectedly shutting down. The attorneys general allege that Apple’s concealment of the battery issues and decision to throttle the performance of consumers’ iPhones led to Apple profiting from selling additional iPhones to consumers whose phone performance Apple had slowed.”
The case against Apple dealt with “unexpected power-offs” or “UPOs.” The complaint filed in this case was far more specific:
“Apple limited the amount of battery information available to its consumers, which prevented consumers from being able to ascertain the true reason they were experiencing UPOs. Apple never publicly disclosed that the UPO issue actually extended well beyond what Apple claimed was a ‘very small number of iPhone 6s devices’ involved in the recall. Instead, Apple’s statements regarding the extent of the UPO issues in late 2016 were false, misleading, and even contradictory, and they were targeted solely to the Chinese market, despite the fact that UPOs occurred in iPhones across the globe. Thus, contrary to Apple’s public statements, the UPO issue was not affecting a ‘small number’ or ‘very small number’ of users or devices in late 2016. Instead, the UPO issue was affecting millions of users daily…. Apple’s behavior confirms this understanding, given that it ultimately chose to adopt a drastic countermeasure that was not limited to a ‘small number’ of devices but was delivered instead to the entire installed base of iPhone 6 series devices in iOS 10.2.1 and 7 series devices in iOS 11.2.”
This all makes so little sense. Apple must have known that these details would eventually become public.
I suppose there is a philosophical ethics question at play: If a company believes it will get away with deceiving customers to boost revenue and profits, should it proceed? In this instance, that wasn’t the issue; Apple execs had to know they would quickly get caught. Any debate about Apple ethics needs to be postponed, pending someone finding that Apple actually has any ethics.
Knowing this would undermine how the iPhone is perceived — and especially how well Apple could be trusted — what was Apple thinking when it approved this plan, which looks like something created by a James Bond villain or Mr. Burns from The Simpsons.
I wish that Apple had focused more on iOS and iPhone capabilities, rather than trying to con people into buying new devices. The last iPhone rollout did little beyond increasing CPU speed, offering pointless 5G claims and adding some minor capabilities that few cared about. (Now, had it added back Touch ID during a pandemic, that would have given people a reason to upgrade.)
Did Apple learn a lesson? Probably, but it was the wrong lesson. Years after the incident, Apple was forced to pay a trivial amount (well, trivial for Apple). It wasn’t forced to, for example, refund the purchase price of every iPhone it sold because of the slowdown in addition to fines and penalties.
Now that would have made Apple think differently. As long as it can get caught cheating and still be allowed to keep most of the money, it has no reason to change.