The “lost” fourth-generation Apple iPhone that surfaced last month, and the resulting media coverage, could have immeasurable damage on current iPhone sales, Apple claimed in court documents relating to the case.
In documents released by a San Mateo, Calif. county judge on Friday, Apple called the published materials surrounding the discovery of the Apple iPhone 4G prototype “immensely damaging.” The just-released documents detail what lead up to the search of Gizmodo editor Jason Chen’s home and the seizure of several computers after Chen and Gizmodo published several stories and photographs detailing the new iPhone prototype, which many expect Apple will launch at its Worldwide Developers Conference (WWDC) next month in San Francisco.
Apple representatives said the iPhone 4G prototype was “invaluable” and that the publication of the images is “immensely damaging” to Apple, wrote Matthew Broad, a member of the San Mateo County Sherriff’s Office and a member of the Rapid Enforcement Allied Computer Team (REACT), in court documents, including a search warrant for Chen’s home. “By publishing details about the phone and its features, sales of current Apple products are hurt wherein people that would have otherwise purchased a currently existing Apple product would wait for the next item to be released,” he wrote, citing his conversation with the representatives, adding that Apple feared its earnings would take a hit.
Apple representatives couldn’t estimate a potential dollar amount that would be lost due to the lost and found Apple iPhone 4G prototype, but told Broad it was “huge.”
But Apple is jumping the gun when it said sales of current iPhones and products would nosedive because of the sneak peek at the 4G. Apple has proven itself a sales magician and has rounded up a loyal cadre of followers who will buy nearly each and every product that bitten Apple logo appears on, even if they already own a previous generation model.
Apple’s sales prowess can also be seen in the recent release of the Apple iPad. Many industry watchers predicted the iPad would be dead on arrival and questioned the need for a touch-screen tablet that with a form-factor wedged between a smartphone and a laptop. Apple sold well over a million iPads in roughly the first month, and the release of the 3G model several weeks later only added more fuel to the sales fire.
Apple is known for constantly refreshing its product. And the technology company has consistently offered annual updates to the iPhone hardware since it’s official launch in 2007. Apple followed 2007’s first generation with 2008’s iPhone 3G, then followed that with 2009’s iPhone 3Gs.
Apple buyers and consumers know a new iPhone will hit in the summer of 2010. They’ve known it since they plunked down the dough for a 3GS. That’s how Apple works. For Apple to claim that early details of its latest smartphone creation leaking to the public will have a “huge” negative impact current sales is short-sighted. Apple is assuming consumers don’t expect a new iPhone each year.
Instead, Apple should embrace the leak as free advertising and publicity and get out ahead of it. Apple knows it has the power to make consumers and fanboys alike salivate with the prospect of new gear, why not use the leak to its advantage instead of crying poor house?
Could the iPhone leak put a tiny dent in two months worth of iPhone 3GS sales as consumers await the 4G? Perhaps. But saying the leak is “huge” and will be “immensely damaging” is hyperbole.
Apple need not worry. It can expect another blowout quarter when it reports third quarter earnings in a couple of months.