Apple Mac: Is the rebel brand faltering?

Computers were just dull, grey boxes until Apple came along. The 'rebel' brand's beautifully designed, brilliantly marketed products became the epitome of plugged-in, wired-up, 21st-century chic. But as the company has prospered, so its devotees have become uneasy. Faulty products, poor service - and worse - the list of grievances is getting longer. Is Steve Jobs' empire losing its cool?

When I switch on my Apple Mac, the first thing I see on the screen is a smiling face - the icon of Apple's operating system. It seems apt. Once the technology world's underdog, Apple has become the consumer power-brand of the 21st century, a company that knows what real people want from their cutting-edge gadgets.

Apple has had reason to be cheerful. But the happy face on the screen of my MacBook laptop is starting to look more like a pained grimace. In recent months, court cases, faulty products and bad PR have taken the shine off these objects of consumer desire. Could the unthinkable be coming to pass? As David has become Goliath, has Apple lost its cool?

Throughout its 30-year existence, Apple has enjoyed an enthusiastic cult following. Even its corporate history is imbued with a sense of romance. It was not born in a faceless boardroom; instead, legend places its genesis in a garage. Apple Computer, founded in 1976, was the labour of love of "the two Steves", Wozniak and Jobs, the latter a college drop-out who would go on to sell his beloved VW Camper Van to finance Apple's early computers. These were mavericks, innovators, creative free spirits who seemed to fit the West Coast counterculture as much as they did the entrepreneurship of Silicon Valley. Yes, they lost out in the business war, as Microsoft came to dominate the market, but the Mac-savvy true believers became evangelists to their Windows-using friends.

There was a cachet to recounting how Apple popularised technologies that have shaped the face of modern computing: colour screens, the mouse, CD-Roms, icons, drop-down menus and even the ability to vary fonts. For years, people didn't just buy Macs, they bought into the idea, the funkier alternative to Bill Gates's monolithic Microsoft and the mainstream world of PCs. But now the very enthusiasm of Apple fans for the company's original ethos is being ranged against it. The people who, over the internet, shared their incredulity that the masses should persist in buying PCs, have now come together to call Apple to account.

More than any other product, it was the iPod that gave Apple a powerful share of the market and had the competition running scared. By 2005, sales of the various Mac computers trailed those of the music player, which accounted for 46 per cent of Apple's total revenue. But problems have beset even the celebrated iPod. After transferring manufacturing from the US to China, the company's reputation for quality suffered. Cracks started to appear - literally - and the online community was there to broadcast the bad news to the world.

Last September, a batch of newly launched iPod Nanos were prone to cracked, scratched or failing screens, sometimes within hours of purchase. In response, an aggrieved Nano owner named Matthew Peterson set up a website to collate complaints and force Apple to address the issue. It received 30 e-mails per hour, eventually prompting the firm to offer replacements to angry and disillusioned customers.

Then, just two weeks after the launch of the Intel-powered MacBook in May, some users of the signature white units began to report a premature and permanent yellowing of the casing. After spending upwards of £749 on a laptop, one of whose major attractions was its styling, customers were not happy - especially since the AppleCare warranty excludes cosmetic issues, as those calling the company were reminded.

Again, aggrieved users gathered together online. Within days, the thread discussing this on Apple's support forums had grown to over 1,000 posts and was promptly locked, preventing new replies. Debate then moved to websites such as stainedbook.info and appledefects.com, where sufferers pondered how to force the firm to acknowledge the issue. Two weeks later, callers to technical support found that the company was now replacing the casing, though the official line remains that Apple is aware of and is looking into the issue.

Apple has always enjoyed the benefits of positive publicity generated by supporters' online discussions of its products. But it also runs a regime of ruthless information control that would put many Hollywood publicists to shame. Those who have had the misfortune to seek information other than that contained in official statements will be well aware of Apple's tendency to be unavailable for comment - anyone who doubts this should try a quick online search of Apple-related news and see how many articles sign off with this very phrase.

Frustrated by the company's unwillingness to discuss its workings, the media has seized on any story that the corporation would rather suppress. "Apple is quite arrogant when it comes to a negative story," says Dylan Armbrust, editor in chief of Computeractive magazine. "But if someone comes across as obstructive it makes the media dig deeper."

