• Newsletter Issue #441

    May 11th, 2008


    Why would anyone want to build their own Mac — or PC for that matter? Well, I suppose it’s all about the satisfaction of a job well done, in the same fashion you feel good after building a book case in your garage. Of course, when it comes to a personal computer, it’s more a matter of assembling prebuilt parts that are readily available for any of hundreds of PC parts outlets, rather than doing everything from scratch.

    I can tell you I wouldn’t bother nowadays, but, as someone who once assembled radio kits as a teenager rather than go out and pursue sports-related activities with the rest of the kids in the neighborhood, I understand the mindset. Once upon a time, I might have done the very same thing.

    Well, on this week’s episode of The Tech Night Owl LIVE, Macworld Senior Editor Rob Griffiths detailed his “FrankenMac” project, where he built a Mac clone from off-the-shelf parts that can run Mac OS X Leopard. Now Rob is an old hand at putting PCs together, and while assembly quality was, well, passable, the end result worked just fine, even with Mac OS X.

    Fortunately, nobody from Apple complained about Rob’s blatant disregard for their end user license, and I don’t expect they will. But a certain PC maker in Florida is living on borrowed time, and I am firmly convinced Apple’s legal eagles are readying the papers that will put their little venture on the ropes.

    In a special segment of “The David Biedny Zone,” our Special Correspondent reminisced about the tenth anniversary of the iMac, and wondered whether it makes sense for Apple to produce a mid-range desktop without a display. As I said on several occasions, I had extended face time with the original iMac in the months before its release, as a member of Apple’s former Customer Quality Feedback program.

    And AOL is back, with new Mac software now available to access the service. We presented an update on what’s happening with that embattled company from Lee Givens, Product Manager for AOL Desktop for the Mac.

    Moving to another front, on The Paracast this week, we’ll feature a skeptical point of view for a change. In this case, a responsible, but skeptical approach to the paranormal from investigator Derek Bartholomaus, from The Independent Investigations Group. During this session, Derek will detail his long-term investigations into the Billy Meier case and other research.


    Although this conversation probably never took place, I can well believe the scene is playing out as if it did.

    One day, Steve Jobs and Google CEO Eric Schmidt, who sits on Apple’s Board of Directors, were having lunch and talking shop. In one of those fated eureka moments, they both devised a strategy that would, over time, consign Microsoft to irrelevance.

    Apple’s part of this grand scheme includes those cute little Mac versus PC ads, where the PC is a slightly paunchy, overweight corporate type who suffers the slings and arrows of Windows and never quite comprehends the folly of his ways. The Mac, portrayed as young, hip and perhaps a little full of himself, tolerates the PC’s foibles with a bemused expression.

    The message isn’t lost on customers, who are deserting the Windows platform in droves, with the numbers growing larger every single year. Where Microsoft experienced a flattening of Windows sales — which they attribute to growing piracy in the Third World rather than confront the real reason — Apple continues to flourish. If you can believe the figures, some 50% of the folks who buy Macs at one of Apple’s own retail outlets are new to the platform. That’s a figure, by the way, which has sustained itself for several years, as Mac sales continue to soar.

    So Microsoft continues to experience a steady erosion of its once insurmountable operating system dominance. While it’s not a stampede by any means, the handwriting does appear to be on the wall.

    Sure, Microsoft doesn’t always lose a sale when someone buys a Mac. A number of you buy get a copy of Windows to run with Boot Camp, or under virtualization with Parallels Desktop or VMWare Fusion. And Microsoft appears to be selling a fair amount of copies of Office for the Mac, though I’m skeptical that the 2008 version is doing quite as well as previous versions.

    However, Microsoft has not yet signaled any intention of abandoning the Mac, despite the threat from the renewed platform wars. So far the sale of more Macs is largely a positive development for them, because it means more Windows and Office licenses sold at full retail, rather than at sharply-reduced OEM prices. Microsoft also did a good thing for their bottom line when they licensed ActiveSync, used to connect to Exchange email servers, for the iPhone. That will surely help keep costly Exchange license sales at a good clip.

    Except for one thing, and that is the rumor that Apple might enhance .Mac to incorporate push email and online calendar syncing that will allow both Mac and Windows users to enjoy the very same capabilities. In other words, .Mac may soon become a direct competitor to Exchange.

    Google is doing its share to confound Microsoft. Search and click ads are only part of the picture.

