Sculley on Apple and Intel

[Rincewind42]

Re: Re: Naah Sculley-boy, you being Apple's CEO was the w

Originally posted by EvilMole
Despite what CNN says (and what Apple said at the time), this simply isn't true. As the figures I quoted earlier showed, Mac OS sales reached a high of 11% market share penetration in January 1997, when cloning was at its peak. It began its long decline after that. Apple's own share had stabilized at around 9%, and is now down to a mere 3%-ish.

It doesn't matter if the market share goes up if the platform goes under. That's a classic Sculley error. Mac market share may have gone from 9% to 11%, but if Apple's marketshare in particular gets cut in half (which given the success of Power Computing by itself can be the gauge of) then it doesn't seem like a good idea to Apple now does it? Who will evolve the platform if Apple was driven out of the market? Regardless of all the speculation that analysts have put out, I seriously doubt that Apple could become a software-only company (especially then, maybe it would be easier now, but I don't think so). Ultimately the only solution was to kill the clone market before it could kill them. In the end, all you have to do is look at what the Clone market did to IBM. They did all the research, secured all the initial contracts (including the one with the Devil himself) and then got promptly thrown out of the PC industry they started when Compaq beat them to the 386. Power Computing was poised to beat Apple to the G3 before the axe came down.

 

[synergy]

Re: Re: Naah Sculley-boy, you being Apple's CEO was the w

Originally posted by EvilMole
Despite what CNN says (and what Apple said at the time), this simply isn't true. As the figures I quoted earlier showed, Mac OS sales reached a high of 11% market share penetration in January 1997, when cloning was at its peak. It began its long decline after that. Apple's own share had stabilized at around 9%, and is now down to a mere 3%-ish.

The truth is more complex. In the short term, Apple needed to buy time to reposition itself as what an analyst friend of mine calls "a boutique computer company": that is, a company that makes high-price, high-design value machines, leaving the cloners to make the "grey box that you hide under your desk" machines. To buy this time, Jobs decided to cull the cloners, without thinking of the long-term effects on Apple's business relationships (a classic Jobs error, and one that he's made several times in the past).

You are comparing market share when Apple had a higher percentage at a time of lower overall home computer sales. Unit sales remained similar for apple through the 97 to 00 period.
The overall home computer market expanded greatly at that time thus reducing Apple's overall percentage of the market.
Commoditization really expanded the market through cheap PCs and everyone wanting to be on the "net".
At the same time Apple had red ink on its financial statements for some time leading upto 1997. If their net sales were increasing their bottom line should have been better. Apple makes money on the hardware. By killing the clone makers they stopped their own market share from further eroding. There are plenty of news reports of how the run up to the 97 time period the whole clone computer deal was starting to fall apart.
Is it any wonder that less than one year after the clones are stopped that Apple returns to profitability?

 

[ipiloot]

Re: Re: Re: Re: Naah Sculley-boy, you being Apple's CEO was the worst mistake...

Originally posted by EvilMole
From $1 billion in sales, to $10 billion in sales. By contrast, Apple is now hitting about $6 billion in sales per year.

Or let's look at Job's performance over the past few years. In Q3 2000, Apple shipped just over a million Macs. In Q3 2003, that had slipped to just 771,000 units - and that's not just a blip, the figures inbetween have shown a steady slide.

Or perhaps you'd like market share figures. In 1994 (the year after Sculley left), Dataquest put the Mac market share at 8.9%. In January 1997, while Amelio was CEO, the total for all Macs (including clones) had risen to 11%, with Apple accounting for about 9% (yes, folks, contrary to the Jobs-inspired myth, cloners didn't cost Apple market share - in fact, they increased it overall for the Mac). By 2002, this was down to 3.8%. So, in other words, despite the "success" of the iMac, Jobs has overseen a significant slide in the Mac's market share, and, since the first wave of iMac euphoria died down, a slide in unit sales as well.

So if sales are slipping, how is Apple actually making money? Ironically, part of it is accounting tricks (none of them illegal - Fred Anderson is a very good CFO in this regard), partly by eating the dealers up with Apple Store (thus increasing its own margin), and partly be small but significant diversification - iPod, yearly updates, .Mac. Plus, of course, sales of ARM shares, which in more than a couple of quarters have been the difference between Apple making a loss and Apple making a profit.

Don't look at the revenue side only. Apple made a loss at that time. Huge loss. When Jobs took over the company in 1997 it was very near to the banckruptcy. Would the company continue the clone program (supporting clones alone costed more than license revenues from them), it'd be gone already.

