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Apple The Media News

How Apple Orchestrates Controlled Leaks, and Why 195

Lanxon writes "'I was a Senior Marketing Manager at Apple and I was instructed to do some controlled leaks,' confesses John Martellaro. Monday's article at the Wall Street Journal, which provided confirmation of an Apple tablet device, had all the earmarks of a controlled leak. Here's how Apple does it. Often Apple has a need to let information out, unofficially. The company has been doing that for years, and it helps preserve Apple's consistent, official reputation for never talking about unreleased products. The way it works is that a senior exec will come in and say, 'We need to release this specific information. John, do you have a trusted friend at a major outlet? If so, call him/her and have a conversation. Idly mention this information and suggest that if it were published, that would be nice. No e-mails!'"
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How Apple Orchestrates Controlled Leaks, and Why

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  • duh? (Score:5, Interesting)

    by falcon5768 ( 629591 ) <Falcon5768@comca ... t minus caffeine> on Wednesday January 06, 2010 @10:02AM (#30668898) Journal
    Thats how they all do it. Hell its even how the government does it. This isnt news, its well known common practice. Thats why its always fun when Apple goes after someone about a leak. Because in those situations, you KNOW Apple didnt authorize the leak and it makes you snicker.
  • by Anonymous Coward on Wednesday January 06, 2010 @10:11AM (#30668972)

    When the rumors started, I looked at the options chains for AAPL and saw that there was a large call to put ration meaning that the market was very bullish on AAPL - it also means that some folks are in fact trading on these "rumors" and making a few bucks on it.

    Illegal? I think so. But, I'd be hearing it from a friend of an insider of an executive - I'd like to see the Government prove it. Besides, it's not like I'm Martha Stewart or someone else that's high profile where the Government makes an example of to scare the rest of us from doing it.

  • Re:duh? (Score:3, Interesting)

    by Cronock ( 1709244 ) on Wednesday January 06, 2010 @10:22AM (#30669098)
    I think it also gives Apple a way to test reaction to its products without ever promising anything. That and along with the very active Apple news/rumor sites create a culture that just gets people exited about products, and builds anticipation. I'm sure often these leaks are red herrings too, which keep the "sources" from being accurate often enough to be trusted.
  • Controlled Leaks (Score:2, Interesting)

    by Anonymous Coward on Wednesday January 06, 2010 @10:27AM (#30669144)

    "...Senior Marketing Manager at Apple and I was instructed to do some controlled leaks".

    Let me be the first to say that anytime you boss wants you to do something "off the record", you need to start doing 1 or all of 3 things:

    1. recording massive amounts of evidence(when did he ask you, how, what time, save emails offsite) for your own benefit
    2. get an authorization document on company letterhead signed by him
    3. refuse to do it.

    They are setting you up my friend. You've probably broken some type of law already and don't even know it. I can't wait to hear their ass-covering testimony. "I never authorized him to do that. Yes your honor, I did speak with him on 1/6/2010 about the new tablet computer. I said I would like him to discuss the new changes to the device with his colleagues at work. Never at any time did I mention it was OK to discuss a confidential hardware/software design with the MEDIA!!!

  • The reasons (Score:5, Interesting)

    by Sockatume ( 732728 ) on Wednesday January 06, 2010 @10:31AM (#30669186)

    For those who don't feel like actually reading the article, here're the specific reasons given for the tablet leaks:

    * to light a fire under a recalcitrant partner
    * to float the idea of the US$1,000 price point and gauge reaction
    * to panic/confuse a potential competitor about whom Apple had some knowledge
    * to whet analyst and observer expectations to make sure the right kind and number of people show up at the (presumed) January 26 event. Apple hates empty seats and demands SRO at these events.

    I'm especially curious about the first and the third. Who is the competitor? The Google/Alex Reader partnership? The rumoured Chrome OS tablet? And who is the partner, a content provider or an OEM? Were they concerned that there wasn't enough interest in the device to guarantee volume, or was it something else?

  • by larry bagina ( 561269 ) on Wednesday January 06, 2010 @10:34AM (#30669230) Journal
    Insider trading is illegal but it's not clearly defined. Mark Cuban recently won a case where he was accused of insider trading. Martha Stewart is an interesting example because she was prosecuted for obstruction of justice and lying to investigators, not for insider trading. The coverup is far worse than the crime, especially when there might not have even been a crime in the first place.
  • by Darkness404 ( 1287218 ) on Wednesday January 06, 2010 @10:45AM (#30669374)
    The problem is, there are some things Apple simply won't do. For one, they want to release gadgets in generations. Just look at the iPod, first it was a black and white screen, then it was a color screen, then it could play videos then it had a touch screen, etc. If Apple doesn't see any way to easily upgrade a device, they won't make it. Unlike most "geek centered" devices, Apple's gadgets usually are lower-speced than their competitors but bring polish to the market. Look at the iPod, it wasn't exactly the largest media player at the time, nor did it have the most specs.
  • Re:The reasons (Score:3, Interesting)

    by snowwrestler ( 896305 ) on Wednesday January 06, 2010 @10:54AM (#30669498)

    In the case of today, I would guess:

    the competitor is Microsoft [nytimes.com]


    the partners are Verizon [computerworld.com] (more [iphonefaq.org]) and TV networks (for content) [arstechnica.com]

  • by peragrin ( 659227 ) on Wednesday January 06, 2010 @11:03AM (#30669598)

    That's because apple wants to release good products at launch time. Sure you can use the latest screen technology hut it doubles the cost comes with unstable drivers and if you sneeze at it cracks. Apple sells the whole widget. Having an easily scratched screen material is just as bad as buggy software.