    Then there’s Gmail, a superior free solution to the eternally challenged Hotmail service. Even better, Gmail offers larger mailboxes, IMAP and other features that are unavailable with Hotmail, even as an extra-cost option. What’s more, if you’re inundated with spam, you’ll find Gmail’s filtering system to be far more robust than almost any system on the planet, at any price, whether it involves hardware or software.

    Building upon that base, Google next delivered Google Apps, which includes Gmail, a free Office software suite, and other features that provide the very same cloud computing environment that Microsoft is touting as part of its future. However, Google is doing it now, and it’s quite well done, thank you, even if the apps that compete with Microsoft Office don’t offer most of the advanced features of the latter.

    What they do offer is great collaborative capabilities, which allow multiple users to log onto an account at the same time and work on the very same documents. I suppose that can become somewhat confusing, although it does seem that Google has managed to sort things out.

    Just recently, Google leveraged the Postini email and Web security technology it acquired some time back to deliver something known as Web Security for Enterprise. The expanded capabilities help provide safer work environments for corporate customers.

    Now you can get the basic Google Apps setup free, but the commercial versions, starting at $50 for annual subscriptions per user, include uptime guarantees, phone support and other enhancements, including the new Postini-derived capabilities. Indeed, all of our email, except for the newsletter, which originates from our Web servers, are handled via Google Apps. And we like it fine.

    So how is Microsoft to react to these developments?

    Well, right now, they continue to cooperate with Apple, although their efforts to acquire Yahoo in a bid to better compete with Google failed miserably. Or at least so far. There are unconfirmed reports that the Redmond gorilla might give it another go in the future if Yahoo’s turnaround plans don’t bear fruit.

    I suppose it’s possible that Microsoft might some day prefer to abandon Office for the Mac, particularly if the Windows erosion persists at an accelerated rate. But then they’d find themselves between a rock and a hard place, without doubt confronting the continued wrath and risking more fines from the regulators at the European Union. That’s definitely not a good thing.

    Worse, if the Democrats take control of the White House in 2009, is it possible that the U.S. Department of Justice might begin to consider more stringent examinations of Microsoft’s actions.

    All in all, Microsoft is walking a tightrope here. As far as Apple is concerned, for now they will have to groan and bear it. Google’s competition is more difficult to deal with. It does seem to me that Microsoft hasn’t a clue what to do next with Yahoo out of the picture, other than to rebrand existing products under new names under the illusion that they are delivering something new, rather than just yesterday’s technology with a different label.

    In the long run, Microsoft will likely survive and remain a serious competitor. But that have already seen the top of the mountain, and the long slide downward may prove to be unstoppable.


    Maybe it’s a mistake, or maybe Apple is officially telegraphing the forthcoming availability of the first major upgrade to the iPhone. But as I write this article, the iPhone is listed as “Currently Unavailable” at Apple’s online store. That is in sharp contrast to the usual “Ships in xx Days” that would appear if they were simply low on stock.

    So does that mean you should rush out and try to find an available iPhone at your local Apple retail store or AT&T factory branch as soon as you can before it’s too late? Or does it make more sense to just sit back and wait for the situation to clarify itself?

    Unless you truly need an iPhone right here and now, my suggestion would simply be to wait and see if things suddenly change in a few days, and then make your decision. It’s not that there is anything particularly wrong with iPhone 1.0. After all, it has been an incredible success, and it’s sent other wireless phone makers scrambling to deliver their inevitable imitations, in the same fashion as we had all those purported “iPod killers” before everyone realized the iPod was unbeatable.

    The next iPhone’s basic layout is no doubt preordained. Apple has a winner, and no reason to tamper with a proven formula just yet, though they’ve done that before with the iPod nano. Instead, expect the promised 3G support and perhaps true GPS capabilities as well, rather than a triangulation method using cell towers.

    The only fly in the ointment here is that these two features threaten to seriously drain battery life, even if the new chipsets are more power efficient. Apple’s solution may be to employ newer lithium ion battery technologies, or just try to miniaturize parts further to add space for a larger power cell within the same confines.

    I don’t think that most iPhone users would settle for shorter battery life. Right now, it’s pretty decent, although it could be better. I’d personally be disappointed if it got worse.

    At the same time, nothing would stop Apple from making some cosmetic changes to the case design, to provide a superior illusion that version 2.0 is new and different.