Steve made a huge job turning the company around. Before it was a swamp of lazy engineers and loose management. Overcrowded and objectiveless. Making loss every day more-and-more. Now it's a properly working creative company. Losing market share was the result of what was made long itme before Steve took over. Keep in mind that since 1995 Apple did not have competitive edge in OS anymore. At least if we speak in pure technical basis. Win got comparably good. Apple did'nt have modern OS up until OSX got usable and that happened with Jaguar. Last year.


I have to admit that Sculley did many good things. He's first 4-5 years in the company were fabulous. The way he pushed the company forward was magnificent.
But after the period, when good operations management only made the difference passed by, the lack of vision started to bring the company down. Lots of management rules were overriden. That's why he lost the job eventually.

The major mistake that Apple did under the management of Sculley, Spindler and Amelio was using proprietary parts in all-over the system. To be honest - Amelio started the switch to commodity hardware (PCI/AGP slots, USB ports and anything else familiar from PC world besides processor and OS), but Jobs made it a strategy. That allowed the company to cut cost so much that it's now able to build machines as cheap or cheaper than others in the industry. Far more. Apple gets the OS cheaper than usual PC-maker - believe it or not. Approximately half as cheap. Keep in mind that bringing Steve back to company was Gil's idea. A brillinat one from the company's perspective and total disaster from he's own's. Instead Steve we would maybe have Gasseé. And there wouldn't be the Apple Co. we know and love anymore.


OS and processor make the identity of Apple. You can't rip off half the identity and hope that the customers are still happy. This is why I say that Sculley STILL HAS NO CLUE! And You, EvilMole also.

 

[themadchemist]

perhaps this was the only thing he did RIGHT.

 

[EvilMole]

Re: Re: Re: Re: Re: Re: Re: Re: Re: Naah Sculley-boy, you being Apple's CEO was the worst mistake...

Originally posted by Rincewind42
However, most of Apple's losses were in the desktop sector. They had gains in the laptop sector, but not enough to offset the loss in desktops, mostly the PowerMac.

Certainly, Apple was hurt by having a poor pro desktop line. I don't have the figures to hand at the moment, but pre-Jobs it was selling around three times as many pro desktop machines as it is now. Coming from a base that low, the Power Mac G5 has to recover a huge number of sales in order for it to make up all the ground that Jobs has lost. I'm not convinced that a machine that only really matches the fastest Windows machines around is going to make up that ground.

 

[EvilMole]

Re: Naah Sculley-boy, you being Apple's CEO was the worst mistake...

Originally posted by ipiloot
Don't look at the revenue side only. Apple made a loss at that time. Huge loss. When Jobs took over the company in 1997 it was very near to the banckruptcy. Would the company continue the clone program (supporting clones alone costed more than license revenues from them), it'd be gone already.

...which is, of course, why they needed to up the price of the cloner's licenses.

Steve made a huge job turning the company around. Before it was a swamp of lazy engineers and loose management. Overcrowded and objectiveless

Couldn't agree more. But the credit for that goes to Amelio, who curtailed huge numbers of projects and laid off a lot of engineers who were adding nothing to the core products.

OS and processor make the identity of Apple. You can't rip off half the identity and hope that the customers are still happy. This is why I say that Sculley STILL HAS NO CLUE! And You, EvilMole also.

Well, that's your opinion. I only care about what I see on screen - Mac OS X is what makes my Mac a Mac, not the chip that I never see and really don't give a damn about.

 

[BrandonRP0123]

I think we're forgetting a few important things here:

1. Mac OS X's core already DOES run on x86. See www.opendarwin.org.

While the elegant GUI that makes up a good portion of what we think is Mac OS X isn't available - the underpinnings (including X11) are.

2. Apple tried this x86 thing before. Remember the DOS/PC cards you could get for the NuBus slots in the older Power Macs? Yes. They had a 486DX2/66Mhz chip on them, etc. Check your apple history. They were a flop, IIRC.

3. Intel is a chip maker. They make the P4 for the PC market just as IBM used to produce x86 chips for the PC market. Don't even mention the new Centrino stuff - because that's just an added chip on their mobile processor motherboard. They could very well make a mobile processor board with a PPC G5 and add an airport extreme chip onto it.

They're not married to it - it's just a source of income for them. IBM produces x86 servers, Linux applications and things of the sort - yet they're also accomplishing this task for Apple.

 

[Rincewind42]

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Naah Sculley-boy, you being Apple's CEO was the worst mistak

Originally posted by EvilMole
Certainly, Apple was hurt by having a poor pro desktop line. I don't have the figures to hand at the moment, but pre-Jobs it was selling around three times as many pro desktop machines as it is now. Coming from a base that low, the Power Mac G5 has to recover a huge number of sales in order for it to make up all the ground that Jobs has lost. I'm not convinced that a machine that only really matches the fastest Windows machines around is going to make up that ground.

