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In Round One of MacNewsWorld's Midsummer Mac Death Match ["A Midsummer's Mac Death Match, Round One: Chaffin vs. Enderle," MacNewsWorld, July 12, 2004], Mac Observer editor-in-chief Bryan Chaffin and industry analyst Rob Enderle prognosticated on the state of Apple (Nasdaq: AAPL) five years from now.
Chaffin foretold a world in which Apple would anchor the Digital Hub, become a (small) player in the enterprise market, blaze a trail in the digital-video market and free the people from the tyranny of "My Computer" to the pursuit of "My Digital Life."
For his part, Enderle also presaged a time five years from now, in which Apple would be a digital entertainment powerhouse. He even concurred somewhat with Chaffin that Apple would continue to build and maintain a stranglehold on professional content-creation applications -- workstations even!
But Mac PCs? A Mac OS? Only if Linux somehow were to be exterminated by the forces of SCO and other mutants from the dark side, said Enderle.
Or unless HP (NYSE: HPQ) invites Apple out for a game of Beach-Blanket Bingo...
Rob Enderle:
Apple: Think (Completely) Different
Wow. Even though there is virtually no indication that Corporate America even wants Apple PCs, nor any evidence that Apple even is capable of building an enterprise channel (even though Apple has been working on one on and off nearly since the company's inception), my disillusioned counterpart thinks Apple will be a major enterprise player.
For the record, it took Microsoft (Nasdaq: MSFT) nearly 15 years (some would argue longer) to ascend to this level, and that company needed IBM (NYSE: IBM) and others to get there. While Apple has partnered with HP to move iPods, I doubt that HP will become an enterprise channel for Apple PCs -- and the enterprise has effectively resisted, without assistance, new entries for what, 30 or 40 years?
Netscape failed, while Linux required the support of companies like EDS, IBM and HP and about 10 years to make the move that my compatriot on the other side feels will take Apple five years unassisted.
It would be nice to know the sequence of events that Chaffin thinks will bring Apple success 
in the enterprise, but then he didn't even bother to create a complete scenario. He merely argued for the result that undoubtedly will be the most popular with his fans.
I envy him that.
Will History Repeat Itself?
Now it is interesting Chaffin and I both agree that Apple will likely do well in the digital-media space. However, I actually think Apple can do better than Sony (NYSE: SNE), to whom it's so often been compared.
For one thing, Sony has a nasty history of not figuring out standards until it's too late and then getting in its own way. For instance, even after Apple showed the world how to put together a winning solution like iTunes and iPod -- a solution that Sony should be able to easily match given their channels and resources -- Sony still hasn't been able to get it right.
Unfortunately, Apple also has a standards problem. Apple's refusal thus far to license out its digital-rights management (DRM) technology could relegate its solutions to niche status, and the company could, once again, find itself relinquishing a market it should have owned to someone else.
My hope is that, having made this same mistake before, Apple this time will see this one coming and change its strategy before it is too late. But companies and the people who run them have a nasty habit of repeating errors they won't admit to having made in the first place.
The Linux Factor
Of course, Chaffin has completely ignored the entry of Linux into the market, or what Linux has done to the other UNIX vendors. He acts as if he has never heard of this platform or has read how Novell, RedHat and others are designing future distributions based on Apple's operating system. There is no shortage of ex-Apple programmers who weren't particularly happy about having been laid off and who now are working on these new distributions.
I can certainly understand why Chaffin would want to leave out platforms that were purpose built with similar value propositions to the Mac on Linux and sold by IBM and HP because they would clearly break the Apple he portrays in his enterprise prediction. That more Linux distributions than Mac OS ones run in enterprises today, he conveniently left out as well.
In the digital-media space, if you bother to look, you will see that HP has been replacing old SGI hardware with Linux-based systems in companies like DreamWorks (who are also listed as Apple backers) very aggressively. For its part, HP has done the necessary infrastructure work that is beyond Apple's ability. Those things include massive data and project management, the most complete collaborative (including video wall-conferencing) solution on the market and a technology roadmap that transports media from creation to consumer that even includes TVs and video players.
