Neil Cybart

Fitbit's Ongoing Skin Irritation Issues and Lessons from "Antennagate"

Fitbit is once again in the news as early adopters are reporting the Fitbit Charge wearable is causing skin irritation. A similar thing happened earlier this year with the Fitbit Force, which resulted in Fitbit issuing a voluntary recall after consulting with medical experts. Turns out some users experienced an allergic reaction to the adhesive holding the housing and band together. What's going on with the Charge? Fitbit's official response is some of the irritation is a result of the device "staying in contact with the skin for extended periods" and likely due to sweat, water, or soap. 

Fitbit's response reminded me a bit of Antennagate and Steve Jobs' initial  "just avoid holding it in that way" reaction concerning iPhone 4 reception issues when touching the steel antenna bands. With Apple about to enter the wearable space with Apple Watch, I wonder if we are seeing a future "-gate" in the making where users complain about wrist irritation or discomfort. I thought it was appropriate to look back at Antennagate and compare the lessons learned from that public relations crisis to Fitbit's current issues and the upcoming Apple Watch. 

  1. Not Letting Design Trump Engineering. Antennagate was the result of design trumping engineering as Jony wanted to use a non-coated steel rim for the iPhone 4 despite the obvious drawbacks in terms of signal strength. The end result was problematic signal loss if the gap in the steel rim was covered. Obviously this issue of design being more important than engineering continues to be a risk factor with Apple Watch, especially with its design playing such a crucial role. Having the product be in contact with skin for hours at a time doesn't help matters, although having to take it off to charge each night may actually be Apple's saving grace as people won't wear the watch for days at a time. By having periodic breaks in usage, Apple may not need to worry about users not cleaning or washing the skin underneath the watch band leading to irritation issues, similar to what Fitbit is experiencing.   
  2. Conduct Proper Testing. Apple did not properly test the iPhone 4 due to fear that its redesign would be seen in public. With Apple Watch, executives have been wearing the devices for a few months, which should help catch any obvious long-term use problems. However, it is hard to have a large-scale test program due to fear of an unit getting into the wrong hands. 
  3. Don't Initially Downplay the Problem. Apple initially downplayed any problem with the iPhone 4 with Steve Jobs even going so far as to blame Google, according to Walter Isaacson. While it does seem like Fitbit may be handling the current skin irritation reports better than last time, it is important to not give off-the-cuff remarks about an issue people, no matter how few, are indeed talking about. 
  4. Gather facts. Take the time to gather the needed data, studies, and opinions that will help determine the exact problem and steps needed to address the problem. In a world where an instant response is demanded, taking time to gather the facts is often the hardest step. 
  5. Bring in Public Relations and Advertising Experts. A response to a crisis is just as important as the crisis itself. Tim Cook appears to have mastered the art as seen with Apple's response to the Maps fiasco and, to a lesser extent, Bendgate.
  6. Appear Firm and Confident in Decision. Steve Jobs did not apologize for Antennagate, but he didn't come off as arrogant during the press conference. Tim Cook did apologize for Apple Maps. 

The main lesson learned from Antennagate was to reframe the issue.  Apple explained how all phones have antenna issues. Even if the press disagreed with Apple's claim, the discussion has now shifted away from just Apple's antenna issues. For Apple Maps, Apple said they were trying to improve maps for its users by building a new version from the ground up, and with the recent Bendgate, Apple said only nine customers contacted Apple with a bent iPhone, which took a lot of wind out of the conspiracy theorists. Fitbit seems to be pushing the argument that only a few people have complained of an irritation, and all wearable devices show similar reactions if worn for extensive periods of time. If true, I wouldn't be surprised if Apple Watch has few new "-gate" controversies soon after launch, but I expect Apple to be much more prepared this time around. 

Apple's iPhone Strategy: Selling Shovels to Miners

When Steve Jobs unveiled the iPhone in 2007, few expected the camera would become one of the device's most popular features, positioning photo as a primary communication medium. While social networks have embraced the growing popularity of taking and sharing photos, and a cottage industry of camera accessories have thrived, Apple is positioned to benefit from the current photo renaissance by selling the software and hardware tools needed to sustain the movement. In essence, Apple is the hardware store selling shovels to gold miners in 1849 dazzled by the prospect of striking it rich. Apple's best strategy continues to be utilizing its hardware and software capabilities to introduce tools that allow users to push the envelope on new forms of communication including photo, video, and eventually haptics.