If you don't think that Windows 95 had a lot to do with that, then you need to brush up. With the introduction of Windows 95, Apple lost a LOT of market differentiation, and thus people that had previously bought Macs for what Macs did and that no one else did, suddenly saw the economics of going the PC route. After all, why pay 50% more for the same thing they would ask (regardless of your feelings on the interchangeability of Mac OS & Windows)?

Sculley, Spindler, and Amelio's answer to that is to be like everyone else. Jobs' answer is to make yourself different again. You can see the former in all of the PC makers that folded or nearly folded during and before the downturn (many a company has fallen to Dell). The latter can be seen today in Apple.

An x86 Mac that couldn't run Windows would have been seen as just another Mac and blown off in the same way. An x86 Mac that could run Windows wouldn't be considered unless it was preloaded with Windows.

Finally, the Benchmarks say that the G5 only matches a high end PC workstation (yes, we are talking about $4000 dual Xeon systems, not $2000 commodity single P4 PCs). But in actual use, applications not benchmarks, by and large the G5 trounces the competition. All it takes is one thing that you can't do, or can't do as fast on a PC to show the value of the G5. Because the things you can't do or can't do as fast are far fewer.

 

[bousozoku]

Re: Re: Re: Re: Re: Re: Re: Naah Sculley-boy, you being Apple's CEO was the worst mis

Originally posted by merges
Hear, hear!

I can't believe the purely negative, apparently uneducated, instant reactions to Sculley. It takes a very, very bright guy to make two household names. And it takes some pretty solid business knowledge to increase a company's revenue tenfold. And while we're at it, it takes a lot of guts to risk the kind of innovation that Apple was doing in the 80s and early 90s, which has in many ways led them to where they are today.

The innovation, other than the idea for Newton, had nothing to do with Sculley. One of his first actions was to have Apple legal sue Digital Research and Atari over GEM. Was it a surprise that Mac OS languished after Steve Jobs was gone? Sculley presided over an automatic upgrade cycle.

 

[agengler]

Still clueless after all these years

I'm certainly glad he "screwed up" and didn't go with intel.

"Intel Inside" is a warning more than a declaration.

 

[Cappy]

It's always amazing how in topics like this so many facts are inaccurate or missing.

1. PCI and commodity parts in Macs were already in development and even for sale before Amelio took over. I should know since I bought my 7500 just before Amelio was put on the stage.

2. The imac "success" that everyone credits Jobs for was already something in motion by Amelio. Apple continually had stated about year before its intro that they would be hitting the consumer market hard with something they had currently in development and Amelio backed that up after his release in an interview.

3. An x86 Mac does not translate into an apples to apples comparison of different timelines that people are comparing in what would have happened to Apple in going x86 or not. A different business model and marketing plan would have been needed and there is no easy way to predict if that would or would not have been successful.

4. People have conveniently forgotten that IBM really didn't follow through well on a number of fronts years ago with the PPC. What happened to OS/2 on PPC? What happened to OS/2 period? If they're so dedicated to their cpu line, why does Moto catch all of the blame for lack of speed when during the same timeframe, IBM was not really producing anything significantly better?

5. Be very careful how you use those revenue numbers during Amelio's years as he repeatedly talked about bringing those numbers down so that Apple could be profitable. They were around the 10-12 billion/year and he talked about 6-8 billion/yr being where they needed to be to become efficient and profitable again. That was part of a strategy and not truly a direct result from Apple sales being taken away.

I agree with the person who stated Scully is responsible for the Apple we love. He's not truly responsible for what Apple came to be but his regrets he mentions actually point to many of the very issues plaguing Apple now. He was no idiot. His problem is probably more that he just got burned out and should have picked someone with better vision to take over earlier. Spindler was a joke. Of course we can't let the board escape any blame. They played a large role in things and didn't get near the negative publicity that the CEO's did.

The thing to remember in situations like this is that there is an apple in every crowd. Someone who pushes for quality and might have the cool things that people respect. Typically those people never come in first and I think people here don't realize that. Apple has done some amazing things to get where they are but while it's sad they can't increase market penetration, it's not really in the cards. It's all about business people. Apple's only real saving grace is that they have tons of assets and patents that they can tap to enter new markets so that when the current desktop market truly dwindles and dies(and it will), they should be pretty well prepared to move Mac technology into those other markets regardless of the cpu used.

