Tick-Tock, Tick-Tock

May 17

Well, it was written in the stars, and just about everyone is getting it wrong after 20 years plus amnesia at the Justice Department regarding anti-trust lawsuits. I refer to memory lapses because AT&T increased it's stock revenue stake by choice - not by governmental mandate. Lord knows, after Rockefeller was broken up by the govt, each one of 10+ new companies with his stock name attached made him 50 times richer (meaning if you want to be stinking rich, get busted up by the govt. It's GREAT for your portfolio). But we're still talking about time, since Reno is obviously having her period. And it's up to Microsoft to stem the flow. But this isn't the trial of your average maxi-pad, this is a company that knows what the first amendment, and the basic laws of anti-trust. Anti-trust was established to protect the consumer - not companies - from corporate greed, high prices, price fixing, and other tricks that large corporate entities can deliver onto the populace. BUT, what do you do when the entity has constantly lowered prices, provided material for free - and has brought enough to the consumer table, that they've achieved a global standard for the marketplace by sheer demand? Well, if you're a feckless competitor who has a rampaging mormon from Utah in your corner, backing up your devistated firm's (aka Novel, Wordperfect, etc) attempt to keep up with Silicon Valley politics, you're hot property for the new government which protects companies - not consumers. After effectively roasting a few bodies in Waco on an open fire the last time the justice wing of the government attempted to constructively deal with a situation west of the Mississippi river, Janet-baby (Ms. Jackson if you're nasty) is now trying to apply some heat to Bill. What I particularly like in this episode of governmental carnage - are the two "hardcore" points that shelved the last round of talks. One, Microsoft can't force it's logo on the opening screen of it's product. I suppose this goes hand in hand with the government's frustration on being able to dictate art, and what appears on the covers of the average book. But as we all know, free speech doesn't have much in the way of precident in the electronic age - and is the largest reason I've taken great pains to make sure there's nothing verbotten artwork wise in this site. First Amendment aside, I love the second idea of theirs. Unbundle the browser (which no longer exists as a seperate product but - like Unix -integrates internet functionality within the OS) or put the competitors product into your product by decree. Gates' Coke and Pepsi comparrison aside, this is pure lunacy! The government proported it's argument under the guise of the phone companies which have to offer competiting services on their wires. Well - USWEST doesn't advertise for Ameritech - and we're talking about a company that isn't regulated by the FCC. This is all moot anyway, because the government will try to duck logic at the merest drop of the hat. What I'm more concerned with is the parallels between Microsoft and JVC. People gravitated twords one OS which was the most prevelent, cheapest, and easiest to use all things considered to take material from work to home etc. People gravitated to VHS because it was not only cheaper, but wasn't tied up around one company's logic and revenue stream like Beta. Movie companies - like today's software companies - also supported a format with more seats. The upshot is that this "monopoly" of video tape standards was the evolutionary upshot of the LP, the CD, and every other carrier of media that prevails in the long term scheme of things. The irony - that everyone is blind to is - that JVC wasn't drawn into the Justice Department's grasp because they weren't based in this country. Now that Microsoft is a global company - how much would it save Bill Gates in the long term (given the fact that everytime he releases a new product his ass is in Fed doo-doo) to move his company to the nearest country that would love him to bestow technology leadership status on their shores? How hard would it be to secure tax breaks for all the jobs he would provide? How tempting would it be for another country to take the lead in the computer industry in one fell-swoop? - And - just how far is Canada from Redmond Washington anyway? The final question is this. Just how anxious is the justice department to give away another American technological leadership position after automobiles, television, VCR's, low-end chip fabrication, video games, audio equipment and storage technology, and most manufacturing after basic textiles and nuclear bombs? Let's just say if I had 50 billion dollars in personal income to blow, and the cost of a 10 year lawsuit could be offset by moving headquarters a whole 80 miles due north - I'd be pretty tempted to fuck the USA in a heartbeat. Keep it up Janet. You may get laid yet!

