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People keep buying Apple products despite recent headaches

After the botched MobileMe/iPhone 3G launch, as well as more recent problems users have reported with iPhone 3G reception, you’d assume customers would punish Apple.

Add to that an assortment of other issues over the past year or so, from the bricking of unlocked iPhones last fall to a plethora of Mac OS X Leopard bugs to last week’s iPhone “kill switch” dustup, and you have a lot of reasons consumers might want to avoid Apple products.

But whatever the disappointments, you won’t see it reflected in the company’s third quarter sales numbers.

Apple is expected to report another record quarter in September, according to a note to clients by Royal Bank of Canada analyst Mike Abramsky. AppleInsider reported this morning that Abramsky said Apple should see year-over year growth of 44 percent, with Mac sales topping 3 million for the first time.

That would beat the previous record – 2.496 million Macs sold, just set in the July quarter – by an amazing 20 percent. Abramsky also predicts iPhone 3G sales for the quarter to reach 5.1 million, which would nearly double the previous record for iPhone sales (2.315 million in the December 2007 quarter).

Earlier this week Apple made news by scoring 10 points higher than its closest competitor (Dell) on the University of Michigan’s American Customer Satisfaction Index. Apple received its highest score ever, 85 on the ASCI’s 100-point scale. Last year it scored a 79.

"Apple is not without its quality problems," ACSI project head Claes Fornell told Computerworld. "People know there have been some service and product quality problems, but Apple has an almost Teflon-like quality. Its problems don't really seem to matter to consumers."

The ASCI survey was taken before the MobileMe launch and recent iPhone 3G problems, but it seems someone is always complaining about an Apple product or service, if not taking them to court.

How can Apple commit so many wrongs and yet continue to enjoy record customer satisfaction numbers and booming sales growth?

Apple’s hold on customers can’t be completely explained by the “fanboy effect”; that is, people so devoted to the company they forgive it for any transgression. Apple has added many new customers in the past few years that do not fall into that category, from casual iPod owners to disgruntled PC users switching from Windows.

Such customers have bought Apple products with high expectations they would “just work.” I can’t imagine they’d tolerate consistently poor quality and bad service when those factors most likely drove them into the Apple camp.

Here’s what I think Apple’s “Teflon” is made of:

Cool factor: Apple’s marketing machine has successfully sold the idea of Apple as the coolest consumer technology company, a notion reinforced by its acclaimed product designs. People who buy Apple products feel that the company’s hip image will reflect on them. It doesn’t fix the problems, but it makes it harder to turn away from Apple.

Worse alternatives: Even if you have had a bad experience with Apple, many know first-hand that living with a Dell or Hewlett-Packard PC running Windows could be worse. Apple’s seamless control of the entire user experience has no substitute in the consumer technology world.

Apple trying harder: Though historically poor at fixing problems, Apple has gotten better recently. Not only did it work hard to address MobileMe’s problems, it just this week gave MobileMe account holders 60 more free days in addition to the 30 days it awarded a month ago. The company apologized. Customers will forgive a company that makes an effort to make things right.

Apple also has made an effort to get software fixes out to customers more rapidly, although it could do a better job of explaining to affected customers what the heck is going on (e.g., this week’s iPhone 3G reception fix).

Not as bad as it looks: Apple benefits from the media’s obsession with it when it rolls out new products – no tech company gets comparable attention – but that backfires when Apple has trouble. Many of Apple’s problems that draw extensive coverage would be largely ignored if they befell another company.

Squeaky wheels: With the exception of some large-scale blunders, like the MobileMe/iPhone 3G launch, most of Apple’s problems affect a relatively small number of customers, many of whom are very vocal. Most Apple customers have minor, easily rectified problems, and have no serious beef with the company.

For Apple to lose massive numbers of customers, it’s going to have to commit sins far worse than any it has thus far and be utterly non-repentant.

Comments

A big part of it is that Apple's recent woes have been in a large part confined to the noisy echo chamber of the blogosphere.

Case in point-my dentist just bought an iPhone, and was proudly demoing it to me. I asked him about the reported 3G issues, and he just looked at me blankly. Not a big Techmeme reader, obviously :p

The other commenter is right - yea, if you launch a blog - you can complain loudly but other AT&T issues we already have with the 1G iphone, the 6 people I know with 3G's have reported no extra problems. I have MobileMe and sync and the uptime seems fine ... email was down once I ried to access but it was back in 20-minutes so while Apple admited to problems, it hasn't affected me much and I get 40-50 push emails a day with no real problems. I have SMTP problems with one account but the other 4 work just fine ... so, yea, a lot of complainers but if Apple really sold 2 million iphones, how many complainers 20? 50? 100?

It has been said that most of the connectivity problems are isolated cases. What leads you to believe that they're not. Even if 2% of iPhone users had problems and they're making the most noise, it would seem as though all iPhone users are having this connectivity problem. The vast majority of iPhone 3G users probably have no connectivity problems at all. I do believe there are some people experiencing problems, but not enough to stop people from purchasing iPhones. And I do believe that for the users that are having a problem, Apple will issue a fix if possible or replace those phones. There is still a possibility that certain AT&T networks may be at fault in conjunction with a faulty Infineon 3G chipset. Give Apple a month to work on a fix.

My only beef with Apple is that they don't include some kind of sticker or fridge magnet with the iMacs, Macbook Pros, or iPod Touches...I want my PS3 to have Apple's logo above the 'Playstation 3' logo.

A very relevant subject. I have been a recent apple user, having bought an ipod only 2 years ago, and more significantly switched to a Mac about 6 months back. I've had severe issues with the mac - not defects, fortunately, but just figuring out how to get things done on Mac, which in Windows was a cinch. And I have to say, apart from a few things better on a Mac, by and large you can do more and easier on Windows.

So I have to agree that it seems it's the Cool factor that's dominant, and overall the impression I have of Apple as a company is, "I'm just so creative and cool, I don't have to care about the customer" - they just don't come across as a company concerned about solving customer problems.

I'm willing to tolerate any gadget or company that pushes me forward and invokes me wanting to learn and try new things. And that's why I like Apple.

Innovation too has some growing pains.

That's so funny, Vikas, because I think of my migration as completely the opposite of your 'Windows was a cinch' experience. But it came home to me when a family member switched recently and was frustrated about a particular issue. I explained how to do what she was after, and she replied, 'That's it? I do it in one step instead of three (on PC)? Well, somebody should have told me that Mac makes stuff too easy." Her indignation made me laugh.

Thanks Charles, though I'm afraid I don't quite agree. I have posted about my experience in detail at http://chordsoflife.wordpress.com/2008/03/09/mac-vs-windows/, but here are a couple of pet-peeves:

1. keyboard short-cuts are far better on Windows, whether OS related, or Office related, e.g. its much easier to move files using CTL-X in windows - I couldn't fine an equivalent on Mac.

2. Sharing files over a windows network is a pain to configure - haven't been able to do it yet.

3. I connect to a Windows Domain at work and have a set-up a Mobile account. But when I try and logon to it while in the presence of another Wi-Fi network (which is not connected to the domain, say at home) it hangs till I switch off the wi-fi!

4. Googling for help yields much better results for windows than for mac.

These are just some...

Here's another I just discovered - how do I forward a Card by email from Address Book? There is no "forward card" option...

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About David Zeiler
David ZeilerDavid Zeiler follows all developments related to Apple, Inc. Having spent his early computing years on the Apple II platform, he moved to the Mac in 1993.

At The Baltimore Sun he designs pages, compelled against his will to work on a Windows-based PC.
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