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Nov 98 Viewpoint

Volume Number: 14 (1998)
Issue Number: 11
Column Tag: Viewpoint

Nov 98 Viewpoint

by Nicholas C. "nick.c" DeMello,

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.


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