Bahamut's Lair

Apple Computer: Fluffers wanted

By Bahamut (bahamut@dog.com), 4 October 2000

Well, this plucky little fictional creature’s pluck just ran out. A mighty big collapse in Apple’s value has left him, well, shall we say, unencumbered by the prospect of capital gains taxes anytime in the near future.

For those of you who still have Apple stock, you can take consolation from CFO Fred Anderson telling you not to worry – this is just a “speed bump”. Everything will be rosy in the future.

No doubt we can thank Apple’s newfound focus on leak-plugging that this came as such a surprise. The snuffing out of “Worker Bee” has had the desired effect. In contrast to previous quarters, not one hint leaked out that Apple was going to record lower earnings. Good going, Fred! Focus where focus is due.

The result is that unlike some wise investors who chose to sell out before earnings were announced, Bahamut has wound up feeling grumpy and mean. In fact, some would go so far as to say he’s back to his old, Cassandra-like self again. Heck, since the recent turn of events (full disclosure no longer required, but given anyway: this fictional creature is no longer long on Apple stock!), Baha’s in a mood to do a little explaining and a little prophesying – and not a whole hell of a lot of it is positive.

Hardware’s going soft

As my last column concluded, Apple’s beginning to flounder on the hardware end. Since then things have only gotten worse.

“Not one bleedin’ MHz!” was the cry that rang out after the last MWNY. Dual processors are a long-awaited treat, but given the current growth in speed in PPC Land, we might well have to wait until the next millennium to surpass the one-gigahertz mark on a single chip.

But Motorola’s impotence is not the only problem. To see this, just take a walk by your local Apple retailer, dear Reader. It’s very instructive. You might be surprised to see a Cinema Display or two on display! Why have you never seen one before? Answer ... because they were selling before! Of course if’n you’re contemplating buying one of the new models and you don’t own a brand new Mac, you’re out of luck, duck, thanks to their new incompatible-with-all-past-models connector. No wonder they’re staying firmly on the shelves.

And if you’re a desktop publishing type who needs both a big screen and quality color control that an LCD display simply can’t provide ... well, you’ll search in vain for that nice 20" ColorSync-calibrated tube, since it’s gone the way of the floppy drive. Apple’s new “focus” on consumer video editing has eliminated DTP from its target market.

Then there’s Mr. Cube. Rather than being a home entertainment center-cum-mini-DV editing station, we have a Mac for the Bang and Olufsen set, or perhaps a millennial version of the Twentieth Anniversary Mac for a slightly less extortionate price. Moreover, as many of you have commented, the Cube is remarkably big in real life. For just a bit more, you could spring for a PowerBook and have portability and a free, built-in uninterruptable power supply (read: battery). Hmm ... tough decision, no?

Hardware’s weak, make no mistake about it.

For now, Apple is a niche player and it needs to grow that niche. Pie-in-the-sky dreams about being the Sony of computer companies will result in the Macintosh being the Betamax of computers. A Cube is not a substitute for a ballsy home theater system – especially with the crummy quality of the DVD decoding it ships with. (Message to the Steved one: upgrade it now!) An iMac is not first and foremost a DV editing machine. The Mac’s strength is and always will be – unless Little Steven and sidekick Avie blow it – simplicity and the ease by which documents can be created on it.

X marks the spot

On the upside, Baha’s been using OS X Public Beta for some time now and he has to say, he’s more impressed than he expected to be. The little fella is certainly much more stable, faster, and a bit more intuitive than Barbie DP4. It seems almost possible to work in S’X PB on a regular basis, barring the ever-present lack of printer drivers and our “new friend” Colonel Panic. But there’s still a long way to go with X, and if Apple’s limp on the hardware end, nobody, but nobody, will be getting a jones for the Aquafied OS.

A dose of Viagra

What can Steve do to fix this mess? There are a few things that might put life back into Apple. First off, Herr Jobs needs to repair the injuries he’s making to the DTP world by reinvigorating ColorSync and bringing back the big ColorSync tube ... and tout Quartz to the moon while he’s at it, as DTP folks should love many of its features.

But as he does this, Steve can also use the VT100-like form-factor of the iMac coupled with the awesome Microsoft Office 2001 to expand in the enterprise market. Many, many employees of our digital revolution work on Microsoft Word, Excel, Internet Explorer, Outlook Express (now Entourage) or Outlook – and that’s it. Steve needs to sell the power of Microsoft solutions running on Mac hardware above all else. Free ads for Microsoft on network TV (“Look what you can do with Word ... on a Mac”)? You betcha.

And, more than anything, OS X needs to have access to Windows NT services without requiring tinkering on the NT server side. The mad hatter sysadmin down the hallway is not going to bother to install Mac Services on his NT server, not if it distracts him from that sixpack of Dunkin’ Donuts. Nuh-uh. So OS X has to provide that connectivity out of the box. Nothing will sell OS X better than interoperability with NT. You bring a PowerBook to an Intel-only office, plug it into the LAN and wham... full server access. That’s what L’il Steven needs to sell OS X and get Apple feeling perky again. Oh yeah, that and more stability and more speed (which may resolve themselves when the darn thing is finished).

What goes up...

Finally, a reflection on modern-day realities. As more and more people have come to own stocks, even if only through mutual funds, we are living in a society where purchasing and stock ownership are increasingly linked. I buy IBM stock because I own an IBM machine that I like, unlike that hated Dell device. You buy Apple computers because you own Apple stock. But this splendid symbiosis can be undone when some 75 million shares of APPL.0 get dumped in one day.

Moreover, the perception that a company is doing well on the stock market is inescapably linked to its sales. “Why should I buy Apple when their stock just collapsed and they might go under?” isn’t just a question you ask yourself if you’re contemplating investing – it’s also a question you ask yourself if you’re contemplating buying new hardware. When Apple stock was on the rise, good news about Apple was common on the business page and the corporation got tons of free advertising for its new machines. But that effect cuts both ways. A headline in the local paper saying “Why’s Apple back? Because the iMac’s cool” is going to convince somebody out there to buy a Mac, but “Stock market dragged down by sour Apple” will send them directly to the Gateway web site. In today’s environment, both investors and customers are impressed with the size of your stock price. Given Apple’s recent detumescence, Steve should be having some market performance anxiety.


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