Fall is usually a good time for apple lovers. The crop is coming in, supplies are plentiful and prices affordable. Kids bob for apples at Halloween parties and adults indulge in gooey caramel-coated apples as snacks. Yes, fall is the season to be an apple lover.
Unless we’re talking about Apple, the computer company. August’s release of Windows 95, supply problems, news of internal strife, and most recently, the much lower-than-expected profits has made for a very, very difficult season at Apple.
Just about every computer columnist in the country has penned a few words about Apple’s lackluster performance and blitzed the company about its products and philosophy. Windows users are sticking their tongues out and saying “I told you so.”
But this is just another typical month in a another typical year at Apple.
Certainly, gross profits plunged 47 percent, from $114.7 million in 1994 to $60.1 million in the period that ended Sept. 29. But let’s not forget that any company that makes $60 million in profit in one quarter is still very healthy.
The press, in my opinion, puts far too much emphasis on financial results. Every company has times when cash-flow is tight or something didn’t quite click resulting in lower-than-expected sales. Is it the end of the world? Not usually.
And then there are internal problems at Apple. Chief Apple-picker Michael Spindler has been accused of everything from Open Transport 1.0.1’s dismal performance to being responsible for Hurricane Opal’s fury along with East Coast. This guy can’t get a break at all. Does anyone remember that he supported the PowerPC way back when? That he allowed the PPC team to simply ‘create?’ No. I’m afraid the only thing people remember about his performance is that margins slid from 20.7 percent from last year’s 27.2 percent.
This, along with news that Chief Financial Officer Joseph Graziano resigned after a tiff with Spindler and the board of directors, has made every analyst say that Apple certainly won’t be around this time next year.
Apple fans have heard this before. It’s almost like a bad a sitcom. The plots are the same, but the actors are different.
I say that because the company has been in this particular bind before and will probably revisit doomsayer-central a few more times before the end of the decade. It’s inevitable. Looking back just a few months, Apple was on top of the world with its latest announcement of Power PC-based Macintoshes. The press was aglow with praise for the innovative thinking, attractive pricing and apparent availability of the computers.
And then the sky started to fall. Apple grossly underestimated demand for the latest Power Macs, and so actually buying one turned out to be far more difficult than it should. And then performance problems sneaked up with Open Transport. And the PowerBook 5300s caught on fire. And then…well, you get the picture.
While this was happening Microsoft not-so-quietly announced Windows 95. Bill Gates and company did a great job creating an artificial need for Windows 95, and the press was there by his side touting the death of the Mac OS. Just the way it did when Windows 3.1 was introduced back in 1990.
The point I make is this: Apple’s current problems are no different than they were the last time all this happened. Poor product forecasting. Lower than expected earnings. Market share slipping. We’ve been here before and Apple has survived.
And though Apple will survive this round of attacks on its character, philosophy and products, it may suffer a bloody nose in the process. Apple can’t seem to stimulate the overall computer-buying public. Sure, they’ve convinced and graphics and publishing industry, but what about the average home computer buyer?
As I’ve said, Gates and company did a great job creating an artificial need for Windows 95. In late August, you couldn’t turn on a TV without seeing Microsoft ads. Open a magazine? You’d see an ad with that silly “Start” message. Newspapers ran stories about software stores opening early to satisfy demand.
All this for a product that only mimics the Mac ‘experience.’ Is Windows 95 superior to the Mac OS? If you listen to Microsoft it is. And a whole lot of people listen to Microsoft.
While Windows 95 is no real Mac-killer, I think the next generation product from Microsoft may be. Talk to folks who upgraded from Windows 3.1 to Windows 95. They’ll tell you amazing stories about how much more they love their computer. If upgrading is such a great experience, it will be revisted. And Microsoft weathers reports of bugs, bad products and delays by reminding everyone that its software powers 80 percent of the world’s computers. The press eats it up. Now that’s effective media control.
And this is just the beginning of the Microsoft juggernaut. Windows NT is looming in the distance and looks hungry—for both market share and computing resources. What happens if Microsoft abandons Windows 95 and moves everything to NT? KABOOM! NT becomes the world’s bestselling operating system.
Apple only dreams of such media influence. How does Apple respond to press assertions that it can’t get enough of the right product to market? By blaming its suppliers. The press do not eat it up. They've seen it too often. Apple ought to simply come clean and admit it has problems forecasting product demand, and work towards addressing the issue. Anytime your supply problems cost you $100 million in sales, something is very wrong.
But let’s look at history once again. Remember the original PowerBooks? Everyone loved the design, but the price was too high and supply was limited. The original Quadras? Compatibility issues with the ’040 cache. The Power Macs? Slowness of the emulation software. Here in 1995, it's much of the same thing.
Apple is a very healthy company trapped in a repeating cycle of hits and misses. Right now, smaller victories are being muted by much larger problems. History tells us it is only a matter of time, however, before some grand new technology is unveiled and we’ll all be happy Mac’ers again.
And then, the cycle begins anew…
 
Jim Hines explores the darker side of the Macintosh and PC culture in 'Blue Sunshine' Write to Jim at jhines@iglou.com, or simply 'Jim Hines' on America Online.
