From: drd@siia.mv.com (David Dick)
Subject: Re: History was made today...
Organization: Software Innovations, Inc.
Date: Sat, 19 Dec 92 00:06:43 GMT

In <1gon7oINNshk@mirror.digex.com> hacker@access.digex.com (Dark Hacker) writes:

>History was made today.  IBM's stock price dropped to below its book
>value of 55 today, to close at 51 points per share on news that Big
>Blue would be shedding another 25,000 workers and cutting their
>dividend.  On the very same day, Apple Computer stock closed at 55
>points per share, 4 points higher than that of Big Blue.

Relative share price is really quite irrelevant; compare price/earnings
or percent over book, or...

>When the Apple Macintosh was first introduced, IBM derided this computer
>as "a toy" claiming that mice were too difficult for users to comprehend
>and use.  They laughed at the little toaster of a machine:  "The business
>world will never accept it."  "No one could use this for any serious
>commercial development."

IBM thumbing its nose at Apple is not the point; some of its problems
stem from the fact that it followed Apple into the personal computer
market.

>But who's laughing now?  IBM is on the skids and scrambling to stay
>alive.  Apple Computer is experiencing record sales and revenues
>thanks to their new Powerbook computers.

I would hardly say IBM is "scrambling"; it just no longer has the
enormous success it's had since the mid-sixties, when it bet the
company on a brand new way of building computers (a whole series
capable of running roughly the same software).

>Innovation and attention to the customer in the form of ergonomic design
>and well engineered products are what distinguish Apple's computers from
>the utter crap being churned out by IBM and the PC clone manufacturers.
>No longer able to rely on consistant sales of big mainframes to huge
>institutions, IBM is suddenly finding it has to (gasp) compete and, if
>it learns its lesson at all, will have learned it too late.

Don't forget that IBM: made personal computers possible by inventing
floppy disks and "Winchester" hard disks (just about the only kind anyone
uses), and redefined the personal computer by making a relatively open
design that allowed an explosion of independent hardware and software
suppliers.

The duplication of their PC design made it difficult for them to make
money selling their PC, but led directly to the current plunge of PC
prices.  How many Macintosh cloners are there?  Didn't Apple buy
a company named Cadmus that had produced a Mac-like interface on 
a UNIX workstation?

>Ignore the market... and the market will ignore you...

But IBM has not ignored the market -- it's following one trend that
Apple is decidedly not following: open systems.

Remember Sculley said that no one ever made money selling
non-proprietary systems.

I think the lesson of comparing the current fortunes IBM and Apple
may well be that it's hard to make money selling open systems, but
it's easier to make money selling proprietary systems.

I'm not trying to be an IBM fan, but explaining the financial results 
of the two companies is not simple "good guys/bad guys".

David Dick
Software Innovations, Inc.
[the Software Moving Company; converting software to UNIX for over a decade]
Newsgroups: comp.sys.mac.misc,comp.sys.mac.system,comp.sys.novell