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The Big iSleep

The Big iSleep

Another year, another hapless Apple employee leaves an iPhone prototype in a drinking establishment, leading to a convoluted tale of police involvement and home searches. It's impossible to say whether a similar incident last year actually hurt iPhone 4 sales -- though that phone's sold rather well. But for Apple, secrecy is always a top priority and a key ingredient to its product launches.

By Rachelle Dragani MacNewsWorld ECT News Network
09/07/11 5:00 AM PT

News from Apple reads like a mystery novel over the past week. It all started with the apparent loss of an iPhone prototype in a San Francisco bar.

That scenario may sound familiar. Last year, the gadget site Gizmodo made headlines by obtaining an iPhone 4 prototype after an Apple employee left the test model in another Bay Area bar. The police were eventually involved. A similar scenario has reportedly played out recently.

The latest incident and the surrounding investigation have been shrouded in conflicting reports, unclear statements and the typical secrecy that always accompanies discussions of unreleased Apple products.

The prototype supposedly went missing early last week from Cava 22, a bar in the Mission District area of San Francisco. It's unknown whether the phone was stolen or simply left behind or dropped.

As rumors started to spread, the San Francisco police department initially said it had no knowledge of the incident. They backpedaled, though, when new reports implied that Apple employees may have been impersonating San Francisco Police officials to gather information for the case.


Apple did not respond to MacNewsWorld's requests for further comment, keeping in line with the company's general habit of maintaining absolute secrecy regarding product releases and even the daily happenings at Apple's Cupertino, Calif., headquarters.

"It's always important for companies to protect the details of their new products, given that other companies are always looking to replicate each other's products, especially with Apple," Walter Piecyk, analyst at BTIG, told MacNewsWorld.

Apple's affinity for secrecy is something that recently retired CEO Steve Jobs worked toward as the company developed the products that have made Apple such a powerful player in the tech industry.

"I think it's clearly a cultural thing, developed by Steve Jobs but then built up over the years as part of the mystery of Apple products. It's just smart marketing." Jeff Fidacaro, senior equity analyst at Susquehanna Financial Group, told MacNewsWorld.

Part of Apple's success story has been its approach to marketing, and part of that is to keep the public guessing on what's coming next.

"Apple does it better than most, and that's why they have a best-selling smartphone," said Piecyk.

"People have tried to emulate this buzz, and unless you have compelling products combined with the hype, you can't do it," added Fidacaro. "Apple definitely excels versus the competition. We've seen other companies try to play it out in a couple other competitive launches, but they haven't been met with as much fanfare."

Keeping Sales Up

With the next iPhone widely expected to arrive sometime next month, it's even been suggested this entire incident is a publicity stunt to keep Apple-watchers guessing and fighting for clues on the next big gadget.

Whether or not the situation was manufactured by Apple, the company and other wireless device competitors know that this September is an important month for handheld phone sales. Typically, when a launch is near, smartphone sales have declined, since potential buyers will hold out for the upcoming product.

"This month, the challenge for wireless operators is to continue to sell phones in advance of the new product. This month is going to be tough, in part because of anticipation, and hopefully sales will hold up," said Piecyk.

Since Apple has opened up sales across borders and in emerging markets, however, during recent product launches, international sales have been able to bolster the company even if domestic sales take a dip.

"I think there's a little bit less of a seasonality because of expanding distribution globally. They're making up for it by opening new markets," said Fidacaro.

Rachelle Dragani is a freelance reporter based in Brooklyn, NY. She enjoys staying on top of e-commerce deals, reporting on what new gadget is coming your way, and keeping tabs on anyone trying to hack into your info. Feel free to e-mail her at rachelle.dragani@newsroom.ectnews.com.

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