TV-PGSeptember 6, 2001: Motorola issues another earnings warning and announces still more layoffs. Meanwhile, Fred Anderson reports that Apple's still looking pretty rosy-cheeked, despite the current state of the economy, and the Department of Justice (under new management) announces that it's no longer seeking a Microsoft breakup in the "Redmond Justice" case...
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From the writer/creator of AtAT, a Pandemic Dad Joke taken WAYYYYYY too far

 
Kinda Like Picking At A Scab (9/6/01)
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Here at AtAT, we don't claim to possess any actual journalistic training, know-how, or ethics (particularly ethics), but we've picked up a few things about reporting over the years by watching reruns of "Murphy Brown" and the "Scoop" Brady episode of "The Brady Bunch." For one thing, we know that "Dog Bites Man" is not news. "Man Bites Dog," on the other hand, is news. By extension, we're pretty sure that "Dog Sues Man For Veterinary Expenses" also qualifies as news, as does "Man Gnaws Judge, Faces Battery Charges." What we're not sure about is this: is "Dog Bites Man 643 Times" news? In other words, if something fairly humdrum and ordinary happens an extraordinary number of times, at what point does that become newsworthy?

We merely ask because Motorola is at it again. No, it's not going around chewing on Labradors, nice break from the status quo that might be. Instead, according to a Reuters story, the company just issued another earnings warning and plans to deal with the shortfall the only way it seems to know how. You guessed it: more layoffs. Motorola's human resources department (or what's left of it, anyway) is now hard at work cranking out yet another 2000 pink slips to be doled out by the end of the year. As far as Motorola is concerned, layoffs are like the medieval leeches of the 21st Century Tech Downturn: there's no ill that a good bleeding can't fix.

For those of you keeping count, these latest 2000 job cuts reportedly bring Motorola's total to a whopping 32,000 layoffs since the company's Scary Times™ started last year. And if all Motorola made was cell phones, frankly, we wouldn't much care; for better or for worse, however, Motorola is still the main player in the production of those G4 processors that power Apple's professional Macs, and therefore, when Motorola hurts, it's not unlikely that eventually Mac users might feel the pain. You do recall Apple's September 1999 earnings warning and resulting overnight eleven-point stock drop, right? Then perhaps you recall that Apple blamed its shortfall on "lower than planned deliveries of G4 processor chips from Motorola."

Not that history necessarily repeats, mind you, and we've certainly heard nothing about a dearth of G4s so far. But as long as Apple is largely dependent on Motorola for its high-end PowerPCs, every round of job cuts is a potential brick wall for the Mac platform. Sleep tight!

 
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Fred: No News Is Good News (9/6/01)
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Okay, so Compaq sold out to Hewlett-Packard, Gateway is on its last legs, and Motorola keeps hacking away at its headcount in a desperate bid to become profitable again. Nearly every tech company (and no small share of non-tech ones) is cancelling acquisitions, closing plants, laying off workers, selling out to bigger fish, or just plain closing its doors. Meanwhile, the stock market continues its plunge to scary new depths, which comes as little surprise amid this sort of financial turmoil. Economic prosperity? That is such a last-millennium concept.

So how's Apple faring during this extended session of economic carnage? For the answer, look no further than Fred Anderson, Apple's Chief Financial Officer (that's business-speak for "main money dude"). Fred is widely credited with being a major force in Apple's miraculous comeback from the brink of oblivion in the mid-'90s, so he is clearly a man you want in your corner during... challenging times like these. And according to MacCentral, Fred mentioned at the Salomon Smith Barney Tech2001 Conference that he has nothing new to report-- a fact which should have Apple watchers (not to mention Apple investors) heaving massive sighs of relief.

