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TECHNOLOGY
Is Our Affair With Apple Doomed to Hit the Rocks?
Posted by David Rosenbaum | CFO.com | US
March 16, 2012 10:16 AM ET
I had a few friends over for dinner last week and by 9 p.m., over coffee and cake, about six had pulled out their iPhones and were talking apps. One raved about Pandora, the app that creates a virtual radio station, playing tunes algorithmically designed for you and you alone; another swore she used her iPhone flashlight every day; a third enthused about an app that scans bar codes at supermarkets, helping him avoid lines at check-out. My friends nattered on, holding their phones tenderly. They loved them. As Fernando Alvarez, mobile solutions practice leader for technology consulting firm Capgemini says, "The device has become part of who you are. It's very personal." That loving connection between person and device has helped make Apple the world's most valuable business. It broke the $500 billion market capitalization barrier this month, and yesterday it was reported that it had socked away almost $100 billion in cash last year. Some analysts are predicting that its stock price, which briefly topped $600 yesterday, is hurtling toward $700. Morgan Stanley predicted Apple shares could approach $1,000 by the end of 2013. Much of that investment is based on love. But love can turn sour. Early this week, a man filed a class action suit against Apple saying the company's advertising for Siri, the iPhone 4S' voice-activated assistant, is "fundamentally and designedly false and misleading." If youıve seen the ads (and who hasn't?), Siri is supposed to be an electronic Jeeves, swiftly responding to your every wish. In fact, what Siri mostly does when you ask it a question is suggest you search the web. Big whoop. Indeed, Siri's functionality has allegedly degraded since its release, which is why (some speculate) it's not in the new iPad that hits the stores today. In other Apple bad news, the company is still being raked over the coals about sweatshop conditions at Foxconn, the Chinese factory where iPhones and iPads are manufactured. Of course, Foxconn also builds products for Intel, Dell, HP, Nokia . . . the list is long. But Apple gets most of the heat because love (or, if you insist, goodwill) is a more important component of its value than, say, Cisco's. And yesterday, the New York Times reported that Apple is receiving "hundreds of online complaints" about the practices and security of its App Store. Accounts have been hacked and fraudulent transactions processed; money has been stolen; developers have been ripped off; false advertising is rife; app rankings have been manipulated; some apps are blatant scams. Of course, with more than 600,000 apps in the store, there are bound to be some bad apples . . . so to speak. What all this points to is that the bad press Apple has received recently will inevitably get worse. If your business is based on people loving you, you better be good . . . all the time. Love may not be the best foundation for a relationship. Just look at the divorce rate, whatever it is. Hey, I know. I'll ask Siri. Siri suggests I search the web. Pretty lazy, Siri. I'm beginning to dislike you. And FYI, Siri, for the past 20 years about half of all U.S. marriages, most begun in love, end in divorce.
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