    Most people don't realize that hardware and material science is a major part of product design. Bringing a final product to market is about trade offs.
    There havebeen touch screens and tablets for years upon years. But until recently the hardware and software haventbeen ready for mass deployments. Just look at Microsoft. Is windows tablet edition a good piece of tablet software? Ithas all the pieces but they haven't been assembled properly yet. The need for convertible tablets is why. Msft is trying to shove a mouse and keyboard based desktop at tablet users. But that isn't how tablet need to work. They need their own UI

    just having the ingredents doesn't mean you can bake cake.

  • Re:More like Apple (Score:3, Interesting)

    by dimeglio ( 456244 ) on Wednesday January 06, 2010 @11:04AM (#30669610)

    if Apple were a smaller company

    Sure, you are being rather hypothetical as Apple is in fact a huge company with innovative ideas. People do care what they'll come out with. So you don't make much of a point. Note that Google once was a small company. I first heard of them through an industry insider who said: "watch-out for this company called Google" in a web cast, "they have quite an interesting concept." Next thing you know, Altavista and Yahoo lost their leads as web search tools. Why did Google succeed? In my opinion, it was the reputation of their leaders as technical gurus and not traditional marketing types. The non obtrusiveness of their interface and their innovative monetization model also helped get them the lead.

    Apple has a to know their next product will be a hit. These leaks provide an outlet and a low risk method of measuring acceptance. If reaction is negative, they never admit the leak and the idea is postponed, otherwise, it might go ahead. Too bad Segway didn't do the same thing. They would have probably not have spent so much in a product which is interesting but honestly not that compelling.

  • SEC (Score:1, Interesting)

    by Anonymous Coward on Wednesday January 06, 2010 @11:07AM (#30669642)

    Isn't it a requirement of all exchange-listed companies to issue a press release for pretty much anything they want to say?

    I'm pretty sure the SEC would be quite interested in this guy's story.

  • Re:More like applie (Score:2, Interesting)

    by Anonymous Coward on Wednesday January 06, 2010 @11:08AM (#30669654)

    Yeah, and that's how it works. They go to these sites and give a little taster and then as soon as its leaked, they get their dogs out and tell the rest of the news outlets that "XYZ BLOG IS WRONG WE ARE NOT BLAH BLAH BLAH", when in fact, if it were false, Apple would not comment at all.

    Why do I know this? I had it happen to me where I was the source of a posting that caused a half billion dollar spike in their stock (ok...maybe exagerating) and a thousand dollar hosting bill (which was mysteriously paid for by a benefactor after the fact).

    Well timed conversation, no note of NDA (which never happens with Apple or other big companies), enough information and the whole speech of We Can't Stop You From Publishing This, But We'd Hope You Don't (i.e., they push and push to the point where you KNOW you almost have to...the first few times I had things like this, I didn't publish the info...why? Because I said I wouldn't...wow! Ethics suck...it was only after being prodded with hints of the fact that they maybe talking out of both sides of their mouth and may actually need to talk to someone a little less ethical that might want the traffic that I got the clue).

    Apple knows what they are doing in this regard. I've been around with senior officials for a few big deals...these days, I've been asked simply what my opinion would be and the take on the publics reaction outside of the fanboy RDF (I love the company, but I'm critical when I think they cock up...which they do like anyone else, I just think they do it in a better way!) And these days, the ethics worked out because I'm giving information they know isn't going to be leaked and unless given the signal, it ain't going anywhere (which could have really helped my income if I would have just thrown some money a few months ago at the stock...luckily, the market has already adjusted and people pretty much know whats coming out, even if they don't have a fucking clue). I make a little off my recommendations and get to play with nice toys...and have never signed an NDA to this date with the company.

    The only time this has worked negatively was when I made a sarcastic comment that was obviously over the top, and some wonk at the WSJ had kept me in his twitterbookspace feed and posted something about ANOTHER company that was just wrong and it dropped 2% of its value (trust me, this was a lot). I've never seen a C&D for a joke before (one that even humorless lawyers knew was a joke). My lawyer told them to fuck off in otherwords and we delayed things long enough to not have to do a damn thing.

    So yeah, Apple is by far the best in this world...Microsoft just sucks in this regard...I won't even get into how bad their efforts have been...its almost like an epic fail "Please post this press release exactly as we stated, in which case if you do, we will sue you, but don't worry because we really won't but we might, just to make an example of you, but you won't know, but we really like you, we really do....but seriously, don't fuck with me boy I'm watching you).

