18 Feb 99
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The story by Jon Elsen in The New York Post on ABC execs leaving NYC puts the final nail in the coffin of the Disney to buy Apple and Pixar and make Steve Jobs Disney's president. And, there are even more things signaled in that article that not even the reporter who wrote the story realizes. But, that has not reached fruition yet. But, it was intimated in the Golden Convergence 1.1 RFI Report column on MacWEEK.
We hope that all of those who were holding out hope that the rumors just might be true won't be too dejected. Apparently Mr. Eisner has an heir apparent and it's not Steve Jobs. And we don't want to be the one to break the news to him.
Working....
Contrary to what a lot of people would assume, the responses coming in on that column on MacWEEK are positive regarding the move to New York. As for those who are protesting, we can pretty much figure out which ones are reading from the "Talking Points" script of the conspirators who are trying to make it appear that there's a huge groundswell of grassroots support for keeping the expo in Boston, and even reversing the decision to go back to New York in '99.
What? There's a "Conspiracy" behind those "Talking Points" canned responses? You bet. What the conspirators don't realize is that there's a mole in their midst. Someone who actually likes the idea of Macworld Expo returning to New York, even as they appear to support the conspiracy.
If we keep getting the canned responses from those using the old, and even new, "Talking Points" we'll out the conspirators and you'll also see which Mac Centric Internet sites and others are reading from that canned script. In fact, you'll be able to recognize everyone who is part and parcel, or a supporter of that effort! Some might think it's like clubbing baby seals for sport by outing them, but when you start playing those games being discovered and outed should be considered as part of the dangers.
Are we concerned about revealing the identity of that mole? Not really. They're safe. They'll probably be just as publicly outraged that we outed the conspirators!
And, if need be we'll respond to each and every one of those talking points. Starting with the fallacious "New York isn't safe." New York is safe. Safe enough for families with small children in tow as they walk through Times Square late at night. New York is safer than it has been in decades. That's why some New Yorkers are complaining that it's "Too safe." Go figure.
Don't let any convince you that it isn't safe. And don't stay away from MWNY '99 because someone convinced you it wasn't.
In fact, Aikiko Ashley ( a New York based Mac consultant) has offered to act as a free resource to anyone who wants to know where to stay and go "economically" in The City. Can't beat the price! See? It's not "too expensive" either.
Like the MWNY '99 graphic? Someone made it up for us as a special treat. We still don't know if they want public attribution, but if they do we'll reveal their identity.
Working...
Well, work on the RFI Apple Recon Weekly Update ground to a halt when we were apprised that AppleInsider is reporting on a rumor that had been shopped around to us for months. Given the fact that we didn't comment on the rumors, report their existence or even reply to those who promulgated the "Disney+Apple+Pixar & Steve Jobs as CEO" rumors should be telling. As soon as the AppleInsider report hit the web, not only did the queries start coming in but "an extremely reliable source close to Apple" came calling and was treating it as a joke. It was "Right. The press releases are going to hit the wires at any time! Buy! Buy! Buy!" We hope you realize that they were being sarcastic over this rumor report and aren't hitting the Buy buttons.
The AppleInsider rumor report couldn't resist taking a sarcastic shot at both RFI and Apple Recon with their mention of the hybrid Disney / Apple graphics we have been using to telegraph future anticipated developments. They're being "churlish juveniles" to put it mildly ( Note: that churlish reference was deleted by MacNN/AppleInsider later in the day).
While we are expecting developments between Disney (DIS.N) and Apple (AAPL.O), it is not some complex merger deal that would require the approval of three (3), count them THREE!, sets of shareholders which would also leave Steve Jobs as Disney's president. Steve Jobs is "good, real good" but he's not "good enough" for either The Street or Disney's shareholders. If Michael Ovtiz didn't last at Disney, what makes anyone think that Steve Jobs would? That's not a slight against Mr. Jobs' talents or capabilities, it's just our opinion. And, it would be shared by many on The Street and in Hollywood. Steve Jobs suddenly becoming "The Most Feared Executive in Hollywood"? Disney Chairman Michael Eisner's heir apparent? Come on!
Furthermore, Disney is an immense entertainment conglomerate. We don't think Mr. Jobs has the experience or the desire to oversee Disney's diverse and immense holdings. Things like: Disney Studios, Disney Interactive, Theme Parks, ABC, ad infinitum ad nauseam. Toss in also overseeing both Apple and Pixar (PIXR.O), and it soon becomes ludicrous.
Do you see why we offered that advice to Mac Centric Internet sites when they started their forays into the markets? Why we said: "Kids! don't try this at home!"? Even if Robert Morgan personally floated the content of that AppleInsider report to Traders who knew him and implicitly trusted him, as soon as he was done they'd ask him if he was feeling all right. Then, they would ask him what he had been: smoking, ingesting, inhaling, snorting or rubbing into his belly button. Enough said. Back toreal work.
While we don't know if that rumor report was meant to flood our mailboxes and send the phones ringing for private comment, or whether it was planted by someone long a lot of out of the money Feb 99 Apple call options, we don't know. What we do know is that the truthfulness of that "Disney to buy Apple and Pixar and make Steve Jobs Disney's president" sure gave a lot of people some of the best belly laughs since we were sent this picture over the weekend that shows how President Clinton really feels about a lot of those on both sides of the Impeachment issue!
Also. Those "Disney and Apple" graphics were only meant to telegraph anticipated developments between Apple and Disney, not a takeover or merger. The time for that to have even be a possibility has long since passed. And while they'll stay up, we promised not to keep looking for "Hidden Mickeys," like the one in the HAL ad.
Whistling as we work!
Please stop flooding the mailboxes with requests for commentary on the Disney and Apple rumors. We will not be making any public comments on the rumor reports until after the markets are closed. Thank you for your patience.
Working....
Just for some fun, if you like Lionel Trains and would like to see some QuickTime Movies, like the Bloomie's holiday window display, then point your browser here. We're working on some other things, but this is just for fun!
Working....
Yes, the rumors are true. It's MacWorld Expo New York (MWNY) '99. Those reporting that it's not decided yet, or are trying to mount "Save MacWorld Expo Boston '99!" campaigns are wrong. Totally wrong. And yes, there are sound and strategic reasons behind the move back to New York. So, everyone might as well deal with it if they oppose the move back to New York; just as we had to deal with the move back to Boston that was announced last Summer.
If you remember, we delineated the reasons why the Expo should have stayed in New York in our report from last summer. Once we edit out some erratic characters, we'll make it publicly available so you can see that we're being consistent in our position.
Working....
If you have been sending e-mail to any of the pelagius.com e-mail addresses and have not been receiving a response, please be advised that we're aware of the problems and are working on getting them resolved. To put it kindly, the mail server is "puking" and access is sporadic. As soon as it's back in working order we'll let you know. But, once you get a reply you will know, won't you?
NOTE: Yes, we have pulled those sensitive reports off our servers and will be pulling down others in the near future.
Working...
As promised, the Golden Convergence 1.1 has been supplied. That's the last we're going to have to say publicly on the details.
On a related note, those who want to see the index of other RFI Report columns can see the index here or access it from MacWEEK's site.
Finally. We also suggest you pick up a copy of Rules For Revolutionaries.
Working....
