Why Apple’s Mac platform fell into crisis

“Apple’s recent quarterly earnings report blew past all expectations. More importantly, dramatic unit sales growth shows the company is executing a working strategy for building the Mac platform,” Daniel Eran writes for RoughlyDrafted. “That raises the obvious question: why has Apple’s market share historically been so low, and why did Apple fail to make any progress in the 1990’s?”

“Here’s a look at why Apple’s platform fell into crisis, and why the solutions prescribed by analysts didn’t work,” Eran writes.

Eran takes a look at the following:
• Market share
• Apple’s premium PCs
• Creating and maintaining a functional Mac market
• Disasters in retail (Sears et al.)
• Mac clones disaster
• Disasters in direct sales
• No compelling reason to buy a Mac
• Delayed migration to NeXT/Mac OS X

Full article here.

42 Comments

  1. net worth understands how things work.

    maczealot: your last post is an illustration of the old saying: If you can’t dazzle them with intelligence, baffle them with bs.

    It worked. The last two sentences do make some sense…………. I think.

  2. Hey Creative–

    You don’t know a lot about successful people. It’s not that they never make failures, it’s that they push ahead anyway. Enjoy the rampant future success you’re obviously going to enjoy as you regurgitate others’ questionable judgments for the sake of saying…well…nothing.

    Night sweetie.

    Oh. And I had a problem once.

  3. kenth:

    Actually, I am baffled by me’s linking “virtuous behavior” with success in business. I always considered intelligence, insight, and discernment the primary factors determining success in business, and none of these characteristics are intrinsically related to one’s ethics, beliefs, and conscience. Of course, luck, serendipity, and chance also have to be considered as factors in success and none of these is due to one’s wisdom, wit, or conscience. me’s post is a simplistic explanation of an intricate issue.

  4. Apple failed before Steve Jobs return because of:

    1: Apple was still pushing the losing RISC processor aligned with IBM/Motorola against Intel and suffered from being able to produce as many cheap processors as Intel could.

    I remember many times a new PowerMac was introduced that the demand was so great it took Apple months to fill all the orders. The most recent being the Powermac G5.

    2: Previous high price for Mac’s because of the pricier RISC processors. Apple is now more competitve with other PC makers, but still has a long way to go in offering more hardware choice options.

    3: No OS improvements before OS X. Apple didn’t innovate and it nearly died.

  5. Peterson:

    Uh, huh. My point exactly. So what that Job’s and Apple learned from their mistakes, isn’t that the least one should expect from a successful person or company? Steve Job’s is human and not some omniscient digital deity. I like Steve Job’s and appreciate everything he has done for Apple, but I’m certain that there are many other people in Cupertino and elsewhere have also contributed to Apple’s success and Apple’s blunders. People who don’t recognize that even creative people can and often make mistake need to reassess their perceptions of reality.

  6. Rabiddog: I may be wrong, but I think the RISC processors were actually cheaper and smaller than CISC processors. I don’t think the reason Macs are competing on price as well as they do has anything to do with cheaper processors as much as better design and manufacturing efficiency. Also, Macs can offer a lot of ‘free’ software since Apple is one of the best software producing companies around, and boosts the ‘value’ of their hardware products, thus making them competitive pricewise.

  7. Peterson”

    “If that was your point, your writing needs some help. Try less inflammatory language, you hemorrhoid.”

    Peterson, be honest, it seems that you had no problem understanding what I wrote. Also, don’t offer advice that you are unwilling to apply to yourself, it make you appears to be a complete ass, and who am I to disagree with that assessment.

    “Let me translate my point for you: graduate high school.”

    Assuming that you know my academic history is evidence of your utter stupidity. Of course, if you were able to produce my academic transcripts it would certainly prove your lack of intelligence, but you are certainly smart enough not to do that, right, Peterson?

    Keep it up. Peterson, I enjoy watching people like you make fools of themselves.

