"Apple's New Fraud Problem"

Steve Jobs

In an opinion piece for Wired, Ron Adner has made the misguided case that Apple is on the cusp of a dire crisis. Citing a typical list of problems (e.g., Apple’s walled garden approach to software distribution, App Store knock-offs and fraud, and recent revelations concerning working conditions), Adner argues that Tim Cook — apparently much like his predecessor — is facing a disastrous problem. According to Adner, Tim Cook must muster some reality distortion skills in order to “re-earn the trust of his loyal subjects.”

Under the protective blanket of Steve Jobs’ “reality distortion field,” Apple’s famous lack of transparency was held up as sign of confident genius. However, in the absence of distortion, opaque responses to security breakdowns are increasingly hard to admire.

Refuting Mr. Adner’s position requires the simple act of reading the headlines from the past seven days. In this time, Apple’s stock price has broken the $600 barrier, Tim Cook has announced a dividend initiative, Apple has sold an enormous number of its latest iPad, and Mike Daisey’s accounts of working conditions in China were found to be fictitious.

In this light, Mr. Adner’s argument is irrefutably legless.

Any perceived crises bubbling at 1 Infinite Loop is a matter of hyperbole and link-bait. Apple — unlike any other time in its history — has exclusively reached a developmental stage heretofore unseen in the technology industry. Atmospheric sales and industry-leading customer satisfaction characterize a company thoroughly worthy of the trust of the end-user.

Apple’s new CEO, Tim Cook, was able to bypass his first major leadership crisis, blunting outrage over poor working conditions in supplier factories with promises of fact-finding committees. Fraud in the iTunes store, however, is a different test. It is an execution failure that directly undermines Apple’s reputation for delivering on its promises. And it can’t be fixed with a hand adjustment, a simple hardware upgrade, or a task-force working paper.

I do not mean to assume the role of the Apple apologist — there are certainly flaws in the company’s structure and outlook — but this is unquestionably ignorant reasoning.

Apple — unlike the vast majority of its competitors — is taking admirable steps to address transparency in working conditions and the like. With specific regard to correcting flaws with the App Store, Apple recently acquired Chomp. Given Chomp’s existence as a means for app discovery within the App Store, it’s fairly easy to infer Apple’s intentions in such an acquisition.

As an aside, I must note that reports such as Adner’s are primarily infuriating due to their ill-informed positioning of Apple as the protagonist of their narrative. Leveling accusations of far-reaching fraudulence and poor working conditions at one technology manufacturer is woefully flawed. The industry as a whole — albeit at different degrees — is guilty of such problems. Just because Apple has reached the pinnacle of the industry does not mean it should be subject to the lion’s share of criticism.

Perhaps fraudulent apps are an increasing problem but, I say without hesitation, the problem would be infinitely worse if Apple’s measures and controls were not in place. The Android Market is veritably riddled with knockoffs and malware capable of far greater misdeeds than their iOS counterparts. This is not a question of transparency, it is a matter of accountability in a ballooning marketplace. Apple, unlike its competitors, is doing its utmost to stem the persistent flow of fraudulent apps and halt the rise (or potential for) malware. The App Store is merely a victim of its own astronomic success and, given the human process involved, is bound to suffer lapses from time to time.

Leaping upon Apple’s 25 billion apps sold and preaching about a handful of cases of fraud is shortsighted, particularly given the deep-seated trend toward accountability inherent within the company.

Mr. Adner’s assumption that Steve Jobs’s absence will provide for Apple’s downfall is antiquated and ill-informed. Today, we are greeted with a company open to the topic of philanthropy, cognizant of the happiness of its shareholders, and enjoying unfettered success in the technology marketplace. Perhaps there are some issues here and there, but any semblance of rebellion — or even widespread dissent — is utterly bereft of the current landscape.

I do not pretend that working conditions and matters of fraud are inconsequential, I merely pose the argument that there are far worse culprits of such misdemeanors. Furthermore, I contend that Apple, contrary to Mr. Adner’s perspective, is doing its utmost to foster and encourage the deserving trust of its users.

I’m absolutely not a blind advocate of Apple but, given the circumstances, there is little to be critical of without opening the door for unnecessary and inaccurate hyperbole. Mr. Adner is, without question, guilty of such flaws.