The Truth About Splitting Up Apple

The Truth About Splitting Up Apple: The Specialized Company Myth.

Introductory Note:

This article is old.  In internet years it is pre-historic in as much as you cannot find it in the web archive.  For those who have never known the period when Apple was intent on erasing itself from history this article is from that time.  It was before Jobs came back.  It was before anyone even cared what Jobs was doing (Ross Perot had given up on NeXT, and Pixar had not released any movies yet.)  It was a time when we thought all was probably lost but were praying something would change.  It was a time when I read MacWorld hanging off every detail of Copland; the 3rd try to fix the long in the tooth Mac OS.  It was also a time when stupid people were suggesting Apple do what almost killed Palm; separate into a hardware company and a software company.  You’ll note Palm is alive and well; the company that was spun off to maintain Palm OS is as good as gone.  In the mid nineties some retards, (and by retards I mean wall street analysts whom at the time didn’t even need a high school education (resulting in the first recession of the decade) suggested Apple would be better as a hardware company separate from their software.  This even while about the only thing Apple had going for it was it could provide an awesome user experience because it controlled both (though at the time it didn’t do much with either).  What saved Apple?  Massive control of both.  I’ll save the I told you sos, and post the first article I ever had published in so far as I can recall (At the now defunct ThessaSource).

The Truth About Splitting Up Apple: The Specialized Company Myth.

BY: GEORGE EDWARD GREEN III

There has been an idea going around in the shadows of the computer industry now that Apple would have a better shot at survival if it separated itself into two joint entities, one for hardware, and one for software, namely the Mac OS. Recently, with Apple’s string of overly publicized troubles, a lot of people have begun to call this idea everything from “Insightful,” to “The only way for Apple to survive.” Worse yet is the fact that many smart, insightful people have actually taken a liking to this idea, and are beginning to view it as a good one! However if one looks closely, this idea is not only, short sighted, but possibly a way to give Apple a quick death!

To begin to see the problems with this proposal, one must consider some of the differences between Mac OS and Wintel markets. For instance in the Wintel world, you have one guy making the OS (or shell), another making the “computer,” another million making periphials, etc. However in the Mac OS world, one company makes the OS, and the same company makes the hardware (the Mac ROM and logic board). Because of this, Mac users enjoy unparalleled fusion between their OS and their hardware; the two are developed to be a cohesive pair; they are designed to work perfectly together, and they come close to this mark. Thus Mac users don’t get nearly as many hardware/software conflicts as our friends in the Wintel world. Now if the Mac OS and Macintosh hardware divisions suddenly became different companies, all this would start to change. Forget even the horrible record for two division existing together at Apple, there would begin to be slight errors every time the Mac OS is released. Then those errors would become a little worse, until they started to become large fundamental errors in the OS, that deeply affected the OS’s stability, and the integrity of the platform overall.

Ah, but there is even more wrong with this idea than an oversight of what makes the Mac OS fundamentally better. Think for a minute what happens when Apple becomes separate companies. Money needs to be more tightly regulated, confusion builds in many areas, decisions become slower and slower, and divisions are left to their own wits to keep them alive. Now consider the enemy of Mac OS: Windows. Yes, Microsoft makes much money on the Mac, but they do not like the Mac OS at all. It keeps their marketshare down. It is resistance to the Wintel-centric view of computing. Now think what might happen if Mac OS became it’s own little company with it’s own little funds, and it’s own pathetic marketing division. Consider what has happened even to seasoned companies that tried to compete with Microsoft for OS market share, Big Blue left with it’s tail between it’s legs. In short Mac OS, Inc. would be eaten alive. No, they would NOT be able to compete more effectively against Microsoft. Indeed, they would instead provide an easy target for Microsoft to chomp on.

And let’s not forget rival hardware companies. Certainly this brave new Mac hardware company would produce some snazzy stuff, but would that help? Has AMD, or Cyrix, with their faster cheaper CPUs, been able to beat out Intel yet? And yet it is thought that Mac Hardware Inc. could easily take on Intel, AMD, Cyrix, Gateway, Compaq, Dell, etc. with a continuingly unstable OS? Of course, separation is the key… to a quick fate under the foot of Wintel.

So is not being separate companies REALLY holding Apple back? Maybe it’s actually holding it TOGETHER. What I would suggest is exactly what Apple is doing. Get more money from cloners, organize finances, maintain their OS strategy, and advance their hardware appeal while reducing the cost for operating the company. Apple is progressing very nicely in this manner, and it looks as though we might actually start to see a profit in a few quarters or so. However, rash decisions like splitting the company up are NOT the answer. You’ll note that I didn’t even bother to add in the chaos such an event would wreak on Apple’s employee’s preventing it from making ANYTHING competitive for at least 6 months, and that’s if they were very very organized to begin with, which they are not.

So before one goes out shouting how Apple must become specialized to be competitive with Wintel, one must realize that the Mac OS IS a different platform and cannot use the same approach as the PC world uses. For instance does Microsoft OR Intel focus on education, or Desktop Publishing, to get profits rolling? No, they don’t and if they did, they’d be headed down fast.

George Edward Green III is CEO of Current Productions of New York and is working on dispelling other myths in an upcoming web site to be known as MacRelations. You can reach him at kharaku@Capital.Net. thessaSOURCE would also appreciate feedback directly at thessa@prodigy.net.

Author Notes…

George Edward Green III is President of Current Productions Consulting in New York. He also runs and Mac Relations, his own Macintosh news and editorials site. George welcomes feedback via email at kharaku@capital.net.