Competition Makes Companies Stronger

Just like Apple in 1990, Microsoft appeared untouchable in 2000. In reality however, both companies had really been softened by the lack of strong competition, and were so intoxicated by the praise of market analysts that they ignored brewing threats that were soon to develop into formidable rivals.

In 1990, Apple's competitors--including Atari, Amiga, and NeXT--were delivering specialized hardware DSPs and advanced operating system features well in advance of the Mac, but Apple felt secure than none of these companies could provide any significant competition.

Apple also didn't count on Microsoft offering much of a threat, since the company's Windows product had been an embarrassing joke until 1990, and was still laughably behind.

Apple wasn't prepared for Microsoft's Windows 95, followed by its four paid updates that were released over the next five years. That lack of preparedness, exacerbated by poor governance, lead to major troubles for Apple within just a few years.

The analysts that had previously celebrated the company were quick to turn on it, and discount every effort the company made to recover. Increasingly, analysts compared Apple to Microsoft--a very different company with an entirely different business plan.

The Turning of Tables
In 2000, Microsoft Windows was still a poor product, but it had replaced DOS on hundreds of millions of PCs, and was strong competition to the ten year old operating system that Apple was still trying to sell.

When Windows 2000 shipped, Apple's efforts to sell Mac OS 9 and its delayed attempts to deliver Mac OS X similarly appeared laughably behind the times.

It was Microsoft that wasn't ready when Mac OS X Jaguar was delivered in 2002; it offered many of the key features intended for Microsoft's Longhorn, expected in 2003.

Apple then rapidly delivered Panther in 2003, Tiger in 2005, and then moved Tiger to Intel in 2006. Meanwhile, Longhorn hadn't gone anywhere but back to the drawing board.

Now that Windows Vista has finally shipped, critics are panning it as being an overpriced, unnecessary upgrade. Customers who have been waiting for Vista to ship have taken the opportunity to investigate the Mac, which not only offers a better product now than Vista, but also promises a further leap beyond Vista later this year with the release of Mac OS X Leopard.

High Prices, Low Product Innovation

Instead of working to develop and popularize the Mac as a consumer product with broad appeal, Apple's CEO John Sculley artificially raised its price by $500, pushing it out of the range that many could easily afford.

The original Mac was already a relatively expensive product, because it required more RAM and other specialized hardware in order to deliver its entirely graphical environment. However, Sculley also packed the expense of a huge advertising campaign into the new Mac's price, bumping it from $1995 to $2495.

Between 1985-1990, Apple continued to release Mac models priced significantly higher than most consumers could afford, and positioned the company's Apple II computers as its entry level machines. Apple continued to sell the Apple IIGS, which was not compatible with the Mac, up to the end of 1992.

Jean Louise Gassée, Sculley's replacement for Steve Jobs, ran the Mac platform into the ground by insisting on high price points for new models, following the logic that Apple needed to get the most money it could out of the Mac’s technology.

High Prices, Low Product Innovation

Instead of working to develop and popularize the Mac as a consumer product with broad appeal, Apple's CEO John Sculley artificially raised its price by $500, pushing it out of the range that many could easily afford.

The original Mac was already a relatively expensive product, because it required more RAM and other specialized hardware in order to deliver its entirely graphical environment. However, Sculley also packed the expense of a huge advertising campaign into the new Mac's price, bumping it from $1995 to $2495.

Between 1985-1990, Apple continued to release Mac models priced significantly higher than most consumers could afford, and positioned the company's Apple II computers as its entry level machines. Apple continued to sell the Apple IIGS, which was not compatible with the Mac, up to the end of 1992.

Jean Louise Gassée, Sculley's replacement for Steve Jobs, ran the Mac platform into the ground by insisting on high price points for new models, following the logic that Apple needed to get the most money it could out of the Mac’s technology.

Dell Switches Back to Windows XP

Bowing to user demand, Dell (DELL) announced yesterday that it has gone back to offering PCs with configured with Windows XP rather than Microsoft's (MSFT) new Vista operating system. Vista is still an option for customers who prefer it.
"We heard you loud and clear on bringing the Windows XP option back to our Dell consumer PC offerings," Dell said on its Ideas in Action page.
In a statement last week, Microsoft said such a move is normal after a new operating system comes out, according to CNET News. Apple (AAPL) suffered similar resistance in the switch from OS 9 to OS X, but unlike Vista, OS X offers a mechanism for going back to "classic" mode.
Microsoft has said it will stop selling Windows XP to major PC manufacturers by January, 2008.

Apple Joins Microsoft, Dell & Others To Fight Hollywood & The CBDTPA

Yet another group is standing up to protest Senator Fritz Hollings' misleadingly named Consumer Broadband and Digital Television Promotion Act, or CBDTPA. The CBDTPA is a proposed law being backed and pushed by the Motion Picture Association of America (MPAA), and sponsored by Senator Hollings. As it is written, the CBDTPA would, if passed, require all computer hardware and consumer electronics devices to have hardware-level copy copyright protection built in. This would allow utter control by media companies over how, when, and by whom digital content was displayed or played on your computer, whether or not you owned it legally.
That is, until some rebellious 18 year old hacker figured out how to crack it (the TMO office pool suggests that will take as long as 23 minutes).
The CBDTPA has been resisted by a wide assortment of privacy advocates, anti-copyright activists, civil libertarians, and even tech companies. According to CNet, there is a new outfit fighting against the proposed legislation, and it's no rag-tag group of misfits letting their voice be heard. The group, called the Alliance for Digital Progress, consists of none other than corporate heavyweights like Apple, Microsoft, Dell, Cisco, Hewlett-Packard, and Intel. From CNet:
A coalition of companies including Apple Computer, Microsoft, Dell Computer, Cisco Systems, Hewlett-Packard and Intel said Thursday that they had joined together to oppose legislation backed by the movie studios that would allow the U.S. government to set antipiracy standards for PCs and consumer-electronics devices.
Their specific target is a bill by Sen. Fritz Hollings, D-S.C., which was introduced last year but has yet to be introduced to the 108th Congress, which began its session this month. By demonstrating broad opposition to the idea, and by enlisting libertarian and conservative advocacy groups in their coalition, the firms hope to bottle up any similar proposal this year.
Fred McClure, a former aide to President George H.W. Bush and head of the Washington office of the Winstead Consulting Group, has been hired to lead the effort, called the Alliance for Digital Progress.