May 18
As a continuation, Apple die-hards (and lord knows the harder they pray, the harder they'll die) are probably giggling up a storm from all the Microsoft hot water newsbits floating around. In fact, it's featured prominently in makido, macweek, and just about every other surviving pro-mac site out there. It would probably be redundant of me to point out two things about the irony of such actions. One, Apple is still under investigation with the SEC from their heavy stupidity with their cancelations of the Apple cone licenses - so much so, they're in some governmental shit that is deeper - and has more relevant precident - than anything the wimpy Justice Department could dish out. The SEC sends people to JAIL - the Justice Department usually makes rulings and slaps fines or suggests rulings that get shaken down in various supreme courts. But with all the press about Microsoft - much like Clinton's latest wierdness - people actually like Microsoft, and hate the run of the mill government more than ever. The fact that the general public doesn't give a shit, and prefer what they're hammering away on - in stark contrast to the mere photogenic value of Janet Reno - is a pretty closed contest. But the numbers are in. 90% plus of those polled like Microsoft just fine, and the investment community thinks the DOJ is out to lunch. The interplay present is that Microsoft is in the news, and on all television channels by name - and not in the same light reserved for the likes of Bill Clinton's crotch, or Saddam Hussien for that matter. This time, people - IE: most of the computing public- are wondering what the future holds for what they use, and why the govt is behaving like asses in the first place. In other news, Microsoft is getting more free PR and advertising than what Apple could spend half a billion dollars in mere media spending let alone creative exposure. It may not be the exposure that Microsoft may hope for - but with Bill Gates' defending himself in every newspaper , and every television screen, it's the best PR that anyone who studies fallout from controversy could hope for. Free mindshare! It's one thing to have your product on 90 plus percent of the desktops out there - it's another to be reaching 90 plus percent of the eyeballs in North America - and probably equal numbers globally. The fact that public opinion is backing Microsoft is even better! Where does this leave Apple? Like any summer movie running up against the likes of Steven Speilberg or George Lucas. Given the fact that Apple is now spending nearly 300 million hard to get dollars on mindshare - and is getting thrashed by 10 minute full-page soundbites for Microsoft. This can't be feeling good for all the media buyers at Chait-Day who are already wringing hands over the low exposure of Apple - their premiere client. Now Bill Gate's puss is on every TV screen defending his practices. See Jobs anywhere lately? See any of his PR sheets anymore? See his commericals filling equal air-time to get parity? It's all enough to make you wonder if, coincidence aside, that every time Microsoft releases a major product - they suddenly make the news about some govt. related crap - as the most calculated and subtle PR campeign in history. Well, after seeing the results of Windows 95's lawsuits, this release could be a doozy. I wonder how Apple will fair after enduring this media storm that's hundreds of miles due north of them? It's almost in the relm of conspiracy theory. But I'll leave that to the Oliver Stones of the world.

May 19

More SEC numbers - and while the MacJihad are crowing on about 1.8 billion in the bank (nearly 1 billion on borrowed stock notes - aka LOANS!), the longer term and more significant items were either glossed-over, or entirely ignored in the grand scheme of things. Except for the soon to be dead in AugustMacWeek, which mentioned that - despite 2 "profitable" quarters - Apple's net sales, their lifeblood, was down 3 billion dollars or 20% from a year ago. Obviously it's nice to eek out a mere 45 million or so on 1.2 BILLION in revenue - but it's that much scarier when that very revenue is shrinking STILL! I don't know what's left to cut for Apple if it's going to attempt to remain profitable with sales and revenue declines like these. I mean lessie. Apple's dropped Rhapsody for some quasi-fictional OS future development, they've cast Newton to the free winds, they nuked Claris, they reduced the product line, they decimated the printer and peripherals line, Apple's demolished the server groups, and they've frozen salaries and benefits so much that all the smart people have already jumped ship for warmer waters. I guess the only thing left is the same parallel that Steve Jobs broached when Canon cut off the support tit in 1993 for NeXT. In 1993 NeXT was on the fiscal ropes, bleeding badly. The investors wouldn't sink any more good money after bad without some concesions. So, the hardware went out with the bathwater, and within 4 months the enitire assembly plant - right down to the wall hangings (last seen in NeXTworld's offices in 93)- went into recievership and even saw token "joke" auctions during the NeXTworld Expo of the same year. There's two major possible outcomes - if the hemorraging goes on until the end of the year. Apple will either have to find offshore - IE non-Apple - fabricators for their fruit, or they will have to hack and slash about 40% of their workforce to keep up with the slide in revenue, sales and marketshare. Just keep in mind that it's been predicted here first - in spite of the fact that Robert Cringely refered to Apple's current plans as a mere wish-list rather than a forcast. Well, you can't always get what you wish for. Sometimes you have to make do with what you have. Problem for Apple is, they don't have very much anymore.

