Apple secret sacrosanct
Written on June 25, 2009
SAN FRANCISCO – Apple is one of the world’s coolest companies. But there is one cool-company trend it has rejected: chatting with the world through blogs and dropping tidbits about its inner workings.
Few companies, indeed, are more secretive than Apple, or as punitive to those who dare violate its rules on keeping tight control over data. Employees have been fired for leaking news to outsiders and the company has been known to spread disinformation about product plans to its own workers.
"They make everyone super, super paranoid about security," said Mark Hamblin, who worked on the touch-screen technology for the iPhone and left Apple last year. "I have never seen anything else like it at another company."
But even by Apple’s standards, its handling of news about the health of its CEO and co-founder, Steven P. Jobs, who has battled pancreatic cancer and recently had a liver transplant while on a leave of absence, is unparalleled.
Jobs received the liver about two months ago, according to people briefed on the matter by current and former board members.
Apple representatives have declined to address the matter, reciting with maddening discipline only that Jobs is due back by the end of June.
Jobs was actually at work on Apple’s sprawling corporate campus Monday, according to a person who saw him there. Company representatives would not say whether he had returned permanently.
Even senior officials at Apple fear crossing Jobs. One, who is normally more open, when asked for a deep-background briefing about Jobs’ health after news of the transplant had become public, replied: "Just can’t do it. Too sensitive."
Secrecy at Apple is baked into the corporate culture. Staff working on top-secret projects must thread their way through a maze of security doors, swiping their badges again and again before entering a numeric code to reach their offices, according to one former employee who worked in such areas.
Some Apple staff in the most sensitive product-testing rooms must cover devices with black cloaks when working on them, and turn on a red warning light when devices are unmasked so everyone knows to be extra careful, he said.
Staff are often just as surprised by new products as everyone else.
"I was at the iPod launch," said Edward Eigerman, who spent four years as a systems engineer at Apple and now runs his own technology consulting firm. "No one that I worked with saw that coming california health insurance.”
Eigerman was fired from Apple in 2005 when he was implicated in an incident in which a co-worker leaked a preview of some new software to a business customer as a favour. He said Apple routinely tries to find and fire leakers.
Five years ago, Apple brought its obsession with secrecy to the courts. It sued several bloggers who covered the company, arguing that they violated trade-secret laws and were not entitled to First Amendment protections. A California appeals court ruled for the bloggers, and Apple had to pay $700,000 (U.S.) in legal fees. It also sued a blog called Think Secret and settled for an undisclosed amount but, as part of the deal, that blog shut down.
Regis McKenna, a noted Silicon Valley marketing veteran who advised Apple on its media strategy in its early days, said of the secrecy, "It really started around trying to keep the surprise aspect to product launches, which can have a lot of power. But what most people don’t understand is that Steve has always been very personal about his life. He has always kept things close to the vest … and only confided in relatively few people."
Many other firms use online outlets like blogs and Twitter and try to be more open with shareholders and more responsive to customers.
But not Apple.
"They don’t communicate. It’s a total black box," said Gene Munster, a Piper Jaffray analyst who has studied Apple for five years. He said Apple routinely "jams the frequencies," or gives observers misinformation to throw them off the scent of new products or other news.
For corporate governance experts, and perhaps federal regulators, the biggest question is whether Jobs’ approach has led to the breaking of laws that cover what firms must disclose to the public about the well-being of their CEO.
Some believe Apple did not need to disclose Jobs’ liver transplant because he was on a leave of absence and had passed responsibility for day-to-day operations to COO Timothy Cook.
Other governance experts argue the liver transplant now makes one of Apple’s assertions from January – that Jobs was suffering only from a hormonal imbalance – seem like a deliberate mistruth, unless his health suddenly deteriorated. Of course, no one knows enough to say definitively.
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