People use a camera to accomplish different tasks. While some like to capture moments spent with family and friends, others use a camera to take and share class notes, or accomplish daily chores like making a shopping list. Technology writer Om Malik wrote an essay on how the photograph represents a new visual language for the web, making it easier to consume content by removing language barriers and appealing to our senses. We like photos and are able to share and consume images much easier and quicker than text.

Most people now freely send and receive photos using messaging apps, like WhatsApp and iMessage, and social networks to communicate with others. Instagram's 300 million users sending 70 million photos and videos a day serves as the poster child of this movement. Meanwhile, Snapchat is quickly gaining popularity and relevancy in how media and content are distributed through photos and videos, while Pinterest adds a bit of an enterprise angle to the mix. 

Apple is positioned quite well in terms of benefitting from this photo renaissance. In many ways, Apple helped kickstart the movement as the iPhone was the first mass-market phone to include adequate cameras capable of taking pictures worthy of sharing, while larger mobile data plans and faster data speeds made photo sharing possible. Even though the first front-facing phone camera was unveiled years before the iPhone was introduced, when two cameras were included in the iPhone 4, millions of people began to take photos of themselves without turning the phone around. A few years later the selfie was born, which I suspect will go down as a movement within the much bigger photograph renaissance. Selfie sticks are becoming popular across the world, and new ways of taking selfies are being introduced, such as the Donut Selfie, which I classified as "selfie innovation." GoPro represents yet another offshoot from the trend of technology changing the way we communicate and record the world. 

I like using the current photo renaissance as a easy to understand case study on how Apple should approach M&A. While some want Apple to use its cash to buy a few of the larger social networks, the changing dynamics behind what guides a social network's popularity is often ignored. Facebook correctly bought Instagram, despite having the means to build its own photo-focused social network. Meanwhile, Twitter has seen success with short Vine video clips, but in terms of embracing photos, the solution has not been as smooth as Instagram. If a different form of communication takes off,  all of these social networks will need to adapt once again either by buying smaller start-ups or building a organic solution. For Apple, a company with a maniacal goal on staying focused and placing very few big bets, this scenario doesn't seem to fit with the company's mission statement. Instead, a more appropriate strategy for Apple is to sell the tools needed to support and encourage new communication standards and mediums, such as embracing touch and haptics in Apple Watch. As another example, by selling both the hardware camera components, as well as the software, Apple is able to stand out from the crowd in terms of its mobile camera solutions, which helps iPhone and iPad unit sales.

Like a gold rush, while few will strike it rich with photos, like Snapchat and Instagram, many will flop or miss out on the significant upside. Meanwhile, the shop selling the tools (software and hardware camera solutions) will make out like a bandit. 

The Scott Forstall Mystery

Mystery continues to surround Scott Forstall's removal from Apple in October 2012. Forstall has not given any public comments on the circumstances leading up to his dismissal as SVP of iOS Software, an unusual twist in an industry where executive turnover is common, and talent is scarce. As Apple struggles a bit with recent software launches and mishaps, many are asking if Apple would have been better off with Scott Forstall still leading iOS software. I suspect Apple is giving Forstall quite a bit of financial incentive to remain quiet on what transpired leading to his termination in an effort to not overshadow the Apple Watch launch, a project Forstall likely worked on in the early development stages.  

Even though the media may have looked at Scott Forstall's removal as a near-term story in 2012, I have continued to be interested in the long-term implications, not only resulting from the event, but what can be learned from those currently leading Apple, including CEO Tim Cook, SVP of Design Jony Ive, and SVP of Marketing Phil Schiller, and how they determined Forstall had to be relieved of his duties. To properly understand how a company operates, one needs to look at how the company is managed.

The official explanation from Apple for Scott Forstall's removal was to increase collaboration, which implies Forstall was impeding such collaboration. Beyond that, we have been told very little information about the events leading up the management shakeup, besides "sources" telling various journalists there were personality tensions. Fortune reporter Adam Lashinsky positioned the Apple Maps debacle, and Forstall's refusal to apologize for it's problematic launch, as the final nail in the coffin.  Not having the other side of the story makes this situation that more interesting. 

