Ten… top tech cock-ups of 2012
Twelve months of corporate clods, government bumblers, and half-arsed hackers
2. Facebook's sorry IPO
When Facebook went public it was a huge event for the technology industry, and a simultaneous bubble-bursting of social media stocks that had been a long time coming.
Those of us who lived through the original dotcom boom saw the signs. It's the oldest tradition in the technology book: if you build it they will come, and as long as the VC money is flowing then party on. When an online coupon-clipping concern like Groupon gets a $15bn valuation, you know something's amiss.
Facebook's IPO wasn't helped by problems with NASDAQ's servers, which faltered under the demand for shares. This caused some very uneven trading, and when the $38 initial share price started to drop the system couldn't handle the share trades. NASDAQ is currently facing a lawsuit over the whole issue.
As the days went on, Facebook's stock price fell and fell, leaving more and more investors wondering just how they'd managed to come up with a $100bn valuation for the social network. Other companies that went for an IPO in the same way also suffered – although LinkedIn, which had lowballed its initial sales price, and which returns a healthy profit, still looks good.
Facebook's share price looks to have bottomed out – for now – and is slowly rising at time of going to press – for now – but a lot of fund managers and some private investors such as Mark Cuban took a bath. The madness of crowds always has victims.
That said, from a purely capitalistic viewpoint (as Eric Schmidt would put it), Facebook and its founders made out like bandits. The IPO price was in line with secondary trading market prices and all the shares sold at price. A lot of people got very paper-rich and Mark Zuckerberg was happy: he kept control of the company.
But I suspect that Facebook's problems with the IPO will continue to hurt the company. It's a quoted firm now, with responsibilities to shareholders and a need to bring in ever-larger profits. As we've seen with the botched attempt to monetize Instagram and Facebook data, the effects of going public may be felt for some time to come.
1. Apple's crap Map app-flap slap
There really could be only one pick for the number-one spot on this list. The Apple Maps fiasco has done more to hurt the company's image than anything else this year, leaving their reputation – and those of some of its supporters – in the dust.
At the start of the year Apple was riding high. The loss of cofounder Steve Jobs had been handled better than many in the industry had expected, and Tim Cook looked like a safe pair of hands to take the company forward. Apple was on its way to being the most valuable in the world in dollar terms, and was beating the competition like a red-headed stepchild.
But Jobs' legacy included an unpleasant fight with Android. Jobs had been annoyed at Eric Schmidt's apparent betrayal of accepting board membership at Apple at the same time that Google had been working on a smartphone alternative to the iPhone.
War was declared, red in tooth, claw, and lawyers letters over Android. In addition, Apple decided with iOS 6 to block parts of Google's game plan by dumping its mapping application.
This might have worked if Apple had a remotely comparable product.
Google has ploughed millions into its mapping division, and by any reasonable standard it has the best free mapping information out there. If you want to know where to go and what your destination looks like, Google has the data.
Mapping is a key function for smartphone users. The free turn-by-turn navigation offered by Android is crippling simple GPS firms such as TomTom and is increasingly becoming a must-have app for users. Not a true killer app, but close.
When iOS 6 with Apple Maps launched, there was initially little fuss. Apple's policy of only letting friendly reviewers get advanced access to kit held up well, and virtually none of Cupertino's chosen few even mentioned the mapping function in their glowing reviews of the new operating system. But then users actually tried it out and the results were plain to see.
Apple's Maps app simply didn't work correctly. Sure, it could get you from point to point – just about – but the level of detail included was poor and mapping information was frequently wrong. The list of cock-ups grew day by day as people realized that the application just wasn't fit in any meaningful way.
Even the Australian police warned against using it for fear of getting lost in the desert.
True, companies such as Microsoft have made a good business plan of copying the competition with services and software that are not as good but just good enough. But for Apple, this approach just didn't work. Apple's key selling point has been that its devices and the software they run "just work". It's one of the reasons Apple has done so well in the smartphone arena and has dominated the tablet market.
Breaking that covenant by putting out such a lousy piece of software hurt the company more than it would like to admit. Apple apologized, and fired some of the people involved, but the damage was done. Apple's whole argument that it has to tightly control the hardware and software of its products to ensure quality was exploded once it became clear that it was pushing a duff product to suit its personal peccadillos.
Google, meantime, was sitting pretty. Globally, Android has far outpaced the sales figures of iOS, and Google announced work on an iOS 6 mapping app while expressing concerns that Apple wouldn't allow it. Eventually Cupertino did, and the results were depressing for Cook & Co: over 10 million downloads of the application in 48 hours and a significant uptake in iOS 6 upgrades once Google's mapping was available.
It would be wrong to attribute Apple's plummeting share price solely to the Maps fiasco – the stock market has been on a little bubble of its own and many fund managers got aboard Cupertino's bandwagon too late – but it had an undeniable effect. Users are now souring on Apple, and the rot may yet continue.
2013 is going to be a very interesting year for Apple – and for Google, and for RIM, and for HP, and for Facebook, and for many, many others. ®
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