May 20

When it rains, it pours. In this case the SEC filing and tip of Apple's hand has led to more than just a few ripples in the silicon pond. In this case, the biggest fish in the stockmarket mindshare and mutual fund water theory - Standards and Poors - rated Apple a "non-investment" grade. People, when you hear "non-investment", you can't get anywhere closer to an "F-" for your performance. I mean sure the MacJihad can go full-goose bozo for their favorite bias, but you don't fuck with Wall Street unless you're looking to cut your own throat - legally and fiscially with the investors. Well, the investors got their heads-up, and it's a recommendation to run screaming from Apple. Why it took so long is my only question. Sure their "profits" were as slim as it takes a downsizing one of those to meet it's sales and revenue dip. No sweat that Apple's profits were in the double million digits amongst a sales of billions with a black hole of non-disclosure at the bottem line. But when you put all things into the pot and cook them, the investor community is the first to notice - because they have the most money riding on the horse. It's no short-order drill that they effectively predicted that the USA had lost it's touch with the video game market when Warner-Atari left hundreds of thousands of units gathering dust on the shelves while the Japanese were ripe for taking over - it's all in the WSJ for proof-positive. Well, Apple's now in the negitave limelight. And like Atari - it will take about a year for the rest of the world to take note of the obvious. But don't take my biased word for it - do your own damn research into failing companies and find out the time lag between gross Wall Street pointers - and how things fared in publically disclosed reality. Somewhere in the middle you'll find the rationale behind the site you're now reading.

May 21

There's one hell of a footnote left from all the SEC fallout from the latest bomb from Apple - which rivals anything India or Pakistan could come up with. Apple - according to SEC disclosure claims that they - quote - "Don't anticipate any significant quarterly reveue growth until the 4th quarter of 98 - and YEARLY quaterly growth until the 1st quarter of 99". For those of you not in tune with SEC geekspeak I'll translate. Apple Computer is fucked. Given the current crash and burn mode, Apple can't even give postitive forcasts until the turn of the year by all accounts. This is a safe bet since, if they don't meet the forcast, they won't have to face numerous lawsuits from the investor community when they posted conservative numbers way in advance. They could end up loosing a ton - and still look good in the SEC graces. The fact that they would say such a thing in the wiles of Steve Jobs and his reality distortion field means that Apple is playing according to the rules of the SEC - which means they can't lie like a dog to the investment communtiy. The problem is - that Apple is able to bury or non-announce such verbage to the popular press which still goes nuts over all the pop-speak that makes Apple look like a sure thing to all the Wall Street betters out there. Whether this will result in some lawsuits in spite of themselves remains to be seen. But rest assured - Apple is in trouble by even the same SEC disclosure which requires a team of mules to haul them out into the open. How the rest of the Jackasses out there respond is anyone's guess.

May 22

More baked fruit. This time in the form of 3600 dealers, VARs and assorted points of purchase from Apple's network of 8000. This combined with a liquidation of 4500 authorized repair centers - that could otherwise bring the various Mac lemons back to life. Well of course, the usual suspects are saying that they weren't part of the program, didn't adovcate Apple strong enough, didn't wear Steve Jobs masks behind the counters, and the trite list of self-serving depreciation that Apple hurls at the nearest logic bomb - every time they drop the big one. This time they're full of shit. There's no other way to put it really. When say - a VAR in Sunnyvale sells 500 million dollars worth of Macintoshes a year - you know that they had those same Macintoshes plugged in on the shelves looking as good as they could. Out of 1.2 billion dollar a year sales, APG is now cut out of their contracts to sell half their product line. To say that this might make any VAR pissed is underestimating the obvious. According to MacWeek, the president of APG, Steve Chappel said quote - "they killed half our business, we've been stabbed in the back". I warned everyone out there that if you do the dance with Apple, you're frugging with death incarnate. Well, APG's knife wound looks exactly like BusinessLand's stab scar from 1991. BusinessLand did all they could to sell NeXT computers, being the largest reseller in the country this was no small time operation in progress. But in spite of the fact that until the slabs came out they had nothing sellable in inventory, they kept trying to make reality fit Steve Jobs' ego and dellusions. Then the bomb dropped. NeXT finally made a computer with a floppy drive, that had an 040 which made it faster than a glacier, and most importantly - sold at half the pricepoint. Was BusinessLand invited to the party? Hell no! NeXT - sitting pretty for the first 6 months with pre-orders - decided to dry hump every reseller out there and keep the spooge for themselves through their own newly deployed reseller network. Fast forward to today - and we have Apple selling their computers themselves, through their own website, at full retail value. No need to suffer the indignity of channel loading and offering discounts to resellers and letting them pocket support contracts etc., ho no! No sense supporting a user channel that took 15 years to build, and only 10 months to destroy. No sense loosing shelf presence over greed. No point in making it harder to servince and maintain a user base that is now used to all the hand-holding and troubleshooting that Dell, IBM, Gateway, and Compaq can offer. Now Apple can take 500 million worth of sales from one measly VAR in Sunnyvale, and gobble the profits anyone else was eeking out under the guise of "not supporting the monarchy". But why not? When Apple holds contracts that they can break in a heartbeat, it's perfectly obvious that they are doing things for the good of the company, and the economy and the remaining userbase. After all - it's the American way.