RFI 08 Feb 99 -- Target SGI
Over the weekend, RFI was able to nail down the alleged target of Hewlett-Packard's acquisitiveness. The target is Silicon Graphics (SGI.N). Allegedly, H-P wants to acquire Silicon Graphics for its "Internet Servers," but we also suspect that it's for SGI's chip technologies that were never deployed which were supposed to toast the Alpha chips. And no, we don't know the date, the price or anything else. All we know is that SGI is the alleged target. And it's not because of their NT based solutions. They're not really viable.
Someone asked why Hewlett-Packard was in New York shopping around for a PR firm. The answer is quite simple really. For all of the talk of globalization and the salon names having presences out in Silicon Valley, New York is the financial, cultural and media capital of the world. Hewlett-Packard desires a PR firm who could get one-on-one face time with reporters and others. A stuffed Rolodex in Silicon Valley isn't as good as a breakfast, lunch or other meeting with those who could frame the coverage and opinions of the proposed deal.
If you need any further proof, just look back at Sun's attempted takeover of Apple in late '95 and early '96. Was the media battle as a negotiating tool waged in the San Francisco Chronicle and the San Jose Mercury News? No. It was waged in the pages of the Wall Street Journal and the New York Times. Why? Because the audience being addressed were those on The Street and not The Valley. The rest of the world coverage would key off what was in the WSJ and NYT. Same goes for Hewlett-Packard's play for SGI, they have to do wage the media battle in New York.
As soon as the Crudele column appeared last Thursday, we knew the clock was ticking on not only the deal but also for it getting outed. You might not have a lot of lead time with this recon report, but that's the way things happen some times.
Finally. A note to Hewlett-Packard and its potential PR firm. Lock in the Wall Street Journal as part of your media camp as soon as possible. Also try to lock in The New York Post, News.com and its Silicon City section in the NYP. These are the two papers The Street reads for markets and business news. The NYT and IBD aren't read for that. If you have any doubts, just look at the news coverage of when the NYSE was shut down for that computer glitch. CNBC reported that the traders were just standing around reading the New York Post. Photographs in the newspapers showed them sitting on the curb outside the NYSE smoking, drinking coffee and reading the New York Post. Traders (with a capital "T") buy the NYP every day lest they miss a Crudele column. What? You thought we were the only ones that did that? Note to Hewlett-Packard, lock in the WSJ and NYP. The New York Times doesn't really have relevance for business and markets. No one around here has read it, except on Sundays, for over 5 years. Why? Relevance.
Working....
In a press release, eMediaweekly announced that it would be suspending publication after its 01 Feb 99 issue. In the press release Colin Crawford, President/CEO of Mac Publishing, L.L.C. stated:
"Computer publications across the industry had a difficult year in 1998 and we have seen indications 1999 will be no easier. Although eMediaweekly, with its integrated editorial coverage of the entire digital media spectrum, launched with rave reviews from our readers, the digital publishing market isn't mature enough to sustain a newsweekly at this time.... Our goal was to serve digital media managers with the level of in-depth, ojective coverage of multi-platform products that they needed. I'm proud that eMediaweekly was the first and only publication to do that on a weekly basis."
While we'll miss eMediaweekly, there was no statement as to whether eMediaweekly will continue on as an Internet only publication. We thought you'd want to hear it from us.
Working...
See the changed logo next to the Five Flavors? Well, lest we have to tell people why we might get forced to take down the old logo, as well as what its presence meant and why it links to where it does, we decided to have some fun with a "quirk" in the design of the new G3 cases. Thanks to Jason Leif for bringing that quirk to our attention! It was a Lifesaver!
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Stay Tuned? Stay Tuned for What? You might ask. Well. Stay Tuned for the Next RFI Report installment on MacWEEK is what you should stay tuned for!
We had to re-queue the Special Report that was sent out this morning as the original queue was delayed in the ether. The second queue should be in your mailbox now.
Look for more gas cans and pyrotechnics this week! And yes, the party continues!
Working....
Will wonders never cease! We've been informed of an entirely new explanation as to the significance of that Disney Apple logo! Funny as all get out and really real too.
Partying...
Well, the FireWire QT Camcorder is out of the bag and we appreciate the comments and other feedback that's coming in. And no, that camera doesn't already exist but it's coming. Not everything was revealed, we just pulled back the curtain a little. Things will be coming out bit by bit. You see, when you leave nothing to the imagination then interest wanes. No?
As for the healthy skepticism regarding Hollywood wanting to go digital, as was outlined in that RFI Report on MacWEEK, wasn't it Steven Spielberg who reportedly expressed his desire that his next film be totally digital? All it will take is one "Name" in Hollywood to do so and the others will surely follow. Just remember what happened with Star Wars. It changed the standards almost overnight. And there are reports that there are some prototype cameras that have great resolutions hidden away in somebody's labs.
Which brings us to the "Nobody Will Use FireWire/1394" faction. They will have to be dragged kicking and screaming to use it by the consumers. All along it has been our position that the companies to watch are the Consumer Electronics (CE) companies and not the box makers. Which leads us to...
If we told everyone the real reasons behind why the box makers and others were left to deal with Apple one by one rather than having it on the motherboards -- an entirely different light would be shed on the controversy, and the previous reporting on it would be called into serious question. It's not the reporters fault really. Nor is it those who were complaining. Those who have been complaining have a right to be upset, but they shouldn't be upset at Apple.
But, we don't think any of those complaining or reporting on this will want to go near that topic at all. It's better just to continue on as before, no? If any reporter or media entity "wants to go there," just let us know. We'll be glad to cooperate, as it were. But, don't mind if we discriminate as to whom we talk to about it!
And lest you think that "Nobody Will Use FireWire/1394," consider the home automation industry. And we quote:
"Stop and consider the concept of a true 'Home Computer' - an appliance, like a refrigerator, that provides the SAN environment for the home, as well as energy management, security and other 'home automation chores' for the 'workstation/sensors' located in every room of the house. 2 years ago, there was one pretty raggy 'Home Automation' publication. Today, there are at least 4 flourishing ones. HA Pro, Popular Home Automation, Electronic House are a couple of them: www.pophome.com and www.electronichouse.com ."
And that doesn't even include the publications like Home Theater Magazine who see the digital future and it belongs to FireWire / 1394. Just don't take our word for it. It's the Consumer Electronics (CE) companies that will do it.
Gotta go. It's PARTY TIME! What? Yet another analyst got the vapors and fainted! Send them some smelling salts and our condolences! PARTY TIME!
Yes. We shouldn't be having this much fun. It's not right. Too bad!
There's one thing that Morgan doesn't truck and that's having someone try to dissuade him from authorizing the public discussion of topics, issues, etc., when he wants. In other words, he doesn't take too kindly to someone trying to pressure him. So, when someone interrupted the party we're having to tell him that "he shouldn't release that 'speculation' on ******* because they didn't want people focusing on the potential revenues from FireWire, he laughed. The Special RFI Report on MacWEEK.com that is coming as soon as this evening is Morgan's answer to that person and their entity. Disrupt the party for that? How dare they! That One-Fingered Salute is his answer....
And no, the entity "telling" him not to authorize the release was not any of the companies or entities mentioned in any of the FireWire stories, items, columns, etc. It was "someplace else, completely different."
What's that? Another analyst has gotten the vapors and fainted? Everybody! Let's Mambo!...
To be totally honest, we haven't had this much fun around here since the period just before Macworld Expo Boston '97 and last March, the period just before the "Columbus Box" story broke into the media and the markets. Yeppers. It's kind of like that time all over again.
