• Newsletter Issue #858

    May 9th, 2016


    There’s something about branding. If done properly, it can have a tremendous impact on a company or product’s success. In fact, over the years, product names have become verbs. I grew up thinking that I was consuming Jello rather than gelatin desert. My mom would refer to her refrigerator as a Frigidaire regardless of who made it. It was that well known, at least in the early-to-mid-1900s, according to the Wikipedia history of the company.

    In recent years, digital music players of whatever brand were frequently referred to as iPods, and the iPhone is, to some, a verb for a smartphone rather than one company’s product.

    On the other hand, when you hear the term “personal computer,” you’ll probably consider that a label for a PC running Windows rather than a Mac, despite the fact that the Mac is technically a personal computer. Indeed, many of the components you find in Macs are generic parts that might be found in other PCs, such as the processors from Intel.

    Well, Apple wants you to learn the correct scheme with which to refer to one of their gadgets. So you must regard this brands as proper names. Thus it’s not “The iPhone,” but “iPhone.” It’s not “an Apple Watch” but “Apple Watch.”

    You get the picture.

    As readers and listeners know, I have stubbornly refuse to follow such guidelines in mentioning those products. I do not want to be sucked in to using any company’s market speak.

    Now on this weekend’s episode of  The Tech Night Owl LIVE, blogger and podcaster Kirk McElhearn, also known as Macworld’s “iTunes Guy,” talked about Apple’s peculiar standards for mentioning their products. The discussion moved to Apple’s product refreshes, and whether they are just too tame to convince some people to upgrade. With the iPhone SE selling for $50 less than its predecessor, the iPhone 5s, is Apple considering setting lower prices for other iPhones too when new models arrive this fall?

    You also heard from commentator Bryan Chaffin, co-founder and co-publisher of The Mac Observer, who talked at length about Apple’s financials, and how Wall Street sets expectations (correct or otherwise) for a company. We also discussed rumors of major fixes to Apple Music, and ongoing speculation about whether Apple will actually build a car. Bryan explained why he feels it would be wrong for Apple to buy an existing car company, such as Tesla, because Apple never buys “income” in making acquisitions. There was also be a brief discussion about Apple’s plans to introduce paid search in the App Store.

    On this week’s episode of our other radio show, The Paracast: Gene and guest co-host Greg Bishop, host of “Radio Misterioso,” present Erica Lukes, a UFO researcher who has been passionate about UFOs, abductions and the paranormal for her entire life. After a series of personal UFO sightings in 2013, Erica felt compelled to find out what was taking place in Utah. She took a more active role and joined MUFON, becoming a MUFON Field Investigator and then State Director for MUFON in Utah. Erica worked as an Associate Producer for the MUFON Communications team and was also part of the MUFON Experiencer Research Team. She is currently head of the Utah UFO Research Project, an organization dedicated to scientifically researching UAP.


    As many of you regular readers know full well, there has long been an overemphasis on Apple’s real or perceived flaws. Why do this when they can do that instead? Why can’t Apple be more like other companies? Why is Apple acting too much like other companies? Wait! Isn’t that just a little contradictory? It should be one or the other, except for being a bit of both.

    In any case, it’s easy to find people who will happily rant about what Apple could or should do, and why it’s making a huge mistake not to do thus and so.

    Take the early days of the Mac, where Apple tried to carve its own space against Microsoft and the traditional PC. Many of the original complaints were about Macs using a pretty graphical interface, and the PC using a text-based interface, usually MS-DOS. Thus came the theory that real computers were supposed to be difficult to operate. If you believed in simplicity, you weren’t a real computer user. You were using a toy.

    In short, you could only get serious work done on a PC. It didn’t matter that desktop publishing had its origins on a Mac, where people were generating professional quality documents using QuarkXPress or, to a lesser extent at the time, PageMaker. At a time where Adobe InDesign, PageMaker’s successor, is now the preferred app for desktop publishing, it may be hard to realize that it wasn’t always thus.

    Once Microsoft more-or-less perfected Windows — or at least made it possible to exist in a graphical user environment that was similar to the Mac — it was pretty hard to contend that Macs were toys. After all, some of the same apps appeared on both platforms, doing the same chores within two user interfaces that had more than a passing resemblance to one another.

    Over the years, it has been common practice to assert that Apple needed to license the Mac OS. Follow the Windows methodology, and let any company sell computers using the Mac OS. Forgotten then, and now, was the fact that Apple has always been a hardware company, with the operating system meant to add value. Yes, Apple sold operating system upgrades over the years, but it wasn’t meant as a primary income producer. Microsoft, however, was essentially a software company and thus made most of its revenue from Windows, Office and other products.

