Interesting to see the BBC’s summary of the current iPhone update story: “Apple issues an update which damages iPhones that have been hacked by users”. I’m not sure that’s quite how Apple’s PR people would have put it, but it’s interesting to see that whoever writes those little summaries for the BBC website found it easiest to sum up the story in this way. This is being portrayed as Apple deliberately, strategically damaging the phones, rather than an update unintentionally causing problems with unlocked or modified phones.

Regardless of what the specific issue is here, and whether unmodified iPhones have also lost functionality because of some problem with the update, can’t we just strip out all this nonsense? How many people who wanted an iPhone also wanted to be locked in to AT&T or whatever the local carrier will be in each market? Anyone? Who wants to be locked in to anything? What a waste of technical effort, sweat and customer goodwill: it’s utterly pathetic.

This is exactly what Fred Reichheld‘s ‘Bad profits’ idea calls out so neatly:

Whenever a customer feels misled, mistreated, ignored, or coerced, then profits from that customer are bad. Bad profits come from unfair or misleading pricing. Bad profits arise when companies save money by delivering a lousy customer experience. Bad profits are about extracting value from customers, not creating value.

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If bad profits are earned at the expense of customers, good profits are earned with customers’ enthusiastic cooperation. A company earns good profits when it so delights its customers that they willingly come back for more–and not only that, they tell their friends and colleagues to do business with the company.

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What is the question that can tell good profits from bad? Simplicity itself: How likely is it that you would recommend this company to a friend or colleague?

If your iPhone’s just turned into the most stylish paperweight in the office, are you likely to recommend it to a colleague?

More to the point, if Apple had moved – in the first place – into offering telecom services to go with the hardware, with high levels of user experience and a transparent pricing system, how many iPhone users and Mac evangelists wouldn’t have at least considered changing?