Can't donate to charity?
Volunteer computer time
or Support SETI!
R&D Sponsorship Center
Fonts.com
September 1997

Home Page
Feature Archive
A&I Column Archive
Production Tools
State Marketing Data
US Marketing Data
World Marketing
Classifieds
Service Directory
Quality Assurance
3D Printing


Subscribe to Advertising & Marketing Review!
Contact Ken Custer at 303-277-9840.


On the Fate of Apple


by Glen Emerson Morris

Popular Columns
The Cost of Creativity
When bright ideas cost too much.
Desktop Manufacturing
Hits the Home Market

Someday print any object you need.
Saving Motion, Time & Your Business
Motion time studies can save you money.
A Gold Mine of Data Goes Online
The Statistical Abstract is now online, 1300+ data tables in Excel format, free.
A Process for Quality
How a formal process can improve quality.
Recommended Columns
The Greening of Expectations
It's not a fad, it's critical to our survival.
The Learning Curve to Prosperity
Buckminster Fuller predicted the resource crunch now hitting us. He also gave us the tools to deal with it.

The recent changes at Apple, including the highly publicized departure of Gil Amelio, the return (somewhat) of Steve Jobs, the Microsoft deal, and the continuing loses, all indicate that a fundamentally different Apple is emerging. With thousands of businesses in the media and advertising industries dependent on the Mac for creating print, radio, and video ads, and now putting them on the Internet, what will happen to Apple now is worth considering.

Apple has always been a bit schizophrenic, and understanding exactly why is helpful in evaluating its future. Apple promised technology that would empower ordinary people to overcome the monolithic corporate establishment, yet it was financed and controlled by some of the most conservative megapowers in the business world. This is why the Apple engineers went out of their way to make the easiest to use, most useful computer in the world, and the Apple marketing department went out of their way to make sure most people could never afford one. When Khrushchev said that capitalists would sell people the rope to hang themselves with, he was basically correct, but it was clear he had never priced the rope.

Apples schizophrenia began when it was founded. Contrary to popular belief, Apple Computer was founded by three people, not just the widely known duo of Steve Jobs and Steve Wozniak. The third co-founder was Mike Markkula, who arranged the financing that created the corporate entity of "Apple Computer," and has been the real power behind the scenes ever since, at least until now. What began as a three way partnership of engineering (Woz), marketing (Jobs) and corporate funding (Markulla), soon became a one man show. By 1985, both Jobs and Woziniak were gone and control of Apple was solely in the hands of the President, and the board of directors that appointed him, headed by Mike Markkula.

Markkula was always the principle powerbroker at Apple, determining who would be president and when they would leave, and he also shaped Apple's board of directors. It was Markkula's influence that brought representatives of major corporate names like Rockefeller Venture Capital, Dupont, and National Semiconductor to Apples board. These board members supported the main policies that determined Apples market share; the high prices, and lack of clones.

Of all of the recent events, the resignation of Mike Markkula from the board of directors is the most promising. Now Apple has at least an opportunity to make some fundamental changes, like reasonably priced innovative technology, and a broad and generous licensing policy to attract clone manufacturers. If Apple makes the right choices it can recover, but that's only one of several possible outcomes.

In a worst case scenario, in which Apple goes the way of Eastern and Pan American, the advertising and media industries will have to switch to the Windows platform. Ten years ago that would have been a problem, now it's manageable. Over the past few years Adobe has been bringing the Windows platform up to parity with the Mac platform, helped by a number of ex-Apple engineers. Adobe now derives 51% or more of it's revenue from Windows products. Once PageMaker, Illustrator, and Photoshop were Mac only products, now they're available in Windows version, too. However, a quick demise for Apple is not a likely scenario. With over 20 million Macs currently in use, a buyout would be much more likely.

A slightly better scenario involves Apple being bought by another corporation, which at least allows the Mac OS to die gracefully over a few years, as some of its features are rolled into someone else's product. For instance, Sony buys Apple to get an interface for its video tape recorders so most people will at last be able to program them. (Possible slogan: a VCR for the rest of us!) If Apple's stock fell low enough, it might be attractive to Sun or IBM. Apple's acquisition by another company would mark the time to switch to Windows.

A more likely bad case scenario is that Apple manages to hang on in a small vertical niche, like digital video production or Website development, but loses the critical mass to ever be a major force in the industry again. This would allow business as usual for the advertising & marketing industries for several more years, maybe more.

A mid-range scenario has Apple hanging on, periodically ranging from 3% to 9% of the market. Every two or three years, when the numbers dip, the press will run another flurry of "Apple is Dying" stories, followed by a year or two of largely unreported modest gains. This is essentially business as usual.

A positive scenario, which is actually possible for the first time, is that Apple and the clone manufacturers rebound with a 15% to 30% share of the market. For a 30% share Apple would have to do a lot of things right, but it's possible. Most people and businesses upgrade their computer systems about every three years, giving Apple plenty of opportunity to entice them to switch. Given sound management and vision, Apple could easily have 20% to 30% of the computer market in three years.

It will be difficult to tell which direction Apple is headed until a new CEO is named and his policies become clear, but it is reasonable to assume that in all but the most unlikely outcomes, the advertising and marketing industries will be able to continue using their Macs. Another year or two of bad decisions on Apple's part may change that, but Apple has never managed to be that consistent. As long as Apple is an independent company, selling systems reasonably competitive with the Wintel platform, Apple should remain the platform of choice for the media and advertising industries.

Copyright 1994 - 2010 by Glen Emerson Morris All Rights Reserved

' keywords: Internet advertising, Internet marketing, business, advertising, Internet, marketing. For more advertising and marketing help, news, resources and information visit our Home Page.


Back to top

Economic Indicators
Census 2010
Census Bureau
BEA   NTIA
Health   Labor
Commerce Dept.
More...



It's Time to Let
A Robot
Make Your Sales Pitch!
Support
Roy the Robot
Funded by Kickstarter