> Then there's Jobs' pricing strategy. Nearly a year into the ascent of
> the sub-$1,000 PC market, Apple's least expensive offering goes for
> about $1,400. Granted, G3 Macs offer great performance for the price,
> but schools and new users don't know that--partly because Apple's
> high-tone concept ads don't say so.
There was also a big LA Times business section cover story on Sunday
demonstrating that many schools have abandoned Macs for PCs. #1 reason:
price. Not price-performance, just price.
Combine this with Bill Gates' publicly-stated philanthropic goal of
putting PCs in every U.S. public library, and with universities'
widespread adoption of the PC as the platform of choice, and you have a
complete inculcation of the PC culture in every nook and cranny of the
U.S. educational system.
The article below is right: if I'm a new user, no way a "think
different" or "bunnies" ad is going to suggest to me that the Mac is
superior. Furthermore, making Rhapsody invisible seems like a bad move
as well: what's the rationale behind positioning Rhapsody solely as a
server OS for now?
-- Adam
included article:
> Monday, March 16, 1998
> Casting Jobs as Savior Is Premature
> By CHARLES PILLER, LA Times
>
> Since Apple Computer turned a tidy $47-million profit last quarter,
> it's hard to get anyone--even the legions of Apple pessimists--to say a
> bad word about acting Chief Executive Steve Jobs. After all, as
> co-founder with a reputation as a visionary, he does take on an almost
> messianic air.
>
> As for me, I haven't been able to shake the nagging sense that Jobs is
> ill-suited to be cast as the "Father Knows Best" figure that so many in
> the Mac community seem desperate for.
>
> Perhaps the Mac faithful should consider whether unqualified hero
> worship of this guy serves their interest in rebuilding Apple as an
> important force in personal computing.
>
> His uneven history as an executive aside, what do his recent moves
> suggest about where he is taking Apple now?
>
> Jobs' new online-sales apparatus, charisma and sheer force of will
> played some role in the success of Apple's new G3 machines and the
> recently profitable quarter. (We'll know if this was a fluke in
> mid-April, when Apple announces the current quarter's results.)
>
> Also credit Jobs with killing Newton--the bulky, pricey personal
> digital assistant that was a millstone around Apple's corporate neck
> since the day it was introduced.
>
> And don't forget two key moves Jobs made last summer and fall: He
> installed the first competent board of directors Apple's had in ages and
> simplified a mystifyingly complex product line.
>
> Jobs also dumped the ineffectual retail chains and created Apple
> Stores within CompUSA. Even though Mac retail sales continue to
> drop--1.2% of the market in January, according to Computer Intelligence
> of La Jolla, or between 2% and 3%, according to PC Data of Reston,
> Va.--the CompUSA strategy projects an upbeat approach that could
> ultimately build consumer confidence.
>
> Jobs' biggest contribution? He enforced focus on a historically
> unmanageable company whose survival depends on executing well in a few
> key areas.
>
> But focus has come at a price. Jobs had to reduce the bloat from
> Apple's payroll. Unfortunately, along with the layoffs, many of Apple's
> best and brightest have fled Jobs' dictatorial management style,
> flooding Silicon Valley like El Niqo-generated storms. Unlike local
> flood plains, however, other companies have gladly soaked up the talent.
>
> With many departments desperately short-handed, does Apple still have
> the critical mass of engineering talent--or the institutional
> memory--needed to carry core projects forward?
>
> That brings us to the eyebrow-raisers. Remember that Jobs sold Next
> Computer to Apple for $430 million--much of which he pocketed. (Soon
> after, he sold all but one share of his Apple stock, though in fairness,
> he's now being paid exclusively in stock options.)
>
> The NextStep operating system, the basis for Apple's new Rhapsody OS,
> was the ostensible key to Apple's future. What's happened since Jobs
> took the helm? He certainly didn't risk his NextStep proceeds with an
> investment in Apple. Meanwhile, Rhapsody has become close to invisible.
>
> It's being positioned very narrowly--as a server OS. Eventually, Apple
> says, it will be targeted to "power users" and someday as a mainstream
> OS.
>
> "The problem is, if Rhapsody is a server OS, where is the server
> hardware it's going to run on?" asks a former Apple executive. "Where
> are the server engineers inside Apple? They've all been let go."
>
> Jobs also killed Apple clones, with the exception of Umax, which
> strains on a short leash and will probably phase out its Mac business
> this year. Without clones, Jobs said, the Mac would recapture market
> share. Instead, Mac users lost the only low-priced source of Mac
> OS-based systems, as well as the cloners' innovations. And Apple's
> market share continues to plummet.
>
> Then there's Jobs' pricing strategy. Nearly a year into the ascent of
> the sub-$1,000 PC market, Apple's least expensive offering goes for
> about $1,400. Granted, G3 Macs offer great performance for the price,
> but schools and new users don't know that--partly because Apple's
> high-tone concept ads don't say so. Those buyers are looking at the
> bottom line, and they don't see a Mac in the running.
>
> Meanwhile, Jobs is so powerful within Apple that every candidate for
> permanent CEO has reportedly chosen not to work in his shadow.
>
> Phil Schiller, Apple's vice president for worldwide marketing, told me
> recently that Apple has a secret plan for company growth. If you
> remember the Nixon era, that should give you pause. Does Jobs really
> have a plausible plan--beyond showing two or three quarters of profit
> and declaring victory, then getting out and letting others pick up the
> pieces?
>
> Charles Piller can be reached via e-mail at cpiller@mindspring.com
----
adam@cs.caltech.edu
Let me speak to our mutual friend.
-- The Professional