Apple and Private Sector Inefficiency

I am the first to argue that we need to rebalance the economy; that the private sector is generally a force for the good; and that those in the private sector should be more adequately rewarded and recompensed for the risks they take. However, those making those arguments often add another – that the private sector is (automatically) more efficient than the public sector. This can be so, of course, but not necessarily.

It was Apple, of all companies, who provided me last month with the most staggering piece of inefficiency I have ever come across. It is a telling story – of a company which has become too big; of quirkiness becoming sheer stupidity; and of tax avoidance literally costing the customer.

The story is relatively straightforward. My wife ordered an iPad case on Apple’s Online Store; the recipient wished to change the colour; so we went to the Apple Store in Belfast to swap it. Easy.

Or apparently not so easy… there our trials began. The Apple Store is apparently “completely separate” from the Apple Online Store, and thus the item could not simply be exchanged there. No, apparently it had to be exchanged online. Not quite so easy, but still straightforward.

Or apparently not so straightforward… despite having the receipt in front of me, there was no means of returning or exchanging the item online because it had not been bought under an Apple ID. No, apparently it was necessary to phone a call centre to arrange a courier to come and exchange the item from the delivery address. This call was made from right outside the Apple Store where I simply wished to exchange the like-for-like item. This is now plainly unnecessarily complicated…

And it gets worse. At this stage we are informed that this will not take one courier (with the waiting in all afternoon involved with that) but one to collect the item, and then one to deliver the replacement after the original is checked. We are now in insane territory! All we wish to do is replace one colour with another, something we were quite content to do at the Apple Store itself over a week ago yet we are still two courier deliveries (during the working week) away from our objective. We are now in the realms of inefficiency to the point of insanity…

This is not, unfortunately, pure inefficiency. However, it is worth noting that not only does this crazy method of dealing with refunds and exchanges inconvenience the customer, it also obviously inconveniences Apple itself; bizarrely, it has employed call centre staff and a delivery company (twice) instead of merely allowing a case of one colour to be lifted off a shelf and replaced by a case of another colour. Genuinely, no government department or agency would be allowed to get away with such a farce (in the supposedly “inefficient” public sector).

Another issue here is that the “free market” does not always reward the best products, but the best brands. We all know Apple doesn’t make the most advanced smartphones any more, in the same way we know BMW doesn’t make the most reliable cars – yet in each case not only to we reward the company with sales volume but we even pay a premium to do so. This is largely because of the brand (allied with excellent and innovative research) – which in Apple’s case is founded on quirkiness (more specifically perhaps: doing things differently almost purely for the sake of it, which can lead to great creativity). However, when quirkiness becomes sheer stupidity, the game may be up.

There is a still more alarming aspect of this. I can’t help but think the reason Apple is so precious about the divide between the “Online Store” and its High Street Store is given away on the receipt, which notes the former is in effect a subsidiary based in County Cork of a company headquartered (in the small print in the right-hand column) in Luxembourg. In just the last few months we have seen the debate around the “Double Irish” and the “Luxembourg Channels”, all means of minimising the profit declared within the actual country of operation. This may be theoretically legal, but it comes at the cost of inefficiency to the point of insanity – indeed, it can make large companies considerably less efficient than government.

As a Virginia-based friend face-timed me the other day, I explained that I was in the middle of a “battle with iTunes” as I sought with great difficulty to install the latest version on an older operating system. “Well that’s a battle you’re just not going to win” came the immediate response.

Even brilliant businesses can get too big and divert too much tax to the extent they become innovative only in finding new ways to be staggeringly inefficient – now there’s a battle we probably need to win. (Sent from my iPad. Thankfully I’m not fussy about case colour…)

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2 thoughts on “Apple and Private Sector Inefficiency

  1. nikola says:

    i need ask you what apple is about

  2. […] is quite happy to let a huge, wealthy corporation like Apple not pay any tax. The previous January I noted that this was not without penalty to the humble […]

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