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People keep buying Apple products despite recent headaches

After the botched MobileMe/iPhone 3G launch, as well as more recent problems users have reported with iPhone 3G reception, you'd assume customers would punish Apple.

Add to that an assortment of other issues over the past year or so, from the bricking of unlocked iPhones last fall to a plethora of Mac OS X Leopard bugs to last week's iPhone "kill switch" dustup, and you have a lot of reasons consumers might want to avoid Apple products.

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But whatever the disappointments, you won't see it reflected in the company's third quarter sales numbers.

Apple is expected to report another record quarter in September, according to a note to clients by Royal Bank of Canada analyst Mike Abramsky. AppleInsider reported this morning that Abramsky said Apple should see year-over year growth of 44 percent, with Mac sales topping 3 million for the first time.

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That would beat the previous record – 2.496 million Macs sold, just set in the July quarter – by an amazing 20 percent. Abramsky also predicts iPhone 3G sales for the quarter to reach 5.1 million, which would nearly double the previous record for iPhone sales (2.315 million in the December 2007 quarter).

Earlier this week Apple made news by scoring 10 points higher than its closest competitor (Dell) on the University of Michigan's American Customer Satisfaction Index. Apple received its highest score ever, 85 on the ASCI's 100-point scale. Last year it scored a 79.

"Apple is not without its quality problems," ACSI project head Claes Fornell told Computerworld. "People know there have been some service and product quality problems, but Apple has an almost Teflon-like quality. Its problems don't really seem to matter to consumers."

The ASCI survey was taken before the MobileMe launch and recent iPhone 3G problems, but it seems someone is always complaining about an Apple product or service, if not taking them to court.

How can Apple commit so many wrongs and yet continue to enjoy record customer satisfaction numbers and booming sales growth?

Apple's hold on customers can't be completely explained by the "fanboy effect"; that is, people so devoted to the company they forgive it for any transgression. Apple has added many new customers in the past few years that do not fall into that category, from casual iPod owners to disgruntled PC users switching from Windows.

Such customers have bought Apple products with high expectations they would "just work." I can't imagine they'd tolerate consistently poor quality and bad service when those factors most likely drove them into the Apple camp.

Here's what I think Apple's "Teflon" is made of:

Cool factor: Apple's marketing machine has successfully sold the idea of Apple as the coolest consumer technology company, a notion reinforced by its acclaimed product designs. People who buy Apple products feel that the company's hip image will reflect on them. It doesn't fix the problems, but it makes it harder to turn away from Apple.

Worse alternatives: Even if you have had a bad experience with Apple, many know first-hand that living with a Dell or Hewlett-Packard PC running Windows could be worse. Apple's seamless control of the entire user experience has no substitute in the consumer technology world.

Apple trying harder: Though historically poor at fixing problems, Apple has gotten better recently. Not only did it work hard to address MobileMe's problems, it just this week gave MobileMe account holders 60 more free days in addition to the 30 days it awarded a month ago. The company apologized. Customers will forgive a company that makes an effort to make things right.

Apple also has made an effort to get software fixes out to customers more rapidly, although it could do a better job of explaining to affected customers what the heck is going on (e.g., this week's iPhone 3G reception fix).

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Not as bad as it looks: Apple benefits from the media's obsession with it when it rolls out new products – no tech company gets comparable attention – but that backfires when Apple has trouble. Many of Apple's problems that draw extensive coverage would be largely ignored if they befell another company.

Squeaky wheels: With the exception of some large-scale blunders, like the MobileMe/iPhone 3G launch, most of Apple's problems affect a relatively small number of customers, many of whom are very vocal. Most Apple customers have minor, easily rectified problems, and have no serious beef with the company.

For Apple to lose massive numbers of customers, it's going to have to commit sins far worse than any it has thus far and be utterly non-repentant.

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