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Apple and Bone-Headed Decisions

So the meme playing out in the news media is that Apple, the $700 billion gorilla, was rapidly beaten down by a 25-year-old woman. Well, a woman who just happens to be a multimillionaire rock star and one of the most popular recording artists of the day. But still. All it took was one blog articulately expressing her dissatisfaction with Apple and the decision not to pay musical artists during the free 90-day Apple Music trial.

The story goes that Eddy Cue, Apple’s senior VP for Internet Software and Services, awoke Sunday morning to discover Taylor Swift’s posted complaints about the policy. He got together with CEO Tim Cook and, within hours, changed the royalty structure to include payments for music streaming during the period when customers are sampling Apple Music. Chalk it up as a victory for the little people fighting against an “evil” multinational corporation.

I suppose it’s a good thing that Swift has millions of online followers, and her decision to withhold her newest album, “1989,” from Apple Music clearly had its impact. No doubt Apple was inundated with complaints from her fans, that artists deserve to be paid for their work regardless of whether Apple is getting paid. After all, with billions in the bank, why pawn off the costs of selling this service to the entertainers?

But there may be other forces at work here. Apple, for example, believed that, by offering higher royalty payments, it would compensate for the free trial. But the popularity of a new album may be short-lived, and a new release may be past its peak by the time payments begin, thus resulting in a huge loss of income. The cyclical and unpredictable nature of music sales may not have been considered when Apple’s bean counters looked over this deal in terms of numbers and didn’t consider the gray areas that might hurt a musical artists’s paydays.

In this case though, the happy outcome got Apple and Taylor Swift tens of millions of dollars of free publicity, which will only draw more attention to the Apple Music launch, and her new album. Join folks, since Apple was pushed kicking and screaming into giving entertainers a fair shake.

But this isn’t the first time Apple has done things that gave them a poor rap. Don’t forget the Antennagate scandal of 2010, just weeks after the iPhone 4 was released. Seems if you held it the wrong way, reception quality would deteriorate enough under marginal conditions to lose your connection. Steve Jobs didn’t take it seriously, saying you should just hold the handset differently. But within weeks, Apple was forced to hold a press conference where they assured customers that they tested iPhones in a $100 million facility, and that you could impact reception on any mobile handset depending on how you held it. It was all about the laws of physics.

Besides, if you still didn’t like it, you could return the phone for a refund, or get a free bumper case that would easily resolve the problem. This was a good move, but if Jobs wasn’t so flippant about the matter when he first received customer complaints, Apple wouldn’t have given ammunition to competing companies to use it as evidence to sell their own gear. Of course, such gear had similar problems, but perceptions mean a lot.

In 2012, Apple made a huge deal, at a WWDC, in introducing Maps. This was Apple’s response to Google, and isn’t that 3D Flyover feature absolutely awesome? It turned out that the app was strictly a rough beta, and Cook was soon forced to apologize for raising unreasonable expectations. He also discharged the fellow in charge of the project, Scott Forstall, allegedly because he wouldn’t put his name on that apology. But the failure to deliver surely counted for a lot.

Yes, Apple has been steadily improving Maps since then, but the bad reputation still exists. Even though public transit directions are being added, it’s not enough. Only a few cities will be supported when iOS 9 is released, and Google is way ahead. But if Apple originally introduced Maps as a public beta, inviting you to submit errors, you’d become a participant and not a disgruntled customer. Don’t forget that Google keeps many features in beta for years, although that fact isn’t always mentioned in the media.

Now even when Apple reacts quickly to a problem, the media will still pounce. Take that ill-fated iOS 8.0.1 update, which almost bricked some phones. It’s not the first faulty software update from a major tech company — Microsoft has numerous blots on their record — and Apple pulled the update in a little over an hour. Instructions were posted on how to restore the affected handsets, and the fixed version came out the very next day.

But the media continues to make the problem far worse than it really was, implying it took a lot longer to fix, and impacted a large number of iPhone users. The truth rarely gets in the way.

There are other examples where Apple has misjudged customers, or just made wrong decisions. That won’t change, but in reacting quickly to the complaints over not paying royalties when customers were sampling Apple Music, they did a good thing. They also set a precedent that other companies may be forced to follow if they extend free trial periods to match Apple.