There comes a time in a great company that a crises arises due to inflated optimism about the ability to produce superior products compared to the rest of the industry. Apple has now reached one of those thresholds and how the wonder company handles this event will determine its future reputation among consumers.
For those readers that care little about Apple here is a short recap of recent events. During the first half of the year Apple announced and released its IPad to the world. Although the product sold well its success has had more to do with the Apple brand then with the IPad. The IPad was just a bigger version of the IPhone and did not have some basic functions that many people had hoped would be part of the new product.
The IPad was just another product in a line of technology releases and last month Apple reveled the new IPhone 4. Apple held this product high and above any of its other products and started a huge media blitz on the world. One of the slogans was " Changing everything again" to signify that this product was bigger and better than other smart phones in the market. However, there has been a few huge problems that started years ago that might haunt Apple and ruin Steve Jobs credibility.
The single largest problem that the IPhone has encountered is AT&T. Before Apple released its first generation IPhone Steve Jobs was involved in deals with the two biggest wireless networks; Verizon and AT&T. In the end, Steve Jobs decided to sign with AT&T due to disagreements over selling the IPhone. Verizon wanted to duel sell the phone in Apple and Verizon stores. Steve Jobs on the other hand wanted complete control of the product and for it to be exclusive to Apple stores and their partner retailers such as Best Buy. AT&T bowed to every demand that Steve Jobs made and won over Verizon, however, winning such bids is often a curse for both parties.
AT&T's wireless network is based on a GSM standard, in laymen terms, it a slow and outdated network. AT&T offered a preverbal "all you can eat" data plan for Apple customers and Apple users took full advantage of the data buffet. The more IPhones that entered metropolitan areas the worse the 3G service became. On the other hand, Verizon teamed up with Google and HTC to release other smart phones that took full advantage of the superior data network that Verizon offered.
Now Apple and Steve Jobs finds itself at a cross roads. It has a product that suffers from poor signal mixed the already bad service of a struggling AT&T. For now, Apple will be able to continue to coast on its brand and still shining reputation of superior products but the decision to sign with AT&T might hurt Apple's reputation in the long term. It is unlikely that Verizon would accept a deal with Apple if Steve Jobs offered because of the profitability the Droid and Android phones are producing. It will be interesting to see what happens in the Apple press conference that took place earlier this afternoon.