It's not only journalists who get this brush-off. Customers, too, fall victim to the standard reply - including nine-year-old Shea O'Gorman. As part of a letter-writing lesson in her US primary school, Shea wrote to Apple suggesting improvements for her beloved iPod Nano, such as support for song lyrics. This earned a terse response from Mark Aaker, senior counsel of Apple's law department, stating that Apple does not accept unsolicited ideas and that she should not send them in. The company later apologised for the affair, and its policy for dealing with children was changed. But the negative publicity had done its image few favours.

Meanwhile, questions concerning the iPod's durability are continuing. The battery is integral to the unit and cannot be easily replaced. But without purchasing the company's AppleCare extended cover, which gives an extra year's protection above the standard 12-month guarantee - at £39, almost a quarter of the £169 cost of a 4GB iPod Nano - users risk having to replace their machines after the expiry of the basic year's warranty.

Online forums and consumer reviews contain numerous complaints from those who have been told that repairing their failed unit will cost close to the price of a replacement. In response, Apple has countered that the units have a first-year failure rate of 5 per cent compared with up to 30 per cent for some mobile telephones. Any perception that large numbers of the machines had suffered faults must therefore be explained by the sheer number of the devices in circulation.

But as music downloaded from iTunes can only be played on an iPod, those whose machines have expired face either reassembling their music collection or buying another iPod. Now the issue of compatibility is under attack by the French government, which last month approved copyright legislation that could force Apple to make the iPod and iTunes compatible with rivals' offerings.

Given all this, perhaps it is not surprising that a YouGov brand awareness survey index released last week revealed a clear fall in popularity for the Apple brand, with the index for quality falling the most.

For a company keen to exercise strict control over the press, an investigation by The Mail on Sunday in June, which purported to have discovered that Apple's iconic music players were made in sweatshops, was deeply embarrassing. Employees in a Chinese factory run by subcontractor Foxconn allegedly received just £27 a month, living in dormitories of 100 and working 15-hour shifts.

Another factory, in Suzhou near Shanghai, which makes the iPod Shuffle, supposedly paid workers £54 per month - but they had to spend half of this on accommodation and food within the factory complex. Apple immediately announced an investigation, adding: "Apple's supplier code of conduct sets the bar higher than accepted industry standards and we take allegations of non-compliance very seriously."

Ultimately the snowball effect of bad PR reflects on the man whom Apple fans once heralded as their saviour. And at the centre of the consumer's relationship with the company is Steve Jobs. It is he who stands on stage to unveil the new products, always dressed down, never in a suit. His image is the face of Apple.

In 1985, he was forced out of his company by chief executive officer John Sculley, whom Jobs had recruited from the multinational PepsiCo two years before. During his exile, in 1986, rather than joining one of Apple's corporate rivals, Jobs instead bought what was to become the animation company Pixar from Star Wars director George Lucas.

The hit movie Toy Story instantly established Pixar as one of Hollywood's major players, making Jobs a billionaire and furthering his reputation as a man with an uncanny ability to divine the future of popular technologies. In his absence, Apple was in decline.

In 1997, to the delight of his supporters, Jobs made a triumphant return. Within a year the ailing company was once more posting handsome profits. But the fans' excitement abruptly cooled when Jobs revealed a pact with Microsoft. Under this, the software giant would develop Office software for the Mac and Apple would bundle Internet Explorer in all new machines. Worse, Microsoft would purchase $150m (£80m) of Apple stock.

Though horrified that even a tiny part of the company had been sold to Gates, the launch of the iMac in 1998 and the Mac OS X operating system the following year helped to restore fans' confidence. By 2001, when the super-stylish iPod was introduced to the world, most long-term supporters' belief in Apple and Jobs' vision was restored.

"Apple is pretty much the same company it has been since chief executive Steve Jobs returned in the late Nineties, which is pretty much 'do and believe what we say, or else'," says Kasper Jade, publisher and editor-in-chief of AppleInsider. "To have a company that you've supported for nearly a decade turn its back on you and drag you through the legal system is nothing short of disheartening. But just as it's Apple's job to build insanely great products, it's our job to write about them for our million-plus readers, and we'll continue to do that."

