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ATPM 15.07
July 2009





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by Wes Meltzer,

Secrecy Boils Over

Critics of Apple’s tight-lipped secrecy policies paint a portrait of a company that treats its inner workings like nuclear secrets. To these critics, like the industry analysts whose “analysis” usually reads like Sovietologists during the Cold War, the company’s policy on publicly available information is an unreasonable attempt to control public knowledge and potentially harm shareholders’ interests.

I’ve always been reasonably supportive of these efforts. They’re a great way to get a lot of attention without having to lavish liquor and food on tech reporters and opinion-makers, and Apple clearly has no interest in going the Hollywood route. The alternative approaches seem to be either (a) chaos or (b) just seeding your press releases out into the ether. During my abortive attempt at tech reporting for an actual publication as an intern, I would receive as much as a couple hundred press releases a day, and I assume real tech reporters receive even more, so (b) is obviously not a viable option for Apple. (P.S. If you sell Outlook plugins, you’re probably better off relying on word of mouth.) And (a) results mostly in the Microsoft dual approaches, either weird coordinated parties all around the US (cf. Windows 95 release) or major fanfare for weird, semi-vaporware projects (cf. Microsoft Surface).

But those of you who’ve been following the news know that Steve Jobs has been on sick leave since January. Jobs was treated for pancreatic cancer five years ago, and had the tumor removed surgically, but the Wall Street Journal reported in mid-June that he had received a liver transplant sometime in April. The Journal's report speculated that the pancreatic cancer metastasized to his liver, which is apparently fairly common for pancreatic cancer patients.

The Journal’s story was a major scoop, following on the heels of months of speculation about Jobs’ health. It was also curiously timed, released like a lead balloon late on a Friday night during the week of the iPhone 3GS release. And John Gruber notes that the WSJ had no sources for their story, which is astonishingly unusual. This newspaper would source me if I said my mother loved me. (“Meltzer’s mother confirmed to the Journal that she did, indeed, love her son.”)

Although a lot of news organizations—e.g., the San Jose Mercury News, Bloomberg—wrote through the story, I have not seen anyone who claimed that they had verified the story on their own. Gruber quotes CNBC’s story as “verifying” the account, but “two sources confirmed” is only a little better than “according to the Wall Street Journal” if you’re looking for facts.

(Gruber must have better news alerts than I do, because he linked last week to a press release from Methodist Hospital in Tennessee confirming that Jobs had received a liver transplant.)

My first thought when I read the WSJ story was pretty much what I wrote in February, again:

As long as he doesn’t have his finger on The Button, why should I really care whether he’s healthy or sick?

That, and “I’m glad to hear that Steve is recovering. If he really did have a liver transplant two months ago, he must be doing well. Thank goodness for his family and friends.”

But that’s not how everyone sees things, I guess.

Let’s set aside the usual, snide commentary that insinuates that everyone rich or famous who gets a transplant jumps the line. If you’re an analyst or a blogger whose big issue is Apple’s secrecy or some kind of weird hatred of Steve Jobs, then every story about Apple looks like a nail. I’m willing to buy that there’s debate whether Jobs was legally obligated to disclose his medical issues. At the same time, I would think that Jobs going on medical leave (whether under the Family and Medical Leave Act or some other provision doesn’t matter) and giving over control of the company to COO Tim Cook should insulate Jobs.

But the odd tone of anger and disbelief I heard on the subject from all corners of the Internet is just mind-boggling. To some people, the desire for privacy by Steve Jobs, the person, while on medical leave is outweighed by…the fact that Apple, the company, has a penchant for secrecy. We all have a bad habit of playing the “Steve Jobs = Apple” game, but it’s become clear since his bout of ill health in 2004 that Apple is no more the corporate embodiment of Steve Jobs than the United States is the embodiment of its president.

