I’ll start off by saying that I’m not writing this article to make any excuses for Apple. By being far less than transparent in how they handled the iPhone 6 Plus “bendgate” when it occurred in 2014, they set themselves up for PR problems now that details of what they knew in advance have been made public. They made their bed, and now they will take a few deserved lumps for it. I just don’t understand why people are surprised by what they did and why.
I guess I just don’t buy into the notion that Silicon Valley companies all work off of exceptions to the rules that govern the actions of publicly-traded companies in other industries. While Apple, Google, Facebook, Samsung, Amazon and the like may look and often act differently than their non-tech contemporaries in many ways, at their cores, they still play by most of the same rules. When it comes to the business side, they really aren’t that different from other Fortune 500s. Risk management is one such area, and we have plenty of examples of how Apple handles such issues on a very public stage before.
In case you aren’t aware of the details, new information about the 2014 release of the iPhones 6 and 6 Plus came to light this week because of a lawsuit against Apple alleging that the touchscreen failure of many iPhone 6s is related to the phone’s susceptibility to bending. According to The Verge, internal Apple documents that were revealed as part of the discovery process show that they knew that the iPhone 6 was 3.3 times more likely to bend than an iPhone 5S, and that the iPhone 6 Plus was 7.2 times more likely. The suit alleges that the bending of phones are to blame for touchscreen failures, although it still remains to be seen if these issues are exclusively tied together. What we do know is that Apple responded to the issues that were revealed after the release of these phones by making changes to the iPhones 6S and 6S Plus that made them far more durable.
To be honest, I am not even remotely interested in the merits of this lawsuit. I’ll leave it to the engineers to decide if bending or some other issue contributed to touchscreen problems in the iPhone 6 and 6 Plus. However, for those who don’t pay attention to how companies operate, the information that has come out of this lawsuit provides a good example of how they look at risk management. Again, we have seen this before with Apple in the case of the iPhone 4. Apple came up with a unique and very innovative smartphone design that for all of its strengths and advantages, had one flaw. We saw Steve Jobs defend that design publicly with all the defiance and indignation he could muster.
However, we also saw Apple cave to pressure over complaints about the ability to short two of the wireless antennas with a finger placed in the “wrong” spot. While they didn’t recall or spontaneously redesign the iPhone 4, they did give us all free bumpers or cases, and the tempest in a teapot subsided. Then Apple quietly redesigned the antenna setup with the release of the Verizon iPhone 4 early the next year, and then those same improvements made their way to the iPhone 4S. This isn’t an isolated incident, either. Remember the flaking paint on the black iPhone 5? Remember how black went away the next year, replaced with Space Gray? Now we have complaints over the design of Apple’s butterfly keyboard and how susceptible it is to failure due to any debris intrusion coming to head in advance of WWDC. Of course, if you want real examples of how companies handle design issues, go research how often car manufacturers are sued over faults in their designs, and how common these are after a new vehicle design is released. These guys have risk management down to a science.
Of course, we all remember Samsung’s incredible misfortune with the Note 7’s battery problems, which were so severe that a full recall had to be carried out. Many Apple bloggers and super fans took aim and fired at will on their favorite company’s chief competitor, and I certainly took my shots, as well. However, while this is more of an extreme example, the way it played out is another interesting window into how companies approach risk and design shortcomings. I guess what I am saying is that, despite all of our comments to the contrary a couple of years ago, Apple and Samsung are more alike when it comes to handling risk than they are different. Remember that Samsung tried everything possible to prevent a full recall until it was the only option that remained. Sound familiar?
Why do companies behave this way? I think that is the really simple part. It’s all about money. When a problem is revealed, companies turn to the tried and true actuarial tables to determine the next step. Risk managers will figure out what each potential solution will cost, what the estimated PR impact will be, both positive and negative, and which solution ultimately offers the best balance of the lowest cost with the least PR damage and exposure to lawsuits. Obviously, companies don’t always handle this process well, and they often settle on solutions that hurt more than they help. Apple is no exception, as their initial response to questions about their handling of battery issues through software throttling caused a much bigger backlash than they would have faced with more transparency.
Again, I am not defending Apple’s actions here. Based on the documents that were revealed this week, they knew more about the iPhone 6 and 6 Plus’ susceptibility to bending than they admitted publicly in 2014. Did they deem that 3.3 and 7.2 times more likely to bend than the iPhone 5S was acceptable? Considering that the iPhone 5S is a smaller and very solid design, that may be possible. However, I think it is far more likely that Apple discovered this susceptibility to bending far enough into the design process that they would have major delay issues getting the new phones out the door, and in response, they determined that the risk of just replacing bent phones without question and riding out the inevitable PR hit was easier than reworking the design. Whether anyone wants to admit it or not, most other large companies would likely make the same call today.
I don’t think any of this should be a surprise to anyone who has their eyes open. This is how large companies conduct business. Samsung pushed the limits on battery designed and literally got burned. Do you really think they didn’t have any information on the potential risk of the Note 7’s tightly-packed design before release? Google released a Pixel 2 phone with a very poor screen and terrible color calibration. What was their initial response? They tried to explain and excuse the problems away. But do you think no one at Google realized that burn-in and ghosting were not just possible, but likely to happen before they sent out review units? Does anyone out there really believe that no one at Apple who held the iPhone 4 before release figured out that its new antenna design had an issue? After looking back at the many examples of how tech companies handle design problems and risk, if you still they they are somehow different from the rest of the corporate world, then I don’t know what else to tell you.