Karma. Doing the “right thing.” Thinking different. Apple’s enlightened approach to building customer loyalty is now famous, generating big headlines every time CEO Steve Jobs takes on Hollywood or the music industry. Attempts to raise iTunes prices? “Greedy.” A fight with NBC over revenues? “Give peace a chance.” That’s Apple, your socially-conscious corporate friend, who does right by you while standing up to big bullies — sort of like a character from a Pixar movie.

But over the past two weeks, Apple’s fans have been grumbling that the company they knew and loved is transforming into another Microsoft, making short-sighted, anti-consumer decisions and carelessly releasing products with user experience-diminishing problems. In response, an increasingly angry erosion of Apple’s brand loyalty is beginning, with complaints mounting all over the Internet, including on the company’s own discussion forums. This time, it’s not just a cadre of Microsoft fans trying to anonymously stir up trouble for the Cupertino-based company, but rather legitimately upset Apple customers who are threatening boycotts of current and future iPod, iTunes, and Mac offerings.

Put aside Apple’s $200 iPhone price drop, which generated a lot of anger but was quickly resolved by the company, and bugs in both new iPod and iTunes software, which the company is certainly working to repair. Instead, consider just four of the issues that are still largely unresolved by Apple, and the extreme anger and disappointment that its customers have been expressing as a result.

Apple Breaks 2005-2007 Video Add-Ons: No Warning, Just Buy New Ones

What Happened? Almost any “Made for iPod” accessory you’ve purchased with video output no longer outputs photos or videos when connected to the new iPods. This impacts in-car, home, and airplane accessories alike.

The Details: For the past several years, Apple has actively touted the growing iPod accessory market as one of the family’s biggest selling points. Over and over again, the company has trotted out numbers — 1,000, 2,000, 3,000 iPod accessories — suggesting that iPod owners don’t just benefit from great hardware, but the ability to buy add-ons that enhance the hardware’s performance, and work across the family thanks to their use of a common “iPod connector” or “Dock Connector.” It has also created a “Made for iPod” program, which is supposed to guarantee iPod compatibility.

That’s why buyers of the new 2007 iPods were in for a shock when they learned — not from Apple — that the company had broken compatibility of virtually all the video accessories that have been released over the last three years. Speakers with video outputs, video-specific docks, portable video displays, and wearable video displays — each typically expensive — just don’t work with the iPods. The “TV Out” menus, which enabled all past photo and video iPods to display pictures and movies on a connected TV, are now locked up, and the only way to unlock them is to buy new, stunningly expensive Apple-authorized video accessories. Old $10-20 video cables won’t work.

Accessory makers have suggested that Apple is attempting to take control — and extra profits — on third-party video accessories; companies will have to purchase Apple-developed “authentication chips” in order for new video accessories to work. Besides requiring re-engineering of the products to include these chips, which do little more than serve as a padlock to prevent unauthorized accessories from working, this move will further increase already objectionable accessory prices for consumers, and most importantly require consumers to re-purchase speakers, docks, and portable add-on displays if they want to use them with the new iPods.

Customer Responses: “Almost Redmondesque in its audacity to lock-in buyers into a newly conceived ecosystem. Guess ‘Made for iPod’ isn’t all that it was made out to be, after all.”

“I was considering upgrading my iPod video 5g to the ‘classic’, but not if I have to buy another cable to watch it on my tv… No thanks, Apple. This time, you blew it.”

“Was seriously considering a Touch…now no way. I’ve bought into the Apple products hook line and sinker the last few years – iPod, nano, iMac… but if things go this way, with exclusion of 3rd party, I’m done.”

What Apple Can Easily Do: Issue a software patch to restore compatibility with the majority of Dock Connecting video accessories. A number of accessories that used the iPod’s headphone port will still not work, but they’re a comparative minority, and few users will mind.

iTunes Store iPod Games: Buy Them Again for New iPods

What Happened? People who purchased any or all of Apple’s past “iPod Games” from the iTunes Store have learned that, unlike music and videos, the games must be re-purchased to work on new iPods.

The Details: Imagine you bought a bunch of music from the iTunes Store, and after Apple released its 2008 iPods, you discovered that you’d have to re-purchase all the music again because it wouldn’t play on the new iPods. “That’s technology,” right?

