Re: Apple

[Mitch Stone <mstone@vc.net>]

--- From a message sent by Norm on 8/4/98 12:18 PM ---
>
>     That would be a valid point if it wasn't for the fact that the
>entire platform (Apple's *plus* clones) was losing marketshare during
>that same time period.  I see no direct 'cause and effect' relationship
>that can be proven here.  I never said that the availability of clones
>didn't have a negative effect on Apple's hardware revenue, but that
>said I still don't see any evidence proving (or even close) that it was
>much of a factor in Apple's financial problems.

No, no, you overlooked what I just wrote: The MacOS market share was 
increasing, albeit slightly, during the clone times. The media simply 
failed to report it. It was Apple's hardware market share that declined 
precipitously, and this is what was reported far and wide because of its 
dramatic impact on Apple's bottom line. 

As for the financial effect, Steve Jobs claimed that Apple was losing a 
couple hundred dollars on every clone sold. I don't know exactly how he 
arrived at his numbers, but it took into account at least some of Apple's 
unrecovered R&D costs for maintaining both the OS and hardware designs.

>
>     This is like a guy making $50K/yr blaming his $20/week smoking
>habit for having to declare bankruptcy!!  Will saving the $20/week help
>him, a little, but to make it the scapegoat for his current financial
>problems would be a bit disingenuous.
>
>     I agree it's a somewhat extreme and simplistic analogy, but IMO
>the basic concept fits.  The lost hardware revenue that resulted from
>cloning was rather small compared to their overall losses, so I don't
>see how cloning can be considered the culprit.

Simply, all the evidence points to this as the cause. I'm not sure why 
this fiction persists, but some folks are convinced Apple had a winning 
strategy in cloning but abandoned it anyway for some counterintuitive or 
perverse reason known only to Steve Jobs. Why won't the fact that they 
were losing money at it hand over fist suffice? If that's not enough 
evidence, consider also the last three profitable quarters since the end 
of cloning.

But to bring this back to the subject at hand, I'd submit that Apple's 
horrific experience with cloning only goes to prove the importance of 
IBM's "gift" to the marketplace. And I will point out once again that IBM 
was nearly driven out of business by this mistake. Apple, having flirted 
with it, was very nearly bankrupted also. What more do we need to know?

   Mitch Stone
   Editor, Boycott Microsoft
   http://www.vcnet.com/bms 
 +---
   We're the leaders, wait for us! --- Microsoft motto