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ZDNET - Apple's new Nero
How a hack journalist proves ignorance with bad imagery.

By:David K. Every
©Copyright 1999


ZD NET article (7/1/97) - by Charles Cooper

The article shows how a writer can try to use imagery to hide the fact that he doesn't know what he is talking about, and spewing trash and spin, mixed with ignorance and fluff -- and those are the good parts of the article.

To show you where this articles goes awry from the facts, lets look at it in detail --

From his second floor perch at Apple Computer's pavilion, a lone product manager enjoyed an unobstructed window view of the showgoers flooding the main hall at PC Expo in New York last month. It was a welcome change from his corner of the Javits Center where it was so quiet you could hear a dime drop.

"It's been slow," he said, in what goes down as the most monumental piece of understatement since Nero said, "What fire?"

What does the "lone" product manager have to do with anything? Is he implying that there was only one product manager in the building? Or was the author trying to distort the truth and set a mood to fit his desires? I believe it was stated that 10's of thousands of visitors made it to the Apple (PowerPC) Pavilion during that show called "PC-Expo".

Many companies involved mentioned that they got exposure from a different market place, and stated that were glad they went. So it seems that those involved disagree with Mr. Coopers spin.

I am sure that it was likely slow compared to the main floor -- but so what? The point is to attract a different market, and to try to get them to open their minds. Something that the author proves is hard to do. So what if you only get attention from 10-20% of the entire show? This is a PC-Centric show, and about breaking into new markets -- not about the loss of the Mac market (which is what the author tries to imply). In the past there was even LESS of a presence by Apple or Mac developers/companies -- so this is an improvement! But I guess that wouldn't fit the spin the author is trying to create.

I would also wonder at what relationship a city burning has to do with Apple going to a trade-show? I realize that the author is trying to spin Apple's doom because they had a larger presence at a show than ever before -- but it is up to us to see the idiocy in that mixed metaphor. I do -- how about you?

If the moment had metaphorical significance, it was what it said about Apple and its management--from lonely product manager on up. Increasingly, it appears that, instead of reacting with alarm, they look down as their company is consumed before them--only to stand around and fiddle. And the damage is becoming more and more apparent: Aside from the loyal electronic legions periodically mobilized by chief evangelist Guy Kawasaki, the ranks of those who believe in Apple are dwindling.

OK. More garbage and spin, that seems unrelated to fact.

Apple has certainly been reacting to market pressure and what is going on in the industry. They have changed their OS direction, acquired a company (NeXT), cut 20% of their staff (in the last couple of years), they have opened to cloning, they are changing advertising agencies, they have changed their management (almost completely), etc., etc., ad infinitum. So to say they are standing around requires either chutzpah of indescribable levels, or a complete lack of touch with reality.

To compound the ignorance of that paragraph the writer goes on to say that everyone in abandoning Apple (and Macs) except for the Guy Kawasaki crowd. Interesting comment considering the Mac has been gaining market share (especially in the last couple quarters) -- and this is despite the continual bashing by the press (like the author). Apple still maintains the highest repurchase rate, highest customer satisfaction, and highest customer loyalty. So where is the slightest support for this ridiculous claim?!?!

And it's just not Apple's rank-and-file loyalists who are leaving the burning city.

Again -- that point was never supported or proven, and seems to be in direct contradiction with the facts.

Talented junior and middle managers are leaving in a troubling brain drain robbing Apple of its future. These are the people who aren't important enough to find their names in press releases, but the ones who work endless 15-hour days in pursuit of the next great widget.

While I am sure there are a couple of talented junior and middle managers (at Apple as well as elsewhere) I doubt they are the ones that are leaving. In fact, much of Apples problems have stemmed FROM their management -- as anyone who has been involved with the company will tell you. Many are exactly the people that got Apple into many of their problems -- and they are exactly the people that should get eliminated.

Of course they don't need to be in press releases -- welcome to America. Name the last time you saw a middle managers' name in a press release (especially if it was because he was laid off, or encouraged to leave)?

As for brain drain, this is the first time I have seen a writer so completely clueless as to imply that middle managers are the brains of the outfit -- or that they make products. They are only supposed to help communicate directions (and status) and get the resources for engineers so that the engineers can create the widgets. Not exactly the brains of the outfit. I get the feeling that the author was once a middle-manager, but was too incompetent at that and so became a second rate writer instead.