Party time!
Not Working! Playing!
In his latest RFI Report column on MacWEEK, Morgan took a controversial stance over the protestations on the FireWire licensing issue. And while he promised a serialization of the Golden Convergence Report on MacWEEK.com, it might be delayed. Seems that someone kicked over a can of gas into a smoldering fire.....
Like the MacWEEK.com animated gif? You might miss it on the MacWEEK site, unless you look for it. We guess that MacWEEK has decided to take up the challenge for an "Analyst Death Match" and also selected Morgan's "Tag Team" partner. None other than Jason O'Grady, of O'Grady PowerPage (formerly of MacAddict Network, but don't tell them, they're still in denial over losing him!) fame, who has gotten a picture of a P1/WebMate that's pretty darn close. But, the host organization has to come up with a better name and acronym that W.W.O.D.
Yes, all of us here are having a lot of fun watching the, for the moment, private pyrotechnics display. And more are running to the scene with their own cans of gas and even more fireworks. It's becoming quite a party!
Working. And having more fun doing it than people should have! What's that? Another analyst who downgraded Apple just got the vapors and fainted? Excellent! Crank up the LeRoux and ......
This is work? Every week should be like this one!
First. The RFI Report on MacWEEK.com will be weighing in on the FireWire controversy in its next installment. And, there will be a surprise in it for some.
Since some have decided to out the details of the 2.0 iMacs just two weeks after the "Five Flavored iMacs" were unveiled, we might as well out the upcoming iMacs called "Chameleons." They are called chameleons for a reason. Apple has been working with certain resin manufacturers who have also been working on special "plasma plastics" for the U.S. military (Department of Defense). When the "Chameleon" iMacs ship sometime after the millennium (OS X Client is required), people will no longer have to worry about which colors will be popular and which won't. And yes, this is all part of Apple's "Secret Plan," as far as controlling what colors are popular and those that aren't. In fact, the nascent "Chameleon Technology" is already extant in the latest "Five Flavor iMacs." Which is why Apple isn't too concerned about controlling the inventory of colors.
You see, the "Chameleon Technology" could be called "Crayons for Adults" because the technology will utilize the "Crayons" in Mac OS to allow the owners to select which case color best complements their decor. And as they move it from room to room, or just because they are bored with the "old" color, they can also change the color of their "Chameleon" iMac. This strategy was arrived at after holding focus groups with numerous interior designers, as well as Martha Stewart.
So. You might as well not only not bother to buy those Rev. C iMacs, you might as well not bother buying the 2.0 iMacs. In fact, don't bother buying any Macs at all until the "Chameleon Technology" is deployed all across the Mac line! Why settle for a Mac that is restricted to "just one color" when you'll be able to pick and choose which color you want at any given time?
And if you believed the above, we've got some "Oceanfront Property in Arizona" we'd like to sell you for only $25,000 per acre. Same goes for some of the other reportage on upcoming Mac products.
To what are we inferring? What are we implying? Can you say "Leak Hunt" along the lines of the previously reported Leak Hunts? Thought you could. Nice try! Be very careful out there as the "MIMH" are sowing lots of dezinformatsia in order "To Catch a Leak."
Working....
Ranch Hand Robert. It's just something that's a send off of the "Ranch Hand Robert" that was mentioned in the MacWEEK RFI Report on Farmers and iMacs. We thought it was worth a smile.
As for the Disney / Apple logo? Logo? What logo? ......
Instead of wondering about what Apple and-or Disney might or might not be doing, go to Louisiana's LeRoux site and enjoy some great music. And as Morgan said on the Ranch Hand Robert page: "If you've got to ask, then.."
A lot of people contacted us about why AAPL "tanked" yesterday, and most blamed the Salomon Smith Barney downgrade as the prime reason. Well, that contributed to the decline. Unless you were only watching Apple (AAPL.O), NASDAQ did decline almost 40 points yesterday. Also, it is options expiry today which brings in other factors. The Salomon Smith Barney downgrade (which alleged channel stuffing by Apple, amongst other things) only assisted those who were trying to push the stock down below the 45 strike. There's one big problem with the basis for that downgrade -- the "channel stuffing" allegation. Apple didn't stuff the channel, but they're the ones that have to clean up the mess allegedly caused by it. Allegedly, "Somebody" ordered more iMacs than the execution of their strategy could handle. Remember all of those anecdotal reports on how Best Buy's (BBY.N) execution of their "Son of Salon Store" was terrible? That the salespeople were either clueless or even tried to steer people who were asking about iMacs towards non-Apple boxes? Those anecdotal reports were numerous. Well....
And, the number of Rev. B iMacs in the channel are nowhere near the numbers that the analyst alleges. "Five weeks of iMac inventory" would amount to what? Hundreds of thousands of iMacs? No way. The number of Rev. B iMacs in the channel that were caused by the alleged "channel stuffing" are only in the range of 60,000 - 80,000 TOTAL. And, that figure also includes the number of Rev. B iMacs in stock at the distributors. As soon as this Update is out we're going to be working on a "Special Report" regarding the alleged channel stuffing and then sending it out to RFI subscribers.
And no, we don't want to start an "Analyst Death Match" as there already is at least one in progress in relation to Apple. All we are saying is that the allegations of Apple "stuffing the channel," as well as the alleged numbers of Rev. B iMacs in the channel are vastly overblown. We'll lay out the alleged scenario (and what is being done about it), etc. in that Report.
Working....
Gotcha, didn't we? Tomorrow Apple will be posting its earnings after the markets close. Current Consensus Estimates are for Apple to post 69/70˘ Fully Diluted EPS. Our range of 66-72˘ EPS doesn't seem so crazy now does it? Especially given the fact that Consensus had Apple's Q1 earnings at 65˘ EPS when we gave our range. And RFI's statement that AAPL would be trading near 50 by the end of January doesn't sound so crazy anymore, does it?
Watch and wait. We just might have something tomorrow. Either here or on MacWEEK.com. We'll see.
Working....
Both the initial item and the follow-up that was posted on Apple Recon was not warmly received by the Mac Community, and especially the Mac Centric Internet Community. That was taken as a given. RFI expected those updates to evoke those reactions from the Mac Centric Internet Community but it's a "Kill the Messenger" response rather than considering the message.
For the record, RFI was not intimating that Mac Surfer Headline News was in the sights of MacTopia, but MacTopia, myapple.com, Sherlock, et al are a potential threat to sites such as Mac Surfer Headline News, etc. We're sorry but it's true. Just take a look at the dearth of coverage on the Mac Centric Internet sites pertaining to MacTopia. Very few Mac Centric sites reported on it. What amazes us is that even they seem to realize the potential threat of MacTopia. What's going to happen when Apple launches "myapple.com" and has similar features? Ignore it? Scream at us for issuing private and public warnings about the potential threats?
We're willing to take the flamage and ostracism on this issue but we'd rather inform the general public on this, as well as those businesses / entities who rely on Internet advertising banners to get their message out to the masses. Those businesses that advertise on Mac Centric Internet sites. RFI isn't bashing: Mac Surfer Headline News, the sites listed on it, Mac Addict Network, et al. We've been trying to warn them since July '97. Don't you think that a lot would prefer that RFI just kept its damn mouth shut and let events take their course? Probably.
