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Apple's reels as clone maker plans Wintel Machine.
NYT Syndicate is at it again (still).

By:David K. Every
©Copyright 1999


Article (7/1/97) - by Tom Bemis
http://nytsyn.com:80/live/Latest/182_070197_164200_8662.html

The article is another perfect example of spinning facts to match your predefined conclusions.

CUPERTINO, Calif. -- Apple Computer Inc. shares fell to their lowest level in more than 11 years Tuesday after a maker of Macintosh-compatible computers said it plans to make machines using Microsoft Corp. software and Intel Corp. chips.

Interesting -- but is there any relationship between the two events? Of course Apples stock bounced back the next day (by 5%), and they had already been running at near their lowest level in 11 years. So the little down spike in the day was not that significant a news event -- just a lame excuse for more misinformation and Apple bashing.

Actually the blow may have been caused because the press also reported that Steve Jobs sold all his Apple stock -- and that was driving the stock down (even though Jobs has little to do with Apples decisions, and that report has never been proven either).

Sure the NYT and others ran articles about Power Computing "leaving", and sure that did harm Apple. But Apple is more reeling from the spin rather than the stock or supposed facts. The facts of the matter are far from the spin -- Power Computing made an IPO, and became one of the fastest growing computer companies in the history of the industry (all because of the Mac). The have completely outclassed Compaq, which was the prior rapid growth title holder. So PCC has done a great job of selling Macs, and their growth proves that people want Macs (from Apple or elsewhere). But that issue is camouflaged (or dodged) by the writing.

Power Computing revealed in their filing that they are going make some PC clones, but expect that within 5 years it will still be under 20% of their total business. Yet the articles from NYT and others had titles that said "Clone maker abandons Apple". That doesn't seem to be the case. Power Computing has stated that they are going to make a few NT boxes, pre-configured as servers, to AUGMENT (not replace) their Mac business. This is to expand the Mac business into more corporations and help the Mac, Apple and Power Computing. No where is this point addressed in most of the articles that I have seen on the issue.

Yet Apple drops under two points (less than 10%), on error filled reporting, and the press spins that as "Apple is reeling".

Power Computing Corp., the first company licensed to make clones of Apple's Macintosh personal computer line, yesterday filed to sell 3 million shares in an initial public offering to raise money in part to pay for a foray into the ``Wintel'' market.

Interesting. Peter Khang (one of the investors in PCC) started in this business by making Leading Edge -- a well known PC computer. And this rumor of PCC making PC-Clones has been known about for nearly a year now (at least since I have first heard of it) -- so it is not really news. The press has chosen to spin hard now, while PCC is under an FTC gag-rule (dealing with IPO's) and can not respond -- which is also timed with Apples corporate gag-rule having to do with complying with FTC rules and quarterly reports. Interesting timing.

To say that the Power Computing is offering the IPO to pay for its foray into "Wintel" seem disingenuous -- since PCC implies in their own documents (IPO) that it is not intended to be a large part of their business. They did this because they have grown so quickly that they want to take advantage of money that is out there, to become rich(er), to increase their Mac markets, and lastly to go into many new markets (probably mostly Mac based -- but also some server solutions).

Of course Apple itself may also go into the Intel Clone business (especially with servers) for the same reason that PCC is doing so. The perception is that NT is cool, and that IT depts. want NT servers. So Apple and PCC can offer Intel based NT servers, pre-configured with lots of Mac clients, and INCREASE their Mac sales. Which is the whole point!

``It looks like Apple's platform is a dying species,'' said Henry Voskoboynik, an analyst with ABN Amro Chicago Corp. ``Even the clone makers are turning their back on Apple,'' he said.

I would just love to know how trying to expand their own market is "turning their backs on Apple".

While we are at it, I would love to know how Apple is a dying species when the quotes of late, like this TechWeb article, express that Apples market share has been growing the last couple quarters. Of course the comment is more ludicrous because it doesn't target Apple, but instead the "Apple Platform" -- which includes all Mac Clones as well. The only reason Apple had any down-turn at all was because they opened their markets up to cloning, which have been growing at an extraordinary rate (like Power Computing themselves). So Clone makers market share growth, on top of Apple's growth as well, makes this analysts seem doubly ignorant.

