This could be bullish for MSFT tomorrow. Sure, it touts Apple sales, but is very optimistic about PC growth and long-term health. Besides, it's not as if every Apple sold is MSFT's loss - apart from OS there are quite a few applications MSFT has in every one of those boxes - and hey, what about that AAPL investment Billy made awhile ago! That's what I love about Softie, a finger in every pie, getting a cut from every transaction!
nytimes.com
Ask Jon Rubinstein, the man in charge of
hardware at Apple Computer Inc., about the supposedly imminent
"post-PC era," and he answers like someone who works for
Microsoft or Intel, the twin pillars of the personal-computer industry, rather
than for this quirky California computer maker.
For though it has become fashionable to say that the PC era is waning and
the future of computing lies in a burgeoning assortment of wired and
wireless hand-held consumer-electronics gizmos, Rubinstein is still a true
believer in powerful, full-featured personal computers.
"Yes, there will be appliances out there, but if you look at the PC it's still in
its infancy," Rubinstein said. "I keep hearing that the PC is dead, but when
I look at the next couple of years, that's not what I see at all."
Apple Computer, which itself was all but given up for dead a few years
ago, has had a remarkable resurrection. Eleven days ago, the company
exceeded analysts' estimates in reporting its sixth consecutive profitable
quarter. For the last two quarters, it has held more than 12 percent of the
retail and mail-order PC market. And the company is once again one of
the top five makers of personal computers in the United States.
Moreover, while manufacturers on the Microsoft-Intel side of the PC
industry are being pinched by prices that are spiraling below $500 with no
end in sight, Apple, the "Think Different" company, is busily selling a line of
desktop computers whose price begins at $1,500, helping raise Apple's
profit margin more than a point from last year, to 26.2 percent.
"Apple understands simplicity, branding and style," said Charles Wolf, a
Wall Street analyst at Warburg Dillon Read. "It's amazing that nobody on
the PC side gets it."
To the outside world, Apple's charismatic co-founder, Steve Jobs, gets
much of the public credit for what is certainly one of the most remarkable
turnarounds in U.S. corporate history.
But the secret to Jobs' successful return to Apple is the small
manufacturing and design team and the highly disciplined engineering
process that Rubinstein has quietly put in place during the last two years.
It is this team that is responsible for the popular iMac machines that Apple
began shipping last August, for the critically acclaimed G3 desktop and
portable machines that updated Apple's moribund Macintosh and
Powerbook lines, and for a new low-priced portable to be introduced in the
next few months.
"The Apple you and I knew two years ago is dead," said Andrew Gore,
editor in chief of Macworld, the trade magazine that tracks Apple more
closely than any other publication. "It's a completely different company. It's
unfortunate that Apple has chosen to keep Jon Rubinstein under wraps."
Those familiar with Rubinstein, 42, know him as someone who has spent
his entire career evolving with the computer industry. After earning
bachelor's and master's degrees in electrical engineering at Cornell
University, and a master's in computer science from Colorado State
University, he moved to California, where he became a computer
work-station designer for Hewlett-Packard before joining Ardent, a
start-up supercomputer company.
From there, he caught on with Next Computer, the company Jobs founded
in 1986 after being forced out at Apple. Rubinstein ran Next's hardware
engineering until the company shifted to an all-software approach. He left
to set up an independent hardware-design firm that Rubinstein
subsequently sold to Motorola in 1996 -- part of the proceeds of which he
planned to spend on wandering the world.
Two months into his sojourn, Rubinstein was touring Scotland when a
phone call caught up with him. It was from Gilbert Amelio, who had
recently been brought in as the chairman of Apple. Apple had run up
losses in 1996 and 1997 totaling $1.86 billion and was being counted out of
the game by virtually everyone in the personal-computer industry. But
offered the job of running Apple's hardware operations, Rubinstein agreed
instantly.
In fact, Rubinstein accepted so readily that Amelio later wondered in his
book "On the Firing Line: My 500 Days at Apple" whether he had been the
victim of a palace coup. It was on the advice of Jobs that Amelio hired not
only Rubinstein but also Avi Tevanian, who was then head of software at
Next and now has that job at Apple.
Perhaps it was all part of a secret plan by Jobs to recapture Apple, Amelio
wondered in print, after he had been ousted by a board that brought Jobs
back to run the company temporarily -- an arrangement that has continued
for 20 months and counting.
"That would be news to me," Rubinstein said of the conspiracy theory. He
came to Apple, he said, because he saw himself primarily as a
desktop-computer designer and he thought that the company, even in its
deepest crises, was the place to be.
