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RMM & Griffman

Business buy for millions - or billions - at a time; fanboys buy an iPod nano and screen cleaner.

Macworld posted an article on the 23 things their panel of 'experts' wants to see in OS X 10.5 Leopard. 'You don't stay on top by standing still', writes Rob Griffiths in the preamble. The panel of 'experts' is otherwise comprised of Christopher Breen, Jason Snell, Jim Dalrymple, and Philip Michaels.

A forum discussion ensued, and on page 7 'RMM', a former system analyst with IBM and DEC, entered the foray.

First and foremost, I want bulletproof security. That may mean some steps back in order to take steps forward. Unix (i.e., the underlying FreeBSD Unix before it got tweaked into Darwin) has that kind of security. If Apple is to be anything but an irrelevant niche player, then having a robust, secure operating system is the key to success.

I don't like Spotlight. Its predecessor worked just fine. Perhaps it could be brought back in some form as an alternative.

Boot Camp is either a sad alternative to providing a virtual system, with proper and secure sandboxing, or it's a prototype which Apple has deliberately enshrouded in fog so no one could see where it was really going. A virtual environment would allow multiple OSes, with OS X always on tap. Options should be available to restrict these environments so they can't contaminate each other, or to open things up, e.g., with shared folders, processes that can communicate with each other, etc.

Eye candy and 'digital lifestyle' features don't do nearly as much for me as reliability, stability and good, clean hardware.

I wish Apple would make its next release available on any platform. Linux isn't ready for the masses, and Windows is an unmitigated disaster. Vista will probably cost more than it's worth, what with the cost of the OS, necessary upgrades (e.g., 512 MB RAM minimum), broken device drivers and applications, etc. And it will, no doubt, be thoroughly compromised 3 weeks after it hits the market. The opportunity to grow the market exists, but Apple needs to make some hard choices to move out of Microsoft's shadow.

Griffman (Rob Griffiths) was right back.

'I wish Apple would make its next release available on any platform.'

And that would be the last thing they did prior to going under...


And so was RMM.

Yeah, Rob, you're right. The model of making the operating system available on non-proprietary hardware didn't work for Microsoft, did it?

Apple needs to recognize that their principal asset is the operating system, not the hardware on which it runs. Apple is a niche player with 2-3 percent of the market, and dim prospects for more than doubling that market share if they're lucky. It's about time that Apple focused on its core strengths: its operating system, companion software, and 'designer' hardware. If there's a market for higher-priced hardware that leads the market in terms of design, then by all means, keep manufacturing it. Learn something from their earlier experience licensing the OS.

Steve Jobs left Apple (OK, he got kicked out) and formed NeXT, where they developed and abandoned hardware in favor of selling their operating system on a cross-platform basis. They were doing better as a software developer than they did as a hardware manufacturer. They might have done very well for themselves if Apple hadn't bought NeXT.

Given the current state of Apple's hardware, there's an even stronger argument for focusing on the OS. The current line of 'not-quite-laptops' is experiencing serious problems with stains, heat, noise, swollen batteries, scratched CDs, etc. I can't recommend them to anyone over leftover PPCs right now. Maybe that will change within the next 6 months.

After this Rob Griffiths launches into a long and not easily readable detour about why selling OS X to 900 million PC users doesn't make economic sense.

But Griffman's talking about a corporation - and RMM and everyone else are (thankfully) talking about the planet.

This business about being concerned for the welfare of the entire planet is not new - Radsoft and Rixstep have been on this tack for years, as has Mark Shuttleworth - but it's totally alien to the Apple Davidians. Instead of devolving into a typical fanboy discussion about - for example - the relative merits of single pane versus multi-pane windows, Griffman gets back at RMM with a 'scientific' analysis.

Microsoft has a large advantage that Apple can never have: it started selling software. Apple didn't.

[Ludicrous. Totally ludicrous. Microsoft started with BASIC for the Altair. Apple today are the only company - repeat the only company - in the broad personal computer market with hardware lock-in. The above argument is unadulterated nonsense, as Michael Dell would readily concur. Ed.]

Moving from a hardware-based business model to one based on software isn't simple. While NEXT was doing better, it only sold for $300 million, and it wasn't doing well enough to be a solo going concern. Not a very good example, overall, of how to move from hardware to software.

[No, but they made no money with hardware lock-in and at least they were making $300 million a year when they became platform independent. And $300 million is nothing to judge a company by when it's still in 'startup phase'. $300 million still represents six times what Apple made in a comparable situation - and at the time NeXT made $300 million, Apple were an estimated five months from bankruptcy. Ed.]

Consider what it would do to Apple, just looking at three product lines as represented by three machines: Consumer (iMac), Portable (MacBook Pro), and Pro (Quad G5). If those machines no longer exist (why buy them, if you can just put the OS on a $299 clone?), then here's what Apple needs to do to recover the lost profit, with some simple assumptions, and the baseline assumption that a $129 copy of OS X nets Apple maybe $80 in profit.

[Yes but Microsoft's margins are equivalent and yet Bill Gates is the richest bugger on the planet. The OS is the key that unlocks the door. It's MS Office and other products which make the big killing. Further, Apple are known for thinking in terms of not three but four hardware product lines. Bad research, Griffman. Ed.]

iMac: Assume Apple makes about $150 per unit in profit. Each iMac unit will have to be replaced by two unit sales of OS X.

