• Newsletter Issue #484

    March 8th, 2009

    THIS WEEK’S TECH NIGHT OWL LIVE RADIO UPDATE

    As I mention later in this issue, I’ve been on AOL for 20 years. To many of you that’s probably 20 years too long, but maybe you’ll sing a different tune after you read my commentary, or at least you’ll understand my particular point of view.

    In any case, on this week’s episode of The Tech Night Owl LIVE, we brought back AOL’s Mac product manager, Lee Givens, who offered a history of the development of AIM, which began in 1994, and then introduced version 2.0 for the iPhone. Maybe you hadn’t heard, but the original iPhone version of AIM was cobbled together by an AOL developer who had never previously developed for any Apple platform in just two weeks. This was just in time to be displayed at a special Apple presentation, where they originally introduced the iPhone SDK.

    In another segment on the show, TidBITS writer Doug McLean, a newcomer to the show, profiled the recently released Safari 4.0 beta and discussed Apple’s recent iMac refresh.

    Macworld’s Jim Dalrymple presented even more information about Apple’s new product announcements, and also delivered an update on the status of the album he and his band, Full Throttle, are currently recording. We hope to have a sample track from that forthcoming musical production in the very near future, assuming everything goes according to schedule.

    On The Paracast this week, master UFO curmudgeon Don Ecker returns to talk about the state of the UFO field in his uniquely blunt fashion.

    Now available! The Official Paracast T-Shirt. We’re taking orders direct from our new Official Paracast Store, where you can place your order and pay with a major credit card or PayPal. The shirts come in white, 100% cotton, and feature The Paracast logo on the front. The rear emblem states: “Separating Signal From Noise.” You can get them for $14.95, each, plus shipping, and you can select from most popular sizes.

    YOU CAN’T COMPARE A MAC AND PC BY PRICE ALONE!

    When the media grabs on to something, even if it’s a false concept, you just know they’ll never let it go. Take those frequent claims that Macs are “premium priced” compared to the PC.

    In recent years, I’ve said over and over again that the Mac and the PC are priced in roughly the same ballpark so long as both are identically equipped, as much as possible, in terms of hardware and software. On the high-end of the scale, moreover, a Mac Pro — in reality a workstation more than a personal computer — is usually priced far less than the equivalent product from a mainstream maker such as Dell.

    I realize my claims have rules and exceptions, and so you might be able to find areas where Apple simply can’t or won’t compete. But let me nonetheless put my cards on the table so you know where I’m coming from before you voice the same old arguments.

    When I say “identically equipped,” it doesn’t just mean having the same processor, RAM complement and hard drive capacity. We have to take the comparisons a whole lot further for them to be accurate. Moreover, I am not talking about a home-built PC, since there is no possible equivalent from Apple.

    So you’d want to make sure, for example, that both products have gigabit Ethernet, a decent number of USB 2.0 ports, and FireWire 800, which is now present on all computers from Apple except the unibody MacBook.

    However, that’s only part of the picture.

    Unlike all the other PC makers out there, Apple is a company that builds the entire widget, and that includes the operating system and most of the bundled software. Competitors need to go to third parties for those products, starting with Microsoft for the operating system and perhaps a few of the accompanying applications. But they may have to seek out other sources for the rest.

    In order to keep the costs low, it’s very common for the PC maker to preload a cheaper version of Windows with their boxes. At best, you’ll get Vista Home Premium, and the upgrade to Ultimate — assuming it’s offered — can set you back another $100 or so. In some cases, it’s not offered.

    Compare that to Mac OS X, which ships in one client version, with all features present and accounted for. More to the point saying that you may not need some of the features isn’t relevant. This sort of comparison requires matching the features as closely as possible. If you begin to pick and choose what you need and what you don’t need, it all goes out the window simply because Apple may not allow you to ditch certain items to keep the comparisons accurate. Indeed, you may not even be able to add things to the Windows PC to bring it up to the same standard, but you do the best you can.

    I tried this sort of comparison with a Dell All-In-One, and found that they didn’t offer Vista Ultimate on the most expensive model available at that time. But it still ended up more expensive than the iMac unless it was stripped down to eliminate all sorts of matching features.

    If you choose to protest the methodology, the argument is over and it will never be settled.

    Here’s the main point: When you rate the Mac against the similarly-equipped Windows box, you will often be shocked to find that the price difference, despite what you’ve been led to believe, is relatively slight in almost every case. Sometimes the Mac will be cheaper, sometimes not, but not to a significant degree.

    When it comes to the high end of the ledger, the Mac Pro is often far less expensive than a Dell Precision Workstation, that company’s closest equivalent model.

    I once mentioned this state of affairs to someone in Dell, a product management person, and they admitted it to be true. They also gave me the excuse that they were looking into it. But that’s where it stood. The situation never changed.

