Gentlemen:
Joe Kennedy's investment advice was to "sell on trumpets, buy on cannons."
Few trumpet fanfares in the press have ever blared so loudly as they do now for Microsoft and Windows 95. To read the computer trades, you'd think Windows 95 was the Second Coming, only with bigger sales. Even the business press went gaga at the Win95 Introduction in August. Some writers suggested that the whole economy rides on Microsoft's bullet train. And maybe it does.
So what has Apple been doing while the Microsoft train gains speed? Standing on the tracks, mocking the inevitable.
How else do you explain Apple ads in the Wall Street Journal that look like they might as well be for Unisys? Or the persistence of those what's-in-my-PowerBook ads that stopped working long ago? Or those snotty ads that called Windows 95 a "decoy?"
Windows 95 may look like a decoy to you guys, but it looks pretty real to everyone else, including the Macintosh press. Even Steven Levy, the most understanding journalist ever to cover Apple, called Windows 95 "a nuclear-tipped SCUD targeted for Cupertino."
To the rest of the world, Cupertino already looks like a smoking hole. The business press pays little attention to the herds of departing employees and developers, instead sitting outside the Board's cave, holding a death watch for Michael Spindler. When Joe Graziano's head rolled out of that cave on October 3, Business Week called it "business as usual." When Dan Eilers' noggin bounced out in November, the event was greeted with another shrug.
The rest of the world cares even less. I can page through entire issues of computer industry publications and stumble across hardly a mention of Apple. Even publications that care about Macintosh niches like multimedia and publishing look down at the platform through a rising tide of applications that run only on Windows.
It doesn't matter that Windows 95 is still plainly inferior to the Mac OS in many ways. The world has made Windows its Frame of Reference. Case in point: the October 1995 issue of NewMedia, where Scott Kahn's column craps all over Windows 95, sings the praises of NT, plugs the awaited Cairo, and at the very end offers a simple strategy that hurried readers will probably never read: "Of course... you can always do what we've done here at NewMedia -- put a Macintosh on everybody's desk." With friends like that, who needs enemies?
And with enemies like Jean-Louis Gassee, where are you going to find friends? JL and his Be box were the hit of Agenda 96, where a tearfully triumphant JL got a standing ovation and one prominent attendee saw the new box as "the final nail in Apple's coffin." Even Dave Winer, one of the biggest friends Apple ever had, called for developers to support the new platform. [See "Welcome Back Jean-Louis" in DaveNet '95.]
Of course, Apple has a much higher threshold of death than most of its critics suspect. Sales are up. Demand is up. Even market share is up. Successful $12 billion companies don't just dry up and blow away. Look at Digital, or even Unisys. But most of that $12 billion comes from the Old Mac Replacement Market. Apple needs something more.
I can think of twelve things. And none of them are anywhere near the path of Microsoft's bullet train. Here they are...
Now, as Windows 95 threatens to reduce Macintosh to irrelevance, Apple needs to look back, like Simba the lost lion, and remember who it is and where it came from.
Apple's original position was revolutionary. Against IBM and the gray corporatism that dulled the rest of the computing world, Apple stood out like a tree in a factory. That position is still revolutionary. And now the timing is finally right. Because Microsoft is the new IBM. This is too bad for Microsoft, because it got to where it is by being what Apple should have been: totally involved with its customers, its developers and its partners. But, like IBM did for so long, Microsoft now bears the weight of the world on its shoulders. That world will depend on a vast and complex mess of infrastructures that big business can't wait to build around Windows 95 and its quiet but stronger older brother, Windows NT.
The computer business, however, is not limited to business computers. "The rest of us" are still here, and we're the ones making a revolution. This revolution is personal. One by one, and together in groups, we are rebuilding the world. A few years ago, we didn't have the means. The threshold of manifestation was too high. For most individuals, it cost too much money to create a business, to invest capital, to publish materials, to acquire customers. And why should we sacrifice pay, benefits and job security?
Today, job security is rare. We need to be self-reliant and ambitious, whether we like it or not. And now we have the World Wide Web -- plus all the other electronic frontiers served by the Internet. The Web is the Wild West of our time. It is vast, untamed, and in many places hostile to civilized culture. What worked in high-rises and marble buildings won't work here.