    I repeat, those that worship Jobs have a nitwit for a deity.

  8. I agree with “me” and “mike” — except for this one small point:

    “The creative professionals as a secondary market is a great move for Apple, but notice how they never actually advertise to them..? “

    As a media professional, I am exposed daily to Mac-related advertising for software and via co-op ads from vendors and system integrators. Most people won’t see these ads unless they receive the trade mags or are on the Apple Pro mailing lists.

    Long live Apple!

  9. I agree with “me”, too. And “net worth”.

    Personally, I don’t think clones were a disaster. I owned one. It was faster, cheaper, and better than any available Mac. And I didn’t care if had the Apple logo on it, I wanted the OS and software. Besides, the Apple hardware was so difficult to navigate to add hard drives, etc, it didn’t deserve the premium price (not that Power Computing systems were the epitome of elegance).

    I remember in the early ’90s when Apple was rolling out the LC and it’s derivatives as the “affordable” Macs, the audience was flat out insane with joy. They wanted competively-priced gear to sell. Well, the price was better, but the content wasn’t.

    Which is where “net worth’s” assessment about creativity and drive comes in – the clone makers were the only ones inovating in any way (remember the DayStar?, et al?).

    Jobs needed to kill the clones to implement his vision which includes a creative force behind it. Clearly, the CEOs between Jobs’ tenures didn’t have beyond the business margin vision. Yah, margins were insane. But they weren’t selling anything!

  10. grok, me,

    Yup and yes. To survive in a capitalist enviroment (what other kind is there), you have to have people that know how to run a business. So often the problem becomes that these business types become the top dogs in management and that’s often when we see companies begin to teeter-totter as they become top heavy, and an empowered select few strive to milk the business for everything they think it should be worth (legally and sometimes sudo legally). Never the less, running a business requires a unique skill set and lots and lots of practice.

    Enter creative types who often, and let me say frankly, rarely have any real business acumen – doesn’t mean they don’t have good ideas, just not a good grasp on the reality of “making it happen”. Even so, without the so called “creative types” new businesses and services would be in short supply, and what there was would always be in a constant state of coming and going as ideas were launched, the profit made, and the next idea brought in. That’s in fact mostly what we see in the real business world. Its so rare to see a good idea capitalized on in order to keep improving on the idea, in order to keep making more money to sell more product to more people who will in turn desire more improvements, and so on and so forth. I think this is the beginning of a more ideal way to practice capitalizm, and I think in many ways that’s the kind of journey Apple has been on.

    Its taken some real time, but it seems to be coming around in a way it never has before. If Apple ends up with a real competative market share, not only against other hardware makers, but more importantly, against MS, I believe that it will be one of the more solid manufacturers the country, and now the world, has ever seen. Its really a neat thing to watch and participate in.

  11. In the late 80 & 90s, the biggest problem wasn’t that Apple was run by “business types,” the problem was that those “business types” didn’t not have a clue how to run a business.

    1. Manage inventory! (remember when Apple had a billion dollars in backorders of one machine and billion models of another machine in the warehouses.)

    2. Manage Logistics—ah yes, let’s build part of a computer in Japan then ship it Ireland to add a few components, then ship it back to China to sell. Brilliant!

    3. Manage Retail presence—let’s sell Macs everywhere, Sears, Best Buy, Circuit City, only the machines are in a corner, broken and all the sales people are ignorant at best and hostile at worst.

    4. Manage Product Line—let’s have 50 different versions of the LC, Performa, etc. to give everyone “choice”—all it did was confuse everyone and drive up the overall manufacturing costs.

    5. Finally—what JEG said, “Not targeting Corporate customers and giving Microsoft the keys to the car didn’t help either.” You’d think business types would figure out some ways to sell Macs to businesses! That’s where the bulk of computer sales were going in the late 80s & 90s. Remember when Motorola was building the CPUs for Apple but even they used Windows?!

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