 

[tYNS]

Sour Grapes

Seems to me that Scully has a very large case of Sour Grapes.

Scully was a Business Boy running a creative company. they do not match. I cannot say he was an idiot, the newton was a interesting idea, just not approached properly. Scully really did not do much for Macintosh other than fill a roll and "continue" a created success. He never created success.

It reminds me of the old Atari 2600 story. The company that made such a sought after machine but never took it anywhere after that. Eventually people outgrew the technology and found even better things.

In a way we have to be grateful that scully was at apple all these years.. The true creative ideas that we are now seeing from Apple were matured over the years from steve jobs as he developed NeXT ... This is GREAT.

It is baffling to think what would apple really be like if Steve Jobs hadn't gone out on his own. If he were allowed to have had his hand in over the late 80's and early nineties.

things happen for a reason And it all seems to be looking really good for apple now.

 

[Kai]

I worked at Intel for almost 5 years (blue collar) and can tell you first hand it’s a great company that takes care of the employees and customers. Much like another company we all appreciate, Apple. Intel and Apple have more in common than we may think.

Oh, then i guess this must be an evil ploy from AMD's Jerry Sanders himself, right? ;-) Or maybe I'm just hallucinating...

Sun has it too and look at whom they are starting to buy CPU's from!

Urrmm - AMD?? ;-)

I subscribe to your point though that Intel *could* make some excellent PPC-CPUs though.. Just like AMD for that matter! ;-) Everybody's better than Moto!
The only problem i see is Intels "king of the hill" attitude. They couldn't be just part of a PPC-Consortium, no: They have to OWN the whole shebang before they're happy!
They're much like M$ in this respect...

It’s scary to think it, but what if there were catastrophic failures in IBM’s leadership, business model (again), or earnings and they had to start shedding overhead.

Say, have you heard of a thing called "contractual obligations"? ;-)
And exactly why should IBM be less trustworthy and "shaky" than Intel, when they're the _only_ constant that has been around since Day Zero of the Computing Age?
Hell, IBM is over 3 times as old as Intel!!..

I don’t have all of the answers but Intel takes risks all the time (one of their core values)

Name one single risk they ever took except for EPIC/the Itanic!

kevib: 4 Cores in a P980? Gimme a break!
a) what you're talking about is the Power5, not the P980!
b) The Power5 has 2 cores (hence "Dualcore") like the Power4 did. It will have SMT and some other goodies extra though..
c) IBM integrates 4 Power4-Dualcores in one MCM (Multi-Chip-Module) and will continue to do so with the Power5. Maybe that's what you meant..
d) The P970 is a stripped-down Power4 with a single core and Altivec. Guess how many cores the P980 will have if the Power5 has 2? ;-)

pigwin32: I really like the term "backstreet solder monkey"! ;-)

And as for RISC vs CISC: The battle is OVER for many years! Like many here said: RISC has won, just like predicted! *All* Chips produced today are RISC-Chips, some just have extra x86/CISC-Translation logic on top that does nothing but slow them down! ;-)

 

[1macker1]

there is nothing wrong with intell chips, in fact there are among the fastest out there, along with AMD. I dont see how the changing of chips (esp. moving away from motorola) could have hurt apple. Think where apple could be if it wasn't trying to push it's MHz myth, and staying with Moto so long

 

[bousozoku]

Re: Sour Grapes

Originally posted by tYNS
Seems to me that Scully has a very large case of Sour Grapes.

...

It reminds me of the old Atari 2600 story. The company that made such a sought after machine but never took it anywhere after that. Eventually people outgrew the technology and found even better things.

...

Atari's 680x0 computers were quite popular, especially in the music industry, where they were number one. Many of those applications started out on the Atari ST line. This line was very popular in Europe and took the number one spot in several countries.

Sculley has so many sour grapes, he should be able to make a lot of whine.

 

[kherdin]

Originally posted by 1macker1
there is nothing wrong with intell chips, in fact there are among the fastest out there, along with AMD.

Nothing wrong with them? How about the new Prescott revision to the Pentium line dissipating abouyt 110W of heat per CPU? I think that can be considered as something wrong with them - considering a TWO PROCESSOR G5 2GHZ system doesn't even consume that much (although it comes close, but remember its TWO processors, not one!).

-Myrd

 

[1macker1]

Heat is a issue, but it goes along with making the chip faster. Dealing with the heat is part of the engineer's task. The G5 has the biggest heat sinks known to man on their processors. I dont mean big heat sinks i mean HUGE heat sinks.

