Linked by Thom Holwerda on Fri 25th Aug 2006 20:33 UTC, submitted by Saad
Legal When Mac sales dropped off in 1985, Bill Gates personally wrote John Sculley suggesting that he license the Macintosh design to companies like Apollo, DEC and Wang, and establish the software as the industry standard. Apple declined, and Microsoft published Windows. Sculley was enraged, and eventually filed suit. After five years, Apple lost, but not before severely damaging its relationship with Microsoft (which accounted for 2/3 of all Mac software sales).
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Fatal delusion
by alcibiades on Sat 26th Aug 2006 03:11 UTC
alcibiades
Member since:
2005-10-12

You see the fatal delusion of Cupertino in those years in the report about Gassee's view:

"Gassée reasoned that the Macintosh was so vastly superior to the existing PC graphical environments that Apple would never face any serious competition and would be able to rely on profit-rich hardware sales (with margins over 55% until the early 90s)."

They had a brilliant vision of the future of personal computing at the interface level. The thing they were totally blind about was the future of the market. Gassee's view of the world implied one of two things.

One case would be, there would be Apple selling a gui, and everyone else selling a more or less crippled gui, or even DOS, with Apple having a 5-10% market share and the market growing more or less as it did. To go for this you had to fail to see the power of demand of the rapidly growing market. One way or another a market of this size was going to deliver to its customers what everyone could see was the future of the interface.

Alternatively, you could believe that Apple would have huge market share, and more or less monopolize hardware and software both. But to believe that, you had to believe that the market growth would be tiny. Any realistic view of how big the market was going to be meant accepting that one manufacturer was not going to dominate it in the way Gassee's view required.

An instructive comparison is Philips with the CD. Philips seems to have understood both the future of music - digital - and the future of the market - so big that insisting on being the only supplier of one technology would lead to that technology being marginalised.

Not that it worked out badly in the end. Apple with MS market power would probably have been at least as bad as MS.

What triumphed was really the Windows business model, rather than Windows. A model which allowed enough hardware manufacturers to meet the demand. What Apple's management team effectively did was to ensure that if the world was going to buy the computers they wanted, they would necessarily not be Macs.

Its very interesting to look at the sales charts from Ars Technica and reflect on what was happening to Mac sales and market share while Gassee and the team were indulging their delusions. Of the two things you had to understand in those days, it was far more important to understand the market than to be able to deliver refined product. As the early Windows snaps show, if you were willing to deliver something, people would buy, almost regardless of how unrefined it was. Apple simply could not, or rather would not, deliver to demand. It drove the market to MS.

People often say that it was MS anti competitive tactics that won. Never seen that. When MS was a $25m a year company, and Apple $1 billion, it didn't have the power to indulge in them. What you have to explain in those years is how MS ever got to the position where it had the power to use anti competitive tactics.

Reply Score: 5

RE: Fatal delusion
by Cloudy on Sat 26th Aug 2006 05:04 in reply to "Fatal delusion"
Cloudy Member since:
2006-02-15

What you have to explain in those years is how MS ever got to the position where it had the power to use anti competitive tactics.

They leveraged the IBM monopoly to their advantage and IBM's regret.

If it hadn't been the forces entirely outside of Microsoft's control that led to the 'exact clone' pc clone market, coupled with MS's providing IBM with the OS for the PC, MS would have just been another of a dozen players in the software provider business.

Reply Parent Score: 4

RE: Fatal delusion
by javiercero1 on Sat 26th Aug 2006 05:09 in reply to "Fatal delusion"
javiercero1 Member since:
2005-11-10

Hum, I agree with some of your points... but you seem to ignore the fact that by the time Apple introduced the Mac. MS was already a huge company, since PCs were selling by the dozens.

The initial licensing scheme of DOS is what allowed to squash other players in the GUI arena that were competing with somewhat supperior offerings than Windows 1.x/2.x, like GeoWorks, and GEM. Those anticompetitive practices are what forced every other player out of the PC OS market. This allowed MS to have the huge momentum behind being the quasy exclusive supplier of the OS for the defacto computer platform that a lot of the emerging personal computing manufacturing was standarizing about. If you did not see that, then you were not paying much attention during the 80s.

What apple was trying to do, is to hold on to the onslaught from MS the best they could. And so far they are still in business...

Reply Parent Score: 4

RE[2]: Fatal delusion
by siebharinn on Sat 26th Aug 2006 11:50 in reply to "RE: Fatal delusion"
siebharinn Member since:
2005-07-06

"The initial licensing scheme of DOS is what allowed to squash other players in the GUI arena that were competing with somewhat supperior offerings than Windows 1.x/2.x, like GeoWorks, and GEM. Those anticompetitive practices are what forced every other player out of the PC OS market."

That is revisionist bullshit.

Reply Parent Score: 2

RE[2]: Fatal delusion
by rcsteiner on Mon 28th Aug 2006 18:01 in reply to "RE: Fatal delusion"
rcsteiner Member since:
2005-07-12

The initial licensing scheme of DOS is what allowed to squash other players in the GUI arena that were competing with somewhat supperior offerings than Windows 1.x/2.x, like GeoWorks, and GEM. Those anticompetitive practices are what forced every other player out of the PC OS market.

The licensing scheme of DOS wasn't paricularly relevant, since both PC/GEOS and GEM ran on top of (and thus had a hard requirement for) DOS. I still run PC/GEOS (in the form of Breadbox Office) on MS-DOS, PC-DOS, and in OS/2 VDMs to this day.

Reply Parent Score: 1