RFI apologizes to anyone or any entity that we might have upset with those items. Honestly. We understand the reaction. It's kind of like the reaction you have towards your best friend when they come to tell you that your spouse / lover is being unfaithful to you. You're inclined to want to kill the messenger because the message causes pain. Never mind that even if your best friend never told you, and you later found out that they knew, that it wouldn't change what was happening one iota. Sigh. We wonder what the reaction would be if RFI released those "Future of the Internet" reports. And yes, we already know what the reaction would be -- "Apocolypse Howl."
Enough said.
It's something that we've known about for a long time but have sat on. So, we might as well "out it" so you won't miss the "Bombage" that might get lost in the noise and hear people say: "What Microsoft Bombage?" Here goes. Remember RFI stated, in its initial Microsoft Bombage report as well as the "Vast Mac Wing Conspiracy" report that Microsoft and Bill Gates would be tagged in the coming months as part and parcel of some "Vast Mac Wing Conspiracy"? Well, at the keynote today you wil be confronted with the evidence that will probably be used against Microsoft in those allegations and charges. Microsoft will be unveiling a new Mac Centric Web site called "MacTopia." The existence of it has long been known and the name is now officially confirmed. And no, RFI is not going to publicly out it before the keynote, or even before the media reports on it.
Why is it "Bombage" you might ask? Well......
If the hordes of MSN and WebTV masses have a "Preferred Mac Centric Web Site Wholly Owned by Microsoft" which one do you think they will be defaulted to? If that same site also has "preferred content sites and partners," then which sites do you think they will proceed to? Let's take it as a given that "MacTopia" also includes links to the Ziff-Davis and Mac Publishing sites as part of a "content partnership." What will that do to those Mac Centric sites that are not "preferred content partners and creators"? And what happens if "myapple.com" does the same thing as "MacTopia" and also has a "content partnership" with MacTopia? Are you starting to see the writing on the wall?
Now. Let's also take it as a given that Microsoft's "MacTopia" also has enough "goodies" and other enticements to have the Mac Faithful head there, as well as the "preferred content creators and partners" sites rather than the Mac Centric Internet sites that are currently listed on Mac Surfer Headline News or part of the Mac Addict Network? What happens then? You know what starts to happen. The major vendors and advertisers start doing "One Stop Shopping" at not only MacTopia but myapple.com and those "preferred content creators / partners." The rest are left standing outside the candy store window with their noses pressed against the glass and wondering why they aren't allowed inside. Ergo, the potential for accusations of a "Vast Mac Wing Conspiracy."
Is that "Bombage" enough for you? Or will it take the fact that MacTopia might also have links to the "Apple Consumer Store" where you can not only buy Mac hardware and software but also buy Microsoft Mac applications as well as directly from the Microsoft store? Thank you very much.
RFI stated that the Microsoft "Bombage" would be "Macworld San Francisco (MWSF) & Beyond." Anyone who takes the kneejerk reaction that it isn't bombage and "Since it's from Microsoft it's going to stink and it won't be an impact at all" better start ingesting large amounts of coffee so they will wake up. You see, RFI stated that Microsoft has been watching and waiting to see if Apple's turn around was "really real." They have been doing so since Macworld Boston '97. Not only has their $150 million investment in Apple generated some nice capital gains to date but they have also become convinced that it's "Really Real." Something that the naysaying pundits, analysts, and media members should consider. MacTopia is an endorsement of Apple's turnaround as Microsoft has apparently been commiting more money to Mac development and other efforts; and this is just one indication. And, who are we to argue with Microsoft?
As a humorous aside, isn't it interesting that soon after Microsoft bought Apple stock it stopped buying its own? Just kidding. But the coincidence is a humorous observation.
RFI Subscribers should have the Macworld San Francisco '99 Special Report in their mailboxes by the time you read this. We will be formatting it into a PDF version in the near future and make it available to subscribers. We wanted to get the report out as soon as possible. And, we wanted to make certain that you had the analysis of the "Major Bombage" that was not analyzed in the Updates from yesterday.
RFI did not want to rush out an instant analysis but we wanted to make certain that the import of the bombage was discussed in depth. And yes, it's once again "A Tale of Two Macworlds."
During the first few minutes of Mr. Jobs' keynote address, something that he said caused more than a few cases of whiplash. Since we were watching the keynote on ZDTV on Sony DSS DirectTV (Channel 273) we didn't have to worry about the vagaries of the Webcast; so we heard every word in digital clarity as will those on the Webcasts once QuickTime Streaming is available to all.
What was that potential Freudian Slip? It was when Mr. Jobs stated that they would be shipping the new G3 boxes with both Motorola and Intel chips. A "Say What?!" reaction was immediately generated. And while we're assigning it to an honest mistake, both IBM and Intel both start with an "I" you know, we also wonder whether it was either a joke about the hack of MacWEEK or a Freudian Slip as he had something else on his mind. But, we're putting it down to an honest mistake. Yet, it did give us all quite a chuckle. Now, if he said Transmeta instead of Intel then we'd really have gotten whiplash!
Another potential explanation is that Mr. Jobs appeared to be a bit under the weather if his suppressed cough was any indication. Again, that could account for the error. Yet, it did serve for more than a little levity as that sunk into people's consciousness; if they caught it at all.
Of course Apple isn't going to ship boxes; or allow others to ship Intel based OS X Server boxes; because Apple has repeatedly denied any such thing. So we all might as well get that out of our heads. Right? Just like we were supposed to get "iMacs of Many Colors" out of our heads as well. And no, we're not intimating anything at all. Nothing whatsoever.....
Pardon us for entering into the realm of both Oliver Stone and the X-Files, but is there a "Vast Mac Wing Conspiracy" out there? A "Vast Mac Wing Conspiracy" whose intent is to cull the number of Mac Centric Internet sites that currently exists? A "conspiracy" replete with the proverbial "Marlboro Smoking Man" ensuring that the conspirators desires are carried out while concealing the truth?
Or, is it all a fevered fantasy of some who believe that such a conspiracy does exist? That the real reasons behind their current and future difficulties are due to market forces as well as Apple's publicly stated desires regarding the "Mac Centric 'Publishing' Market"? RFI is not saying "Yea or Nay;" as Robert Morgan hastily conceals a pack of Marlboro box in his pocket.....
However, as far back as July '97 RFI did issue those forecasts and warnings about the Mac Centric Internet "Universe" as well as repeating and stressing them periodically through all of '98. Not to mention that those forces and factors were accelerating since the Summer and Fall. In fact, they are accelerating even more.
Why did RFI choose to address this yet again; especially addressing it in such a manner as to intimate that there might be some form of "Vast Mac Wing Conspiracy"? Because RFI truly believes that in the coming months that there will be public accusations and discussions amongst the Mac Community; especially amongst Mac Centric Internet sites; that such a "Conspiracy" does in fact exist. And, that they will point to recent developments as their justification of their allegations as well as "interpreting past developments" to buttress their suspicions, allegations and accusations. Call it the "JFK / Area 51 Syndrome" if you so desire.
To temper any future allegations and accusations, RFI will reiterate that long before anyone might have even considered that such a "Vast Mac Wing Conspiracy" exists we laid out what would happen to the Mac Centric Internet Community long ago. And we not only laid out the roadmap of what those forces and pressures would be, but we also issued warnings of what was to come. RFI even went out on a limb again in '98 in an attempt to forewarn people that this was coming even faster than we anticipated.
