November 1997 • Volume 7 • Number 11
Baby Please Don't Go
By Gregory A. Farley
It doesn't take a computer industry analyst to
see that things are pretty messed up at Apple Computer
headquarters in Cupertino, Calif. When the company finally
began licensing its operating system a couple of years ago,
paving the way for a handful of manufacturers (Umax,
Motorola and Power Computing) to commence churning out
powerful and affordable Mac clones, its goal was to broaden
the installed base of Mac OS computers ... to chip slowly
away at the Intel/Microsoft stronghold. Instead, the clones
ate away at Apple's share of computer sales (Macintosh unit
sales dropped 25 percent over two years) while market
penetration remained essentially static (at between 9 and 11
percent of installed PCs). Apple's board booted CEO Gil
Amelio a couple of months ago to check the company's
downward spiral. (Under Amelio's direction for 17 months,
Apple lost more than $2 billion and cut staff dramatically.)
Meanwhile, Apple's founding guru, Steve Jobs, rejoined the
company shortly before Amelio's departure, and is now
serving as de facto CEO while the board searches for
Amelio's replacement.
In the short time since Jobs returned to Apple to help
call the shots, the company has bought out the largest of
the Mac clone manufacturers (Power Computing) and refused to
extend licensing agreements for its newest technology to
Motorola and Umax (most insiders expect them to give up
their clone businesses shortly). No surprises here. It was
Jobs, primarily, who refused to license the Mac OS in its
early years, keeping Mac prices way too high for way too
long, believing that the best interests of the company and
its stockholders called for Apple to be, first and foremost,
a hardware manufacturer. Had Jobs and other Mac leaders
adopted a different stance, and focused on selling operating
system software rather than computers, Bill Gates certainly
wouldn't be the richest man in America today, and Microsoft
would be just another software vendor vying for market
share.
DOS thou remember?
Do you remember 1984? The only operating system widely used
in business PCs was MS-DOS. Apple's clever, intuitive Mac
interface, had it been made widely available in the
burgeoning PC marketplace, would almost certainly have
trounced the annoying and dreary text-based Microsoft Disk
Operating System. Instead, Apple promised to deliver "the
computer for the rest of us." That ill-conceived marketing
campaign set Mac users apart from business users. "The rest
of us" were creative types who played with computers and
weren't serious about (or even mindful of) using desktop
computer technology to improve business operations and
efficiency. This "us against them" mind-set still prevails.
Wintel MIS guys consider the Macintosh an overpriced toy.
Mac users dismiss Windows boxes as arcane, troublesome and
inelegant.
Sleeping with the enemy?
So you can imagine the shock that rippled through the Mac
user community when Jobs announced late last summer at the
Macworld Expo in Boston that Apple had taken $150 million of
Microsoft's money in return for certain favors. Apple
promised to bundle Microsoft's Web browser, Internet
Explorer, with all its systems and to stand squarely behind
the Microsoft Office productivity suite. Microsoft, putting
its money where its mouth is, vowed to continue producing
Mac-based versions of its software packages.
So what happens next? Will Microsoft continue to buy up Mac shares? Will Apple's new Rhapsody operating system (still some months in the future), which will run Windows-based applications on Intel-based machines, catch on outside of the Macintosh market? Will the new OS cut into Microsoft's share of the interface market at all? Most importantly, can Apple survive into the next millennium?
We should all hope so. As a hardware company, Apple has
developed Macs that can surpass the performance of any
Intel-based computer. The Mac interface is more intuitive
than Windows. The Mac is easier to expand and its
plug-and-play capabilities are genuine. But above and beyond
all that, it's a powerful, tried-and-true alternative to the
Intel/Microsoft juggernaut. As long as users have a choice,
each platform will be driven to create better computers and
more robust software. And that's got to be a good thing.
Web Commerce Update:
A survey recently completed by IntelliQuest Information
Group Inc., Austin, Texas, shows that the number of U.S.
adults utilizing the Internet increased by 46 percent
between 1996 and 1997. And of the 51 million Americans
roaming the cybersphere, 17 percent (8.6 million) shop
online regularly, each spending an average of $50 every
month. That's a $5.1 billion market. Just 12 months before,
IntelliQuest found that 2.6 million adults spent $1.6
billion online on an annualized basis.
IntelliQuest also found that one in five of those adults regularly using the Internet or online services spends 10 hours or more a week online, and that nearly 40 percent of all users are spending more time online than they did a month ago. Where are they finding the time? Most said by watching less television.
And the online population continues to mirror the mainstream more accurately: Women now make up 47 percent of the online population, compared with 36 percent a year ago.
Senior editor Gregory A. Farley is a partner in Lampe Communications, a Decatur, Ga.-based marketing communications company. You can reach him by e-mail at .
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