apple should immediately fire gray powell from his job
gray powell, the apple engineer who lost the iPhone 4th generation prototype should be fired from his job at apple.
he was totally irresponsible for losing that prototype. he has exposed apple’s trade secrets and the key components of their marketing strategies to competitors before the product was launched.
this is not just a cute media scoop where apple, a most secretive company, was exposed in media not on its own doing and not in its own terms but by “accident”, one committed by one of its engineers.
the effect is that it allowed apple’s competitors the best view ever in a product that apple is still about to be launched. the reason product design templates and concepts are being kept secret is to ensure your competitors do not know these so that they cannot pre-empt your efforts.
one of the most important and most successful strategies in marketing is to be the first in offering something to consumers. not only do you want to be first, you want to be first to offer the feature or design for as long as you can. competition may eventually catch up or copy the new feature in some way, but getting ahead of them captures core users and puts you ahead of everyone else.
that intent is also one of the reasons why you patent your designs and get copyright on stuff that you make. you do not want others having the same thing you have labored for.
that is called competitive advantage. apple is famous for competitive advantage and its previous successes were largely founded on it. in fact, a lot of it is founded on superior competitive advantage. apple products succeed not only because they are superior, but equally important they are unique in the market place. there is great value in being the best and being first, a marketing 101.
just look at the app store and itunes. they are mostly unique and it enjoys until now a superior competitive advantage. just imagine how different it would be for apple if the itunes and app store ideas were leaked to the press and apples competitors before they were launched.
because apple had competitive advantage and was the first on those two, these have propped apple, its ipod and iphone businesses to success, translating to huge revenues and even bigger profits.
look no further, the iphone, exactly the prototype that powell lost in that california bar is probably the best example of what secrecy and competitive advantage gives a brand.
a big part of the magic of the iphone to consumers was it’s uniqueness in the market place. that uniqueness was founded on the fact that apple’s competitors did not have a product quite like it.
apple products are known for their superior design and ability to satisfy consumer needs and wants with both almost always being the first to do so in a most effective way. getting the prototype out enabled it’s competitors to remove the advantage.
one of the unique features of the iphone 4G that we now know is a second camera at the face of the handset. no other mobile handset has that feature. with apple’s competitors knowing this now, how many of them are now designing new models with the same feature? would they have thought of it if we did not know about it when powell misplaced the prototype handset? or of they already had plans for it, knowing that apple will have it soon is good reason for them to speed up their own plans on having the same feature in their upcoming new handsets.
the prototype was lost on march 28 but we read about the loss only recently. that is a very long time for a prototype to be studied and figured out by engineers. there must be in someone’s computer a list of new design elements and new features of the yet to be released iphone 4G.
there are 2 key components in any electronic product – its physical components and software. the physical components gives you more than half of the features of the electronic gear. it can tell you capabilities, features and performance. gizmodo did take the prototype apart. they now know everything that the iphone 4G can do.
the loss of the iphone prototype and the subsequent release of its features to its competitors has a very direct impact on the business of apple. apple should respond accordingly by firing powell from his job for risking the iphone business, a core business for the company.
can powell ever be trusted again in apple? we do not think so. his peers and supervisors at apple would not be able to trust him again. it will also be foolish for apple to trust him again with anything.
powell put at risk 40% of apple’s total revenues as the iphone now accounts for that much based on apple’s 2nd quarter financial release announced recently. in other words, powell had in his hand a substantial slice of the business of the company that paid powell’s salary. he had in his hands at least 40% of apple’s future business whose trade secrets may now very well be in the hands of apple’s competitors.
we think it is the duty of apple to it’s stockholders and employees to fire powell from his job. in fact we think powell should be held criminally liable for the potential loss of business for apple.
anyone who owns an AAPL stock should complain to apple and demand that they fire powell from his job. powell put investments on AAPL at high risk.
(disclosure: we are a long term holder of AAPL stocks)
new developments :
april 27, 2010:
- Police poised to expand iPhone prototype probe
- Police seize blogger’s computers over iPhone prototype