Apple's growth, an unwinnable iPhone war and a reputation at risk
Apple is clearly in a war with hackers over the iPhone and its most loyal fans could take a few hits. How Apple performs through these battles will determine the company's overall reputation going forward.
Context & Ripple Effects
The hacking fight has been building since Forbes' late-August Worm In The Apple report on iPhone security exposure, and by late September it has escalated from vulnerability to open confrontation: Apple's software update disables modified handsets, per BBC's pickup, while TUAW reports Apple Geniuses are reportedly unbricking phones at the Genius Bar.
The timing compounds an already bruising stretch for the two-month-old product — a 'Don't Buy' verdict on the three-month re-review, a customer lawsuit over the iPhone price cut naming Apple, Steve Jobs, and AT&T, and Fortune's 'iFlop' verdict on Apple TV. Into this lands Daniel Cooperman's confirmed arrival as general counsel, just as litigation lands.
First-order effects
- iPhone owners who unlocked or modified their handsets face disabled devices after Apple's update, and Apple Store Geniuses are absorbing the fallout, reportedly restoring bricked phones one appointment at a time.
- Apple, Jobs, and AT&T are now defendants in a suit tied to the price cut and rebates, putting the company's newest product and its carrier partner directly into legal dispute weeks after launch.
Second-order effects
- The legal escalation forces organizational response — Cooperman's hire as general counsel reporting to Jobs slots top legal leadership in precisely when customer litigation is active.
- Commentators like Scobleizer frame the combination of bricked phones, lawsuits, and the 'Don't Buy' re-review as a brewing PR problem aimed at the fan base that is Apple's core marketing asset.
Third-order effects
- If the pattern holds, consumer device makers face a structural trade-off between locking down platforms against hackers and alienating the enthusiast community that seeds early adoption — a fight that recurs each time a closed device reaches scale.
- Sustained conflict between vendor updates and independent modifications pushes security from an IT afterthought to a board-level brand issue, with general counsel and store staff both on the front line.
The trend: As consumer hardware platforms scale, the battle between vendor lockdowns and the hacker community is shifting from a technical skirmish into a recurring test of brand trust and legal posture.