  • Re:Ethics (Score:3, Interesting)

    by A. B3ttik ( 1344591 ) on Wednesday January 06, 2010 @11:08AM (#30669662)
    What makes you think this is unethical? They're not lying or even doing things underhanded. They're just spreading information in an unusual way.

    Note that as a fellow Galt Follower, I am interested in your response.
  • Surprised? (Score:2, Interesting)

    by Andrevan ( 621897 ) on Wednesday January 06, 2010 @11:11AM (#30669684) Journal
    Is anyone really reading this and scratching their heads, saying, "Well gee, I thought it was a bunch of intrepid hackers who broke into the mainframe to steal the pix?" Of course Apple orchestrates their leaks and rumors. Even their litigious cease and desisting of Mac rumor sites is all part of cultivating their mystique. Even "non-evil" companies like Google pull shit like this. It's all part of the marketing game to build pre-release buzz for products.
  • by BobMcD ( 601576 ) on Wednesday January 06, 2010 @11:18AM (#30669764)

    In many places this sort of recording isn't legal. It is theoretically possible to attach some sort of consequences to breaking a confidence. It would be a different matter if you gave your permission to be recorded, were in a public place, etc, but if you specifically asked to have a private, off the record, conversation things get a little less black and white.

    A person may or may not face legal penalty for this kind of behavior, but you can be certain they would never get those kinds of tips again. Since tips generate stories and stories generate money, there isn't a great deal of incentive for outing a tipster.

  • A Public Service (Score:3, Interesting)

    by DannyO152 ( 544940 ) on Wednesday January 06, 2010 @11:46AM (#30670236)

    By fleshing out an implementation, perhaps this pre-empts someone patenting "Controlled Leak, Product" (as opposed to nuclear power plant, hot air balloon, disinformation, tire, etc.)

  • Re:Stocks? (Score:3, Interesting)

    by swb ( 14022 ) on Wednesday January 06, 2010 @12:10PM (#30670652)

    You do know that insiders only trade on their own account when they have to unload stock options or for other PR reasons.

    They make real their money on inside trades through proxies and third parties.

  • by Archangel Michael ( 180766 ) on Wednesday January 06, 2010 @12:53PM (#30671336) Journal

    The leaks work so well because Apple is a hot, popular company. They don't, by themselves, make Apple a hot, popular company.

    Actually, I think it is a chicken/egg issue. At this point, the kind of leaking that happens is partly responsible for building the chic, hot, popular. People generally want to be in the "in crowd", and Part of the whole "leak" mentality is build momentum before a product is released.

    The leaks accomplish this "in-crowd" mentality, especially when it is accompanied by pictures of people waiting in line at the local Apple store for days, for the latest coolness a few months later when said coolness is released.

    Apple has MASTERED this like no other company. Nobody waits in line for the lastest "Dell" or "HP". Why? Because they aren't "cool", and all of the products they release are in fact part of the YAD (yet another device).

    Other companies get this kind of response once, or twice a decade. Apple achieves this on a regular and consistant basis.

    Apple is cool, because people think it is. People think it is cool, because on a regular basis, they release things that people want because Apple is cool.

    It is cool to be Apple.

  • Re:duh? (Score:3, Interesting)

    by eleuthero ( 812560 ) on Wednesday January 06, 2010 @02:09PM (#30672494)
    since most of this thread is about the iphone - 5% failure rate... less than any other smart phone. And if you take something in to Apple, they don't usually "repair" it, they usually just give you a new phone. This is less true with their computers, although they do have a no-lemon policy (non-disclosed as far as I know).
  • by Kreigaffe ( 765218 ) on Wednesday January 06, 2010 @02:49PM (#30673070)

    Which is dropping, and will continue to drop, and more and more people realize what bullshit he signed into law. DMCA, we all love that and love Bill for that, right? NAFTA's been working out great hasn't it? How about shutting down our research on Integral Fast Reactors? That's some future tech shit right there, and it's not like our nuclear tech was lagging behind the rest of the world already thanks to NIMBY-ism, but hey too bad now. GE's got some reactors based on that they're designing/building that should be able to drop right in to a coal plant with just some rerouted pipes and a new control room -- they're eying up China, not America. Ohh, and don't forget the Brady Bill, which did not do anything for crime -- crime rates were lower before, and after, that bill's run.

    He also signed that awesome internet decency thing that was destroyed by the SCOTUS pretty quick, a telecom reform act that opened the door for ClearChannel to make you not care to ever listen to the radio again, a Marriage Defense bill that allowed states to forbid same-sex marriages and also defined "marriage", federally, as between a man and a woman.. hey that's cool, right?

    Bang-up job, Bill, bang-up job! Pretty much EVERYTHING that man did in office is distasteful to.. well the entire /. mindthink. The man is charismatic, though, to the point where people love him enough to forget all the bad things he's done.

  • Uncontrolled leaks (Score:4, Interesting)

    by 200_success ( 623160 ) on Wednesday January 06, 2010 @04:08PM (#30674110)
    Also of interest is how Apple handles unauthorized leaks [gizmodo.com] from its employees. Apparently, they lock down buildings and inspect employees' personal communication devices to hunt down the perpetrator.

"We don't care. We don't have to. We're the Phone Company."