"It was a no-brainer," he recalled. "Apple was the last innovative
high-volume computer maker in the world."
From a highly disorganized company where as many as four independent
engineering teams might work simultaneously to design the same computer,
Apple is now working on a dozen projects using cooperating,
interdisciplinary teams -- using what Rubinstein refers to as a "fast-track
design." The approach puts many parts of the design process in parallel,
speeding the time to market.
"I look at this as having a bag of technology tricks, and at the appropriate
time I bring them out and put them in our products," he said. "And we have
more in our bag of tricks."
Colleagues say that Rubinstein is obsessive about checklists, which have
now been built into every facet of Apple's engineering system.
And when things are not caught by the checklists, Apple's designers take a
SWAT-team approach to fixing bugs.
When the company's innovative iMac computer first shipped last year,
Rubinstein attended a midnight store-opening celebration in Palo Alto. By
the next morning, after hearing consumer complaints at the store and on
Macintosh enthusiasts' Web sites, he knew that the machine had some
problems -- the worst being that the computer did not work with a newly
designed Epson printer.
A software patch was created in a matter of days and widely distributed
with the aid of the Internet, sidestepping a potentially serious
public-relations stumble for the new iMac.
The Epson episode could have been much worse. Several years before
Rubinstein's arrival, a few of the company's new Powerbook portable
machines actually caught fire while in use. The machine had to be
withdrawn from the market, and for more than a quarter Apple went
without revenue from an important part of its product line.
If Rubinstein's team is more efficient than Apple's earlier hardware groups,
it is also a remarkably more insular and frequently secretive organization --
perhaps the clearest break from the former Apple Computer, which was
so porous that it was known in some circles as "a ship that leaks from the
top."
Indeed, among the Valley's digerati the company is now referred to as
"Jobs & Company," and Apple has adopted an almost Japanese-style
adherence to the ideal of the unified team.
But Rubinstein dismisses the popular notion that Jobs can act as a
capricious tyrant.
"I love working with Steve," he said. "We make a good team, and he raises
the bar on me."
Yet while working to uphold Jobs' exacting standards, Rubinstein may
provide an important buffer between Jobs and the rest of the company.
"He is absolutely unflappable," said Glen Miranker, Rubinstein's vice
president for desktop systems. "It's a particular value in the present
environment."
There are those outside Apple who are skeptical about the company's
resurgence. They note that with the exception of the iMac, which has
found a market in both first-time computer users and former owners of
Microsoft-Intel PCs, Apple is still selling to a core group of customers
devoted to the Apple Macintosh legacy.
"I see them being strong for a while and then slowly fading," said Seymour
Merrin, a computer industry consultant at Merrin Information Services in
Palo Alto. "They can't afford the development spending that an Intel can
make."
Even Apple executives acknowledge that the company has made little
headway in corporate markets recently.
Moreover, despite the company's contention that thousands of new
software applications have been introduced for Apple machines,
companies like Nisus Software, which develops applications for the
Macintosh and benefited from the industry innovation the Macintosh
stimulated during the 1980s and early 1990s, say they have yet to feel the
impact of the turnaround.
And others wonder whether the introduction of two successful computers
under Rubinstein -- the iMac and the G3 desktop line -- necessarily mean
Apple can sustain its comeback in the highly volatile PC industry.
"I don't look at this as pulling a rabbit out of the hat," Rubinstein said. "Our
strategy has a lot of dimension, from industrial design to performance to
functionality."
That claim will be put to the test late this spring or early summer when
Apple introduces its long-awaited entry into the consumer market for
portable computers, priced in the $1,000 to $1,500 range.
With a sleek, gray translucent case and clamshell shape, according to those
who have seen it, the computer will be as radical an industrial design
departure from the standard boxy notebooks as the iMac was from the
conventional desktop PC.
Whether the machine -- which Jobs has reportedly insisted will weigh less
than 5 pounds and have a large flat-panel display -- will be a runaway hit
like the iMac is hard to predict. Though certainly another example of Jobs'
think-different philosophy, it will appear while much of the rest of the PC
industry is focusing on so-called subnotebooks, which weigh less than 4
pounds and are the rage among the computer road-warrior set.
Rubinstein is confident the machine will be a hit, in part because it will
incorporate features from the company's heavier laptops, like long battery
life and disk-drive bays for floppies, CD-ROMs or DVDs.
"The industry is waiting to see what we do next," he said. "I heard that
some of them are holding back their products and saying, 'I don't want to
be iMac'd."' |