    I also want to remind you that it’s very possible AT&T will exact a higher monthly data fee if you upgrade from their Edge network to 3G. That’s because of the greater data throughput, plus the possible higher bandwidth that will be consumed by the typical iPhone user. But I’m just taking a wait and see attitude about that.

    Aside from speedier Internet access and navigation capabilities, the new and the old iPhones will essentially share all the other features, courtesy of the version 2.0 firmware that’s due out late in June. I can’t wait to see what sort of killer apps thousands of developers are working on as we speak. My personal needs are modest, though. A true AIM client would be nice, and AOL has already told listeners to The Tech Night Owl LIVE that they hope to deliver that solution soon, since it was presented during Apple’s original rollout of the iPhone SDK.

    Obviously I don’t need concern myself about Exchange support, and I await news of the app lineup to see what other possibilities present themselves.

    It would also be nice to be able to do simple editing on a document, and having true cut, copy and paste functions would also be useful. Enhancements to the touch screen to provide better feedback when typing will probably depend on upgraded circuitry that could appear on the new iPhones but wouldn’t be supported on the original model.

    The real question, though, is whether I’d actually buy one. For now, the answer is no. I suppose I could pass off my existing iPhone to my son, Grayson, but I like it fine as it is, and I have more important things to do with my hard-earned dollars.


    The Tech Night Owl Newsletter is a weekly information service of Making The Impossible, Inc.

    Publisher/Editor: Gene Steinberg
    Managing Editor: Grayson Steinberg
    Marketing and Public Relations: Barbara Kaplan
    Worldwide Licensing and Marketing: Sharon Jarvis

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    9 Responses to “Newsletter Issue #441”

    1. dana Sutton says:

      The only thing possibly wrong about your prognostications, Gene, is that you write “Microsoft” where maybe you might better be writing “Microsoft under its current management.” Steve Balmer looks more and more like the Gil Amelio of the MS world. Under his leadership MS is a blind, stumbling giant, its software products are getting progressively more mediocre and as soon as you get out of the software area, MS’s other enterprises are pathetic, colossal money-losers. Balmer’s clumsy failure to acquire Yahoo has done much to discredit him personally. Well, okay, my purpose isn’t to write a personal diatribe against the guy. It’s simply to point out that Balmer and the rest of Microsoft’s present leadership can always be replaced, and I wouldn’t rule out the possibility that new and smarter management could turn things around. Look what happened with Apple. So I wouldn’t be in too much of a hurry to write an obituary for MS.

    2. The only way that could happen would be for Microsoft’s stockholders and directors to want to make that sort of change at the time. I’m surprised we’re not seeing any revolts. Even then, it would take years to turn the huge battleship around, by which time their market share will have eroded perhaps dangerously.


    3. Lino Positano says:

      No Dana, because the analogy between the deposition of Mr. Blowhard at MS and and his replacement by any new talent, on the one hand, and Jobs reappearing at Apple to depose Gil Amelio, on the other, does hold up to scrutiny. Why? Because Jobs’ return to Apple would be most closely analogous to Gates’ return to MS, but the latter’s return will likely not occur (He said as much) and, if he did, he could bring himself to kill off his very own disparate babies — Frankenstein-like as they are — to simplify the product line unlike Jobs who easily enough killed off the babies, probably because they did not hold his DNA.

      Besides willingness, there is also the issue of ability; Neither Gates nor anyone else, for that matter, would likely be able to intellectually, psychologically, and bureaucratically reign-in on all the disparation currently metastesizing at MS.

      Gates will likely not be able retake control of his former ship that is currently spinnakering out of control and then, like Jobs at Apple, pare down MS to its essentials because MS has no essentials; Its stock in trade, its sine qua nons, is to be all things to all IS engineers, reflected by its unfocused, splayed astrological chart.

      Apple never had this and never seemed to be. Also, Apple’s mission is the opposite: to appeal to quality rather than to MS’s quantity.

      So you can see Dana, there is no one available that has Job’s forte and vision to pop right into the guts of MS to ruthlessly save itself from itself.

      God, Jobs did such a superb job at culling the chaff from Apple that he or his vision surely could be used to do the same at the Bush administration’s bloated, disparate, and tanking foreign and domestic policies. Continue to “Support the troops” by waving the flag and adhering bumper stickers, but impeach George “Dubya” Bush.

    4. Grizzly says:

      Apple doesn’t mean shit in the industry. It’s just a fashion and hype phenomenon.
      Gooqle on the other Hand is a much bigger opponent, at least online.
      Even if Microsoft was selling shit people must still buy it bundled with their computers.
      They make money with bloated software and that sells hardware, so it’s a win win situation.