Of course, both Windows and Mac machines make good covered wagons on the Internet's Webward trails. But which ones are best suited for frontier life? Which ones will lead the way?
The most personal ones.
It makes people the killer application, by giving unprecedented support to positive human urges that have never seen anything like it. For the curious, the enterprising, the ambitious, the convivial, the entertaining, it's a wide new world of boundless productive pleasures. And the resources, for the most part, are other people.
The company at the front of this movement today isn't Apple, Microsoft, IBM or any of the other usual suspects. It's Netscape.
The way Apple apparently sees it, Netscape is just a browser. But to the people who are making the Web what it is, Netscape is THE browser. Netscape is to the Web what Windows is to an Intel PC. In other words, Netscape levels the playing field. This is good for Apple, provided Apple takes advantage of its position.
Jim Clark calls the Internet "a dial tone for data." By this metaphor, Netscape is the touch-tone system and PCs are the phones. But, while Netscape looks and works the same on Macs and Windows PCs, Macs are (for now) much easier to use. This matters when you're selling the multimedia equivalent of a telephone.
This means Apple can make Macs that are finally what the the company promised with the Mac's first slogan: "The computer for the rest of us."
That's a lot of people. Many of those people have never bought a computer. Many want a computer but haven't made up their minds. Many have PCs and hate them. Many work at home. But they will only buy a Mac if it makes getting on the Web as easy as dialing a phone.
Which is why Apple needs to bundle Netscape. This is the key.
Every new Apple should ship with a Netscape alias on the desktop or in the Apple Menu, ready to launch straight into a home page for first-time net surfers. And Apple should add value to Netscape itself, packing it with bookmarks to useful locations, and offering new sets of bookmarks at its own FTP sites.
The goal should be to make all new Macs, especially cheap compact ones, the most ready-to-use Web appliances in the world.
Of course, Netscape only takes care of browsing. The other big issue is access. For this, Apple can...
Here is what every serious Compuserve customer discovers.
First: the best forums in the business, and on nearly every topic you can name. Some of these forums have been around for more than a decade, and constitute mature communities that it will take months or years for Microsoft to duplicate, if it ever can. Every forum I know is exceptionally principled and well-managed. Their sysops are capable moderators, facilitators and shop stewards. Forum memberships are packed with smart, experienced, dedicated, professional and helpful participants that far outnumber the flakes, kids and creeps who overpopulate competing services (including the once-venerable Usenet newsgroups on the Internet). All of them use real names. And every forum library is a treasure of accumulated wisdom, experience, data, graphics and more. (Historical note: the famous Pentium bug first came to light in Compuserve forums.)
Second: a choice of user interfaces. Compuserve is open to many different software tools, all of which serve as off-line readers. This is a sharp contrast from Prodigy, AOL and Apple's own eWorld (which still looks and feels like an AOL knock-off). All these other services force the user to stay on line while participating in forums. And none have threading worthy of the name. With Compuserve, users can selectively download threads, view them as tree structures, pluck (or add) whatever fruit they please, and extend their branches with each new session -- all while thinking and writing off-line. This has no equivalent on any other online service, or on the Internet.
Third, Compuserve has research tools and libraries that beat the crap out of anything short of Dialog and the other expensive private database services. For business research, Compuserve has no equal, including any of the current Internet offerings.
Fourth, Compuserve is truly international. In the past two years, I have successfully logged onto the service through local numbers in London, Brighton, Paris, Geneva, Rome, Barcelona, Sao Paulo, LAX, SFO, ORD, JFK, DFW, Pasadena, Seattle, San Diego, Boulder, Honolulu, Christchurch, Auckland, Melbourne, Sydney, and Emerald Isle, NC -- to name just a few. No other online service comes close to Compuserve's worldwide scope.
And fifth, Compuserve is the only online service that provides full PPP Internet access, for any browser the user chooses. Same goes for other Internet software, such as Telnet, Fetch and Usenet news readers. Its pricing might not be the best deal in the world; but it's the only one you can get anywhere in the world.