There were a few noteworthy developments that I think deserve to be mentioned when getting the full perspective on Scott Forstall. In May 2012, quite a few eyebrows were raised when Forstall sold 95% of his AAPL stock holdings. Insider stock trades have notoriously been scrutinized to get clues as to how management views the future. While it would seem obvious that selling stock is a negative, other factors such as asset diversification, restricted stock units, and tax issues come into play. One year earlier, Forstall (along with the entire executive team) was granted restricted stock units worth at the time $60 million, with a vesting schedule through 2016. Selling shares in May of 2012 with the full understanding that his direct ownership would once again increase as options vested would likely limit the amount of negative connotations from Forstall's selling. However, weeks later, the world was shown iOS 6 and reaction was muted compared to previous iOS unveilings. Apple Maps was labeled as a focal point, while Forstall's design ideas were everywhere. Three months later, Apple Maps turned into Apple's biggest nightmare since Antennagate and Forstall's stock sale seemed a bit more appropriate. Did Forstall sense trouble on the horizon? 

I suspect that Forstall was finding himself falling out of favor with the direction Jony and the rest of the executive team were heading. Apple was moving beyond phones and tablets into wearables, and software's role was changing.

Tim Cook and Jony have gone on record to say that the Apple Watch was under development for three years, which would date the project back to 2011. I would go further and say that Apple knew it was moving fast into wearables from the success of the iPod nano watch faces. Scott Forstall would have then been involved in the initial development stages of a wearable. While it's unclear when features like the Digital Crown (which plays a major role in the watch's user interface) were developed, I think disagreement around the project played some role in Forstall's ousting, thereby suggesting it was in Apple's best interest to keep Forstall from going public with details of the project not specifically included in his non-disclosure agreement. I think Apple and Forstall negotiated a severance package that contains most, if not all, of his restricted stock units granted to him in 2011 on the condition that he remain out of the public eye. Beyond the Apple Watch, I actually don't think Forstall's knowledge on Apple's future plans is too valuable, especially considering he is already two years removed from Apple. The most valuable piece of information isn't what Apple is working on, but what they aren't working on, and even then I have doubts Forstall would be privy to everything occurring in Jony's labs. 

Some observers say Apple must miss not having Scott Forstall. I look at the statement as unfalsifiable since it is impossible to know all of the corresponding events that would have taken place if Scott Forstall were still as Apple. I would point out that considering some of Apple's biggest product mishaps occurred under Forstall's leadership, I tend to think Forstall's value-add to Apple has been overestimated. In addition, Craig Federighi has been doing a relatively good job leading software engineering as seen with the upbeat developer reaction following WWDC 2014. 

Apple's success is due to its management team being more valuable as a collective group than each individual separately. Scott Forstall's sheer talent and vision led him to hold one of the more powerful positions within Apple, largely at the blessing of Steve Jobs, however I suspect Apple's changing priorities with wearables contributed to his dismissal. If there is one lesson to learn from the Forstall mystery these past two years, it is that executive collaboration has contributed to the Apple of yesterday (new touch interface and app revolution) being very different from the Apple of today (new ecosystem services and personalized wearable hardware).

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Jony Ive Is the Most Powerful Person at Apple

Yesterday I put forth my theory on the issue underlying this ongoing App Store scuffle with developers: a bigger battle between Apple hardware and software. While Apple is quite confident, and some would even say defiant, with its hardware and design, software seems to be treated with some level of hesitation and debate as Apple continues to think about how iOS should be used, especially after a plethora of new APIs are released to developers. Regardless of the near-term solution to the App Store issues, be it management changes, organizational structure tweaks, or nothing at all, I suspect Apple SVP of Design Jonathan Ive's influence will play a role in the discussion. I deliberately hinted in yesterday's article that in my view, Jony is currently the most powerful person at Apple. I knew such a statement needed an article unto itself because of its controversial underpinnings. We are currently seeing Jony's Apple uncurl its wings, and while there are clearly risks involved with Jony holding so much power, in some ways, Jony is filling some of Steve Job's old role as master collaborator and thinker.  

The world generally knows very little about Jony Ive. While there have been some books written about the man, such as Leander Kahney's Jony Ive: The Genius Behind Apple's Greatest Products, I've always been able to fall back on Walter Issacson's biography, Steve Jobs, to get a bit more direct interpretation from Steve Jobs himself on certain topics.