Originally posted by kherdin
Nothing wrong with them? How about the new Prescott revision to the Pentium line dissipating abouyt 110W of heat per CPU? I think that can be considered as something wrong with them - considering a TWO PROCESSOR G5 2GHZ system doesn't even consume that much (although it comes close, but remember its TWO processors, not one!).

-Myrd

 

[Rincewind42]

Originally posted by 1macker1
Think where apple could be if it wasn't trying to push it's MHz myth, and staying with Moto so long

The Mhz Myth isn't a myth - all it has EVER stated is that Mhz isn't everything to speed. It's alive and well in that a 2Ghz G5 meets or beats a 3.2 Ghz P4. If Mhz alone mattered, you would expect the G5 to be about 62% the speed of the P4.

Where Apple went wrong was in not getting something faster than a 1.42 Ghz G4 by the time Intel managed to get to 3Ghz P4s. And the Mhz Myth still plays there because a 1.42 Ghz G4 is faster than Mhz alone would predict when faced with a 3Ghz P4 (it just doesn't beat it).

And for the record, Intel has to face the Mhz Myth too - it's Itaniums and Pentium-M processors are both faster than the P4 Mhz for Mhz. They created the Mhz Myth, it's about time they reaped what they sowed.

 

[Rincewind42]

Originally posted by 1macker1
Heat is a issue, but it goes along with making the chip faster. Dealing with the heat is part of the engineer's task. The G5 has the biggest heat sinks known to man on their processors. I dont mean big heat sinks i mean HUGE heat sinks.

They still put out less power than a 3.2Ghz P4. The heat sinks are so honking big so that you can get more airflow through them, thus making for a more efficient (and quieter) cooling system. If they put on a heat sink half the size you can bet those fans would be kicking up at full speed all the time.

 

[1macker1]

I just don understand why all of a sudden, Apple is trying to push the clock speed up (up to 3Ghz by next year). I belive that a system with a slower chip and a better design, can be as fast as a bad design with a fast chip.

but i guess a faster chip and a good design is even better.

 

[daveL]

Originally posted by 1macker1
I just don understand why all of a sudden, Apple is trying to push the clock speed up (up to 3Ghz by next year). I belive that a system with a slower chip and a better design, can be as fast as a bad design with a fast chip.

but i guess a faster chip and a good design is even better.

Looking at your sig, I'd wager you're the person banned from MR yesterday based on your exchange with Rower_CPU.

 

[Rincewind42]

Originally posted by 1macker1
I just don understand why all of a sudden, Apple is trying to push the clock speed up (up to 3Ghz by next year). I belive that a system with a slower chip and a better design, can be as fast as a bad design with a fast chip.

but i guess a faster chip and a good design is even better.

Why wouldn't they want to push up the clock frequency? If they never did, they wouldn't have bothered to have gone past the G3 (or earlier).

And IBM has won awards in processor design for their Power4 processor - from which the 970 is derived. I'd say that peer recognition makes for a decent measure of good design.

 

[Mac til death]

it doesn't bother me that Sculley said this because he never knew how to run the company anyway....

He needs to stick to Pepsi.... maybe they could start shipping intel processors in their 7up.

 

[VIREBEL661]

Originally posted by Dippo
I still think RISC is much better than CISC. CISC is reaching it's limitations while RISC still has some ground to go.

That's just my opinion, no real scientific data to back it up with.

Totally agree..

 

[Gyroscope]

Major reason Apple market share eroded back in mid-late 90's was that after release of Windows95/NT it pretty much lost OS war to Microsoft. It also had little to do with the hardware. Under Sculley Apple just hasn't realized importance of having modern pre-emptive multitasking, memory protected OS. They had good hardware base to do so any time they wanted. IBM/Microsoft had to wait for i386 to do anything with OS/2, and Microsoft couldn't do anything with Windows for years to come. Apple had at least 2-3 years head start here. I used to tease my dad that my Amiga500 ($350) could format floppy disk while I was typing stuff into it while my dad's MacSE would just halt until it finished formating(on $2000-3000 machine). Then Windows95/NT came out. Businesses jumped on bandwagon cuz in windows NT they saw an modern server OS that was supposedly cheaper and easier to administer than unix boxes of those days. Consequently it was very logical to deploy WinOS on client side (Win95) to go along with it. Win95 also became very popular in consumer space helped by falling hardware prices and dawn of internet era. Apple
got really caught up in this. They didn't have an modern OS ready to go(Copland was an failure) and they couldn't respond well to falling PC hardware prices, because burdened with prop. standards ala ADB,NuBus etc they just couldn't build cheap and good box. Result was disastrous Performa/LC line of Macs that suffered from quality/price-performance issues and in turn further helped to Apple's downfall.