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WHICH WOULD YOU LIKE FIRST....
I shouldn't trick you into thinking that there was good news and bad news about Apple this past month. It was pretty much all bad. The computer industry press, with some more mainstream publications thrown in for good measure, basically ground Apple into little bits after (and immediately before) the resignation of CEO Gil Amelio on the heels of another big reported loss for the company's sales figures. Where to begin....
Business Week
With headlines like "Is Apple Mincemeat?" (July 28) and "Dangerous Limbo at Apple" (July 21), Business Week painted a grim picture (complete with graphs showing the company's stock performance) of Apple's immediate past and questionable future. They even threw in a picture of Gil Amelio that may or may not show him in the midst of wiping a tear from his eye. "Apple is in a shambles. Instead of slowing Apple's decline, Amelio's regime presided over an accelerated loss of market share, deteriorating earnings, and a stock that, at less than 14, has lost half its value and is at its lowest point in a decade." You get the idea. Business Week gave voice to speculation that Apple should just give in and start making Wintels, an area that many seem to think the hardware maker could do well in. Meanwhile, the magazine notes that Apple may soon find itself the victim of a hostile takeover if their stock loses another 50% of it's value.
Sample of Business Week's vision of Apple's future: Steve Jobs, if he ascends to a position of greater power, "could even make matters worse" given his hostile stand towards clone makers.
PC Week
A pair of articles in the July 14 issue detailed the Amelio exit. Included is a picture of Steve Jobs that may or may not (probably not) show him praying for Apple's future. Remembered in one article were the "bumper stickers that were passed out (when Amelio joined Apple that) read 'I was there when the comeback began -- July 22, 1996." It reminded me of the much more accurate signs that some Apple employees reportedly posted in their cubes when Apple co-founder Steve Jobs was brought back in December: "I was here when Steve returned. I'll be here when Gil is gone." Unlike Business Week, PC Week did discuss to some extent the fact that Ellen Hancock resigned with Amelio. Amelio brought Hancock into Apple as chief technology officer. She quickly found herself cast in the role of wicked stepmother by Apple-lovers and the industry press.
Sample of PC Week's vision of Apple's future: Steve Jobs, although he will take on more responsibility, is probably not going to step into the role of CEO. He is, after all, CEO of another company right now, the currently more successful Pixar Animation Studios. Of course, PC Week gossiper Spencer F. Katt had an opinion on who to recruit for the top job: Senator Fred Thompson. "If (Thompson) can blow the whistle on all those Commies running around the White House, he's the man for this job. The Mac is as American as apple pie."
Infoworld
Ever an Apple-loving company, Infoworld magazine had surprisingly little to say about the exit of Amelio. Most of the dirty work was left to that publication's fictional gossip columnist Robert X. Cringely. Weighing in earlier than most publications, Cringely wrote in his July 7 column (written in June): "Losers are lining up for a second chance in the Gil Amelio pool. Folks around the Valley toss in a buck a guess to pick the date when Dr. Gil steps down from Apple. Most bets were placed on June 30 or earlier." For the July 14 issue, Cringely's entire column was turned over to the story as the columnist dissected and interpreted the corporate spin surrounding the resignation of Amelio. Of particular interest to Cringely was the unknown identity of the shareholder who sold 1.5 million shares of Apple stock in June.
Sample of Cringely's vision of Apple's future: Steve Jobs, busy with work at Pixar, won't be the next CEO. Rather, "a reliable rumor broker suggested I look at Borland CEO Del Yocam, who spent 10 years at Apple pulling tours of duty in operations and manufacturing for the Apple II division...."
Interactive Week
No pictures and graphs. This publication stuck to the basics while politely commenting that reviews of Amelio's performance at Apple were "mixed." Noted are how Amelio reorganized the company, got inventory off warehouse shelves, and cut operating costs. Also noted is that Apple still has quite a bit of cash on hand, but won't if current trends continue.
Sample of Interactive Week's vision of Apple's future: "Steve Jobs is expected to take an expanded role, possibly even as chairman."
Most interesting rumor award goes to Interactive Week: "Rumors circulated that Amelio's resignation was due to declining health. Several sources close to the 52-year-old Amelio said he is suffering from Parkinson's disease. But Amelio went on the record last week emphatically denying rumors he is sick." I don't know ... with $800 million dollars in losses, who needs to pretend health is a factor?
Network Week
Two pictures included. One very scary one of Amelio and one of Hancock. This publication rated the story as worthy of only some space in a page six sidebar (with five other stories) in the July 14 issue. "Consensus was that instability at the top of Apple's chain of command would only further the firm's downward spiral."
Sample of Network Week's vision of Apple's future: "Steve Jobs, one of Apple's founders, will have an expanded role in the company .... However, Apple officials would not speculate about whether Jobs was considering taking the CEO slot."
Information Week
In the July 14 issue of this publication, there was one picture, but not of the resigning members of the company or of Jobs. Rather it was the man "holding down the fort," CFO Fred Anderson. The reason for this is that Information Week focused a little bit more on the "what's next?" aspect of the story. But not much. It was pointed out that Anderson "will assume some of the day-to-day operations handled by Amelio until a replacement is found."
