Marketing, Lying and the iPhone 4

I’m surprised at how often I hear people say that it’s OK for marketing to lie about products.  I’ve even heard people say that lying about products is marketing’s “job”.  Newsflash: It’s not marketing’s job to lie.  In fact, it’s not OK at all for marketing to lie.  Trust is expensive to rebuild once you lose it.

The Retina Display “Fib”

The topic of how much lying marketing can “get away with” came up recently with the launch of the Apple iPhone 4.  At the launch, Steve Jobs touted Apple’s new “retina display”, describing the resolution as better than “the limit of the human retina”.  This spawned a debate about the technology, starting with several experts who questioned the claim that the display was better than the limit of the human eye.  There were also complaints that Apple had “faked” images of the display in its advertising, showing a resolution that was much higher than the phone could actually display.

The Reception Issue/Non-issue

Just when things had seemed to quiet down a bit, the issue of the new phone’s reception hit the news.  It began with users complaining that holding the phone by the bottom left hand corner would cause it to lose reception and drop calls.  Apple responded by stating that other phones had similar issues and that customers should simply hold the phone differently or buy a case.  Users were not terribly happy with either of those options.  A few days later, Apple issued another statement saying that the problem was really due to the way signal strength was calculated and displayed.  What looked like 4 bars was really only 2 bars in the first place.  Holding the phone in the “wrong” may cause the display to change but the reception didn’t really degrade.  A software update would fix the bar display problem and everyone could go back to loving their iPhone and hating their carrier for providing lousy reception.  Customers continued to grumble about dropped calls but it seems the issue (if you could describe it as one) had been fixed.

Then the intrepid folks at Consumer Reports decided to test it.  It wasn’t pretty.  In a controlled environment their tests showed that the signal strength of the iPhone 4 did significantly degrade if held certain ways and calls could be dropped.  (An aside – they suggested that a bit of duct tape applied to the phone would fix the problem.  Duct tape.  On an iPhone. That image alone is enough to give legions of design-conscious iPhone buyers nightmares).  Consumer Reports then called on Apple to step up and offer customers a fix for the problem in a way that doesn’t require additional consumer expense.

If the tests by Consumer Reports are accurate, there is a serious question about whether Apple knew this was an issue all along and lied to avoid a hardware recall.  What started out as a technical glitch turned into a situation where Apple’s trustworthiness as a vendor has been seriously called into question.

But Aren’t They Still Selling Like Hotcakes?

I’m not a hardware engineer so I have no opinion about whether or not Apple deliberately mislead customers.  Nor am I ruling out the possibility that Apple has a rebuttal to the Consumer Reports testing that proves that the problem isn’t what it seems today.  And despite the problem, the phones are still selling faster than they can make them.

But there has been some damage done.  There are enough people out there that believe that Apple lied about the issue that they will begin the treat the company like liars.   What that means is that every claim Apple makes about its products will be scrutinized in a way it wouldn’t be if we still trusted them.  In the future Apple will be accused of lying, even when they aren’t and if they get caught in even the smallest of lies, it will be front page news.  This risk is being discussed by financial analysts and (in the short term anyway) the stock has take a hit.  The ramifications of the “death grip” incident however will likely be longer term and the cost will be measured in a loss of user trust and increased scrutiny.

The lesson for marketers is that outright lying to your customer base is risky.  Getting treated like a liar is not fun and rebuilding trust in your community is difficult and expensive.

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30 thoughts on “Marketing, Lying and the iPhone 4”

  1. Hi April,

    Interesting post. I thought I’d point out two additional points in order to balance things out.

    1) Turns out Apple is correct in their statement that the display meets the resolving power of the human eye. There are a few caveats here (we’re talking about the average eye, not a *perfect* eye). Many of the so-called experts actually made incorrect calculations. See:
    http://blogs.discovermagazine.com/badastronomy/2010/06/10/resolving-the-iphone-resolution/
    http://prometheus.med.utah.edu/~bwjones/2010/06/apple-retina-display/

    2) There are clearly some pretty serious hardware issues with this antenna. That being said, it’s not affecting everyone, and only in areas of poor carrier reception to begin with. I know I don’t know my phone with a death grip as some people do. In other cases, the antenna does actually provide *better* reception than any previous iPhone.

