This document discusses Apple's refusal to unlock an iPhone for the FBI and the potential business risks this poses. It argues that Apple risks losing market share if competitors rebrand the iPhone as the "terrorist's phone" or if Apple loses the court case. It also notes that if another company hacks the iPhone first, the issue will become moot and Apple will lose face, particularly in Asian markets. The document frames the debate not as an issue of privacy or security, but as a business decision about how Tim Cook handles a threat to Apple's brand, market share, and profits.

1. This is a business article. However, we must address some of the clutter.
On CNBC Mr. Wozniak cited Constitutional Rights. Here is the IV Amendment.
The right of the people to be secure in their persons, houses, papers, and effects, against
unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but
upon probable cause, supported by oath or affirmation, and particularly describing the place to
be searched, and the persons or things to be seized.
Now, let's move on to the business issue. Because it is the business issues that will make or break
Apple's future in the medium and long term.
When I wrote Apple Meets Hollywood, I was discussing the corporate success parabola.
Two years ago I suggested that APPLE and Facebook buy AOL Time Warner CNN. The reason?
Content. $1.5 Billion Dollars + 1.5 Billion Users = Profit$ It never happened. However, others
have been buying up content. Now, Apple is looking for content (original content) for their
devices.
I also wrote
At the same time, another topic near and dear to my heart, is the move to move “In sync” with
Cisco. Why? To make Apple products more useful to more people.
You all know the basic paradigm.
• An organization grows large.
• Economies to scale meet the law of diminishing returns.
• Efficiencies decline.
• Focus on the quality of some products causes the quality of others to suffer.
• There is contention among employees working on different projects.
• Profits will attract competitors.
• A large number of competitors will nibble at profits.
• Unique features of competing products will create pressure to improve your product.
• Pressure on employees (and on bosses) will effect morale negatively.
• Some competitors will go out of business due to bad products or management.

2. • Other competitors will blend together through M&A creating larger competitors.
• Those competitors will benefit from economies to scale as they grow.
• There will be market penetration. And innovation. And competition.
• They will innovate and or cut prices causing you more pressure.
• Big companies will begin to sell off bits of itself to:
• Concentrate on our core
• Do what we do best
• Cut costs
• Become more efficient
• Focus on R&D
• Better serve our valued and appreciated customers.
Now, APPLE is meeting with Cisco. Great Move.
The real issue with FBI v. AAPL does, ultimately come down to a business issue. Tim Cook is
running the risk of rebranding AAPL in the worst way.
ANALOGY
During the Jimmy Carter gas crisis, Detroit (Synecdoche for The US Auto Industry) refused to
embrace the smaller, 4-cylinder automobile. This offered the Japanese Auto Industry to penetrate
the market. Japanese cars were not only relabled as the economical car, they were soon relables
as the ecological car.
The US auto industry lost market share.
Now look at the cell-phone.
Mr. Cook knows what he is saying, and knows what some of his customers are hearing. But
ignores what others are hearing.
As Yogi Berra said, "In theory, there is no difference between theory and practice. In practice
there is."
As Mr. Cook is pounding and propounding TRUST, he is speaking only to those people he wants
to speak to. However, others listening. When he says, "Trust" others hear what he has to say.

3. By way of metaphor, right now, a terrorist is saying, "Let's buy i-phones. We can trust Apple to
protect our privacy." And exaggeration? No.
And remember, we did capture Osama bin Laden, by tracking him through cell phones.
And we need not discuss all phones or all technology. The safe and face-saving course would be
for Apple to hack into one phone, give the information to the FBI, and have done with it.
Mr. Cook, however, is in a lose-lose situation.
1. His competitors can relabel i-phones as The Terrorist's Phone.
2. He can lose the case in the courts and lose a lot more than his is willing or can afford to lose.
All this, strictly, from a business viewpoint.
Competitors can use this as an opportunity to penetrate Apple's market. A spirit of nationalism
will move the market, the consumer, away from Apple to their own countries phones.
In addition, it is possible someone else will hack the iphone. The entire issue will become moot,
and Tim Cook and Apple will suffer loss of face. In Asian markets, this will become a death-
knell to the Apple brand.
The issue is not privacy, rights, or national security. The entire issue involves how Tim Cook
handles a threat to his brand, his market share, and his bottom line.
Warmest regards,
Slim.
Slimfairview@yahoo.com
If anyone finds this to be helpful, please don't hesitate to send me a really tricked out MacPro or
i-pad and to tuck a few dollars into the envelope along with the thank you note. (I think I will
stick to the Tracfone)
Copyright (c) 2016 Bob Asken
All rights reserved.