Sticking to the legal merits, Warren Buffett told CNBC he didn’t think that CEOs of large-cap companies really deserved any privacy:

Certainly Steve Jobs is important to Apple. So it’s a material fact. Whether he is facing serious surgery or not is a material fact. Whether I’m facing serious surgery is a material fact. Whether (General Electric CEO) Jeff Immelt is, I mean, so I think that’s important to get out. They’re going to find out about it anyway so I don’t see a big privacy issue or anything of the sort. (CNBC)

I’ve culled just a collection of snippets from people who seem disinterested in his actual health, and disinterested in the fact that Steve wasn’t even technically on duty when it became clear he needed a new liver. To them, this is all about the usual “Apple obsessed with secrecy” game:

It’s the latest fib that he and Apple have told concerning his health: the company didn’t disclose that he had had pancreatic cancer in 2004…Jobs’s case is different. How? Because Jobs represents most of Apple’s value. Without his return in the mid-1990s, the company would have gone bust by 2000. (TechWire)

Looks like Apple Chief Executive Steve Jobs’ reality distortion field is portable, because it now appears to have made a trip with Jobs to Memphis, Tenn…[W]e got false information, that Jobs was never a patient. (Forbes)

If Mr. Jobs had retired from Apple—or had taken an open-ended leave—then I would say yes, it’s his business and not his investors’. But he didn’t do that. He took a six-month leave, which ends on Monday. Already, he is reportedly back at work. But what does that mean? Is he fully back in the saddle? Is he part time? Is he involved only in big strategic decisions? Is he back to his old micromanaging self? Have we now reached the point, in other words, where his health is impinging on his ability to run Apple? That’s the real question, isn’t it? Are Mr. Jobs’s health problems affecting his work?…Up to now, those directors have put Mr. Jobs’s obsession with privacy ahead of the interest of the Apple shareholders they are supposed to be representing. (Joe Nocera, The New York Times) (emph. Nocera’s)

Like a hung computer operating system, Apple’s board is neglecting pressing information-retrieval work. Data on the effectiveness of liver transplants for Jobs’ condition is, at once, scant and unpromising. Yet some specific information about Jobs’ condition would be useful in evaluating his prognosis…[O]bviously Jobs is recovering nicely if he’s going back to work next week, right? Perhaps, but it’s not clear how hard he’ll be able to work; recall that Jobs may be working part-time, per a Journal report earlier this week. Or he might not. He might be already back to week, per an anonymous (read: probably spoon-fed by Apple) report from CNBC’s Jim Goldman. Or he might not be returning until June 30. (Gawker)

When the Industry Standard is the voice of reason, it gives you pause:

Anyone who reads the tech press knows there has been constant, merciless speculation about Jobs’ health for months, justified to some extent by the sense that Apple’s well-being is closely tied to his…Still, Apple appears to have continued on a steady course in Jobs’ absence, which may help prepare and reassure investors for whenever he decides to scale back or leave. (The Industry Standard)

John Gruber speculated that, given the timing of the story, the reporting from the Journal was a leak from Jobs himself. I’m not so sure about that, but anything’s possible.

The thing that bothered me about all of this is that, reading these articles and blog posts, I got the distinct sense that this wasn’t really about Steve Jobs’ health. Stories about Apple seem to bring out the intensely personal in people. I felt like what I was really reading about was yet another story about Apple and secrecy.

Leaving the Heat on Too High

I have to be mindful that, if I’m accusing someone else of overstating Steve Jobs’ illness into what’s really a play on Apple, I am not throwing rocks from a glass house.

But what really prompted my frustration at the whole situation was following this story from January—in which, as you’ll recall, Jobs was assailed pretty much from the same l’État c’est moi view on Apple that we’re facing now. As Macworld’s Dan Miller wrote at the time, “[C]overage of Steve Jobs’ health woes has hit some surprising new lows in journalistic IQ.”

In January, all that this was was an unexplained pancreatic disorder of some kind. Apparently his health deteriorated pretty rapidly; his last public appearance, in the fall, had him looking thin but healthy. Pancreatic cancer metastasizing to the liver can certainly spread very quickly. Even then, this was some kind of a crisis in the media.

