Apple seems to have something in common with Lindsay Lohan. Lately both have become ubiquitous with their exploits receiving through coverage in the media. Just as the fallen starlet has paparazzi dogging her in and out of rehab, Apple is facing similar scrutiny, its every move being dissected by tech blogs, business gurus and financial pundits while the info hungry public laps it all up. This has the Cupertino based company’s marketing and PR departments working overtime doing promos or damage control to ensure their brand retains its cachet.

I must confess I have followed the tabloid worthy fortunes of Apple Inc. as eagerly as the next guy, if not more so. And I have good reason to, being the owner of two iPods (the 8 gig nano and an 60 gig video iPod), a 17 inch Mac Book Pro, a Power Book, an Apple TV, an iPod Hi-Fi and the iPhone. Now before you accuse me of drinking the Kool-Aid, I’ll have you know I also own a Toshiba Tablet PC, several non iPod mp3 players, I prefer Vista to Leopard and my primary cell phone is a touch screen Samsung that you can only get in Korea. Truth is I am a bit of a gadget junkie and my toys just get more high tech every year. I was among the first few to get the iPhone but in the space of two months the initial buzz wore off, the bugs revealed themselves and the God phone became a tabloid darling.

First Apple’s two year nuptial agreement with AT&T was threatened by rumors of people cracking the locks that tied the phone to the network. The most publicized was the announcement that seventeen year old tech prodigy George Hotz of New Jersey combined software, creative soldering and some 500 hours to develop a ten step hack. His was the first to allow full functionality on any GSM carrier worldwide without the need of a TurboSIM card or other external hardware. He subsequently traded his liberated iPhone for a Nissan 350Z, three new 8GB iPhones and a paid consulting position. Then on September 11 'iPhoneSimFree” started selling a software only hack to mobile phone resellers.

As can be expected this sent shivers through the two companies who had hoped their exclusive partnership would bring them mutual gain. AT&T got the promise of a windfall of more customers each paying at least $60 in monthly charges, Apple got a carrier who met its rigid requirements and gave it a slice of the revenue. The threat of iPhones using other national or international networks like T-Mobile or Orange meant both companies would get nada beyond the sale of the hardware. You can bet their lawyers are looking for ways to prevent this but it will be an uphill battle. An exemption to the Digital Millennium Copyright Act (DMCA) allows for individuals to unlock their personal phones and remains fuzzy on the topic of whether one can then sell this unlocked phone or the unlocking technology behind it. If the lock is considered as a network gatekeeper then the law is on the side of the hackers because networks aren’t copyrightable under DMCA. Whether Apple and AT&T can successfully claim that the lock protects proprietary software on the device remains to be seen.

As if that wasn’t enough, Steve Jobs had everyone reeling with the surprise announcement that Apple would slash the cost of the iPhone by $200 and discontinue the 4GB model altogether. Their excuse was that they wanted to put it in as many hands as possible over the coming holiday season. A more likely explanation is that iPhones practically flew off the shelves in the first two months on account of loyal Mac users but as demand declines and sales plateau Apple has to resort to tactics like aggressive price cuts to convince more cost conscious buyers. Originally $599, the 8 GB model was the most expensive mass market smart phone and even at the knocked down price of $399 it is remains costly. I just shrugged off the news but the reaction from Apple faithful who had swallowed the hype and stood in line to hand over their hard-earned cash was not as nonchalant. They felt embarrassed and used and they let Apple know it. This prompted Jobs to issue a mea culpa 24 hours later admitting to have abused the trust of their core audience and giving out $100 in store credit to ease their pain. However he defended the cut saying that falling prices have long been the norm in the tech industry. The peace offering quelled the protest and Apple’s disciples have a history of forgiving the company its missteps such as the overheating Mac Book Pro. But company shares fell 5% the day of the price cut announcement and another 1.28% the day after that. I took the $100 credit and gave it my assistant.

Apple was dealt another blow when NBC Universal announced that it would not be renewing its agreement to sell TV shows on the iTunes store once the contract expires this December. They cited a lack of pricing flexibility and DRM issues as factors in their decision. NBC is the source of a host of popular shows such as “The Office” that Apple sells for $1.99 an episode. Their programming effectively accounts for 40% of all the iTunes video downloads in the US. Then followed a back and forth between the two titans both claiming to not be hurting from the breakup and to being open to negotiation. There have been rumblings and restlessness among media companies over Apple’s rigid stance of setting uniform prices and on copy protection so NBC jumping ship should come as no great surprise. One respite for Jobs was the announcement by the president of News Corp that contrary to rumors they were not headed out the door as well. According to Peter Chernin, News Corp had a healthy relationship with Apple but he felt they and not Apple should determine what their product cost.

But not all is cloudy in Cupertino. Apple’s share of the laptop market has jumped considerably. The company now sells more than one in every six laptops purchased in the U.S pushing it past Gateway into third place behind HP and Toshiba. Three months in they sold their millionth iPhone and expect to reach 10 million in 2008. The iPod accounts for 71% of digital music player sales so far this year and a revamped line promises to reenergize lagging sales. First was the unveiling of the new iPod touch, a device which looks like a slightly thinner iPhone (AT&T will not be pleased since this negates the uniqueness of the iPhone). It has no calling capabilities but boasts the same touch screen technology, built in Wi-Fi and a browser. Users will be able to download directly to their iPod touch from a new iTunes Wi-Fi store. A deal with Starbucks means that on entering the coffee shop you are alerted as to what music is playing there and if you like it you can download it from iTunes. The 16GB model is priced like an iPhone at $399. iPod nano got a big makeover, it is less sleek but now supports video and the original video iPod newly renamed the “Classic” has been supersized to a 160 GB model. All this points to Apple having accepted the fact that they are the 800 pound gorilla in the room but that they need to inject new blood into their product range if they want to keep SanDisk and others from eating away at their fat slice of the digital player pie.

So it is safe to say that that for all the brouhaha, all the dire predictions we should not be selling off any Apple stocks prematurely. The 30 year old company has mastered the art of the comeback going from media darling to pariah and back again. And all this publicity gives them relevancy and PR currency that Dell or Sony would kill for. Celebrities even the ones who see their dirty laundry splashed across supermarket tabloids understand that all publicity is good publicity in the end. And just like a Hollywood wild child we can be sure of more drama, more ups and downs and more surprises from Cupertino.