"The most personal computer" and "the computer for the rest of us" can again be both only if Apple sets the reference standard for personal service. What Nordstrom is for retailing, what FedEx is for shipping, what Maytag is for washers, Apple should be for personal computing.
Need more convincing? Compare the margins of Nordstrom, Fedex and Maytag to their competitors.
Newton is the perfect portable shopping device. You can carry it in your purse, your glove compartment, your briefcase, and even your pocket (if you've got got really big ones). It ties well into the cellular phone system. And it should make a great junior Web client. All you need are a downsized version of Netscape and some Java applets that execute out on the Web. Get those put together and you're there.
What's on sale at the Safeway today? Take a look. What should we order from Domino's? Punch it in. What do we want to rent from Blockbuster? Let your fingers do the walking.
The killer Newton apps will be shoppers' aids. The Web is one way. Disposable or flash-resetable PCMCIA cards are another. Sellers' software can be embedded in memory cards that are given away free over the counter or in the mail. Or selling data can be downloaded from web sites, either through a home PC or directly to the Newton.
The key is to make it convenient, easy and (most of all) cheap. That's what everybody wants. And everybody is a pretty big market.
Today's markets are conversations, not target populations. Success goes to companies that participate in their markets, not to companies that just "send messages" from ivory towers. (Sending messages is a luxury of conceit. And if Apple isn't humbled out of its conceit by now, the cause is lost.) Participation requires talking constantly with customers, resellers, developers, third parties and all the other people who make a marketplace.
This strategy accounts for much of Microsoft's success. From top to bottom, Microsoft is exceptionally accessible and responsive, especially for a company its size.
How can Apple get real with its advertising? By demonstrating what it does best. If no Wintel machine can outrun a Tsunami, show it. If a Mac plugs and plays better than a Windows box, show it. If a Mac handles loads that crash a Windows box, show it. Flaunt the advantages... while you still have them.
This is a perfect opportunity to position against Microsoft, which is running artsy ads that might as well be for perfume. Against those, Apple can stand out like King Kong at a tea party.
For the acronymically impaired, SOHO is Small Office/Home Office. It's a huge and growing category, filled with people either working on their own or telecommuting to the main office. Apple is in a great position to win in both the home and the SOHO markets. The company has a very powerful brand name, and its goods are still much easier to set up and use than anything on the Wintel side.
Big business is another story.
Granted, big companies are the biggest customers. But right now most big companies are gladly herding under the Windows banner. And frankly, Apple can't compete. The trump card isn't Windows 95. It's networking. A business PC is a networked PC. Sadly, Apple dropped out of the networking conversation a long time ago. The analysts and reporters stopped covering them. The corporate customers stopped buying them, if they ever did in the first place. Today, as far as most corporate networking guys are concerned, Macs are a pain in the butt: a protected species that ought to be extinct. It doesn't matter to these people if a Mac is easier to run on a network than a PC. They just don't know or care about it.
Expect this to get a lot worse before it gets better. And expect it to get better only when users start doing what they did to get Macs inside corporations in the first place: bringing them in over the transom.
Which won't happen until Apple gives them some reasons. Such as: homes and small offices are filling up with new Mac machines, and companies have no choice but to cope with the spillover.
And who will lead us to this place?
Not Sony. Not Mitsubishi. Not Toshiba. Not Samsung.
Despite their R&D and manufacturing muscle, all these companies are old-fashioned industrial giants. Their most inventive minds work behind fort-like walls through which penetrates hardly a clue about the Information Revolution or the power it gives the people who participate in it.
These companies don't understand the vitality and rapid evolutionary pace of the computer marketplace. As with NEC and Toshiba, they may make some good computers and peripherals, but mostly they're just building inventive industrial designs around incremental steps forward in technology. They aren't changing the world.
Their biggest problem is one that also hobbled Apple for a long time: they want users to contact them only through distributors and retailers, and thus isolate themselves from valuable market input. So their business was devoted instead to putting out what their customers -- distributors and retailers -- were accustomed to expect: faster, louder, cheaper, sharper and fancier versions of the same old stuff. The result of this progress-slowing relationship is the endless procession of incomprehensible black boxes that crowd the shelves at Good Guys and Circuit City.
