Nov 98 Viewpoint
Volume Number: 14
Issue Number: 11
Column Tag: Viewpoint
by Nicholas C. "nick.c" DeMello, editor@mactech.com
For over a decade, I've listened to people prophesize the end of Apple and the Macintosh.
I would sit patiently while they counted through the same list: Macintosh is slow;
Macintosh is expensive; Macintosh in unstable; and there is no software for it. For the
most part I bit my lip, smiled, and went back to getting the job done - on my
Macintosh. I've never enjoyed platform debates and the whole idea of Apple going out of
business was so ludicrous that I didn't considered it worth discussing.
I bit my lip a lot in 1996. In '95 Apple had earned over 400 million dollars, but
instead of making money in 1996 they lost it - over 800 million dollars.
Then things got really bad. In 1997 Apple lost over 1 billion dollars, over 700
million of that in the third quarter alone. Worse than the fiscal loss (debatably), was
the resulting widespread loss of confidence in Apple and the viability of the Macintosh
platform. Suddenly the idea of Apple going out of business wasn't that ludicrous. In
business, the perception that a company is going to fail can be fatal in itself.
Things are getting better though. Last month, Apple finished up their 1998 fiscal year
and I noticed something different: my lip didn't hurt. Apple earned about 50 million
dollars in each of the first two quarters and over $100 million each in the last two
quarters. With over 300 million dollars of profit in 1998 Apple seems to be getting
back on track.
Which of course puts us right back to where we were in 1995 (less two years and 1.8
billion dollars) Or does it?
Have you ever gone to sleep during a rain storm, and then woke up when it stopped?
You can get so used to hearing a noise that you don't notice it anymore. But when the
noise stops the silence is startling. There's a startling silence out there now. I'm
having a hard time finding someone still predicting the end of the Macintosh. That
silence speaks volumes.
People didn't start predicting the end of the Macintosh in '96 or '97 (they've been
doing it since 1984). What happened last year was people started listening to the
predictions (and with good reason, a $1.8 billion loss is a damn good argument and
Rhapsody wasn't the most compelling response to it). This year it's less significant
that folks have stopped listening to the doom-sayers, than that the doom-sayers don't
seem to have much to say.
"Macs are slow," they used to tell me. I had one friend who for years insisted that a
Macintosh could never offer the same performance as a DOS machine (yes, DOS). I
haven't stayed in touch with him over the years, but when the G3 was introduced, I
made a point of looking him up. About a week after I received my G3 PowerBook, I said
hi again. When the iMac came out, he got in touch with me "I figured you'd be calling." I
don't hear anyone complaining about the speed of Macintosh these days (except maybe
that guy in the pastel bunny suit). When Apple silenced the critics by introducing the
G3, they also made a $50 billion profit.
"Macintosh is too expensive." Have you heard that one before? Have you heard it
recently? When Apple introduced a $1,299 computer that was faster than the best
Intel machine on the market, the silence grew a little more - and we still haven't seen
what Jobs has in mind for the consumer portable Macintosh. Apple sold over 278,000
iMacs in this last quarter alone - averaging out to five iMacs every minute of that
quarter. Perhaps most significantly, over 40% of those iMac sales were to folks
who've never owned a Macintosh before. When Apple dealt with this issue, they made a
$100 million.
"Mac OS is unstable." This one I do still hear, but I don't expect to hear it much longer.
Apple has turned out three solid, compelling, system upgrades in roughly six month
increments, and seems to have defined a clear, rational, and achievable plan for the
next year. A plan that includes protected memory (without rebuilding your apps from
scratch). My guess is Apple will profit quite nicely from the silence following Mac OS
X.
That leaves: "There's no software for the Macintosh." Apple announced over a 1,000
new and upgraded Macintosh products since the iMac was introduced, and more are on
the way - a good start on the problem.
Apple has made a remarkable turn around since July of '97, and I applaude them for
that. Part of their success has resulted from listening to their customers, and offering
them compelling and timely products. Part of their success has resulted from listening
to their accountants, from streamlining their distribution system and reducing their
operating expenses. But the next step requires listening to developers and empowering
them to make the software a revitalized Macintosh platform needs to grow and stay
healthy. Personally, I think Apple is learning this lesson too. Cross your fingers folks,
1999 could be an amazing year for Apple, for Macintosh, and for Macintosh
developers.