"Who" are the probable "conspirators" identified as? Well, take your pick amongst the entities who are powerful enough to respond to those market forces and factors in order to survive in the "new universe" as far as Mac Centric content goes. Let's see, who would someone "tag" as potential conspirators?
First and foremost would be none other than Apple Computer itself. When Apple stated its intentions regarding the "Mac Centric Publishing Market" most thought that it only pertained to the print market. Apple's "best case scenario" was to have one or two Mac Centric monthlies so as to simplify things for not only Apple itself but its vendors. Well, those who thought that Apple's desires stopped at the printing presses were, and are, sadly mistaken. What's sauce for the goose is sauce for the gander. Since the Internet has become an ever more important medium for "publishing" and conveying timely information and content, why should Apple "ignore" this ever increasingly important medium for streamlining and simplification? Just as too many print titles causes Apple and its vendors no small amount of distraction regarding ad revenues, etc., so does the proliferation of Mac Centric Internet sites and their almost requisite banner ads from vendors. So, Apple will probably be tagged as "The Ring Leader" and "The Well Manicured Man." Sorry, we can't help the "X-Files" references on this topic.
And, RFI cannot but help that these suspicions and accusations will be leveled against Apple and the probable complaint will be that Apple is trying to drive them out of business because "THEY provide such accurate and timely information that Apple does not want the public to have." Well, if they want to continue in that tradition, all they have to do is alter their business models from ad revenue based to some other type of business model. Remember, RFI stated that in the coming shake out that there would only be about 4 types of Mac Centric Internet sites. Those: Too Big to Fail, Those Too Important to Mess With, Those Who Don't Rely on Ad Revenues, and those which are "Hobbyist Sites" that are on "Free Web Pages" like Geocities, et al.
Secondly. What's any good conspiracy unless "The Evil Empire" (aka: Microsoft) is also a member, if not a "Ring Leader"? So, both Apple and Microsoft will be tagged as "Co-conspirators" and will most likely be indicted. And, there will be all manner of "theories" regarding "secret deals" and other things that have caused the two companies to enter into some form of Faustian bargain.
As RFI stated, no "conspiracy" is a "Real Honest to Goodness Conspiracy" unless both Microsoft and Bill Gates are part of it. Given the fact that Microsoft will probably be taking initiatives to enhance its: Advertising, Marketing, MSN and WebTV content, Mac Market, etc. goes without saying. "The evidence" will be widely discussed. Never mind that it's just good business practices and decisions that are behind the moves. If Microsoft "stops advertising / supporting" certain sites while reallocating those ad dollars elsewhere is nothing sinister. It's something that Apple itself is already doing. If they cull out content currently available on MSN and WebTV, it isn't meant as part of some nefarious plot.
So, we've got two of the major co-conspirators tagged, who else could be part of "The Vast Mac Wing Conspiracy"? Why, none other than the cabal of "Big Businesses" who are motivated by the most evil of evils -- "Crass Heartless Capitalist Greed." Yes, we're talking those "Evil Businesspeople" who will do anything to "crush competition and limit choices for the public," all in an effort to line their pockets. Again, no conspiracy worth its salt will lack their presence as well. Motivated by "their insatiable greed for money and power" they willingly joined the conspiracy.
Who amongst them will be so tagged? Right off the top of our heads, both Ziff-Davis and Mac Publishing come to mind. We're sure there are others as well, but there will be specific reasons for them being tagged. Remember, Mac Publishing is a separate identity even though it's a joint venture between Ziff-Davis and IDG.
Mac Publishing will get so tagged because "it not only wants to protect the (allegedly) waning influence of MacWEEK and Macworld" (ROTFL), but it also wants to crush their competition so they become the only choice for Mac Centric news. Ziff-Davis because they want to crush its competition and extend its influence while also promoting ZDTV. Given the fact that Paul Allen, one of Microsoft's founders, recently invested in ZDTV will only add to the "mountain of evidence" regarding the "Vast Mac Wing Conspiracy."
And yes, there will be others that will be so tagged but both Ziff-Davis and Mac Publishing will be the probable targets of the fiercest insinuations, allegations, accusations, etc. for the simple fact of the matter that both of them are the highest profile businesses as far as Mac Centric related content is concerned.
In the recent survey of Online Publications, MacWEEK came in 6th behind: ZDNet, C|Net, News.com, PC World and one other. Macworld came in 10th. MacCentral, the next Mac Centric site that was listed came in at 34th. With so many titles in the "Top 10" both Ziff-Davis and Mac Publishing are the "Biggest Targets" for the conspiracy theorists. Too bad they will be baseless. Remember, all along, what RFI has said about free markets, even when "Apple Recon Clones" started proliferating; as well as when generic Mac Centric sites started dabbling in waters they should not enter.
Another potential suspect is none other than: Echo 4, RFI, Apple Recon and Robert Morgan himself. Why? Because every good conspiracy needs a nefarious and sinister Wall Street type; even though a "Boesky" or "Gekko" Morgan is not. Sigh.
Why would anyone here be implicated as potential conspirators? Well, who else was talking about what is to come? What other entities wrote reports on not only "The Future of the Internet" but a report on "The Future of the Mac Centric Internet"? Who else would be assigned the role of "The Marlboro Smoking Man"? Don Crabb? Bob LeVitus? Jason O'Grady? Lou Mazzuchelli? No. It has to be some "shadowy figure" who moves behind the scenes.
Before you start taking any of this too seriously, RFI is being more than a mite facetious and talking with tongue firmly planted in cheek.
In the period following "Post MWSF '99," don't be surprised if such conspiracy theories begin being whispered at first and then spoken of openly. And don't be at all surprised if those conspiracy theorists attract a large following within the Mac Community. A following replete with: petition drives, banner campaigns, colored ribbons of "The Mac Internet Liberation Front" or somesuch moniker -- replete with alliterations to the time when "The Jolly Roger" (Pirate flag) was fluttering in the breeze above Cupertino; thereby signifying that those sites are the "True Mac Internet Sites that Serve the Common Good of the Mac Community," etc. Oh, please be prepared. If it comes to pass it will be highly entertaining. And, we're not kidding about this. It could come to pass as well as being highly entertaining.
Exactly what are the developments that will trigger the birthing of these nascent conspiracy theories? Exactly what RFI delineated first in July '97 and then reiterated and refreshed in '98. The market forces which will necessitate a concentration of content provision on the Internet, much like the forces that first precipitated the ascendancy of broadcast networks and then the asecendancy of cable channels; and "virtual networks via cable." Call it "franchises" if you will. Just as a few key players carved up the lion's share of the technology markets, the same will happen regarding the Internet as it goes forward. Some might attempt to call them "effective monopolies" (a la Justice Department standards vis-a-vis Microsoft), but it's the markets which will eventually decide the outcomes. That sound business decisions and market forces will accelerate these extant trends is only ancillary.
What else will contribute to these developments? "Golden Convergence" as well as "The Mother of All Apple Recon." But there are others as well.
One of them is what RFI has called the "Breaking Stories Just to Break Stories Syndrome." Because a lot of Mac Centric Internet sites totally rely on "high volume traffic" to enable them to keep the doors open and the lights on, they are increasingly tempted, some would say "forced," to throw all caution to the wind and post content that others would balk at posting. And the others of their contemporaries soon follow suit lest they fall behind in the "Breaking News Race." RFI has talked about this previously as one of the factors.