An intense corporate paranoia has been revealed, along with a fondness for litigation that has arguably left the brand's long term fans - and new converts - with a sour taste in the mouth.

Last March the firm won its legal battle to make the Mac user websites AppleInsider, PowerPage and Think Secret reveal sources of leaks about forthcoming products from its employees. As these publications do not have large resources with which to contest such litigation, the move was seen as an attempt by the company to intimidate the burgeoning Apple-news industry and its own employees - despite the online rumour mill having frequently provided the company with positive publicity through speculation about its next big release.

The sites contested that California law and the US constitution provided legal protection against forcing journalists to reveal their sources and eventually won their case on appeal. Those on the receiving end of litigation believe Jobs is at the root of the problem.

The recent actions of Jobs' greatest rival have provided a surprising contrast to such behaviour. Last month, Bill Gates' philanthropic credentials received a huge boost after he announced that from 2008 he will take a back seat in Microsoft to spend more time working for his charity, the Bill & Melinda Gates Foundation. Despite its hippy façade, Apple's relationship with charity has been more fraught. In 2004 the iTunes Music Store famously refused to sell the re-recorded Band Aid single at the charity's requested price of £1.49 instead of ITMS standard 79 pence per tune. Apple responded to criticism by saying that its business model depended on selling tracks for a uniform price and it would make up the difference as a charitable gesture.

Still, the company clings to its cool, cult image. Nowhere is this more visible than at its chic and sleek Apple stores. But stepping into the branch on London's Regent Street can feel curiously like entering a church of Scientology. Jobs's motto, "Think Different", would more accurately be "Doublethink Different". On one side of the room a queue of customers lines up to obtain a Genius Bar appointment, only to be told to come back in several hours' time or - if they are the unlucky owner of an out-of-warranty device - to return it to its manufacturer in the Far East as it is no longer Apple's problem. Only feet away, an Apple sales guru extols the virtues of its latest products, and boasts that a "genius" is always on hand to help.

Just a few weeks ago, the company announced profits of $472m, well ahead of forecasts. There is still talk of the "halo effect". But unless the firm's ethos is upgraded, its operations made more transparent and consumer friendly, its labour practices placed beyond reproach, could it be that Apple will become just another big business we all love to hate? Will the happy Mac icon lose its smile?

It's just not special anymore, by Gordon MacMillan

In its early days Apple was seen as almost a rebel brand, which appealed to a community of creatives and geeks. And in design terms, Apple was the technology that was made for creative people: journalists, designers, programmers, writers; people who had a less mainstream take on life. The company built up a strong following as a result.

But Apple wasn't just about appearances. The most important thing about Apple was what it wasn't. It wasn't another IBM. It wasn't Microsoft. People saw it was offering something different - something that complemented a less corporate-driven lifestyle.

Of course, personalities were involved. While a cult grew up around Steve Jobs, Bill Gates was seen by Apple's users as an antichrist figure. In their eyes, he was the head of a massive company that wanted to take over the world, that wanted its stuff on every desktop. They always thought Steve Jobs was fighting from the other corner. They thought he was bringing diversity to their desktop, and to their world.

When Apple was driven to the brink, it fought back - first with the iMac, and then with the iPod and iTunes. When the iPod took off, Apple broke away from its core group of users to become something global, a company whose appeal extended far beyond its traditional advocates. Suddenly, the people who were using iPods were not the people you might have associated with the brand say two years beforehand.

But the Apple had been on the way back well before the iPod. The iMac and iBook started the resurgence, because these funky luminous plastic machines were on everyone's desk. They played on what Apple has always played on - this is not just another computer. Its advertising was saying "Think Different", and, with the iMac, genuinely looked different, too. In reality, Apple may not have been that different from any other computer company, but the people who bought its products bought into the idea.

Now there are different categories of Apple users. There are those who have been with Apple all along, and there are those who love their iPods, but who, like me, have never really liked Apple. So the company is in new territory - it has a new audience, which doesn't have the devotion traditional Apple users have. Apple has become ubiquitous, which has changed the brand beyond recognition, and, perhaps that's the real reason some of the shine has come off. It's just not as special as it was.

Gordon MacMillan is the editor of Brandrepublic.com