I do agree that many middle managers often work hard -- but that is not the same as working smart. I would much rather a manager put in 8 hour days, but kept his people motivated and got his work done, than have one that worked 15 hour days "in pursuit of some widget" -- and didn't get his job done. So the hours worked reference seems to be just more proof in the authors lack of understanding of Apple Computers and Engineering in general. Perhaps he should read Dilbert, as he seems to be pictured therein as the pointy headed middle manager that he is defending.

The company's long-standing agency, BBDO West, has resigned after learning that the powers that be at Apple intended to review the account and entertain competing offers from other advertising firms.

Resigned? That is an interesting word for it. Apple has been unhappy with BBDO's results for some time and quite vocal about it. Many writers (likely this one included) have bashed Apple for lousy advertising and marketing, and so Apple finally does something about it -- by "reviewing the account" (a euphemism for firing their Ad Agency) and this writer spins it that BBDO left Apple. Why? Because they wanted to give up $100 million dollars and 20% of their total business. Sure they did, and this author has a clue.

Education Access, the Apple dealership that controls over 40 percent of Apple's K-12 education business, jumped ship for partnerships with IBM and Microsoft.

Huh? Education Access just made a deal with Power Computing -- which also makes Macs. While I am sure that this is not as a great a thing for Apple as if they had kept the business, it does little to harm the Mac, and may help the platform (even if it doesn't help Apple).

I have also never heard the numbers nearly as high as 40%, but I'll pretend that the author got the numbers right for once in the article. The question is how much of that business will be lost to Apple? Apple will get a new distributor (which is all that EA is) -- and likely keep much of its business -- and the rest of the business, or possibly more, will continue to be Macs in the form of Power Computing machines. Apple also makes some money of those clones, so business lost to Power Computing is not completely lost. This doesn't seem to be nearly the big deal that it was spun to be.

PC's are making some inroads in K-12, but Bill Gates himself has said that Apple is THE market force in education and will be for quite some time. Which seems in direct contradiction to the implied spin of this author. Who knows more about MS's business? MS (Bill Gates) or this Author?

It is also interesting to note that while Windows is making some penetration in K-12, it is mostly in servers and business application (administration) and is losing market share in the curriculum side -- at least according to QED and others. But that would have taken the author a whole sentence to explain, and not fit the spin.

Then the latest insult: On Monday, Mac clone maker Power Computing plans to diversify its business and sell Wintel systems, a painfully obvious reminder that the future of computing is being decided in places other than Cupertino. Can you really blame Power Computing's founder Stephen Kahng? He's only following a strategy designed to limit risks and maximize sales.

Power Computing has stated in their IPO filing that they are only creating a few Windows Servers so that they can sell NT servers pre-bundled with Mac Clients. The idea is to offer IT organizations a single source for systems. The IPO filing states quite clearly that in 5 years they predict the ratio will be at best 20% Windows servers, and 80% Macintosh clones. Somce when is adding value to their Mac systems the same as leaving the platform (as is implied).

When a company files an IPO they have a mandatory quiet period where they can not respond to the presses stupidity -- which is coincidentally when all these really bad articles start coming out. Apple has their own 2 week gag period (right before a quarterly report) where they don't comment -- and is also when the press seems to time their really dumb articles. Complete coincidence I'm sure.

So I am still wondering how this is an insult to Apple to try to increase the penetration of Macs into business? Either Charles Cooper knows these facts and is intentionally spinning them (see lying/distorting), or he is ignorant of them and doesn't know what his own job is supposed to be -- meaning he is more incompetent than even I have given him credit for.

But you can blame those at Apple who continue to treat Mac clone makers, like Power Computing, in ways that make one wonder whether Apple's brass has their heads up their own, well, you know...

We already know that Charles hates Apple and is spinning everything as bad as possible. There is some "tough dealings" going on with licensing -- but these are complex issues that a single sentence can not do justice to. Apple is playing hard ball -- but that is what business is about. Power Computing is also playing hard and cherry-picking Apples markets. Thems' is the breaks -- though it is no surprise to me that Mr. Cooper is spinning things with innuendo and slams and won't discuss the facts.