      The only challenge can come from Open Source, have you never heard from Firefox, OpenOffice, Gimp, Ubuntu, Fedora ?
      That’s what is the future of computing.

    5. MichaelT says:

      Lino and Gene, there is still a possibility of Dana’s scenario coming to pass. Two things are important to remember: Steve Jobs didn’t come back a year after he left, and Microsoft is not dead yet.

      Microsoft is still earning money (despite its consumer-oriented efforts to lose big bucks). Vista and Office are still cash cows. It will take some time for that flow of income to completely die away.

      And Lino, the point you made about Jobs cutting the money-losing sectors that didn’t have his DNA shows that Gates would have to be gone long enough for NEW junk (that he was not involved in developing or approving) to entirely clog the engine of Microsoft before he could come back and save it.

      I don’t believe that will happen either, mainly because I don’t think Gates is a visionary, but it’s possible he’ll be called on at some time in the future to bail out the beleaguered Microsoft. 😀

    6. Gates was never a visionary. He was always a sales person, pushing current products that sort of existed and future products that sometimes never arrived.


    7. Lino Positano says:

      Michael and Gene, yes, my analogy weakens a bit if strictly adhered and you support it by several of your points.

      The consensus of the recent articles — including and especially the excellent ones by Gene — on the state of MS seems to be that MS has too much cash to waste for the likely long period of its decline in the area of influence, quality of badly designed products, but not vision, as Gene correctly asserts.

      Ha ha ha Michael, at the smiley next to the word “beleaguered,” a word that used to be associated with Apple in the late ’90s. Thank God that that period is over and now all seems to be well at Apple in the area of vision, products, and support.

      Yes, Gates would have to be gone until “his” products die out and new ones not of his own emerge from MS for him to have the emotional fortitude to kill them off, if indeed at some time in the future this would be needed to fortify MS, but this too is unlikely since Gates would kill off money losers, not necessarily any products not of his DNA, if there even are any products that are of his creation.

      While Gates could indeed come back, he is too old for the Young Turks now coding at MS. He has aged himself on many levels by putting out bad products and sidewinding and swindling the owners of companies he forced into his fold and then ate them up. His image is like the Image of Dorian Gray, the worse he behaves, the older-looking he gets. He wore himself out. He is done. Now he just sits on his couch watching Jerry Springer while continuing to promote Windows via his Gates Foundation, the whole point behind it, and also a way to expiate his many MS sins, and an ultimately futile attempt to divert our attention away from his countless errors that he perpetrated during his many years.

      Jobs was different; He left more energized and returned with the energy of an adolescent to mold a new more prosperous company, and, of course, he succeeded to astound and astonish Gates. Gates is deflated and dessicated and with a paucity of ideas. This is apparent from his track record. No way that he has the energy and the vision to remake MS.

    8. dana Sutton says:

      When I suggested that MS could still be rescued by a management change, I didn’t mean a new CEO who is a creative visionary like Jobs. No chance in the world of that. I’d settle for reasonably competent corporate manager with a realistic concept of what MS can and cannot do. Nor was I thinking of a return of Gates. Gates and Balmer in fact think far too much alike and have the same managerial style. Except that Gates has a lot more presentable personality and comes across better on interview shows and so forth, there really isn’t much to choose between them, they both make the same mistakes. No, all that MS really needs is a CEO who would pull out of all the money-losing side enterprises, avoid the kind of blatant overaggressiveness that generates so much bad publicity (and keeps attracting the attention of the Feds and the EU) and let the cash cows go on doing their thing with a minimum of fuss and bother. Focus the company’s entire attention on the core activity that really matters to MS’s future, putting out an OS that works reasonably well. With that, they survive. Without it, they don’t. That would be enough to keep MS profitable for a long time to come, and keep the stockholders happy (and, like Gene, I’m surprised Balmer isn’t facing a stockholder rebellion).

    9. Lino Positano says:

      Dana and Gene, so a person who could effectively replace Balmer would have to have more smarts than Emilio but would not necessarily have Gate’s smarts? Ahhh, that sounds like Carly Fiorina, except she is a Rightwinger. Bush’s two pre-presidential business failures have proven that a Rightwing businessperson may not have the smarts to advance a company and, of course a country. Where is a good Leftwinger who loves Window and is a good manger? *S*

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