Well, that "breaking news race" not only caused some sites to repeatedly cross the line, and potentially "burn sources" as well as harm those (Apple, et al) whom they state is their mission to help, but also to engage in the practice of "Fools rush in where angels fear to tread" folly. Liken this to the: $999 Consumer iMacs (via Apple MAP reductions), MWSF '99 G4 boxes, Apple branded Linux boxes, Apple iMac MAP changes because of Best Buy's price cuts, etc., stories. All were subsequently proven wrong once cooler heads and "real journalism" prevailed. And no, RFI is not holding anyone here up to that "real journalism" level. We're specifically talking about Mac Publishing, News.com, etc.
Well, a lot of those sites who are afflicted with the "Breaking Stories Just to Break Stories Syndrome" (First to "publicly publish" gets "bragging rights" even if their reports are wrong or injudicious) have not only "hacked Apple off to a fare-thee-well," but have also "totally hacked off" others -- including Microsoft. Apple Insider's IE 4.5 story prompted Microsoft to not only relax its NDA restrictions on IE 4.5 but also prompted Microsoft to engage in a proactive PR campaign. Definitely not the way to win friends and influence people. Especially if what we have been hearing is true.
The reports of Apple iMac MAP changes caused a crisis at Apple on the first day of its holiday sabbatical as both the media relations personnel and Channel representatives had to go into "full crisis mode" as requests and complaints flooded in.
Now, RFI asks you: "Would you want Apple, Microsoft, et al knowingly and publicly hacked off at you?" Yes, we know. RFI has been there, repeatedly. However, they've learned to separate (us included) "private" (RFI, et al) from "public" (Apple Recon, RFI Report, et al) as far as getting hacked off is concerned. It's one thing to "privately" divulge recon as that's what we're paid for. They have come to realize that. It's another to broadcast it to the world. A delicate balance has to be made. Which is why RFI took its stance last Spring NOT to "Break Stories Just to Break Stories."
The problem is that a lot of Mac Centric sites who, in their hunger for traffic and ad revenues, not only toss caution and standards to the wind but some are also succumbing to the temptations of stealing content from others, plagiarism, questionable practices and other ills that RFI has discussed in the past. And RFI is not accusing anyone so don't get your dander or high dudgeon up!
Within the next 4 - 6 months RFI would not be surprised at all if those insinuations, allegations, accusations, etc. of a "Vast Mac Wing Conspiracy" are either raging privately or publicly. Right down to what RFI delineated as potential actions and reactions. The sad fact of the matter is that those who would sign on to those conspiracy theories will be casting about for anyone to blame but themselves.
Liken it to union members who are so willing to point their fingers and assign blame to anyone and everyone for them losing their jobs. Anyone and everyone except themselves of course. And yes, during M&A deals we've seen this phenomenon all too often. they forgot that the last strike was one strike too many for the company and those jobs left for Asia or Latin America because of that "last strike." And RFI is not "bashing union members" but those who sought to increase their own power and positions by using them for their own purposes. Saw that too when doing M&A deals. The questions posed to the "Leaders" was: "Whom are you most interested in protecting? Yourselves or the workers?" Please, don't get us started on that!
The point we're trying ever so hard to make is that as far as the forces and factors are concerned, not only is there absolutely no "Vast Mac Wing Conspiracy" but that the final end game will solely be the result of market forces and factors. Things that RFI delineated way back in '97.
Lastly. The effected Mac Centric Internet sites should take the time to read the "Cliff Notes Version" of Adam Smith's definitive and classic work on capitalism; if only the part about "The Invisible Hand." When and if they grasp that concept they will have all the explanation they need pertaining to their potential plights. Simple as that.
Enough said.
Addendum: Why did RFI spend so much time discussing something that is baseless? Because there's a better than 50 / 50 shot that it will become an issue in '99. And, it's not only for informational purposes but also as a warning to those who might get caught up in the issue in whatever manner. From content providers to advertisers, vendors, etc. Better safe than sorry so you'll have the ammunition ready to respond. That's why we spent so much time and effort. Besides. It was "fun!"
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What does RFI mean to imply by that? Those who read the "Golden Convergence" Special Report know what we mean. So do others! And for those that want a real giggle, there's always the "Five Flavors" promo spot! Don't get all hot and bothered though. It's just a whimsical flight of fancy by someone desiring to have some "Macworld Expo Fun."
Working....
Just a warning shot. Nothing more, nothing less. But, the graphic above (while "dated") is interesting to say the least, no? And no, as far as the most recent reports go, the AMP/vMac has not been resurrected. We're just having one heck of a lot of fun at the expense of the critics whom are also identified as the Hornets and Buzzsaws. Remember, both of them have a tendency to "whine" and make a lot of noise.
All of: RFI's, Apple Recon's, Echo 4's, and Robert Morgan's critics can now figure out how they're going to perform the excruciating and compex contortions required to wriggle themselves out of their assertions that it was all a "fabrication" to protect the existence of the iMac...
And no, we're not going to hold our breaths waiting for their "Mea Culpas" because some of them aren't around any longer. Or, they possibly won't be in the near future. And those who don't, well. Take that for what it's worth.
There were some cuts from the RFI Report column on MacWEEK.com, so we're going to post the cut paragraphs in order to make the set up for yesterday's RFI Report column more understandable. With that said:
RFI Report:
This week's column was supposed to start addressing the Golden Convergence issue but I had to decide to punt even though the content was at third and one to get the first down. Why did I have to punt the first column on Golden Convergence? Length and complexity. It's the subject of a future series of columns but first it has to be compiled into an RFI Special Report so we can tie it into all of the related issues and potential ramifications for the future. While it has been discussed for some time in RFI, it hasn't been all tied together into one neat package. The columns haven't been spiked or intercepted, just delayed.
In looking at the Golden Convergence content, I realized that it had to be sliced and diced into easily digestible portions while maintaining cohesiveness. It's a task that is easier said than done as so much of it is interrelated. Besides, RFI subscribers have to get the first bite at the Apple (Recon). So, Golden Convergence will first be the subject of a Special Report and then show up in a series of columns once the fullness of time arrives.
In lieu of Golden Convergence, I've had to mine another source of content which will satisfy your appetites until the main courses are ready for consumption. I'll discuss why I believe Apple (AAPL.O) should be trading at or near 50 by January '99 as long as the general markets don't unravel. And for the long suffering readers of Apple Recon, I've arranged a spilling of Yosemite box details on Apple Recon. It's coming to a web site near you -- soon.
Why am I of the opinion that AAPL will be trading at or near 50 by January '99? I'll make it as simple as possible by sharing the original RFI Update item (09 Nov 98) below.....
Unfortunately, some key content was lost in the editing process and also triggered unintended consequences, which we won't get into here and now. Also unfortunately, that RFI Special Report on "Golden Convergence" has to be rewritten as new information has come to light. And, its release to the public will probably be delayed; even as a series of columns on MacWEEK. What will follow that Special Report; first in RFI, as always; will be "The Mother of All Apple Recon." That's just a working title for the present.
Yes, we're working on something that is quite explosive, and some of it is intimated in the content that was posted yesterday. We did a semi document dump yesterday afternoon. So, read and enjoy.
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For all of you long suffering and faithful readers of Apple Recon, we apologize for the benign neglect over the past two months. With the: markets going crazy, Recon For Investors (RFI) busy as all get out, and the RFI Report on MacWEEK.com things have been more than a mite hectic around here. And since we had to prioritize, the public postings of Apple Recon and RFI suffered.
