Are Steve Jobs' Problems at Apple Rotting the Company's Core? The Shelly Palmer Report.

The first quarter of 2008 was the most successful in Apple39s history The company boasted revenue of 96 billion and a net profit of 158 billion compared to revenue of 71 billion and a net profit of 1 billion in the third quarter of 2007 But its second quarter results were down 751 billion in posted revenue and 105 billion in net profit from the first quarter Some people think this downtick signals the beginning of an unfortunate trendline amp8230 or worse I hope not But there is certainly more going on here than meets the eyeIn the eighteen months since Apple dropped Computers from its name the company has greatly expanded its reach However with massive growth have come security flaws software bugs faulty hardware and a plethora of other puzzling problemsWhile Steve Jobs39 operation is known for its quality products and devoted fan boys it seems that the company has compromised quality for growth So much so that even Apple39s most devoted supplicants like me are beginning to lose faith While Apple has had small production problems for years lately the company has experienced an eerily high amount of bad press for malfunctioning electronics The major problems began with the release of its new Leopard Operating System While the system works great on new Macs where it is preinstalled by the factory users running older machines who tried to make the update experienced what can only be described as quotthe blue screen of deathquot a complaint that gets its name from fatal crashes in Microsoft Windows Days after the release of Leopard message boards erupted with complaints from angry users many of whom still pray at the Jobsian alter But many of whom have long memoriesWhile the Leopard Chronicles were widely covered the problems in Cupertino did not stop there In fact they actually got worse culminating with the release of the 3G iPhone Apple has been promoting the new iPhones as quottwice as fast half the pricequot But are they Not so much While the hype for the 3G iPhone was ungodly the phone also received a fair amount of bad press from pundits who noted a significant increase in the cost of data and lackluster battery life Regardless the 3G iPhone sold over a million units in its first weekend on the marketThat same Friday July 11 Apple decided to open its Application store launch MobileMe an updated version of its mac platform which includes access to a broadband cloud and release a software update for the original iPhoneiPhone 10 users were vocal about the problems associated with the software update which caused many iPhones to become plastic bricks A quick Google search for quotiPhone Brickquot will yield 2080000 results from very sad iPhoners No matter how you spin it Apple was unprepared for the launchNothing has been more indicative of Apple39s growing pains than its ultra flawed MobileMe service The service which was a large update to its existing mac platform has been universally panned One of the talkedabout problems with MobileMe was that a small percent of users lost email service for a few days The problem was so serious that a colleague of mine got an email from his girlfriend last weekend while sitting on the beach next to her Puzzled he asked her if she had just sent him a message from her iPhone She said quotNoquot He showed her the email She barely recognized the message because she had sent it a week earlier This was last weekend a month after the initial problems were reported and reportedly fixed The service has been so bad that Apple even publicly stated that its performance has been sub par and has given subscribers three extra months of service for free But what good is three free months if the service doesn39t work properlyApple39s problems don39t stop there The company announced that they would replace iPod Nanos which caught fire and MagSafe power chords which broke or melted Speaking of fire the company also had a major problem roughly ten days ago when a fire erupted at its Research and Development building on the grounds of its headquarters on the infamous 1 Infinite Loop campus Small disasters to be sure but when you add them up you begin to see a patternWith rumors of Jobs39 declining health security bugs the options backdating scandal engineers canceling appearances at hacker conferences and the continuing saga of 3G iPhones39 awful performance on ATampampT39s 3G network including this week39s pending class action lawsuit citing poor iPhone performance Apple cult members are in a tizzy Will the Street be nextCan the House of Jobs get back on track Despite major problems in the last 18 months Apple still tops the ACSI39s customer satisfaction survey ten points higher than closest competitor Dell And sales are robust Apple shipped 2319000 Macintosh computers which represented a 44 percent growth in units sold and a 47 percent increase in revenue for the quarter yearoveryear iPod sales were up five percent in units 22121000 representing a 17 percent revenue increase yearoveryear and the faithful purchased 2315000 iPhones during the same quarter Nice numbersSo to paraphrase the immortal words of Donnie Osmond quotOne bad apple don39t spoil the whole bunch girl Oh I don39t care what they say I don39t care what you heardquotShelly Palmer is Managing Director of Advanced Media Ventures Group LLC and the author of Television Disrupted The Transition from Network to Networked TV 2006 Focal Press Shelly is also President of the National Academy of Television Arts ampamp Sciences NY the organization that bestows the coveted Emmyamp174 Awards He is the ViceChairman of the National Academy of Media Arts ampamp Sciences an organization dedicated to education and leadership in the areas of technology media and entertainment Palmer also oversees the Advanced Media Technology Emmyamp174 Awards which honors outstanding achievements in the science and technology of advanced media You can read Shellyamp8217s blog here Shelly can be reached at shellypalmernetCheck out the 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Are Steve Jobs' Problems at Apple Rotting the Company's Core? The Shelly Palmer Report.

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