This is why buttons and lights are now to Tokyo what chrome and fins once were to Detroit. And the consumer electronics business is wide open territory for any computer company with the balls to take it over. It's ripe for the picking.
Nothing can compete with a fully adrenalized computer company that wants to take advantage of all the possibilities modern technology has to offer, rather than the few that work their way slowly from the R&D labs out to the retail shelves.
See, compared to the computer business, where revolutions happen constantly, consumer electronics make breakthroughs at a blue moon pace. It isn't that the technologies aren't there -- it's that they're ignored.
Digital tuning was around for years before anybody put it in Walkmen and portable radios. And it still stinks in most cases. If a Dell or a Microsoft (or hell, even an Apple) were running Panasonic or Sony, we'd be a lot farther toward CD-quality digital radio (on both AM and FM) than we are today.
At the current pace, we won't see it for a long time, because the Asian giants are waiting (a) for "market demand" to materialize out of the blue (which it won't), and (b) for standards groups to finish work that standards groups, as a species, never finish. The same thing is happening with HDTV, set-top boxes, cheap GPS and host of other Godots.
So now is the perfect time for an inventive, original, well-branded American computer company to move in on the consumer electronics market. And Apple is the perfect candidate for the job. After all, who makes the most personal computer? Who leads the multimedia revolution?
It helps to remember that products built Apple. Not focus groups. Not advertising. Not marketing. Not crusades for market share.
Nearly a century ago, Thorstein Veblen gave us a law without which there would be no Silicon Valley: "Invention is the mother of necessity."
Think about it. Your grandparents got along fine without most of today's electronic necessities. Fifteen years ago, you got along without them, too.
Why shouldn't Apple get the first bite when the computer finally eats the television? Why shouldn't Apple make the first programmable radio with GPS and PCMCIA?
Because Apple still looks and feels like an industrial giant, too. It "comes from" engineering, just like all those big Asian companies. And, like those companies, it has a regrettable legacy of avoiding users and scraping them off on dealers or other parties.
Of course, Apple doesn't need to become a consumer electronics company all by itself. It can team with Motorola and Sony to make car radios that verbalize pager messages. It can team with Matsushita and AT&T to make clone'n'phone modular systems that plug together and share data among computer, telephone and message machine.
Whatever, the opportunities are huge.
Meanwhile, Bill Gates evangelized like John the Baptist.
While it's nice to see Guy Kawasaki back on board, his job should not just be to recover lost ground in the battle against Microsoft. Rather he also should start recruiting developers who want to serve the home and SOHO markets... developers who want to be on board with The American Sony.
Being a hardware company is an advantage for Apple. Because hardware is real. Hardware is solid. Hardware is something people can touch and feel and buy and haul home from the store and see every day. Hardware is what plugs and plays.
In the next few years we will all replace nearly every piece of electronic gear we own. Little if any of that hardware will have carry a Microsoft logo -- even if it's a Mac running Windows.
Think about it.
While the PC business is much more margin-pressured and market-whipsawed than the big iron and fancy instrument trades that anchor HP's culture, there must be some room for Apple to move in a more stable and humane direction. Nothing would help more than to divide the company into independent groups that could adapt and compete much more effectively than the monolith that Apple seems to keep wanting to make of itself.
For example, there is no reason in the world Apple shouldn't compete straight-up with HP in the printer business... except for Apple's need to pool profits and losses. While there are good reasons for pooling, it saps the adrenalin out of what should be the Apple printer division. Claris should be able to compete as an independent software company, eWorld as an independent online service and Newton as an independent PDA company. Right now they're all mooshed together. This can only be demoralizing for everybody.
Apple has what it takes to be a great company. All it needs to do is emulate another great company that has held up admirably over the decades.
Apple needs a CEO who will lead markets as well as Apple itself. For all his flaws (not the least of which was that he didn't use a computer), John Sculley did that. He attracted attention. People looked to him for leadership. For better or worse, the PDA market today has his (and Apple's) fingerprints all over it.
If there were somebody inside Apple with the chops for the job, we'd all know his or her name by now. In the absence of that person, Apple has to look outside. There's just no choice about it.
In addition to the obvious qualifications, the new coach needs these equally important but less obvious characteristics:
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