| | July 29, 1999: AOL and Microsoft duke it out over instant messaging technologies, as Apple joins the fray. Meanwhile, while a Power Mac "speed bump" failed to materialize, Intel readies still-faster processors, and Compaq feels the hurt even as Apple continues to rise from its own ashes... | | |
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A New Fray To Follow (7/29/99)
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Quick-- say Microsoft and AOL are locked in a mortal struggle of Good vs. Evil: whose side are you on? You're having trouble figuring out which side is Good, aren't you? And yet, that's the way this crazy world works, sometimes-- hence the phrase "lesser of two evils." Not that AOL or Microsoft are necessarily evil, per se. Whether or not you think so depends entirely on your perspective, knowledge of the companies, and personal experience with them. Let's just say there's no love lost between either company and the AtAT staff, and we'll leave it at that, especially seeing as how Apple's currently (publicly) buddy-buddy with both companies. It's that whole "strange bedfellows" thing.
See, we don't know whether or not you've been following the latest battle between AOL and Microsoft, but it started when MSN Messenger issued forth from Redmond about a week ago. MSN Messenger is basically Microsoft's answer to AOL Instant Messenger; it seems whenever someone has a hot technology that catches on (QuickTime, Netscape Navigator), Microsoft manages to slap together a copy (Video For Windows, Internet Explorer). The problem arose when it became apparent that MSN Messenger was compatible with AOL's product, and actually accessed AOL's servers. AOL had what is commonly termed a "hissy fit" and reconfigured their own servers to deny access from MSN Messenger. Microsoft countered by tweaking MSN Messenger to get around the blockade; AOL changed things again to block MSN Messenger; etc. And we were all treated to the intensely entertaining sight of Microsoft publicly berating AOL for being anticompetitive and asking them to embrace open standards in the field of instant messaging. It's all great fun.
As faithful viewer LeRoy Whitfield notes, that's all backdrop to Apple's latest press release, which otherwise would appear to be coming from somewhere left of left field. Apparently Apple has come down squarely on AOL's side in this battle, without explicitly stating so; the announcement just vaguely states that Apple and AOL will collaborate on software that will allow Mac users "seamless" instant messaging that's compatible with AOL's architecture. To us, this elicits nothing more than a sarcastic "big whoop," since there's already a Mac version of Instant Messenger; the real news implied there is that Apple is now AOL's ally in this latest battle with Microsoft. You can read more about all this in a CNET article, which includes links to other articles about the past week's carnage. And things are probably only going to get bloodier before this is all resolved. Aren't you excited?
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Speed Bump, Brick Wall (7/29/99)
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So Thursday came and went, with nary a Power Mac speed bump in sight. Evidently MacInTouch was right to pull their original news item, which stated that on Thursday the whole desktop G3 line would receive processor clock speed increases of 100 MHz across the board. If it had been true, that would have brought the current highest-end chip-- the 450 MHz speed demon-- down to the lowest-end system, while raising the bar on the fastest machines to a blistering 550 MHz. That would have been nice, because it would have brought Apple clock speed parity with Wintel manufacturers in the Megahertz Race. (Well, for a few days, anyway; longtime faithful viewer Russell Maggio notes that 600 MHz Pentium IIIs will ship this Monday, as reported in an Electronic Buyer's News article. So much for catching up.)
Anyway, it didn't happen, which means that Apple gets to fight its usual uphill marketing battle; it's easy to advertise something that's faster in raw numbers, because while not everyone reads and understands benchmarks even when they're displayed in USA Today-style 3D bar graphs, even the dimmest bulb can see that 600 is bigger than 450. If you're doubting that dim bulbs buy high-end computers, you haven't spent enough time hanging around in CompUSA or Best Buy-- but the argument applies for the "consumer-level" Intel chips, too: the 500 MHz Celeron debuts on Monday as well, which will only exacerbate the problem of consumers seeing that the iMac has "only" a 333 MHz chip. Bytemarks are one thing, but we suspect that nothing's as visceral to the average computer buying experience as raw clock speed. (Except, perhaps, for a killer industrial design and a choice of translucent colors...) And how do you quantify "ease of use?" Certainly not in any way that reduces to a three-digit number featured prominently in every catalog, Sunday circular, TV commercial, etc.
Regardless, Apple's been doing okay for quite a while now with systems that lag in the Megahertz Race, so we're not particularly worried. It's just that right now Apple's got something like 12% of the retail market by selling computers that look "slower" than the competition, while costing hundreds of dollars more. That's quite a feat. Now imagine what kind of market share Apple could start grabbing from new buyers if those three little digits before the "MHz" indicated that the Mac was as fast as the cheaper but uglier Wintel systems. We drool just thinking about it. But it could be a long, long time before that ever happens, so in the meantime, we'll just content ourselves with waiting for faster pro Macs; those shadowy "unnamed sources with contacts within Apple" wrote in to indicate that Apple just dropped employee prices on the current Power Mac G3s, so there probably is a speed bump coming in the near future.
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That Karma Wheel (7/29/99)
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Only a couple of years ago, nearly everyone had written Apple off as irrelevant, dying, or dead. We were witnesses to the stark horror of massive layoffs, quarter after quarter of huge losses, mediocre products, the cutting of promising projects, market share spiralling ever downward-- in short, it wasn't very pleasant. Many of us had to come to terms with the very real possibility that there was no longer a place for Apple in a world where, say, Compaq was king. And we remember what we told everyone who said to us that Apple would be gone in two years: we're not the type of people who gamble, but that's a bet we'd take. (No one took us up on it, which is why we're not rolling in dough today.)
See, we were betting on two things, really-- the loyalty of the Mac user base, and the fact that two years in the computer business is a freakin' eternity in which anything can happen, and usually does. As you all know, Apple didn't die, and things are looking rosier for the company now than they have in many, many years. And conversely, Compaq, who looked unstoppable a few years back, looks to be in a bit of financial trouble; a CNET article notes that the company not only just announced a quarterly loss of $184 million, but they're also planning to cut about 8,000 jobs and shut down some plants. And those job cuts and closings mean that the company's next quarter might wind up looking like some kind of Dantesque circle of hell for big business, due to what might be a $1 billion restructuring charge. Granted, Compaq's probably unlikely to let things get as out of control as Apple did, and we're not predicting their imminent demise or anything, but we still consider it a clear illustration of how quickly things can change.
One thing we'll say about Apple's near-death experience: hopefully they're aware of the crucial part played by the Macintosh faithful. Hopefully they'll continue to build great products for us to buy, to use, and to fall in love with, and hopefully they'll nurture and respect our loyalty instead of treating it as something they're entitled to, instead of something they earn. Because if they do all that, the future's pretty much unbounded, wouldn't you say?
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