May 23

The great fruit con has now peaked. Everything else from here on in is going to be painfully obvious - even for the likes of the corporate mouthpiece has-been keyboard peckers working for Newsweek. Now the imminent and obvious - is not only being touted by the people at Standards and Poors, CNBC, and every damn financial consultant that actually bothers to glance at Apple's SEC disclosures - but is actually being reflected in the more popular financial rags like Forbes. While Time and Newsweek both have sucked down and published the PR tripe that heralds the iMac as the best thing since "Bone-o-riffic" - the miracle pill that Bob Dole and his harem of wives and wenches in Kansas swear by - the fiscal press familiar has come to it's senses. And has basically echoed every damn point that I've been yammering about for nearly a year. The soft software support. The flagging sales. The lack of a relevant product line in keeping with a comoditized marketplace of boxes. The fact that no one gives a shit about esoteric arguments about an OS that no one actually uses. The fact that even the most obvious SEC numbers confir that - while Dell has risen from 2.9 billion in sales in 93 to 12.3 billion today, and Microsoft has gained 11.3 billion over 3.8 billion in the same period - Apple has SHRUNK in sales from 11 billion in 95 to 7.1 billion in their last fiscal year, with even worse sales releases to come. This in spite of the fact - that the financial press has re-run every factoid into the ground, all painfully obvious to those that don't treat marketing messages like holy scripture - there's another thing that all of them are missing out on. That Apple is running the biggest con since PT Barnum perfected the art of the sideshow. Let's talk margins people! Has anyone but me put 2 and 2 together that Apple now has a profit margin per-unit sold of 22 percent, with projections taking them up to 25 percent? Obviously no one in their right mind will pay that in this day and age which is why the sub - 1000 dollar market is growing like a bat out of hell. The margins on this supersonic rocket is thinner than your average Joe on a hunger strike. But it's no big deal because the volume of these sales have increased the overall compuer market to unheard of proportions. All the while, Apple continues to jag every goddamn dollar out of their remaining faithful who refuse to buy into the "evil empire" or worse - are held hostage by an installed base of units that won't be cleared out until the next tax depreciation curve matures. So what's a computer company to do? Screw the faithful like they've never been screwed before. Let's market new computers that are more expensive than entry level units once you get some non-standard devices plugged into the damn thing. Let's push the top of the line crap and raise the pricetag to boot! Let's huckster insanely priced laptops that give a new meaning to the word "sucker". I have a theory that this whole mess is nothing more than some subconcious revenge ploy by Apple to get back at all the Mac OS users that refused to upgrade after tha last 5 year cycle - and hit them where they live. On the other hand, it could merely be a reintroduction of snobby, esoteric arguements that people "will pay for the best". Well, 90 plus percent of the market has decided otherwise. And the more Apple tightens the thumbscrews on their remaining marketshare with this conduct - the sooner they'll implode when their current user base looks at empty software shelves, looks at rising prices for new hardware configurations, looks at the falling marketshare, and looks at all the Wintel machines surrounding them. Perhaps after all this they'll get a clue. And then the marketshare will really start to slide. But then such an argument in the popular press will be a long time coming because it insults a massive number of potential readers. After all, Forbes is reeling from it's little journalisitic faux-paux with the MacJihad online, imagine what Time.com would endure if they went as far as to point out the obvious sucker bet in play from Cuppertino? The horror - the horror...