    Unfortunately, Apple’s leadership fell for this fallacy in the mid-1990s and licensed the Mac OS, actually Mac OS 7, to a small number of companies. In turn, these companies basically took cheap PC cases and put Mac parts in them, such as a PowerPC processor. They ran Mac OS 7.x, and thus, for all intents and purposes, if you could tolerate something butt ugly, they were Macs.

    Rather than expand the market, the cloners went after Apple’s core customers. This was particularly true of Power Computing, an aggressive startup that followed the Dell model of emphasizing online sales at relatively cheap prices. I had several of them over the years. As hostile as some Macs were when it came to upgrades, a Power box could be worse, with sharp edges around the chassis that, more than a few times, caused cuts and scrapes.

    But they ran pretty much the same as any Mac. They were cheaper, and Power Computing would sometimes get first digs on a new PowerPC processor before they were available in sufficient quantities for Apple to use them.

    Perhaps desperate to grow the market, Apple wrote a bad deal. In addition to paying a flat fee for each license, there was supposedly a starting royalty of  $50 for each computer sold. Apple lost sales to the cloners for obvious reasons, since they sold similar hardware for less. Power Computing went after Apple almost with a vengeance with their hard-core marketing. They’d have elaborate exhibits at Macworld Expos, and were generous about delivering free gear on extended loan (meaning you could keep them) to the tech media.

    When Steve Jobs took over in 1997 as Apple’s iCEO, he realized cloning was a bad deal, and moved to shut it down. The license was for Mac OS 7, so it was mostly a matter of changing the name, and some interface elements, to Mac OS 8 to close out most of the cloners.

    Power protested publicly, taking on the posture of being the aggrieved party fighting for its right to exist. Apple finally bought them out for $100 million, and Power’s online ordering system is said to be the basis for Apple’s online store.

    To this very day, some still suggest Apple needs to license the operating system, even though it’s now given away free of charge. Each lost sale, therefore, means a lot to Apple, so it doesn’t make a lick of sense. Sure, you can make an unofficial Mac clone, which some call a “Hackintosh.” Just go online and you’ll find detailed instructions and lists of the hardware that will ensure the most compatible experience.

    While Apple will take legal steps against a manufacturer for attempting to sell computers with OS X installed, they won’t go after the individual customer engaging in a do-it-yourself project. It may save you some money, at the risk of having a computer for which there is no official support. You do it at your own risk.

    But there is a long list of what Apple should be doing to grow revenue. The most common suggestion is just to cut prices, the better to get customers who just cannot afford expensive smartphones, tablets or computers.

    Apple clearly wants to grow volume and revenue, but not at the expense of profits. While there is some strategic price cutting — such as the recent $50 price cut for the entry-level Apple Watch — the price reductions tend to be modest. The lower profits may actually be made up in higher volumes which, in turn, make components a little cheaper and thus restore the margins.

    There are certainly legitimate things Apple can do to build more reliable gear, and reduce software glitches. The end result might even be higher sales. But it’s not reasonable to contend that Apple knows nothing about marketing, or extracting maximum profits from the sales. Indeed, many of the people who are touting cheap iPhones, iPads and Macs often praise companies that earn little or no profits. Talk about a bizarro approach.

    I’m sure the gentle reader can produce a long list of Apple’s faults, the things that need to change. But being imperfect, as we all are, doesn’t mean Apple doesn’t know what it’s doing. The company’s success over the years was definitely not a fluke.


    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
    Sales and Marketing: Andy Schopick
    Worldwide Licensing: Sharon Jarvis

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    2 Responses to “Newsletter Issue #858”

    1. DaveD says:

      For those of us who braved the trials and tribulations of the early Mac OS X years and experienced troublesome releases, we could understand the predicament that Apple was in. A beleaguered company losing money and a need to get up to speed with new products. We (there were not many back then when compared to today) stood by Apple paying for new Mac OS X and Macs. Apple took us though the almost seamlessly transition to an x86 platform and from 32-bit to 64-bit. Which at the time I thought that OS X was at a mature point. The length between Mac OS X upgrades had expanded to over two years.

      Was there a real need to put OS X back on a yearly cycle? One could understand this for iOS. I would think that iOS is also near the mature point.

      My hope for Apple is to go back to being laser-focused. Don’t arbitrarily change user interfaces and making it less effective or tripping up long time users. Apple’s App Reboots are better than what were replaced and have polish. New and old features work after a new OS is installed. Either fewer software bugs or releases, I vote for fewer releases with long quality testing.

    2. gray says:

      All true but you should also note that the PowerComputing built fast machines when Apple had a design culture that featured “under speccing”. Never shipping with enough RAM and lagging in processor upgrades.

      Now the OS has feature reduction in every iteration and the hardware seems to be less with less. Smaller thinner . . . slower.

      Why not ship an expandable/upgradable mini or a “fatboy” laptop with 24 hour battery and a desktop level processor. Lots of us would buy those before getting a macbook.

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