Jobs shakes up Apple management over MobileMe debacle

Apple may need public beta testing to avoid a repeat, says analyst

Apple CEO Steve Jobs has given MobileMe to the executive who heads iTunes, part of a shake-up over the sync service's public problems since its launch last month, according to a memo sent to company employees earlier this week.

In the e-mail sent to workers Monday, Jobs admitted that the launch of MobileMe "was not our finest hour," saying it "was simply not up to Apple's standards." He also acknowledged that the service, which debuted July 11 along with the iPhone 3G and the new App Store, needed more testing and should have been rolled out in phases.

The secretive CEO also said he had revised Apple's table of organization.

"We are taking many steps to learn from this experience so that we can grow MobileMe into a service that our customers will love," Jobs said in the e-mail, which was first reported by the technology site Ars Technica. "One step that I can share with you today is that the MobileMe team will now report to Eddy Cue, who will lead all of our internet services -- iTunes, the App Store and, starting today, MobileMe."

Cue will have the title Vice President, Internet Services, and will report directly to Jobs.

Previously, MobileMe had been led by Rob Schoeben, Apple's vice president of applications marketing, who was in charge of the service's predecessor, .Mac, as well as some of its biggest applications, including iLife, iWork and Aperture.

"That was probably the most important step, internally as well as externally -- to say that'We screwed up,'" said Mike McGuire, a Gartner analyst.

McGuire, who closely follows Apple's media moves, particularly its iTunes online music mart, was bullish on Cue's track record. "In their post-event examination, they identified that there was at least some problems with [former leadership] at MobileMe," said McGuire. "Eddy has shown with iTunes over the years that he's very good at running a 24/7 worldwide distribution point. He's got some serious chops, and the appointment is interesting."

More intriguing, said McGuire, is the conundrum Apple faces going forward if it's serious about ensuring that it not repeat a MobileMe-like debacle. "I think Apple may have to consider [broadly] beta-testing with services in the'cloud' like MobileMe," he said.

It may not want to, however, even though Jobs admitted that MobileMe "clearly needed more time and testing" in the internal e-mail. "For Apple, both strategically and tactically, a lot of the sizzle would get shown in a beta," noted McGuire. "That would take a certain tool out of their kit, their ability to maintain secrecy around a product launch."

In McGuire's analysis, Apple reaps big benefits by not disclosing information about products before they're available. The buzz that precedes a launch, he said, is usually only exceeded by the excitement when the details become clear. "People say,'This is even better than all the rumors'," said McGuire. "That's been a real valuable asset to them."

But to respond to calls -- both from users and possibly from within Apple -- that it better test before it delivers products, Apple may be forced to give up that asset, in particular as it tries to expand its consumer-centric base to small business or larger companies.

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