Apple,Microsoft,Dell

Dell, Microsoft Struggle. Apple Continues Growth.

Facing nimble, innovative competiton from all sides, Microsoft and Dell stumble, while Apple grows diversified product line to record sales, record profits.
Is this the beginning of the end for PC giants in the US? Or the beginning of a new ‘Apple Era’ for computer users? Or both?
Jay Palmer of Barron’s says Dell has lost its ‘mojo.’ Microsoft lost all mojo years ago.
Both the giant computer box maker and the equally giant software maker are struggling.
Meanwhile, back at the Cupertino, CA ranch, Apple Computer, written off more times than Ann Nicole wrote off her late husband, continues to thrive. Why?
First, Apple’s record revenue and profit growth, as well as record product unit sales, is the direct result of a few gambles, nifty product marketing, and the pay off that comes with building a better widget (pun intended).
The huge gamble was Apple’s move from Mac OS 9.x (the previous ‘classic’ version) to OS X, the unix-like version.
After Steve Jobs and his NeXT cohorts took over Apple in 1997, they embarked on an ambitious plan to create the next Mac OS X using all the tools and knowledge and experience gained from years toiling in near obscurity.
What was launched in 2001 was Mac OS X and the cat generations; Cheetah, Puma, Jaguar, Panther, Tiger, and perhaps next year, Leopard (there’s gotta be something about a Leopard changing ‘spots’ in there).

Mac OS X matured and became dependable and secure. Two things which Microsoft couldn’t boast to the same degree with Windows XP.
While Microsoft was building animosity with customers and their security problems with Windows, Apple was building increased sales, media kudos, and fanatical fans. Again.
Meanwhile, Dell computer continued to blast through revenue and profit records by cranking out PC boxes faster, cheaper than anyone on the planet.
Then, along came portable music. Apple didn’t invent it. They just made it work with a typical Apple-like combination of iTunes, iPod, iTunes Music Store, then ported the whole shebang to Windows so the rest of the world could enjoy the flavor of Apple made.
They did. By the millions Windows users bought and continue to buy iPods and accessories and music from Apple.
Along the way, Microsoft stumbled badly by not being able to repair (sufficient for customers to remain happy) Windows XP’s spyware, adware, malware, and virus problems. Mac OS X literally glistened in comparison.
Worse, Microsoft became years late in launching the next generation Windows; code named Longhorn (stillborn, to some), and changed the name to Windows Vista, now ‘scheduled’ for launch late in 2006.
During these increasingly dark times for Microsoft, millions of customers bought iPods and created the so-called ‘iPod halo effect.’ Windows users liked iPods so much, they also bought Macs.
They bought iMacs, eMacs, Mac mini, iBooks, PowerBooks, and Apple software and they loved every minute of it. Apple’s sales surged on all fronts.
While Microsoft and Dell are nowhere near to running out of money, they both did something that they never did before. They began to miss both revenue and profit targets.
Wall Street loves consistency, and Dell and Microsoft are consistent, but not improved. Wall Street loves improvement. Both have had their stock prices go nowhere for a few years. Apple’s stock? Record price. Again and again.
Apple’s sales are approaching $16-billion, while Dell’s now exceed $60-billion. Both Microsoft and Dell, like Apple, are highly profitable. Only one is a Wall Street darling. Why?
Dell can’t keep up the growth because there is no product innovation, and the company has missed revenue and profits targets twice this year and warns of future shortfalls.
Only a 10-percent growth each year means Dell needs a new $6-billion in revenue this year. And it won’t happen. Apple is growing at over 30-percent this year from last year’s 30-percent growth (I rounded the numbers to protect my innocent lack of detailed memory).

Microsoft, worth about $250-billion on the stock market, continues to miss quarterly targets, too. What’s wrong? Dell and Microsoft combined account for most of the PC industry in the US. They have more money in the bank than God.
Microsoft and Dell are lost. It’s the beginning of the end. And the beginning of a new era. This change of the guard won’t happen over night, as in a military battlefield. But it will happen before your very eyes.
Competition from Chinese PC maker Lenovo will continue to dampen Dell’s revenue and profit picture for years to come. Microsoft will continue to stumble with a patchwork of hurry-up products that further alienate customer affection; revenue and profits.
The new era is here with Apple leading the charge. How? An amazing string of new product launches; each better than the last. iPods, iMacs, Mac mini’s, PowerMac and PowerBook. Look for new products in 2006 as the switch to low-power-usage, high power Intel chips begins.
That’s just hardware. Unlike Dell and Lenovo, Apple also produces award winning software. From Mac OS X to the iLife suite, iWork, Final Cut Pro, Motion, SoundTrack, DVD Studio, Aperture, Logic, Logic Express, and many others.