Sample of their Information Week's vision of Apple's future: Steve Jobs will have an expanded role in the company. Anderson "did not discount the possibility that Jobs would be considered for the CEO position."
It should be pointed out that quite a few magazines took the opportunity to take a shot at what is widely described as Amelio's self-created image as a turnaround expert for troubled companies. He won't be getting much mileage out of that image in the near future.
ROLLING ON
From the July 14th issue of Information Week, a little more bad news. One of the main divisions of Motorola, the Semiconductor Products Sector division, "has decided to standardize on Windows NT." As one of the companies that makes PowerPC chips and Mac Clones, Motorola has always been a company with a strong mix of Macs and Wintels. But with this switch to NT, Motorola's SPS division will not only be embracing Windows, but running NT on Intel chips instead of their own PowerPC chips which have been designed to run the Windows NT system as well.
POWER CONSERVATION BECOMES TRULY PC
As reported in Infoworld (June 30), the makers of the PowerPC chip will be "the first to have volume production" of chips based on the .25 micron processing technology. That's a technique for making chips run with "lower power consumption and increasing performance." The power consumption goes down by about two-thirds with the technique, and the first chips shipped via the .25 micron technology will be the PowerPC 604e processor.
TRAGIC IN THE CLASSICAL SENSE
Reflecting upon the recent worries at Apple, PC Week writer Mike Feibus (July 7) draws parallels back to the Greek tragedy of Oedipus, explaining that the most upsetting thing about Apple's problems have been that the company has brought them on itself. How so? By trying to maintain two distinct businesses, production of hardware and production of system software, that are often at odds with each other when it comes to long-term goals. Take the treatment by Apple of the Mac cloners, treatment which Feibus calls "schizophrenic." If you refer to last month's Bits and Pieces column, you will see outlined some of the hardball tactics that Apple has used in competing with the likes of Power Computing. Business is, after all, a competition, and in order for the hardware side of Apple to be profitable, it has to minimize the market share of those clone makers.
On the other hand, the system software side needs strong clone makers in order to increase the overall market share and strength of the Mac OS. In this battle, as Feibus sees it, Apple's hardware side has more clout than the software side. Thus, Apple has been in the awkward position of slowly but surely impeding the spread and impact of Mac clones. That in turn lessens the market for the Mac OS.
In the June 23 issue of PC Week, the magazine stresses another duality: the development and simultaneous marketing of two different Mac systems. Those two Mac systems are the traditional Mac system which will continue life as System 8 (released in June) and the new Rhapsody/NextStep OS. Unlike the hardware/software conflict at Apple, however, Apple only has long-term plans for one of its operating systems. Is this in-house division of goals another unsuccessful model? Not necessarily. Microsoft is doing much the same thing with its Windows NT vs. Windows 95/98 systems. At this point, Microsoft seems to be positioning Windows NT as the long-term Windows operating system and preparing traditional Windows for its final bow in the Windows 98 incarnation.
"CHAMPAGNE PERFORMANCE AT BEER PRICES"
Such a fun headline that I couldn't resist lifting it word for word from the August issue of Byte! The words are used in reference to Power Computing's new PowerCenter Pro 210. Byte liked the fast new system bus as well as the price ($2444) of the 210-MHz machine.
KIND WORDS
They weren't easy to find in this month of Apple-bashing, but some publications did have good things to say about Apple recently. The July issue of SunExpert, a rather technical and UNIX-oriented magazine, was one example. Inspired by the examination of how Macs can work with UNIX, the magazine explores the advantages of Rhapsody, the Apple/NeXT OS formerly known as OpenStep. The writer (Richard Morin) liked OpenStep when it was a NeXT product and is optimistic about its future with Apple. Among his comments:
--"OpenStep is "strongly oriented toward ease of use and administration, graphical integration and so on."
--"OpenStep provides amazingly powerful tools for GUI-based software development."
--"OpenStep Interface Builder is a facile, intuitive and extremely powerful tool for creating GUI applications."
--"In practice, all of this means that OpenStep applications are quite powerful, work together smoothly, and tend to have the same kind of consistency that makes Mac OS applications easy to learn. In short, OpenStep is an exceptionally powerful and pleasant user environment."
Morin continues with a line of reasoning that would be controversial even among Mac lovers: that Apple's marketing resources will be a great advantage to OpenStep. Marketing would be an area that many Mac supporters would claim was lacking in Apple, but Morin thinks that with this added corporate firepower, "OpenStep is suddenly in a position to compete with ... Windows NT." (Don't count on Motorola reconsidering its chip choice.)
Morin also thinks that developers are going to be particularly blessed by the NeXT Mac OS. "Developers can pick up a copy of Rhapsody (either Intel or PowerPC), create nifty applications in an arbitrary mix of C-based languages, then sell them as Mac OS, Rhapsody and Windows applications .... This brings Apple into the mainstream of application development."
MacToid
Fred Anderson, CFO of Apple (as quoted in Information Week, July 14): "We're out of the business of predicting when the company will return to profitability." Hopefully that means they're returning to the business of making Apple profitable.
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