We didn't forget you, but it's always first things first. And, we read each and every one of your messages, even if we couldn't respond. And yes, we realize that you missed the meaty content on Apple Recon, etc. We heard you loud and clear.
So, as a peace offering, we're going to give you a Special Treat by posting the Yosemite details that we have been able to learn to date, and that only went out in RFI on Friday 13 Nov 98.
So, without further ado:
The details of the Yosemite boxes are finally coming to light and RFI will mention the digest of the reports that we've received as they are interesting to say the least:
On an unrelated note, if they aren't announced or revealed prior to MWSF '99 we can also expect announcements from Apple regarding the Perch / Mezzanine slots as far as the iMac is concerned. The developments previously related to the 17" iMac are really related to the plans Apple has for the Mezzanine slot, which includes the Digital TV ready, etc., that we previously mentioned. And, we can also expect that the 17" iMac will more than likely not be appearing anytime soon. C'est la guerre.
We hope that it was worth the wait, and while the public sites might not be updated as often as most would like, we'll try to do better. Remember though, we have to take care of the RFI subscribers first before we release things publicly on Apple Recon, or anywhere else for that matter.
And we have received queries if there are any plans to provide an "Apple only version of RFI." We're sorry to report, no we are not. For the simple fact of the matter that a lot of the "Apple Recon" and related items are contained in the RFI Daily Updates and RFI Weekly Reports.
As another gift and peace offering, we're also going to give you the following item that appears to buttress the "Fast Forward Time" and "Mac OS X Multimedia Server" (whose original title was "Mac O'Sexy Multimedia Server") columns that were excerpted from previous RFI Updates. With that said:
RFI always wanted to make like Cindy Adams or Liz Smith, and we've finally been given the opportunity. So, here goes:
Who was seen having breakfast with Steve Case of AOL in Palo Alto earlier in the week?
Ooooh. It sends chills up and down our spines! But, it just reinforces the "recon" that was in the "Mac O' Sexy Multimedia Server" item regarding QT and AOL.
RFI also wants to make a clarification from yesterday's update. It was our fault. We decided to inject some venue appropriate language and muddied the message that should have been sent. Instead of "Bombshells" and "Carpet Bombing" we should have used The Valley speak "Bombage," or "BOMBAGE" as to shout the message that should have been sent. We recognized the error of our ways soon after receiving queries such as: "Did you mean Bombage?" Uh oh Gracie, we caused confusion. Yes, we did mean "BOMBAGE." We should not have tried to play it cute with the wording.
And, RFI should also stress that there will most likely be one heck of a Macworld San Francisco bounce in AAPL, maybe more so than usual because of that "BOMBAGE."
If you remember, earlier in the year (Summer?) RFI reported the rumors of an Apple Handheld that surfaced at a meeting of a Hong Kong Newton Users Group. And no, we're not talking about the P1 Consumer Portable. We're talking about the Apple Handheld. RFI reported the initial rumor reports and sighting of the Apple Handheld and then O'Grady's PowerPage carried the ball further.
Yesterday, RFI received reports that there are problems with the Apple Handheld and that they might be some of the same problems bedeviling the P1 that is causing its launch date to slip slide away into the Summer of '99. We also heard a rumor report that the Apple Handheld is allegedly being made by a large modem maker in Taiwan and that this is their first attempt to make a portable or handheld device. But, don't go crazy over these rumor reports as they are just that -- rumors.
Now, if Mr. Jobs gave the world a sneak peek (MWSF '99) at not only the Yosemite boxes but the P1 and the Apple Handheld, wouldn't that put lead in AAPL.O's pencil? Oh my, my! But, don't get your hopes up. With the exception of the Yosemite boxes, it's all sheer speculation.
Even still, it's interesting that the reports of an Apple Handheld, Message Pad replacement, are starting to surface again so close to MWSF and that an alleged manufacturer of those devices has also surfaced? Interesting.
MacWEEK's Mac The Knife (MTK) is considered by us as "The Abby Joseph Cohen of Macdom," and apparently he has confirmed the rumor report from last Spring that Apple's close to inking a deal with CompUSA to provide the services for Apple's mail order effort. Said effort to include not only Apple Hardware and Software but 3rd party vendor products as well. This, if completed, will place pressure on the mail order firms (and gray marketers) that sell Mac related products. The deal is supposed to be consummated by the end of the year. While the number you might call might be answered "Apple Direct" (or whatever), the phones will be answered by CompUSA personnel. Much like the Apple Loan Program is handled by another organization. And people thought we were crazy.
Here's the downside for the other mail order firms, and there are many. It will place pressure on their sales and earnings. RFI gathers that Apple has realized that it could make a bigger profit margin on its EOL and Overstocked inventory by selling it directly itself, via mail order with a partner getting a cut, rather then selling it at a deep discount to mail order firms so they can break MAP and sell it cheaply while still making a profit. And, it will also effectively dry up the supply (or at least seriously limit) for the gray marketers.
The further downside is that Apple is also planning on selling software and 3rd party vendor products as well. In other words, one stop shopping. Or, liken it to having an expanded CompUSA Salon Store without having to leave the comfort of your home. That's not a healthy potential development for the publicly traded mail order firms that sell Mac related products if this comes to fruition. And it's an even more ominous development for the closely held mail order firms and the gray marketers.
Another downside of this for the mail order firms is a double threat. First, and foremost, is Apple's brand. As long as the shoppers experience and customer support (guffaw) is as good or better than the other mail order firms, from where would most shoppers buy if price were equal? One of the other firms or "Apple Direct"? You know which one they'd choose. And would "Apple Direct" be restricted to MAP lest they lose their co-op money from Apple? You're kidding, right? It wouldn't matter, would it? Especially if Apple stuck to MAP on its "current product line."
The second downside for the mail order firms is Apple's immense customer database. It's a veritable "platinum, gold and diamond mine" that some have been imploring Apple to exploit for years. It's an entire database of every Apple hardware and software customer that ever registered an Apple product. They not only know that they are customers, but they also know what they bought and when they bought it. It's a mail order and direct mail firm's fantasy come true. Not just their customers, but every Apple customer. We're talking immense here.
And why does RFI suspect that CompUSA might have been the instigator of this, if not just being Apple's "First Round Draft Pick" for it? Why? Because if push comes to shove, they can pull it from stock at a CompUSA and deliver it to the customer in one of their vans.
The upside for Apple is not only all of the above downsides for the mail order firms but even more. Even with a cut going to its partner, Apple's margins and earnings would be given a boost or even possibly explode. By being able to sell it direct at better margins than they would get from a mail order firm, even a 5% boost on those EOL and Overstock Inventory would do Apple wonders. Other will probably think of other benefits as well. We know we have.
RFI is not saying that Apple is intending to "kill" the mail order firms. That would be counterproductive. Instead, they intend to compete with them. Another RFI heresy has apparently come to pass. RFI just wonders what took Apple so long. No matter. If Apple does this, you should compare this strategy to a Dell / Compag hybrid rather than Dell / Gateway. However, with Apple's inclusion of this in its strategy, it will have opened an entirely new category.