But any idiot can be quoted by the press and given an impressive sounding title. Heck, I've worked for dozens of companies as a consultant -- I can make THAT sound pretty impressive, though I doubt that TRW, Rockwell, State of California or the U.S. Govt. would want me speaking for them. But it would make a great quote "David Every, who once worked for the Govt., says that, 'Henry Voskoboynik, wouldn't know a computer from a microwave oven!". Even if I did get a press quote (accordingly) it would have very little bearing on the accuracy or stupidity of the individual statements I made. <sigh> In that statement about Apple, ol' Henry Voskoboynik showed complete ignorance of the events at Apple, Power Computing, and the computer market space -- which is what this supposed analysts is supposed to know about. I would hide my head in shame, if I was him -- or be furious that Bemis took me out of context and demand an apology/retraction. Maybe ol' Henry isn't sharp enough to know how stupid he sounded.

Apple, which has lost almost $1.5 billion in the past 18 months, began licensing clone makers two years ago in an attempt to reverse the declining demand for machines using its Macintosh operating system.

But the press had been yelling at Apple to license for years. Then as soon as they do, the press crucifies Apple for losing individual market share (for a time), even though the platform market share has risen!

Apple also started the cloning process before they had declining market share -- so this claim is a little foolish. In fact, even claiming declining market share is a little extreme. Apple started with 0% market share when the Mac came out, and has spiked up and down for 13+ years now -- with all the clones and everything they are still something like 9% in the U.S. -- in a market that is growing by up to 20% per year.

While clone makers such as Power Computing have seen sales increase, Apple's market share still continued to decline.

Slight understatement. Power Computing exists as a company BECAUSE of Apple and the Mac OS. So zero sales to over 100,000 in their first year is pretty damn good. Apple market share took a temporary down-turn (as it does cyclically) both because Apple was not able to meet demands, and BECAUSE they had licensed to clones. The "platforms" market share (the term used earlier), has increased -- which is the point. Apple also makes money off of every Power Computing box sold.

Of course the biggest factor in the temporary spike down was because the press was writing tons of inaccurate Apple bashing articles (similar to this one) that claimed Apples imminent demise, and that destroyed consumer confidence -- and sales responded. Of course Apple is still around 2 years later and has actually grown and has better products than ever. Those of us who use Macs are still getting the rewards (and profits) from using a System that is more robust than Windows, and requires far less effort (and cost) to install and maintain.

In an interesting side-note, the NYT Syndicate has 6 links on every page of "news" that they send out. Home, Search, and one which is to their "Bill Gates" sub-site -- which has the head of Microsoft throwing his opinion around as news. I wonder if this is any sort of "conflict of interest"? Do you think a company (like NYT), that has many business dealings with Mr. Bill, would for some reason be biased towards his way of thinking? -- Maybe its just me.

Also interesting to note is if you go searching the NYT/Bloomberg pages, you find Mr. Bemis name on many of the Pro-MS articles, and on many of the Apple-Bashing articles. So much for objectivity in reporting.

A great reader letter -- that will probably not be published in NYT,

Letter to the Editor,

This is the first time I had responded with a complaint to an article online.

Mr. Tom Bemis's Article "Apple Reels as Clone-maker Plans 'Wintel'" demonstrated a serious lack of good journalistic practices.

The use of needless inflammatory words such as "Reels",in the articles title is sophomoric at best. More serious is the apparent lack of checking his sources and facts before proceeding with the article.

Why interview a market analyst instead of talking with the president or any official at Power Computing. I refer you to Henry Fok's interview with Mike Rosenthal and Joel Kocher, president and COO of Power Computing at http://www.macresource.com/mrp/contributions/pcc.shtml. I think you will see that the reason for the move is to sell more Mac clones not move to Wintel or turn the company's back on Apple.

The use of a NT server with Mac clients allows them to sell more Mac clones in enterprise situations. Mr.Fok's statement that they (Rosenthal and Kocher) view this move, "as another weapon to stuff down the throats of Anti-Mac MISes" doesn't sound like they think the "Apple's platform is a dying species" as Mr. Voskoboynik is quoted as saying in Mr. Bemis's article.

If Mr. Fok (a simple Mac user and consultant) could get an interview with Mr. Rosenthal and Kocher, certainly a great and objective reporter like Mr. Bemis should have had no problem.

Or did he even try? Or did he even care to try?

I believe if you put your name (NY Times) and reputation behind an article, it should be written with more journalistic standards than a posting on USENET in alt.warped.bad.journalism.

William J. Callan, Ph.D.
Director, Alabama Department of Public Health, Bureau of Clinical
Laboratories
jcallan@wsnet.com

Created: 07/17/97
Updated: 11/09/02


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