    Now it’s also true that Apple has decided that the best way for them to prosper, in a down or up economy, is not to play in the lowest end of computer or smartphone marketplace. The iPod is an exception, since, at $49 for the basic shuffle, I doubt you can find a competing product that’s actually cheaper and still usable.

    Both Steve Jobs and Tim Cook have said it. Apple won’t build what they regard as “junk,” and that means entering segments where they’d be forced to compete with lots of players, name and otherwise, for meager or non-existent profits with crippled products that won’t truly serve the needs of most potential customers. That is, unless they just can’t afford anything better.

    It would seem to me that the PC makers benefit by allowing the illusion of an “Apple Tax” to persist, and the members of the media that continue to spread the same misinformation are only serving the interests of those companies.

    I suppose you could also argue that Apple would be well served to cut prices and sacrifice short-term profits for longer-term gains in market share. The fact of the matter is that you actually can get discounts on Apple products, particularly from third parties. If you do, though, you can then go to an Apple Store with proof of the lower price and they’ll match or beat it it up to a 10% discount. They aren’t quite as rigid as you think.

    More to the point, I don’t see the lazy members of the media changing their fictional interpretations of Apple’s pricing policies any time soon. Just consider how long it took for some of them to remove the word “beleaguered” from their stories about Apple.

    TWENTY YEARS ON AOL

    In the fall of 1989, I was trying to figure out how I was going to pay a $125 monthly bill from CompuServe, the king of the online world in those days. The answer came in my snail mailbox, in the form of a floppy disk from a fledgling service known as America Online (later referred to strictly as AOL).

    For the charter rate of a “mere” $4.00 per hour, I could get access to their entire service, so I decided to take my chances.

    At the start, I appreciated the friendly, graphical interface that was almost Mac-like, but it took a few years before the landscape became well-populated with members and active discussion forums. Indeed, I began to rack up the hours on AOL too by participating actively in those forums, but before things got out of hand, one of their executives took pity on me and granted me some free hours.

    Eventually, I became a forum moderator (or forum leader) with a free account and, later on, even a small monthly paycheck. Those were the days.

    AOL became greedier, and decided that the Windows market had far more potential, so they began to neglect their Mac users. First, the service’s proprietary Mac software was updated less often and ultimately had fewer features, even though we paid the same price as our PC counterparts.

    In the mid-1990s, they survived the threat of MSN from Microsoft, and that was perhaps the first evidence that the Redmond Gorilla wasn’t quite as unstoppable as many believed, although it took a number of years for their failures to spread into other areas, such as music players.

    Some time after my area of AOL was “discontinued,” and I lost my paid position, they managed to run up their stock price sufficiently during the dot-com boom to snag Time Warner in a regrettable merger. It took a few years, and a plunging price on Wall Street, before the folks at Time Warner realized they’d been had and they began to reassert themselves.

    Today, AOL, though still around, has shed most of its paid online members, other than a few million stalwarts that maybe don’t realize there is a real Internet out there and broadband access.

    AOL’s marketing plan these days is to receive all or most of its income from ad sales, but that doesn’t mean they refuse to take the monthly fees from the remaining users of their fading online service. They are also charging a modest $2.99 for an ad-free version of AIM 2.0 for the iPhone. If you opt for the free edition, you have to put up with occasional pop-up screens with various promotions of one sort or another, but they are less obtrusive than on the desktop versions of AIM.

    Of course, there are free alternatives, including Apple’s iChat, which allow you to access the AIM network without paying a fee or enduring ads.

    In my case, I still retain my AOL membership, though it’s a press account. I do not wish to give up the cherished single name moniker I claimed in the early 1990s, and, besides, the current management, typified by Mac product manager Lee Givens, has demonstrated a renewed loyalty to the computing platform that make them prosperous all those years ago.

    THE FINAL WORD

    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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    4 Responses to “Newsletter Issue #484”

    1. e says:

      The memories….
      I was a beta tester for AppleLink Personal Edition, a joint venture between Apple and Quantum computers. It was set up in 1986 or 1987 to be a consumer version of AppleLink (a developer dial up service managed by GE) for Apple // owners — I still have my AppleLink PE t-shirt!!
      I remember well the days when they added Mac users (oh, the horror) and then, god forbid, Windows users as they changed their name to America Online!
      I kept my account until the late 90s, even though I was getting on line via cable modem at that point and never going to AOL (back then, AOL had no free email). Once I gave up people emailing me at my AOL email, there was no point in keeping it going.
      Oh well. AOL, it was just yesterday when….

    2. Joe S says:

      Do you remember a program named Microphone?

    3. Joe S wrote:

      Do you remember a program named Microphone?

      I used it, yes. I may even have one of their T-shirts here somewhere.

      Peace,
      Gene

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