Two Apples aren't better than one

Writer unleashes Mac users' ire by suggesting company should be split in two

Woe to the technology scribe who writes ill of Apple Computer, Inc.

Every published writer who's run afoul of the sensibilities of the Mac community rapidly learns the consequences.

Vitriol-laden e-mail (known on the Internet as "flames") questioning the author's line of reasoning, intelligence, journalistic ability and worse floods the offender's electronic inbox.

Two months ago Joshua Jaffe, writing for the Web site TheDeal.com, incurred the wrath of Mac users for raising a historically volatile issue: the notion of splitting Apple into two companies.

The idea is that Apple suffers by designing and producing both hardware and software while competitors such as Microsoft Corp. and Dell Computer Corporation concentrate on one or the other. If Apple were split in two, so the theory goes, each unit would benefit from the ability to focus its energies in one area.

Jaffe quotes several well-known analysts to support this theory and cites statistics illustrating Apple's declining market share and poor stock performance relative to the rest of the computer industry through the 1980s and 1990s.

According to Jaffe, Apple is in a death spiral and can survive only through radical change, even suggesting that CEO Steve Jobs has a secret committee sequestered somewhere in Apple's Cupertino, Calif., headquarters studying the plausibility of the idea.

Needless to say, Mac users disagreed.

Jaffe received so many responses he ran a follow-up piece two weeks later consisting almost entirely of e-mails from outraged readers, mostly Mac users, determined to set him straight.

They argued that far from a handicap, Apple being both a hardware and software maker is the company's greatest advantage, affording a level of integration impossible in the Windows world. It's one of the things that makes a Mac a Mac.

Examples of how Apple leverages its vertical integration abound. Perhaps the best example is digital music, where Apple operates an online music store, provides the software to access the store (as well as play and organize the music), and builds a portable hardware device, the iPod, so users can listen to their music anywhere.

Not only do each of the components integrate seamlessly with each other, but each is acclaimed individually as being among the best, if not the best, available.

So why, then, is the absurdity of dividing Apple apparently obvious only to Mac users? Are they arguing from emotion rather than reason? Or is the Mac community's oft-repeated battle cry, "They just don't get it!" an accurate accusation?

In an attempt to dig a bit deeper into this issue, I contacted Jaffe and several of the analysts he cited (as well as a few he didn't) for further insight on the subject.

First, Jaffe isn't anti-Apple, an accusation he said many respondents leveled at him. He's a business journalist critiquing Apple's business strategy and offering what he honestly feels is a valid option for Apple.

"I just wish the feedback had more effectively refuted the arguments I laid out in the story," Jaffe said. "Not one letter offered a viable alternative to the breakup plan I put forward."

But even if one accepts that Apple is in trouble and needs a dramatic new strategy to reverse the trend, a breakup plan hardly seems the appropriate remedy. It simply has too many pitfalls.

Peter Kastner, an analyst with Boston-based Aberdeen Group, Inc., was quoted in the article to affirm the technical feasibility of creating a version of Mac OS X that could run on Intel-based PCs. He was not, however, aware of the article's central premise and quickly dismissed it.

"Splitting the company up would doom the hardware side of the business to a quick and probably painful death," said Kastner. "The software business would have a hard time not starving in a commoditized Unix/Linux marketplace."

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