And, RFI can also sense some nervousness in the other parts of Apple's channel, especially the Apple Authorized Resellers who survived the downsizing of their numbers. They might rightly conclude that an "Apple Direct", with the muscle of CompUSA behind it, could threaten their business. However, it could also be a boost as well if the customer carries that Apple Direct catalog into their store and they are allowed to meet the "Apple Direct" price without harm to them and getting the same price for the products that "Apple Direct" gives itself. That might be an even better thing for Apple in the long run.
We'll see what eventually occurs.
RFI received the first installment of "The Mother of All Apple Recon" that is so radioactive that it makes Chernobyl look like a doused match in a torrential downpour. But, Morgan had to give his word of honor not to discuss or disclose it until such time as he was given the go ahead; as well as some other ground rules. An honor bound promise which we intend to keep. See? Being known for keeping one's word counts a lot to most people. Apparently, it's a rare commodity.
However, it is not "bad" for Apple so get those worries out of your head. The reason why we're giving you this markup notice that "The Mother of All Apple Recon" will eventually be revealed; as well as the fact that you will also know whom to give credit to if they so desire. When we finally get the go ahead, we'll give you a markup notice that it's coming as well as the fact that you'll also see it long before it even shows up on the radar screens of The Street or the industry.
Are we "teasing" you? "Of course" some will say. But, we're not. Suffice it to say that the only reason we're telling you this now is that we don't want you to get bit in the backside, or surprised, when it's finally revealed. It might take weeks, months, or over a quarter for us to reveal it but that will suffice for enough of a markup notice for you. Don't expect it soon, but don't think it will take forever either.
A correspondent for the MacWEEK RFI Report, specifically on the MTK Boards, posited that Apple should sell iMacs in WalMart to boost sales and Mac OS market share. The CompUSA deal notwithstanding, here's why it's both a good idea and a terrible idea.
It's a good idea because it would boost iMac sales and Mac OS market share. On that point they are correct. Toss in the Apple Loan Program and they've got it locked. On that point we'll agree with them.
The terrible idea part of this proposition is the WalMart strategy. First, WalMart would place an order for 100,000+ iMacs and "they'd get a price from Apple" on such a large order. That's the way WalMart operates. Companies large and small both give WalMart a price because they know the huge orders they generate.
Secondly, WalMart doesn't "Do MAP." Just think back to that "Smiley Face" bouncing around the store lowering prices. While Apple's MAP on the iMac is $1299, WalMart would soon be offering them at $999 or $19.95 via a loan or charge agreement. Apple; CompUSA, Best Buy; mailorder firms and other Apple Authorized Resellers would be screaming bloody blue murder even as WalMart iMacs and peripherals would be flying off the shelves.
Even though Apple's margins on the iMac wouldn't take too big of a hit, Apple's Channel would surely be screaming. The "No Sales Tax" dodge would become a non-issue as most consumers wouldn't give a hoot because the sales tax wouldn't mean a darn thing to them. Even a combined sales tax of 10% would mean that they would walk out of the store with an iMac for less than MAP or the total monthly payments for the Apple Loan Program.
Sure it would boost iMac sales and Mac OS market share, but at what cost? Having iMacs and iMac peripherals in WalMart might be a good thing as far as Apple, Mac OS and 3rd Party Vendor sales and market share goes, but at what cost? Alienating the rest of the channel?
CompUSA and Best Buy would perceive it as "rank treason" as far as the "Salon Store" and "iMac Son of Salon Store" deals go. Apple's other Authorized Resellers and VARs would perceive it as a stake driven through their hearts. As long as they stick to MAP, their iMac and peripheral sales would plummet. Especially if WalMart also added the iMac and iMac peripherals to its online store. Good for Apple and WalMart, but at what cost to the rest of the channel?
While RFI acknowledges that such a strategy would benefit Apple in rural areas where there are no CompUSA or Best Buy stores close by, we'd still favor our approach over putting iMacs in WalMart. Why? One word: Support.
However, we can see the lure of Apple putting the iMac and P1 Consumer Portable in WalMart nationwide. It's a siren song for "Really Cool Consumer Companies" to have their products in WalMart because of the dearth of CompUSA, Best Buy, and other large chains close by because of the population density, etc. But, WalMart would also laugh in Apple's face over the threat of losing co-op money for violating MAP. And, WalMart would also laugh in Apple's face over the "Zero Returns" policy. That's not the way WalMart operates. Just consider their corporate culture towards customers.
Apple's consumer lines in WalMart? A great idea yet a terrible idea. Enough said.
The latest RFI Report hit early Monday evening (EST) and the early returns were extremely favorable and they were coming from farmers / ranchers and those from Tech companies that tried to market the Internet to "farm states" in the Midwest in '96. Guess what? They were already wired two years prior and those "backward bumpkins" didn't need the Internet technology to bring them into the 21st Century. They already had it.
Overall the early returns were extremely favorable with some suggestions and some ominous warnings that Apple should take notice of and probably heed. It all boils down to two things: John Deere and VPC/Red Box.
Farmers show an intense brand loyalty to John Deere products even though "they cost more" because of the longevity and "Total Cost of Ownership," something Apple does have similarities to and an edge on. And all of the hot button issues that Morgan hit in that column were applauded. It was like there was an "Amen Corner" as far as the farmers and ranchers go. Some even suggested an Apple and iMac tie-in with John Deere as that's the best selling point for them.
Morgan remembers all too well the "debates" between the International Harvester and John Deere "factions." While it wasn't of the mindless caliber of "Macs Rulez, PeeCees Drewl" (and vice versa) cruft it was just as lively. However, no member of either faction (that Morgan ever saw) refused a member of the other "faction" when they came to help them with their harvest.
The ominous warning part, VPC/Red Box, is more bothersome. The Department of Agriculture, in its infinite bureaucratic wisdom ("Hi, I'm from the government and I'm here to help.." Sorry. Old farmer / rancher joke), has mandated that farmers use Wintel boxes because the new software is Windows only. Never mind that a lot of the initial farm management software was written for the Apple ][. Unless and until Apple decides to say "Stuff It" and put the "Red" into Mac O' Sex, then VPC should be bundled with iMacs and specifically targeted at farmers and ranchers as "Ag compliant." And target them where they live, etc. Not somewhere else or in generic TV ads. Let them have their "John Deere computers" as well as the ability to comply with the idiotic bureaucrats at the federal and state levels.
The early returns were extremely favorable for the above stated reasons. We heard from those who "walked the walk" and lived the life; as well as from those Tech companies who were humbled by the fact that when they arrived with their solutions, the farmers / ranchers were way ahead of them. So much for farmers in Iowa not caring about the Internet.
Apple better wake up and fast lest they lose a huge segment of the mass consumer market. All those "Deer Hunter" game sales should have told Apple something. Actually, they should have told them a heck of a lot. Last we checked, there aren't a heck of a lot of avid deer hunters residing in Silicon Valley or the other places where Apple takes its cultural cues from. And if you don't understand the mass consumer market, how in the heck are you going to become "A Really Cool Consumer Company"?
We'll keep you posted on this issue. It's just fanning the flames of "Prairie Fire."
For those of you who are having Apple Recon withdrawl, there's another place where you can "Get Some" if the public releases on Apple Recon are not as often as you like. The RFI Report debuts today on MacWEEK.com and is going to be a weekly feature. Yes, Robert Morgan has become a Contributing Editor for MacWEEK.com.
Previous Reconcan be accessed on the 15 Sep 98 Index page and links thereon.
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1998 Echo 4 Holdings / Recon For Investors. All Rights Reserved.