[Only if Apple discontinue hardware sales. And no one suggested that. Ed.]

MacBook Pro: Assume Apple makes about $300 per unit.

[This is funny. The cost for a MacBook Pro is today between $600 and $800. Apple are notorious for having one of the highest profit margins in the industry. Ed.]

If Apple's typical product mix is 2 iMacs to every 1 MacBook Pro and Quad G5, then we're looking at moving 18 units of OS X to replace that standard mix. Doesn't necessarily sound so bad, but *who* is going to buy OS X? Certainly not the Windows users, since they have a functional OS that does what they want and runs all their software without requiring Parallels or Boot Camp to function.

[There's no explanation for this naivety. Windows people switch to anything else that's more secure because they're tired of Windows - and Microsoft. Only an Apple fanboy would be clueless here. Ed.]

They would also begin to lose their core customers - people who have traditionally bought Apple hardware clearly wouldn't do so, at least not at any sort of premium over generic hardware, since that would be more than good enough to run OS X. In very short order, hardware sales would tank.

[This would only happen if Apple quality stays at its current level: rock bottom for the entire industry for its entire history. But Griffman is missing something very important here - something fanboys always miss: the demographics involved. In the big world outside Cupertino, purchasers are divided into two great groups: kitchen table users and corporations - and it's the corporations who hold the big money. Apple traditionally do not appeal to corporations because of their mindset but even more because of their insistence on hardware lock-in. And what people use at work they most often use at home. Ed.]

Note that I am *not* saying this is impossible. But as I stated in my much shorter reply, it's the last thing they'd do as Apple.

[Yes, but this is the Davidian crisis, isn't it? Ed.]

They could, of course, turn into a highly profitable very small player in the operating system market... but then again, that's not the Apple that all of its customers have known for 25 years.

[This gives - and feeds on - the illusion that Apple customers (fanboys) are the same 15 million or so users the company had 25 years ago, which is ludicrous. And as Jack Quattlebaum of Apple marketing said, 'it's not the legacy users that are interesting - it's the switchers from Linux and Windows' - and that's just common sense. The fanboy logic layer is 15 million; the total number of PC users is close to one billion. Jobs is known to not try to rock the boat in Cupertino too much - there are just as many fanboys inside the walls as outside them - and these people still live in their pipe dream, but that does not mean it makes good economic sense. The market itself is proof enough of that. Ed.]

RMM is back again.

Note that I said before that I have no objection to Apple's continuing to manufacture 'designer hardware' which would appeal to its traditional base and those who put a premium on quality (currently missing) and style.

Also, I don't have any problem seeing Apple selling a cleaned up, strongly secure (think: Unix) operating system in sufficient quantities to meet your criterion of selling 18 units to replace the standard mix. If OS X, particularly on 'native' Macs, can run Windows in a virtual environment, then the sales pitch is 'buy a Mac and enjoy life with security, and oh, by the way, those Windows apps that haven't been ported to the Mac can be run in a nice, safe sandbox where viruses and spyware won't put your system out of business.' All the good things Macs can do plus all the necessary things that Windows users have to have plus security, which Windows doesn't provide and won't.

Of course, this would mean concocting advertising campaigns that stressed the concept of relevance, something that Apple is notorious for not doing. Almost every Apple advertising campaign has been just... annoying. I've bought Apple in spite of their advertising, never because of it.

And as for cost? Vista is going to send costs through the roof due to its hardware requirements, the need to upgrade software, the need to pay technically qualified people to get everything working again (driver updates, etc.). As likely as not, people will be faced with replacing their systems to gain Vista's 'benefits.' And Vista isn't really going to be much of an improvement in terms of security. the same thing will happen to it as happened with XP Service Pack 2: about 3 weeks after it's released, it will be totally compromised.

Back to my earlier premise that OS X should step back to a secure Unix foundation, and being able to advertise that the Mac, or more specifically, OS X provides a level of security that Windows can't should make those sales targets attainable. And having that assertion be totally true.

Both RMM and Griffman seem to be ostensibly talking about OS X 10.5 but they're not. Griffman's been enthusiastic about a new feature packed version of an OS that still has warts galore and commits operating system crimes left and right - it's better business to ignore the faults and concentrate on building consumer (fanboy) hysteria.

But RMM's gripe is obvious and more far-reaching. The issue is not about a corporation: any market dependent on a single corporation is not a good market. Look at Microsoft.

RMM is not really talking about what Griffman and his panel of 'experts' are talking about. RMM could buy Apple hardware and/or software if it were good enough and did the job for his clients. But he's going to switch to other brands if the products do not measure up because people have jobs to get done - 'business is the usual'.

Business might be anathema to Apple marketing, but business has money and new age hippies queueing outside an Apple store in batik shirts and Birkenstocks do not. Business buy for millions - or billions - at a time; fanboys buy an iPod nano and screen cleaner.

And many fanboys - especially now what with hardware production moved to Chinese sweatshops with non-existent quality control - are aware of the fact that it's the high prices for increasingly inferior products as well as the increasing selection of 'accessory' items that are keeping the company afloat by milking the same paper thin demographic instead of daring compete in the much bigger world around.

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