To wit: Power Computing sub licensed the Macintosh operating system from IBM on better terms than those offered by Apple! (Not that Big Blue is motivated by philanthropic considerations: Power Computing must buy one CPU from IBM for each Mac clone it sells.)

I think that last sentence is the point. Apple has given Motorola and IBM the power to Sub-License -- to increase the licenses and markets. This is a good thing -- but is somehow attempted to be distorted into a bad thing. Of course one of the reasons that IBM CAN add value to licensing from them is by getting their profits off of the chip or motherboard sales. So the author is helping to prove that his prior sentence is no big deal at all, and irrelevant. So Apple allows sub-cloning -- where is the shock or insult that some cloners will actually use those channels that Apple has put in place?

Power's decision also makes sense in light of Apple's wrong-headed determination to squeeze licensees by keeping the ROM portion of its Common Hardware Reference Platform proprietary.

How so? In fact it makes no difference if Power Computing gets their license from Apple or IBM -- because either way they will likely have to get the ROM from Apple. That is not necessarily proprietary, but that is a separate issue. Apple has also said that ROM issues will only exist for the first generation of PPCP (not CHRP).

I also think the issue is not Apple trying to squeeze licensees (as Charles implies) -- in fact Charles has said that Apple is doomed anyway. So Apple is just trying to prevent clone makers from squeezing the life out of Apple. Apple has to do lots of R&D, and should NOT allow cloners to use that R&D without paying for it. Like I said, the issue is complex. Apple needs to make money at this, or else they should not clone.

As annoying as that is, Mac clone makers such as Power Computing have to deal with far more serious problems when they submit their machines to Apple for the required seal of approval. The deal is this: All Mac compatible systems must conform with certain quality control standards.

Is quality control a bad thing? I always thought it was a good thing.

In fact if Apple is trying to prevent the anarchy that is the PC market space. Its a tight rope walk -- Apple wants to retain some control -- but still give away lots of freedom. Sure some people are going to be unhappy with the balance at any given time, but it will fluctuate and balance out in the end. I hardly think this is a serious problem -- more a minor licensing issue. Even if Apple was completely draconian, there would still be clones, because there is LOTS OF MONEY in it!

Notice how the author avoided the issue about how Power Computing had the largest first year sales of any computer maker in history. Far blowing away the previous record held by Compaq?! All done on Macs I might add. Guess that wouldn't fit the spin. He also dodges the fact that there is a long line of other companies to make Mac clones -- and the list gets longer by the day. Instead they (those Apple Bashers) want to focus on the one that leaves, rather than the ten new companies. At least if the company was really leaving then they might have a point.

Apple presumably wants to ensure the machines are all Grade A so customers won't walk away with a bad taste in their mouths from using the Mac OS.

Yes. Good. If the author left this statement alone -- things would be fine. But noooo... he has to go on.

However, the certification process has sometimes taken on an Alice in Wonderland atmosphere. Clone makers claim Apple has raised "nontechnical issues" including one instance where Apple demanded that Power Computing renegotiate its royalty rates. Those kinds of shenanigans had there apparently intended effect, forcing Power to postpone a product introduction because Apple dragged its heels in certifying a new system.

These issues are complex. I am sure there is more than one side to the story -- and hearing a second or third hand account of "one instance" does little to impress me.

The point is that Apple is licensing and changing its business model. But then companies like Power Computing are not doing what they had agreed to do -- which is go for EXPANDING the Mac market. Instead they are often trying to cherry pick Apples customers and pirate Apples market. Look at Power Computings' Ads -- I see many in Mac Magazines, and have seen few in PC mags. That is not trying to expand the market -- however, making NT-Servers preconfigured to serve Mac Networks IS! So Power Computing is doing the best for Apple by doing something that the Author writes is an insult. Then Mr. Cooper ignores the bad that the same company does and blames Apple for everything.

So Power Computing and other clones were playing hard -- and Apple is playing hard right BACK. Welcome to business. The last thing we need is some clueless Apple-Hating writer telling Apple how to run their business -- or whining about issues that he seems to only half understand.

Why Apple treats Mac clone makers like a baby treats a diaper remains a mystery.