    Re: Consumer Reports, an experienced radio engineer has come out and said their methodology was profoundly flawed. http://mobileanalyst.wordpress.com/2010/07/12/iphone-4-report-consumer-reports-study-is-full-of-crap/

    Cheers,
    Eric

    1. Hi,
      I’ve read so much about both of these issues I think I could probably supply at least a dozen links that support either side of the argument. Regardless of what experts on either side of the retina display issue say, you can’t argue that what Apple said wasn’t at least somewhat misleading. As for the antenna issues, there are enough people complaining that I would tend to believe there is a problem but founded or not, Apple’s original response was not what customers wanted to hear.
      The issue (and the point of this post) is that once folks stop trusting you, you will come under a lot of scrutiny, even if there isn’t a problem. The company now has a history of being less than forthright with it’s customers about features and flaws and people will distrust them in the future.
      Thanks for the comment!
      April

      1. I totally agree that they’re doing a poor job addressing it. Likely they are trying to take their time and come out with a solution that will properly fix the problem. In the meantime, though, the damage is done, there’s a bit of a moral panic going on (mostly for no good reason), and they’re not doing much to stop the fire.

        I’ll happily admit that I’m a bit of an Apple fanboy but, at the same time, this isn’t the first time they’ve had some sort of hardware defect and taken a long time to address the issue. The 27″ iMac displays is a recent one. Cracks in the plastic on older iPhones, Macbooks, and other devices, etc. It’s par for the course that Apple denies the issue at first and doesn’t seem to take it seriously. Sadly, it doesn’t seem to affect them much and they don’t change their behaviour. People still rush out to buy the products.

        Part of it, too, is that people hold Apple products up to a different standard. They expect more because they are promised more. A small defect often gets blown up into a really big deal.

        1. You make a good point about Apple being held to a different standard in some respects. I find people are generally quite forgiving with them, or at least they were. You would hate for them to lose that by failing to address what’s happening with the new phones (assuming there is a problem of course).
          April

  2. Great article April. Love your discussion about lying and Marketers. Too many people have this stereotype yet, if we do lie, our career is fundamentally over. It’s all about trust and relationships. Apple is one case study of many. Thanks for bringing the two points together.

      1. One and the same. Glad to see you’re having great success. Also glad to hear another voice in the wilderness speaking candidly on important issues, rather than simply addressing the hot topic of the day. Keep it up.

  3. I once worked with a sales guy who flat out lied to a customer and then got caught at it. Another sales guy shrugged it off as “He was just trying to protect his family.” Huh? Lying to a customer to close a sale at the risk of getting exposed, giving back the commission and possibly getting canned is not protecting your family.

    I’ve also seen marketing people make claims that were not true simply because they didn’t understand what they were talking about.

    I recently encountered a situation where product management positioned the product a certain way but left out some important details, making for some fancy dancing for those of us having to sell and support it.

    Whether its intentional or because of ignorance is immaterial. The costs of getting caught in a lie – or the *appearance* of a lie – are too high. Witness Glaxo, Smith, Klein with their $$ multibillion issues with a diabetes drug.

    Unfortunately we’re all cracked pots at the end of the day and some people get overcome by greed, ignorance, enthusiasm, self-importance, etc. The market is ruthless and eventually figures it out, though. Sadly, not all the players in the market learn that lesson and pay the price with their reputation, their jobs or their companies. Apple has some work to do. It will be interesting to see how they execute.

    1. Hi Tim,
      Thanks for the comment.
      Marketers are paid to highlight the good in their products, that’s what we do. There is still a line you can’t cross though (your story about the sales person is an awful one).
      Customers are pretty smart and unfortunately now more than ever they have the means to spread the word when they catch you fibbing.
      April

  4. ..and it is dangerous to handle feedback unprofessionally, like their reply to hold the phone differently. As other desasters show you need to take people seriously, otherwise they would never calm down. Independently if it is your fault or not. This particularly holds true for companies that are loved, as love and hate are neighbours…

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