There was once a company which did amazing things and had cash reserves of $40 billion.
In the middle of a stellar year, the company brought out a product which sold
three million units at £700 apiece in the first month after launch.
Then it turned out that the product had a flaw - a flaw which the company had been warned about by its engineers, and which could have been corrected, at a cost of eight cents a phone, by the application of a coast of varnish.
One month after the launch of this super-successful - but flawed - product, the company's stock market valuation had fallen by $10 billion.
And the CEO had publicly apologised for it.
MORAL: Don't Spoil The Ship For A Ha'porth Of Tar
When companies get too big, they tend towards arrogance. The iPhone 4 antenna issue reminds me of the Pentium FP division bug, where Intel first tried to hide that there even was a problem and then tried to downplay the impact of it before, finally, agreeing to replace the faulty chips.
You're right, Torben, the initial reaction is: "You, a mere customer, dare to tell me, who sits at God's right hand, that there's something wrong with my product? Get lost."
How quickly these huge corporations forget that the ultimate source of all their money are the "mere customers"!
As Bill Hewlett said many times "The customer defines a job well done"
Unfortunately I don't think that ethos applies even in HP nowadays.
It makes you wonder, Anonymous, have the accountants and MBAs ruined everything decent about the industry?
Well well ..indeed the customer defines a job well done. The problem is many customers define a job well done when it is done well for 80% of the time..as long as it is available *now* and it costs much lesser than certain other products which are done well for a lot more than 80% of the time (or are only available 6 months later).
Secondly, two reasons that "ruined everything descent about the industry":
a) Consumerism
b) Curse of the Moore's
And no, it is not the fault of the MBA types. They are mere cheer leaders, not the root cause.
Consumerism: If all you are willing to pay is for peanuts, then all you get is monkeys. So said the great Lee Kwan Yew.
The world of electronics is cursed..by the Moore's law. Wonder what would happen if Moore's law worked in other places - for example food, clothing, housing etc etc.
But FTM, if that's the case why do so many people buy iPhones and Blackberries?
"David Manners : But FTM, if that's the case why do so many people buy iPhones"
Because they can only get a signal 80% of the time ??? :-)
So many people buy iPhones and Blackberries because they can afford them - thanks to Moore's law.
Note that iToys are becoming increasingly affordable - even Apple can't resist Moore.
In terms of innovation and quality, the iToys are at the very top - in the same league as BMW or Merc or Ferrari or even Rolls Royce.
But in terms of affordability, iToys are now in the league of a Renault or a Toyota.
And who knows, 5 years from now, the world might get even more flat - with iToys (or perfect clones) getting down to the league of Cherry or BYD.
The fact that there is hardly any room for BMW or Merc or Rolls Royce in consumer electronics summarizes the curse of the Moore's law.
Good thing it is a fable and none of it needs to have any connection with reality. Unlike other fables, however, even the moral lesson may not apply.
It could be noted that, a month prior to launch, the market cap was $10B lower than one month after. Wonder who we should blame for that.