The claim that Apple does is silly. Apple is trying to license -- but balance the licensing with reasonable fees so it can be a win-win situation. When the licensees are cherry picking Apples' markets it is a lose-win situation (with Apple on the wrong side of the stick) -- so Apple fights back. That the great Pooper-Cooper doesn't get this is not a surprise to me.

When Gil Amelio took over as CEO from the ailing Michael Spindler, the spin out of Apple was that a Mr. Fix it was now in charge. But far from being the story of a can-do guy who turns Apple around, the ongoing soap opera is turning out to be a tragic tale of an overmatched executive who bears a disturbing resemblance to Emperor Nero.

I didn't see a single example of these claims in the entire article. So where is the support for these claims? This article and its content are unrelated -- it is like me creating an article titled "How to be a master chef and create a souffle" -- then the body of my article explaining how to use Pillsbury pre-made dough to make cookies.

I am always amazed that magazines actually publish this trash.I realize that Charles Cooper gets paid to write for PC-Week and so is biased by his own greed (and ignorance of the Mac market) -- but it still reflects amazingly poorly on ZD-Net. It also shows that the editors at ZD-NET either do not understand their jobs, or do not care. I understand deadlines and other excuses for mediocrity (or worse) -- but there can be no excuses for this type of trash journalism.


Reader Letter -

TO: Charles Cooper

Bah, humbug! Your article shows you're fairly out of touch with the Macintosh market.
 
First, Apple is not being consumed. The MacOS is the second most popular computing platform -- after the hoard of indistinguishable clones using an assortment of Microsoft operating systems and Intel chips (or clones of them).
 
MacOS market share grew 60% last year -- exclusively at the expense of the Wintel world.
And Microsoft can't convince most Windows 3.1 users to switch to Win95.
 
The damage is a perception-reality thing. The press, you included, perceives Apple as mortally wounded. (Not for the first time in their history.) The reality: Apple has billions in the bank. It has outlasted every competitor in the Wintel world, since Apple has been making PCs since 1976 -- five years before IBM and Microsoft teamed up to give us the PC.
 
I could name dozens of PC companies that have failed. Yes Apple persists and the Maclones grow in number.
 
As for BBDO West, Apple dumped them. Please get your facts straight.
 
Education Access has dropped Apple, but not the MacOS. They have teamed up with Power Computing, the #1 Maclone maker.
 
Speaking of Power Computing, did you read their press releases and letters to the public? They are not becoming a Wintel company. Realizing that more and more companies are combining MacOS stations with Windows NT servers, they are repositioning themselves to become the one-stop shop for Mac users on both Mac-only networks and Windows NT networks.
 
As for your allegation that there's something odd about Power Computing diversifying by adding Wintel products, remember:
 
- circa 1986 Dayna offered MacCharlie, the first DOS on Mac solution
 
- some of the first cards for the Macintosh SE and Mac II (April 1986) were DOS compatability cards by Orange Micro, which Apple featured in its ads
 
- Apple specifically chose high density drives that were compatible with both Mac and DOS disks
 
- Apple actively supported Insignia Software and its SoftPC and SoftWindows products, at times packaging them with Macintosh computers
 
- Apple introduced the first PC compatible-from-the-factory Mac with the Quadra 610 DOS Compatible in February 1994. (No Wintel machine to date is capable of running Mac software.)
 
- Apple has included the ability to read PC format 3.5" floppies with the OS since System 7.1
 
- There are a number of ways to run PC software on Macs via software emulation (SoftPC, SoftWindows, Virtual PC, Bluebox) or Hardware (Apple, Orange Micro, Reply).
 
In short, the Macintosh has been able to comfortably coexist with DOS and Windows for over ten years. Why shouldn't a Maclone maker take the next step and sell a Windows NT box for those who want it?
 
Agreed, Apple has not been kind to its clone licensees. Still, it lets Motorola and IBM cut separate deals, further strengthening and diversifying the MacOS market. Apple fears for its hardware market and has not yet levelled the field for Maclones.
 
Apple and the MacOS will survive and thrive, even more so if Apple leaves certification to an independent organization. (How does this compare to the Microsoft-Intel alliance and their hardware specifications?)
 
Hoping you'll be more Apple-savvy next time you write about the best computers in the world. :-)

Daniel Knight, dknight@bakerbooks.com


Created: 07/04/97
Updated: 11/09/02


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