Now it’s become transformed somehow into a major legal battle over the fate of Apple. The New York Times, which got beaten by the Journal on the original story, followed up in Tuesday’s Times with a bonanza about Apple’s secrecy that is excruciatingly bitter. It reads like one of the reporters, Brad Stone or Ashlee Vance, has a bone to pick with Apple:

Few companies, indeed, are more secretive than Apple, or as punitive to those who dare violate the company’s rules on keeping tight control over information. Employees have been fired for leaking news tidbits to outsiders, and the company has been known to spread disinformation about product plans to its own workers.

“They make everyone super, super paranoid about security,” said Mark Hamblin, who worked on the touch-screen technology for the iPhone and left Apple last year. “I have never seen anything else like it at another company.”

But even by Apple’s standards, its handling of news about the health of its chief executive and co-founder, Steven P. Jobs, who has battled pancreatic cancer and recently had a liver transplant while on a leave of absence, is unparalleled.


“They don’t communicate. It’s a total black box,” said Gene Munster, an analyst at Piper Jaffray who has covered Apple for the last five years.

With any other company, this wouldn’t be news. Frankly I’m not sure any other company could sustain the level of secrecy that Apple feels that it needs to sustain a competitive advantage.

But nowhere in the article, except by implication, does anyone ever say that what they do violates any laws or regulations.

As I’ve said before, I’m of two minds on secrecy. I don’t like not having information any sooner than anyone else, but at the same time, from Apple’s perspective it’s probably cheaper to get publicity with surprise than buying it any other way.

Just for repetition’s sake I’ll quote myself, again:

I just don’t think [Jobs’ health is] germane. Frankly, he’s only a public figure up to a point, and as long as he doesn’t have his finger on The Button, why should I really care whether he’s healthy or sick? (Wes’ note from June: Or anyone else! Remember, he was on leave, and not acting in command from his hospital bed.)

Odds and Ends

  • You may have heard of this newfangled “iPhone” thing. Apparently Apple released another one, and from what I hear, it’s a goodie. Reviews from: David Pogue; Ars Technica’s Jacqui Cheng; Coding Horror; Andy Ihnatko; PC World; Ed Baig; Macworld; and Stephen Fry.
  • There’s a lot of chatter on the iPhone 3GS front about AT&T and upgrades. Americans don’t really understand the way carrier-subsidized cell phone sales work (Pogue has a good explainer), so many people are wailing endlessly about how unfair it was that AT&T was charging more than $200. Initially AT&T was insisting on full price for anyone not upgrade-eligible, but they’ve relaxed their rules about upgrade eligibility. Anyone not eligible can pay the $199 or $299 price plus a $200 early upgrade fee. (Seth Weintraub of Computerworld defends AT&T—I wouldn’t want his inbox.)
  • This was originally going to be my whole column, but it got sandwiched, unfortunately, by Jobs news. Apparently Palm’s been advertising that you can sync the new Pre with iTunes. Directly, not via a conduit the way they supported Palm Desktop-iSync synchronization. Jon Lech Johansen suspected that Palm is spoofing an iPod model’s USB vendor and device IDs, and got it confirmed via an anonymous tip. Apple issued a support document shot across the bow, warning Palm and Pre customers that they don’t support this, and it may stop working in newer versions of iTunes. I’ll circle back to this next month, perhaps. We have a lot more to discuss about the Pre.
  • Steve Cuozzo at the New York Post somehow got hold of the numbers on how much Apple sells each year at its Fifth Avenue store in Manhattan. The answer: $440 million. A year. That’s just mind-boggling.
  • A primer on the unusual way in which documents are created on a Mac, and how you can remedy the situation (“Open the application you intend to create a blank document in, and then hit ‘New Document’ there”). Some very interesting suggestions, like having a locked folder of blank file templates that you drag to wherever you want the new document—Apple should take this guy up on it.

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Reader Comments (1)

JS · July 3, 2009 - 10:23 EST #1
Seems that Palm is trying to take advantage of Apple's ecosystem without the time and expense of having to build their own and not pay a dime for Apple's time and expenses to build the iTunes store into a major music retailer. Kind of sleazy. Maybe Apple should start charging heavy licensing fees to companies that attempt to do this.

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