Wrong. Without backwards compatibility, no one would be stupid enough to purchase content from the iTunes Store. Who wants to buy the same thing twice just to use it on a new iPod? This week, Apple decided to find out.

Since 2006, Apple has been selling $4.99 iPod Games, a series of twenty different casual action, puzzle, sports, and quiz titles, releasing the latest one less than a month before new iPods were announced. As early customers discovered — much to their confusion, and after downloading the games, as shown in numerous comments on the iTunes Store — these “iPod Games” could only be played on one iPod, the fifth-generation iPod (with video), and not on the more popular iPod nano.

Apple acknowledged customers’ concerns on September 5. “People would like to have games on their nanos,” Jobs told the audience at a Special Event in San Francisco. “We listened to everybody’s concerns, and we think we’ve nailed it with the new iPod nano.” Prior “iPod Game” titles would be re-released in the iTunes Store for play on the iPod classic and the iPod nano, with the first three games — Sudoku, Tetris, and Ms. Pac-Man — arriving imminently. The games would also work on the iPod classic, Apple’s renamed version of the traditional hard disk-based iPod.

“Great,” thought past iPod game buyers, “now I can use the iPod games I bought last month on the new iPods, just like I can still play the music and videos I bought for my last iPod.” Nope. Rather than letting past games work on the new iPods, or letting customers re-download newly compatible versions, Apple told past iPod game owners to buy the games again. The “reformatted” versions for iPod nano and classic are nothing more than version 1.1 of past version 1.0 games, with minor menu tweaks, and do not feature additional levels or other content changes. Reactions from past iPod game buyers have been profoundly negative: clearly, users believed that iPod games would continue to work on newer Click Wheel iPods.

Customer Responses: “Who are you and what have you done with the real Steve Jobs?”

“Yeah, way to go Apple. Just when I has going to upgrade my Nano, 5.5, and switch to a MacBook Pro. I guess success has now ruined Apple. No longer ‘hip’. Just another generic faceless corporation. Trade the jeans and t neck for the PC suit Steve, your transformation to the dark side is now complete.”

“Repurchase the games with absolutely NO guarantees that they will function on the next generation of iPods? How stupid does Apple think we are? I guess plenty, cause we were dumb enough to buy iPods and iPod games to start with. Great way to destroy a market in it’s infancy, Apple!”

What Apple Can Easily Do: Let past iPod game buyers download versions that work on their new iPods, and either plan to use the same game code on future video-capable iPods, or rename “iPod Games” to “Click Wheel iPod Games” so that people don’t assume they’ll work on touch-screened iPods.

iPod touch Screen Problems: Deny Them, Charge Restocking Fees

What Happened? iPod touch units were shipped with defective screens. When readers tried to return them to Apple Stores, employees denied any problems and charged the customers $30-40 restocking fees.

The Details: When quality control dips on Apple products, and problems occur, the company has two ways of responding — take responsibility, or try to pass it off on customers. Last week’s release of the iPod touch was marred by significant screen problems, including improper displays of black colors, which have been widely reported and blamed variously on manufacturing mistakes, lower-quality display components, and faulty video display drivers. Readers have additionally reported the unusual presence of dead pixels on iPod touch screens. Several readers have noted that similar problems are popping up on recently built iPhones, as well.

Unfortunately, despite thousands of comments on its own and other discussion forums, Apple has not widely acknowledged the issues, and many of its retail stores have been imposing $30-40 restocking fees on customers who have attempted to return their faulty units. Though the problems affect even videos purchased from the iTunes Store, including Pixar’s The Incredibles as shown in our iPod touch review, employees told customers that they improperly encoded their videos, or that the screens are supposed to look like that. The Wall Street Journal late last night confirmed with Apple that some iPod touch units were defective, but Apple has not offered further public comment or restocking fee refunds to affected users.

Customer Responses: “I showed them a side by side comparison of the black levels between the iPod touch and the iPhone. The difference was like night and day. They said the iPhone has a better screen and that I cannot compare the two because it was a different product. I was sooooo p—ed! They said since I opened it they would charge me $40.00! I tried to talk my way out of paying for the restocking fee. But in the end I had to pay for it. Did anyone else have such an awful experience trying to return the iPod Touch? Do you think Apple will realize that there is a problem and then I could get my $40.00 back?”

