Re: mind money

Dwayne Purper (dwayne@FUTMEDIA.COM)
Sun, 9 Jun 1996 12:33:07 +0000

Evan sez:

> There is no longer any money in (desktop) hardware.

So Compaq, Dell, Micron, Gateway, et. al. should be biting their nails as well?
Or do you mean only for
non-Windows platform machines?

> > The same scenario by which they've always made more money: Develop new
> > technologies (OpenDoc, Cyberdog, FutureShare) out the wazoo, stand back and
> let
> > developers fend for themselves and keep the ones that work.
>
> But do these technologies ever make any money for Apple?

Sure they do. Not directly, of course, but the technologies do two things: They
make the OS more robust,
and they entice developers to create software for the platform. Both of which
contribute to the
platform's health, right?

Did drag-and-drop make any money for Apple? Isn't it what put them on the map in
the first place?

If done correctly, OpenDoc could do the same thing. My biggest hangup right now
is when I have to
switch between QuarkXPress, FreeHand and Photoshop. Each time I have to export a
file, quit and open
another program. Give me an OS that lets me switch seamlessly between the three,
that offers all the top
graphics software, that my service bureaus and printers also use ... and I won't
even think about
switching to Microsoft (until it comes out with an alternative).

> > Make enough money to
> > sell expensive machines at reasonably high margins.
>
> To whom?

I guess this sounds dumb, but the same people they've been selling expensive
machines to for years:
graphics, multimedia and, hopefully (for them) internet users. It does sound
like they're losing the
education market, though.

But I do think two trends have eroded Apple's ability to keep getting these
people:

1. Mac clones. Obviously Apple was hoping to increase the MacOS market enough so
that Apple and the
clonemakers could both make out well. But so far, the MacOS market has remained
stagnant and clones
are cutting into Apple's share of hardware sales. (And with good reason.)

2. Developers of graphics software moving to Win95. Before a few years ago, the
graphics community
was a mirror image of the desktop crowd. If you wanted to be a part of it, you
HAD to use a Mac. Software
developers came out with Windows versions either later or never. It didn't
matter whether Apple
machines cost more; you simply had no choice. That has changed significantly in
the last few years, and
more graphics people are now beginning to work with Windows. (At the same time,
more
business-related software and games have been created for MacOS, but Apple
hasn't been able to take
advantage of that.)

Lotsa recent articles identify similar problems at Silicon Graphics and Sun.
Their machines used to be
the only choice for high-end 3-D rendering and animation and such. But with much
cheaper desktop
machines quickly narrowing the power gap, aren't they looking at a major
restructuring as well?

>(Are there _any_ remaining technical advantages in Sys7.5 over Win95?
> It's been a long time since I heard anti-Windows arguments that didn't
> boil down to either taste or morality. Not that these are bad reasons,

But maybe taste and morality are enough to sell to users who were weaned on
MacOS. For now, anyway.
Unless there's a huge advantage in moving to another platform, I suspect they
aren't budging. More
likely, they'll keep the MacOS and shop more carefully for hardware, which
probably means going with
Power Computing or Umax for now.

> At the very least it's a particularly bad version of the cycle; Apple USA
> is about to take $1 _billion_ worth of low-end inventory that nobody wants
> and basically pile it out behind the warehouse and set fire to it (not
> quite, I know). Meanwhile, they've got another billion in orders for
> machines that they can't fill. I believe this is some kind of record
> screwup in the industry.

No argument there.

>And, cycle or not, Apple won't necessarily get
> an infinite number of chances to make the same mistakes over and over.

You're right, not of the epic variety of last year. But Microsoft (yes, I'm
getting tired of using them as an
example) has made more than its share of moderate mistakes.

How about balancing the huge mistakes with successes then?

One thing Apple doesn't seem to get credit for is the almost seamless move from
680X0 to PowerPC.
Keeping as much backward compatibility as possible while easing consumers into
the new machines
seemed like an insane undertaking, but Apple breezed through it more easily than
I could have
imagined. Meanwhile, IBM, which co-developed the platform, kept pushing back
plans for a machine
and finally dumped them altogether.

> There is just no
> place for Apple to add value to hardware -- except in niches where the PPC
> outperforms the Pentium (e.g. Photoshop, evidently).

But isn't that the 9 percent niche they have already? And the one with which
they had been reasonably
successful until they screwed up last year?

> Solution: dump the hardware,

Including printers, monitors, laptops, servers, hard drives, digital cameras,
networking hardware, etc.?
(Erm ... Newtons?)

>port MacOS to Intel,

In addition to Motorola or jilt them?

>and go after vertical
> markets like NeXTstep and OS/2 have managed to do (successfully, or so
> they claim). I'll bet this happens inside of 2 years, although they
> should have done it by last year.

Maybe so, but you're still throwing away a lot of potential by dumping the
*entire* hardware line. I
won't disagree, though, that Apple may be trying to do too many things at once.

> We know how Apple ought to be making money (selling computers at a
> profit), and can tell that they aren't currently doing it.

But unless I'm mistaken, they were doing extremely well before they screwed up
their production last
year. And selling computers at a profit isn't the only way Apple makes money.
(But, yes, it's a big one.)
They sell an entire line of hardware. They (try to) sell software. And, a la
Microsoft, Apple makes money
on every MacOS clone sold.

I hope I'm not coming off as one of those annoying Apple cheerleader types. But
I am probably their
typical consumer. I use Mac, I like Mac and I'd like to see the platform succeed
(and evolve further, of
course). But beyond that, if I'm given good reason, I'll switch my operating
system or hardware. Win95
is not a good reason. Power Computing is.

Dwayne Purper
Chapel Hill, N.C. USA

"With a name like Smuckers, it has to be good."