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When Gawker media purchased a lost — or stolen — iPhone last month, the company set in motion a fascinating story that has much less to do with the specs of Apple's latest product than the state of journalism online and the procurement of information in a digital world. The notoriously secretive Steve Jobs was none too pleased that his latest prototype made it into the wild early. But the company's legal strategy is yet more proof that companies that win in court do not always win over potential customers.

After police raided Gizmodo editor Jason Chen's home this week, the story got even bigger. And Apple is getting more bad publicity from pursuing its legal investigation than any leaked iPhone information could have wrought.

Apple is a famously tight lipped organization. They don't leak information to the press to test out products and features before they launch. Instead, they keep as much under wraps as possible until Steve Jobs and his team can unveil new devices on their own turf. As David Carr put it at The New York Times earlier this year:

"As an organization, Apple is more disciplined in managing message than even the Obama campaign, with a culture — some would say cult — of corporate omertà. The only reason we know that the tablet is for real, that it is probably a 10-inch touch device that will cost $600 to $1,000, is that at some point, Apple had to reach out to partners who do not share its sense of pristine hygiene around information."

Gizmodo's video leak of the iPhone 4G prototype flew in the face of Apple's policy of secrecy surrounding its new products. And the company was not pleased. Apple classified the phone as stolen and requested its return in a letter through lawyers.

Then last week, California police seizing Chen's computers and other digital property. Meanwhile, Apple employees also reportedly showed up at Chen's address and asked to search the property.

Last night on The Daily Show, fake newsman Jon Stewart honed in on some of the issues that have come up since Apple has tried to crack down on the Gizmodo leak. As Stewart put it:

"Apple - you guys were the rebels, man, the underdogs. People believed in you. But now, are you becoming... the man? Remember back in 1984? You had those awesome ads about overthrowing Big Brother. Look in the mirror, man! …It wasn't supposed to be this way. Microsoft was supposed to be the evil one! But you guys are busting down doors in Palo Alto while Commandant Gates is ridding the world of mosquitoes! What the fuck is going on?!"

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Patricio wrote earlier this week that Gizmodo hasn't actually earned back the $5000 it paid for the iPhone prototype. And while the page views may not have translated into immediate income, that $5000 was the best publicity the company could have purchased.

Gawker founder Nick Denton, for one, seems to be reveling in all of the attention his tech blog is receiving. After police raided Chen's home, he quickly tweeted:

"Do bloggers count as journalists? I guess we'll find out."

The publicity that Gizmodo has received because of this incident is undeniable. For example, the site has created a guide to understanding the site for new readers. Of course, Jason Chen may think differently than his employer on this issue since it is his belongings that have been seized, but many commentators — some of whom may not have agreed with Gizmodo's methods — have come down against state police (and Apple) for using a warrant to invaid Chen's home.

The criminal investigation was instigated by Apple. The company would obviously rather have consumers buzzing about its products when they are available for sale rather than when a blog decides to leak their proprietary information. As such, they may be be entitled to a significant payment from Gawker Media. However, now that the information is already out there, Apple also has the ability to piss off a lot of people (and potential consumers) for taking a hard legal stance on this issue. Whether Apple is able to get financial restitution or not, both sides are subject to different conclusions in the court of public opinion.

Images: The Daily Show

Meghan Keane

Published 29 April, 2010 by Meghan Keane

Based in New York, Meghan Keane is US Editor of Econsultancy. You can follow her on Twitter: @keanesian.

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