“Apple is really getting a black eye on this. They really need to quit pretending that it’s not a problem. They need to admit it and fix it. I guess I’d settle for them just fixing it, since I doubt they will ever admit to it.”

“I’m at the Apple store right now, showing the guy side by side comparisons, and he still wont admit and take it back without paying the $40. This is a… scam. … I’m not asking for my money back, I’m asking for a STORE CREDIT, so I can buy a WORKING one when it comes in I’m coming back tomorrow to try this again. Apple may be looking at a Class Action if this doesn’t get resolved.”

What Apple Can Easily Do: Issue no-questions-asked, no-restocking-fee refunds or replacements to customers with screen problems, and refund amounts charged to those who previously came in with problems.

iPhone Ringtones: Pay Twice for Each Song; Forget Using Your Own

What Happened? Rather than letting users play any of their own audio as iPhone ringtones, Apple locked the iPhone’s ringtone feature and requires users to buy both full songs and 30-second song snippets from the iTunes Store for $1.98.

The Details: The iPhone has a built-in speaker that can play back literally any audio that’s coming from inside the device, including iPod music, the sound portions of videos, voices from speakerphones, and web content. It also plays back pre-programmed ringtones — 25 of which are included by Apple on the device. What can’t it do? Play back any piece of audio content in your iTunes library as a ringtone for your phone.

This limitation is entirely artificial: there’s no technical reason the iPhone can’t ring with, say, your girlfriend or boyfriend’s recorded voice, a song you composed yourself, a sound effect from your favorite TV show, or a snippet from your favorite band. Any of all of these items can be played back through your computer, any digital music player, or the iPhone in iPod mode, and they’re all routinely offered by average people, bands, and even TV networks as ways to remember them by.

People expected that ‘consumer-focused’ Apple would find a way to let them play whatever they wanted as an iPhone ringtone, but instead, Apple announced a completely different agenda: you have to buy songs once from iTunes, then pay an additional charge of at least 99 cents (international prices may vary) to get 30 or fewer seconds of the song again as a ringtone. Worse yet, this couldn’t be done with most iTunes songs: virtually none of the Store’s top 10 were eligible for ringtone use during our testing. Consequently, the ringtone creation feature, rolled out in iTunes 7.4, was immediately and widely denounced by iPhone owners, and people began to find ways to create their own iPhone-compatible ringtones.

Rather than ignoring the user-created ringtones, Apple has sought to block them, twice patching iTunes 7.4 (versions 7.4.1 and 7.4.2) to prevent users from adding their own legally-created ringtones to the iPhone. It has also closed discussions on its forums complaining about the restriction, though new topics continue to appear, with user comments such as these:

Customer Responses: “I take this extreme restrictiveness, which is uncharacteristic of Apple, as an offense; some ploy to get people to buy more songs from the Music Store. As such, I shall rebel and purchase no more music from the Store until I can be given a satisfactory answer as to why Apple is keeping us users on such a short leash, or until the Ringtone tyranny is lifted.”

“There was another thread about this last night called ‘Don’t Tread on My Ringtones.’ It had over 300 hits in the first hour, The thread was pulled by Apple. … The original post in the ‘Don’t Tread’ thread raised the question, ‘Why can’t someone use their own music or personally-recorded audio (for example, my wife’s voice) as a ringtone?’ And: ‘Why does Apple seem so intent on actively (by means of ‘upgrades’ that ‘downgrade’ functionality) discouraging individuals and third-parties from accomplishing this?’ These are fair questions, and ultimately, I think, about getting technical support for a particular feature.”

What Apple Can Easily Do: Either unlock the iTunes ringtone creator, or stop blocking users from adding their own 30-second or shorter audio clips to the iPhone’s list of ringtones.

Will Apple take the appropriate steps to satisfy its iPod, iPhone, and iTunes Store customers, or will it continue to engage in the same sorts of user-antagonistic practices that eventually earned Microsoft widespread scorn, consumer lawsuits, and international governmental intervention? Like you, we’ll be watching to see what happens, and hoping Apple quickly does right by its biggest supporters.