| | February 2, 1999: Apple plans to lay off factory workers on three continents, as iMac production gets handed over to a Korean firm with a mediocre reputation and ongoing labor problems. Meanwhile, Apple's increased its advertising budget, yet we still seem to see fewer Apple commercials than we should, and "Redmond Justice" heats up for Sweeps Month with a little tampering of evidence... | | |
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Pink Slips & Gold Stars (2/2/99)
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It seems like those rumored Cork, Ireland layoffs are official-- Apple PR rep Rhona Hamilton has commented on the situation and confirms that there will be layoffs, but states that the situation isn't as dire as many predicted. According to MacCentral, the layoffs come as a result of Apple's "ongoing Worldwide Operations strategy" but Apple plans to lay off only about "50 regular employees" and an unspecified number of temporary employees at the Cork plant. The thing is, the pink slips don't end there-- Apple's plan to outsource iMac production to a third-party company means that jobs will be cut at all of their plants, not just the Cork one.
For example, the Sacramento Bee reports that Apple's Elk Grove plant will suffer a "stunning reversal of fortune" as Apple moves iMac production to South Korean manufacturing firm LG Electronics. About 350 jobs will be cut in Elk Grove-- 300 temporary workers and between 25 and 50 permanent positions; apparently, a similar fate will befall Apple's Singapore plant. It seems that all the workers that Apple added to ramp up iMac production are now being let go-- but that seems to be the nature of the business. Apple notes that having LG Electronics build iMacs will reduce shipping and inventory costs, which could mean that the base price of an iMac will continue to head south to compete with super-cheap Wintel PC's. And speaking of heading south, is there any truth to the rumor that most of the iMacs will be produced in LG's Mexican plant, as Elk Grove workers claim they were told? Hamilton "had no information about that," though she doesn't deny that LG has a plant in Mexico. (Did Ross Perot just wander through here, muttering under his breath about a "giant sucking sound?")
Incidentally, some faithful AtAT viewers wrote in with a couple of interesting facts about LG Electronics. First of all, Russell Maggio notes that "LG" stands for "Lucky Goldstar," which is the new name chosen by the former Korean brand "Goldstar" in order to get away from their reputation for "fairly mediocre" televisions, VCR's, and other consumer electronic devices. Only time will tell if farming out iMac production will change the iMac from "inexpensive" to "cheap." And Shane Burgess mentions that LG is currently merging with Hyundai, and the South Korean LG workers are on strike due to fear of layoffs. That oughta keep things interesting, no? Just one more exciting chapter in the ongoing iMac story...
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Deep Pockets, Big Spender (2/2/99)
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After watching them spend over $3 million on a single sixty-second commercial during the Super Bowl-- their first Big Game ad in fourteen years-- few people would doubt that Apple's being a little more "casual" about its advertising expenditures these days. But have you wondered just how much more Apple is spending on ads these days? According to Insanely Great Mac, Apple spent almost $62 million on television, magazine, and outdoor advertising campaigns during the third quarter. That's up 71.8 percent from the same quarter in the previous year, and it makes Apple the fifth biggest spender among computer companies when it comes to shelling out cash for advertising. Sounds like a marked improvement to us.
On the other hand, when it comes to commercials, Apple seems to have far less media saturation than other companies in the top five. Take Microsoft, for example: sure, they spent more than twice as much as Apple on advertising during the quarter, but we get the sense that we must have seen Microsoft commercials at least five times as often as we saw Apple ones. And you can't sit through a single TV commercial break without seeing an IBM commercial these days; sure, they spent a whopping $208 million, but the proportions still seem a little out of whack. Perhaps IBM and Microsoft funnel most of their funds into television advertising, whereas Apple spreads their money out more into magazine ads and billboards?
Whatever the reason, we find it a little frustrating. Apple's finally got a lot of great commercials, but they aren't the easiest ones to catch on the tube. Consider this: Gateway spent about the same amount on advertising as Apple did in Q3. We know we see Gateway commercials a lot more often than we see Apple commercials. So what's up with that?
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Sweeps Month Scandal (2/2/99)
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Ah, February-- one of those glorious months known to TV lovers everywhere as Sweeps Month, when the airwaves are thick with extra doses of sex, violence, scandal, and all things wicked and ratings-building. It makes us glad to be alive, truly. And if you thought that everyone's favorite antitrust courtroom drama is above injecting some base elements for the sake of a little Sweeps spice, you perhaps ought to reconsider. That's right; "Redmond Justice" is starting out Sweeps Month with a bang, as government mouthpiece David Boies stops just a hair short of accusing Microsoft veep Jim Allchin of falsifying evidence. Just watch them sparks fly!
According to Inter@ctive Week Online, Microsoft has introduced as evidence a videotaped demonstration that proves that Internet Explorer is an inseparable part of Windows, and not just a separate application. The videotape reveals that when IE was "removed" from Windows 98 by running a program written by government witness Edward Felten, Windows still functioned, but it was two to seven times slower when accessing the Windows update service over the Internet. Sounds like a good piece of evidence for Microsoft-- but Boies spotted a clue that something was rotten in Redmond. Felten's "de-IE'd" Windows 98 browser is simply titled "Windows 98," while the browser window shown in the videotape is titled "Internet Explorer." (All together, now: Gasp!)
"You do understand that you came in here and you swore that this was accurate?" asked Eagle-Eye Boies, pointing out the discrepency. Allchin hurriedly claimed that "they filmed the wrong system" or "probably filmed it several times and they probably grabbed the wrong tape." A likely story. Wait, listen, what's that sound? Why, we do believe its the sound of the last of Microsoft's credibility crumbling into dust. See? For those of you who thought "Redmond Justice" had grown stale and uninteresting, this just proves that they still have a few tricks up their sleeves.
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