Here's Steve Jobs on Jony:

“The difference that Jony has made, not only at Apple but in the world, is huge. He is a wickedly intelligent person in all ways. He understands business concepts, marketing concepts. He picks stuff up just like that, click. He understands what we do at our core better than anyone. If I had a spiritual partner at Apple, it’s Jony. Jony and I think up most of the products together and then pull others in and say, ‘Hey, what do you think about this?’ He gets the big picture as well as the most infinitesimal details about each product. And he understands that Apple is a product company. He’s not just a designer. That’s why he works directly fort me. He has more operational power than anyone else at Apple except me. There’s no one who can tell him what to do, or to butt out. That’s the way I set it up.”

Jony has long held a considerable amount of power at Apple. While the last major executive reshuffle in 2012 led to Jony gaining more responsibility by assigning him to lead Human Interface across the company, I don't necessarily look at the change as altering Jony's ultimate power trajectory. If Jony is the most powerful person at Apple, where does Tim Cook fit into the picture? On an organizational chart, Tim Cook may indeed be at the top (I have some doubts that is the case, but for simplicity's sake, I will take what is written on Apple's leadership page as correct), it is far from given that a company's CEO is the de facto most powerful employee at that company. A CEO works for a public company's board of directors, which has the power to fire that CEO (one reason why proper corporate governance calls for the CEO to not also hold the board chairman seat). While CEOs may think they have the ability to fire or hire anyone at will without any checks or balances, they are mistaken. Of course, in practice, this type of situation doesn't come up too often, but maybe that's more of a statement on mediocrity in corporate America and board rooms. Fortunately for Apple, there isn't much evidence to suggest "power" is an issue between Jony and Tim Cook. Both men are well aware of their involvement in the Apple machine and what would happen if that machine stops working, as seen with the 2012 reorganization.

Understanding the power Jony possesses at Apple goes a long way in analyzing how Apple operates and thinks about products and new industries, which relates back to the ongoing issues with Apple software user interface and App Store review. As discussed in my article yesterday, Apple's software quality seems to be having a tough time matching hardware quality. As someone with a similar opinion but a slightly different take told me on Twitter, software development needs to slow down to catch a breath. The much bigger picture is that software plays a vital role in how a user feels and thinks about a product. With Jony overseeing Human Interface, there may be a gap developing so that a somewhat final software product doesn't quite mesh with Jony's vision and intended interface guidelines. While I wouldn't go so far as to say that is the sole reason driving the App Store's ongoing issues (which involve communication issues), I think the much larger theme is that Jony will play an increasing role in where Apple software (including the App Store) is heading. 

How does Jony operate, and is he able to the fill the void left by Steve? I suspect Jony has mastered the art of collaboration and inspiration, which helps mitigate much of the internal risk that destroys other companies. His small industrial design team is firing on all cylinders. Obviously, Steve is irreplaceable and Jony must now rely on his intuition and gut (with input from others) regarding Apple's direction, but the important take away is I do think Jony plays a significant role in setting that direction. What then drives Jony?

As transcribed by Dezeen, here is Jony talking at Design Museum in London last month:

“I really, truly believe that people can sense care. In the same way that they can sense carelessness. I think this is about respect that we have for each other. If you expect me to buy something where all I can sense is carelessness, actually I think that is personally offensive. It’s offensive culturally, because it shows a disregard for our fellow human. I’m not saying that we get it right all the time, but at least our intent is to really, really care. Good design for me starts with that determination and motivation and I don’t think there’s anything, ever, that’s good that’s come from carelessness. The sad thing is that so much of what we’re surrounded by in the physical world that is a product of manufacture, so much of it testifies to carelessness. The one good thing about that is if you do care it is really conspicuous.”

I thought this paragraph did a wonderful job at explaining Apple's mission in the world: making great products filled with passion. While industry consensus is set on hardware being commoditized and software taking over the world, there are important points missing. First, as software expands, new industries, with a lot of problematic product, need to be rethought. Next, a "product" doesn't have to be tangible.  Finally, passion and emotion come from an experience (both tangible and intangible). Jony Ive has actually been the most powerful person at Apple for years. The only difference now is that the outside world is starting to see it is Jony who is truly conducting the delicate process of transforming ideas into products.

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