Apple's Privacy Crisis: 'What Fire?'

 
on April 28 2011 9:03 PM

The delay in responding to privacy breaches is only making the situation worse for Apple, experts contend, with the handling of it more akin to a toy-factory rather than a business.

Apple took over a week to deny that the phones were keeping logs of users' locales after researchers found the file hidden on the iPhone last Wednesday.

Any company that puts off responding ignoring or not saying anything is an insult to the customers, employees and shareholders, said Larry Smith, President of the Institute for Crisis management.

There is an axiom, Smith explained. Never stand in front of a burning building and say to a reporter: 'what fire.'

On Wednesday Apple published a list of questions and answers that explaining that it doesn't store iPhone users' physical locations, but instead a list of Wi-Fi hotspots and cell towers surrounding them.

It came 7 days after the first report came out that phones around the world were keeping detailed location data of users.

Apple said the data help phones figure out their location to help enhance services like maps and other location based services.

It did acknowledge that the data was stored up to a year due to a bug in the system, not intentionally. It would release a fix in coming weeks.

But the response was inadequate given the size and resources of the company explained John Marconi, communications, marketing and crisis management expert at DePaul University.

Apple has shown themselves to be in a class by themselves [in terms of innovation] and for that reason this response is particularly disappointing, Marconi said. With that comes the huge responsibility and when they fall short of delivering the kind of disclosure information they do themselves an enormous amount of damage.

Speaking to the New York Times, Apple CEO Steve Jobs explained that the company began to listen to concerns immediately, and waited to fully understand the situation before issuing a response.

It took us about a week to do an investigation and write a response, which is fairly quick for something this technically complicated. Jobs said. He also explained that he was personally involved in writing the response given its importance.

The delay was the dumbest explanation I've ever heard, Marconi told IBTimes.

I find it hard to believe that a company that realizes it has the capability of amassing this volume of data just found out after the fact

Apple came under fire last year upon the introduction of the iPhone 4 in a scandal widely dubbed antennagate -- a play of words between antenna and the Watergate scandal of the '70s.

A finger place on a specific place would make the phone lose reception, sometimes dropping calls in the process.

At that time, the company also delayed in response before attacking critics and other smartphone competitors, launching videos showcasing the problem exhibited in other phones as well.

But in July Jobs apologized for the issue and gave free cases to customers who had bought the product. The fallout from that has been largely forgotten and Apple is still commanding competitive margins and expanding its share in markets it is involved in.

The American public has a short attention span and we tend to only worry about things that directly impact us now and the minute we aren't feeling the pain, then we get sidetracked paying attention to something else, Smith said. A lot of companies survive and skate through because distraction.

Still, Smith said the better response would have been to acknowledge the problem immediately instead of waiting, but it may be a bi-product of the industry.

The fast, competitive environment makes these companies get so involved in their technology they lose sight of everyday good business practices that would keep them out of trouble.

In this regard Apple is still kind of a toy factory -- the people that work there are making new toys all the time but need to remember that they are running a business, Smith said.

 

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