| | July 1, 1998: Microsoft can add another notch to its big scary belt, as another little guy gives up the ghost. Meanwhile, CompUSA's not having the best time these days, but at least you can now pre-order an iMac from them... | | |
But First, A Word From Our Sponsors |
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Little Guy Gives Up (7/1/98)
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Unfortunately, it's the premature end of another promising legal drama; Microsoft and SyNet have settled out of court for the right to use the name "Internet Explorer." SyNet's founder finally rolled over and accepted a paltry $5 million to dismiss the case and hand over his federal trademark application to Microsoft. CNET's got the goods.
What really surprises us is that SyNet's founder would have accepted only $5 million for the rights to the name. After all, his legal fees eat up $2 million right off the bat, and his business was bankrupted by the legal costs associated with the case, which has been dragging on for years. For a man who seemed so upset about Microsoft being able to steamroll the "little guy," he really changed his tune. Considering he had been granted the trademark and stood a good chance to win his case, we're quite stunned that he'd accept so little for giving up the rights to the name of one of Microsoft's most important products. (It would have cost Microsoft at least six times that amount to change the name of its browser, according to the Wall Street Journal.) Ah, well... Two years is a long time for anyone to fight Microsoft.
By the way, remember how Microsoft's big legal argument against SyNet was that "Internet Explorer" was a generic term, and therefore it could not be registered as a trademark? And that SyNet, in registering the name, was "appropriating the English language?" Well, just take a wild stab in the dark as to what Microsoft apparently plans to do with the trademark application it bought for $5 million. Yup, you guessed it-- Internet Explorer may soon become Internet Explorer®. Funny how over two years of vehement arguments dissolve overnight when suddenly Microsoft is the company applying for the trademark, hmmm? Always remember, "it's only wrong if they do it."
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Addressing the Slump (7/1/98)
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Times are tough all over; just take a gander at CompUSA's reported fourth quarter sales results, available from Infoseek. Yes, their net sales increased by 3% from the same quarter a year ago, but if you only look at the sales from stores that have been open for over a year, it seems that CompUSA's sales have declined by 8.7%. For the whole fiscal year, things were a little better: net sales up 15% overall, and up 1.7% for the stores that are over a year old, but that implies that CompUSA's sales are slacking off as time marches on. In light of these results, it's not exactly a surprise that CompUSA expects to post a loss for the quarter.
Jim Halpin, CompUSA's CEO, announced that he is "very disappointed" with his company's results, and attributed the numbers in part to Windows 98, saying that many people were waiting to buy computers until Microsoft's latest operating system finally shipped. (Now that it's out and apparently selling well, things might start to turn around.) It's also worth noting that CompUSA keeps adding stores and investing in infrastructure, which contributes to a loss in the short term, but (hopefully) sets them up for better performance in the future.
So what does this mean for Apple? By putting all of its Macs in one retailer's basket, Apple was taking a sizeable risk; reports across the country indicate that CompUSAs as a general rule still lack Mac-knowledgable sales staff. On the up side, Halpin specifically mentions the iMac as a likely first-quarter sales-booster, so he's paying at least a little attention to the potential of the Apple line. But the thing that Jim needs to get into his head (and fast) is that Macs aren't going to move unless they're advertised. Did everyone notice the complete and utter lack of Apple equipment in last Sunday's CompUSA circular? We bet selling a few more G3's could have helped CompUSA's bottom line, but until the ads surface, it's just business as usual.
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Place Your Orders (7/1/98)
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So if the iMac is a potential sales booster for CompUSA, it may the last possible salvation for Apple. Apple once had a sizeable chunk of the consumer market, but have since piddled it away by somehow thinking that the Performa line could hold its own against the onslaught of PC's with more features and lower price tags. (The fact that Macs may be easier to use typically isn't going to get most home buyers to shell out several hundred extra dollars, especially since there's no advertising saying that Macs are easier to use.) Consumer market share affects educational market share, and educational market share affects business market share, etc., so Apple's push back into the limelight must be led by the iMac. That's a huge burden for it to carry on its little translucent blue shoulders.
Luckily, people are interested. Very interested, if early reports are true. Die-hard Mac users are looking to upgrade their IIci's and LCIII's, and see the iMac a return to the simplicitly that made the original Mac great. PC users are intrigued by the iMac's distinctive look and incredible price-performance ratio. And the press talked about the iMac for weeks, and will probably talk about it again once it hits the shelves. Heck, there are at least half a dozen websites dedicated to the iMac and the product isn't even shipping yet! Though, one of those sites, iMac iNfo, reports that the iMac has just surfaced in CompUSA's ordering system, implying that it's now possible to pre-order them. iNfo's correspondent reports everything you need to know to get on the waiting list and be the first on your block to have a translucent blue pal.
The fact that the iMac SKU has just surfaced in CompUSA's system implies to us that the reports of CompUSA already having 70,000 iMac pre-orders a few weeks ago was probably completely false. That's kind of a bummer, but if you do plan to get an iMac, you can certainly trundle on down to your local CompUSA and pre-order one now. We at AtAT are holding off until we can test-drive one of the prototypes at next week's MacWorld Expo, and we'll keep you posted on our reactions.
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