In times like this, aside from announcing that it bought the winning PowerBall ticket, the only reason Apple would open its yap about financial matters would be to issue one of those earnings warnings that's all the rage these days-- so unless you're the sort of ghoul who thrives on impending beleaguerment, no news is most definitely good news. Nonetheless, Fred did reiterate certain happy facts about Apple's financial well-being, including Apple's inventory having shrunk to under four weeks and the company's stockpile of cash having increased-- not decreased, but increased-- another $200 million this fiscal year. On top of that, Apple's earlier prediction of a retail break-even quarter in December still stands, as does the expectation of posting a "slight sequential increase in revenues and earnings per share in the September quarter." To sum up? "Apple, quite, frankly, has been a cash machine," sayeth His Fredness.

Now, you have to decide for yourselves whether Fred was speaking metaphorically or he accidentally let slip a bit of info on Apple's next consumer-oriented killer app, "iATM." Personally, we at AtAT have always felt online banking to be a bit of a dud, but if Apple has achieved the holy grail-- a method by which a customer can withdraw funds online and get cash straight out of the slot in the front of his iMac-- then we can hardly wait. Best of all, can the technology that will allow us to download a pizza be far behind?

 
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Breaking Up Is Hard To Do (9/6/01)
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Sorry, "Redmond Justice" fans; if you longed to hear the pitter-patter of little feet after Microsoft was cleft into two or more Babysofts, it may in fact be time to let the dream die. We already knew that the Appeals Court tossed out Judge Jackson's order that Microsoft be split into two organisms, not because it disagreed with Jackson's ruling that the Redmond Beast wielded monopoly power and had illegally abused that power, but because Jackson himself had been a naughty little judge and had granted interviews to the press before the case was over. The case was kicked back to a lower court to decide two issues: whether Microsoft had broken the law by tying Internet Explorer to Windows (one specific point that the Appeals Court apparently felt wasn't properly resolved), and how the company should be punished to ensure that it wouldn't break antitrust laws again.

At that point, a breakup was still possible, though perhaps less likely; if she was so inclined, the new judge (the lovely and talented Colleen Kollar-Kotelly) could still decide that Microsoft would best be broken of its years-long antitrust habits by going under the knife, organizationally speaking. Now, though, the probability of the court ordering Microsoft to be carved into bite-size chunks is positively remote. As faithful viewer Chollyhead tearfully informed us, the Department of Justice has announced that it no longer seeks to have Microsoft drawn and quartered. Instead, according to a CNNfn article, the government will seek "court-ordered changes to the way the software maker conducts business." Ah, yes... because that 1995 consent decree that arose from Microsoft's last tangle with the feds was so darned effective. Never mind that, as CNET reported so long ago, it was Microsoft's blatant violation of said consent decree that led to the current round of "Redmond Justice" in the first place. It's four years later and we're just about back to square one. Now that's progress!

As for why the government has ditched its crusade to have Microsoft split up the middle (and, incidentally, has also decided not to "pursue further proceedings on the tying count of the original complaint"), there are a couple of interpretations open to you. One is that the government is finally sick and tired of this "fast-track" case that has been dragging on in one form or another for four frickin' years (heck, Microsoft was found guilty almost a year and a half ago!) and has finally decided to plow right through Microsoft's endless stalling tactics and get the case locked down and finished ASAP-- and before the official Windows XP release date next month. Perhaps the government has come to the conclusion that a split-up Microsoft probably wouldn't work anyway, and that strict conduct restrictions will do more to prevent future antitrust infractions.

The other more cynical possibility is that, as implied by Slashdot, this decision was largely political in nature. Reportedly the DoJ was "instructed by the Bush Administration to cease its drive to break up Microsoft." Not that we didn't all see it coming, of course, but it's still disillusioning to the few of us with a teensy spark of idealism left to watch it get stomped out by Microsoft's "Let's Lobby Bush And Stall Until He's In Office" plan working exactly the way the company had hoped. But hey, we all gotta grow up sometime.

And if you're really desperate to keep the dream alive, don't forget: just because the government is no longer asking for a Microsoft breakup doesn't necessarily mean that Judge Kollar-Kotelly won't order one anyway. We just wouldn't bet the farm on it if we were you.

 
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