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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Uncle Frank who wrote (18334)	2/21/2000 5:19:00 PM
From: Mike Buckley	Respond to of 54805

Frank, Because all of us are pulling for you on this Monday that we know you're in market withdrawal :), I'll try to aptly paraphrase Moore's discussion of Apple's strategy in a few sentences. But please be aware that I'm probably not up to the task. If you (and others) have Tornado and haven't gotten around to reading it, I think you'll easily digest the information out of context. It begins on page 95 of the soft-back version. Moore makes a strong case that Apple correctly decided to take the high road of establishing itself as the value-added player that allowed the company to sell everything it could make during the tornado at very high margins. Instead of trying to compete with the commoditized, low-margin players vying to be the Gorilla of the IBM-compatible sector, it clearly established itself as the owner of its niche market. During the first tornado, had it tried to go head-on against the future Gorilla, Softie, it surely would have lost because it didn't have enough of a value chain in the software vendors. It's best-case scenario is that it would have ended up as a chimp in a commoditized market instead of a dominating chimp in a high-margin market. During the second tornado when Softie moved to a graphic interface similar to Apple's, it was impossible for Apple to compete because of the DOS's immense installed base. Gorilla theory dictates that had Apple tried to compete, it likely would have ended up like the RISC consortia that has produced little while tying up Sun's and HP's resources. Instead, Apple continues to thrive as dominating player in its niche market. --Mike Buckley