Thursday, March 24, 2005

Apple Butter On the Toast

There was an article, "Is Microsot toast?," in today's online Financial Times. The articles says a lot of good things about Apple, but as always you have to look at what isn't said to get the real skinny on Apple.
Over the two year period commencing March 18, 2003, Microsoft shares rose 5.3 per cent; Apple’s 373 per cent; and the Nasdaq Index, 43.4 per cent (bouncing back from historic lows). The upshot: while Microsoft’s market cap has flat-lined at $260bn, Apple has jumped from $6bn to $35bn. Of course, the spectacularly popular iPod music box has generated much of the buzz – underscoring Apple’s multi-pronged assault on the Microsoft Monopoly.
I give Apple full credit for developing and being successful with the iPod. Just don't get carried away and think that Apple is doing a "multi-pronged assault on the Microsoft Monopoly." That's just not happening. Whether the iPod becomes commoditized like Sony Walkmen or survives it's adolescence is something for the market to determine. Thomas Hazlett the author of the article goes on to ponder about Apple's market share.
That share is still low – just 3 per cent for desk tops, about twice that for notebooks – but a much bigger run may be in the offing. That is because of the plague that has hit the Windows world. Apple, with its tight, integrated interfaces cinching hardware to software has proven powerfully resistant to viruses and spyware, the poisonous infections of the Internet. Meanwhile, Microsoft users scramble to update their software with the latest patches, frantically downloading anti-viral software, running and re-running spyware disinfectants. With the Mac offering equally proficient word processing, presentations, spread sheets, web browsing and email, along with the standard multi-media applications, many are asking: Why bother?
Why bother? Really, the answers are easy, because in order to use an Apple you have to tolerate Apple, and most customers are not going to put up with Apple's penchant for secrecy, their full price operating system upgrades, their take it or leave hardware, and the arrogance of the company.

Sure Apple's market share will grow but to what, 4 or 5%. Linux has already or will soon pass Apple on the desktop. That leaves the real question remaining, why a company with the world's best operating system running on the most elegant hardware has only been able to eke out a less than 2% worldwide market share. Of course we could be really mean and say, "how could you possibly do it twice."

The answer requires looking inward at the dysfunctional company that Apple has become. The iPod is a flash in the pan, to be followed by more of the antics of the only company in technology besides Oracle that has remained without adult leadership. For more details try my ApplePeels blog.

Saturday, March 12, 2005

Dan Gillmor Weighs in on Apple

Just as I knew he would, Dan Gillmor has commented this morning on the ruling which gives Apple the right to subpoena information that will help them find the Apple employees who leaked the information. I completely agree with this quote from Dan's post, "Apple's 'Trade Secrets.'"
"During the time Steve Jobs has run the company, Apple has been hostile to truly independent journalism about its products and policies. This current attack on journalism -- and that is precisely what is going on here -- reflects the side of Jobs that will someday lead the company back down from its current heights."
What few people realize is that this is the side of Jobs that has kept Apple from really being an alternative to Windows. I suspect it will be the reason that Linux eventually ends up as a more viable alternative to those of us who love Apple products but are learning to hate the company.

Apple is all about Steve and a very few key executives. It is not about delivering what the customer wants. Apple is all about delivering what Steve wants. The times that he guesses wisely, we get great products.

If you think Apple is tough on the press, try being an Apple employee advocating some customer requirements which haven't made it to the radar of key people at Apple. Of course there are times when Cupertino is so divorced from reality as to not understand what is missing from the OS even though the customers and potential customers are very clear in what is needed. For an indepth look at this try my Apple Peels posting "Employee Development."

Remember Apple is about Steve, not meeting the needs of customers, and certainly not building a great company. That's why you have employees leaking information. Apple's pursuit of the web journalist contacts is symptom of a much great problem.

Friday, March 11, 2005

Apple Loses in Winning

Many of you have read that Apple has won its suit against the three websites. Apple has made a big mistake in pushing this issue in this manner. Many of us ex-Apple employees have known for years that the world inside Apple doesn't live up to the shinning external image, but this could unfortunately be the issue that lets the rest of the world in on the secret. I tend to agree with Charles Cooper over at CNET in his "Apple lawsuit: Thinking different?" article.
"But now you have to ask whether paranoia has trumped good judgment. With today's ruling, Jobs is in danger of leaving a big black blot on an otherwise remarkable legacy."
I am glad to see the the open letter to Steve Jobs by Mike Langberg of the Mercury News. As a stockholder, I certainly agree with his last statement.
"So it's not too late for you to back down, before the wider world of Apple customers and potential customers begins to see your company as arrogant and overbearing. I recommend you quietly drop the litigation, tighten your internal security to prevent future leaks and move on."
I suspect others such as Dan Gillmor will weigh in on the issue. According to Dan's blog, Grassroots Journalism, he is on the road for the next twenty-four hours. He has already expressed concern in his post, "The Gathering Storm Over Speech."

Perhaps Apple would have better luck keeping secrets if they created an environment like the famous Fishmongers of the Pike Place Fish Market in Seattle. Maybe before Steve goes forward with subpoenas, he should read this article, "Learn from the Fishmonger." He might just learn how to have loyal dedicated employees without a rule of fear. Of course learning from others isn't exactly an Apple strength.

Thursday, March 10, 2005

The Apple Challenge

I am glad the Mercury News decided to stand up for bloggers in their editorial, "Yes, they're still journalists." Most people are surprised that a company which has such a shining public image would go after bloggers. Of course Apple has a history of secrecy and certainly hasn't shown any openess in years. Perhaps the shining public image is only skin deep.

The real problem with the suit is that Apple is trying to solve an internal problem by going after external people. For some reason Apple employees are willing to leak information about unannounced products. I think there is very little evidence that this has done any harm to Apple. As much as Apple wants to complain, no one has been successful at copying Apple hardware products over the years.

Of course software is another story. Microsoft was successful at copying the essence's of Apple's user interface over several years. It certainly wasn't done in secrecy and apparently was legal.

Perhaps the real way for Apple to fix the problem is to create an employee environment that cares more about adhering to the internal Apple dictates for secrecy than for throwing a little fresh meat to their fans. With nearly $5B in the bank, Apple should be able to have a lot of very happy employees.

Apple is a strange company, it has the most loyal customers in the world, but it lives in fear that the slightest slip will cost them their customers. Actually just the opposite is true, if Apple were to open up to potential customers it would have more customers. Somehow I don't think that is going to happen.

The secrecy-driven reality distortion zone has been going on for so long that Apple doesn't know how to get out the cycle or understand the benefits of doing business any other way. At the same time there is a Linux freight train headed down Apple's tracks. I don't think Apple understands the Linux threat or the challenge that it faces in the computer part of its business. What they are doing to the bloggers, may just confirm many people's opinion of Apple, "Love the products, hate the company." It certainly isn't going to help their 2% market share.

For more insight on Apple, check out my "Apple Peels" blog.