It Depends Blog

There has been much news about the “leaked” report that revealed that Apple’s latest iPhone will be called the iPhone X. It seems the model name were discovered and tweeted by Steven Troughton-Smith, who is a game developer, and many of the new phone’s details were reported by Mark Gurman at Bloomberg. And then an even bigger leak occurred, when details of the eleventh major release of the apple mobile operating system (iOS 11) were leaked to 9to5Mac.

For a company that is supposedly obsessed with secrecy, Apple is experiencing a lot of leaks. Tim Cook is quoted as saying "We believe fundamentally that people love surprises," and thus Apple employees are sworn to total secrecy and about the projects they are working. And when speaking at D10 in 2012 Cook mentioned that Apple will “double down on secrecy on products," and will reveal only the most minimal information on any acquisitions of companies that it makes.

One possible explanation for failed secrecy around the new iPhone X is provided in a paper I wrote with colleagues David Hannah and Jan Kietzmann. We explain, with examples, why and how companies are often prolific and deliberate leakers of their own secrets. In the case of Apple, we report how John Martellaro, a former senior marketing manager at Apple, acknowledged that the company has engaged in ‘‘controlled leaks.’’ He described the leaking process as follows:

The way it works is that a senior exec will come in and say, ‘‘We need to release this specific information. John, do you have a trusted friend at a major outlet? If so, call him/her and have a conversation. Idly mention this information and suggest that if it were [to be] published, that would be nice. No e-mails!’’

According to this and other accounts, Apple ‘‘was a ship that leaked from the top’’. In our paper we examine why and how Apple and many other organizations might deliberately leak secrets. To do this we introduce two key dimensions of leaks. The first, is the truthfulness of a deliberate leak, i.e., the degree to which it contains factual or concocted secrets. The second is the signal that companies wish to send about the deliberateness of the leak - we distinguish between overt leaks (the company freely admits it purposely leaked the secret) and covert leaks (the company falsely claims the leak was a mistake or pretends not to know it has occurred).

From these two key dimensions of deliberate leaks –— the truthfulness of what is leaked (factual versus concocted) and the signaled intentionality (overt versus covert) –— we present a framework of four approaches to the deliberate leaking of secrets. We propose four types of deliberate leaks: informing, dissembling, misdirecting, and provoking (see - Figure 1).

Figure 1: Approaches to Leaking

So, if you assume that details of the iPhone X were deliberately leaked, what approach in Figure 1 do you think best explain why and how Apple did this? Is Apple "manipu-leaking" to provoke consumer excitement and interest or to misdirect competitors?

We believe managers and academics should devote more time and attention to understanding the practice of leaking. After all, the evidence suggests that companies that leak secrets may be doing very well from it. Just look at the Google Trends data for the search term “iPhone X” since the leak first occurred on September 9^th 2017:

Numbers represent search interest relative to the highest point on the chart for the given region and time. A value of 100 is the peak popularity for the term. A value of 50 means that the term is half as popular. Likewise a score of 0 means the term was less than 1% as popular as the peak.

This blog post is based on research in the following article:

"We’re leaking, and everything's fine: How and why companies deliberately leak secrets" by Dave R Hannah, Ian P McCarthy, Jan Kietzmann in Business Horizons 58 (6), 659–667, 2015

https://doi.org/10.1016/j.bushor.2015.07.003