Apple simply doesn't have the resources to do most of the types of things HP has done over the next five years.
Gored by Longhorn
Please note also that Chaffin left out Longhorn, the next and vastly improved version of Windows in his opening remarks. Certainly those Mac advocates back in 1994 who chanted that Windows 95 was Mac 88 apparently have been reborn, and I can appreciate why these people might want to cover up the probability that history again will repeat itself.
That remains the Mac way: Ignore the competitors, and certainly ignore any of the related trends because Apple will emerge dominant, regardless of the facts. Fortunately, given the recent changes, I doubt Apple is equally as blind as its devotees -- but you never know.
I got a kick out of the idea of Steve Jobs being able to log into any computer and getting his desktop on a 2009 Mac. Something called "roving profiles" came with Windows NT, although it worked better with Citrix back in the late 1990s. Sun Microsystems (Nasdaq: JAVA) refined this technology and deployed it in the Sun Ray One line years ago. More recently, PC vendors ClearCube and HP have done this using blade PCs.
It is nice to know Apple eventually will do this and again be "first" nearly a decade late. Oh, and the server-centric "My Digital Life" my nearsighted friend mentioned is just another way to describe Web Services -- something that has existed in the rest of the computing world, including mainframes, for some time now.
But it's nice to know Apple will figure this out by 2009 as well.
Apple's Future: Fantasy vs. Reality
In the end, Chaffin simply has painted a picture of a favored future, without any foundation in current trends. He ignores major competitors like Microsoft and Linux and doesn't take into account existing technologies beyond Apple's scope, such as blade PCs, media management technologies and true enterprise sales channels.
Unfortunately, the rest of us have to live in the real world where Microsoft and Linux do exist, where trends do not favor Apple and where Apple is often overmatched. I have a hard time believing that any company will remain unchanged with the increasing virus threats and the massive changes in the technology industry and related buying behaviors in the next few years, let alone the influx of new platforms from competitors.
Given Apple's recent increase in cross-platform products, the staffing changes that favor those products and the known competitive issues on the PC side, there is virtually no reasonable probability that Apple can remain unchanged.
In my view, the consumer PC business remains the most at risk and the enterprise business unattainable over this five-year forecast period. Sometimes simply wanting a particular outcome is not enough to ensure it.
Bryan Chaffin:
Off We Go, Again
I've been rebutting many of the arguments Enderle made in his opening remarks for a couple of years now. In fact, I deconstructed a couple of them in our first Death Match. But being wrong never stopped him before, however, so off we go, again.
A Long Way Off
Longhorn crush the Mac OS? Please. I'll believe Longhorn will crush the Mac OS when I see it crush the Mac OS.
Enderle described Longhorn as being very Mac-like, but the commonsense counter to that is that it is Mac-like to the Mac OS of today. What will Mac OS X look like in two years, when Longhorn is released?
Longhorn is cool, to be sure, and it has some interesting (and good) advances in OS technology that Microsoft has planned on including in it, but it's a couple of years away still.
Even when it does come out, and even if it has everything in it that is promised today, Longhorn still will be a Microsoft operating system. It will have been designed and built by committee, intended to please focus groups. Its purpose will be to advance Microsoft technologies and market share, not the end user. Microsoft is simply not set up to produce great software, and never has been.
As Steve Capps -- a member of the original Mac and Newton teams, as well as an Apple Fellow who eventually defected to Microsoft to make Windows a better OS -- told me in an interview:
I can tell you exactly why Apple products come out so good and Microsoft products come out so bad.At Apple, nobody sits down and says "This is what we're going to ship." The product is the god to which we all pray.
At Microsoft, the schedule and the plans are the god. Nobody has a vision. They get to this mediocrity because nobody's willing to stand up and say: "You know, we shouldn't do this at all."
That's why Windows 3.1 sucked; that's why Windows 98 sucked; that's why Windows NT and Windows 2000 sucked (less); that's why Windows XP sucked (again, less); and it's why Longhorn still will not match the Mac OS' elegance and sophistication, even though it will most likely suck less than its predecessors.
Longhorn will not kill the Mac OS, just as Windows 95 didn't really hurt Apple in the 1990s. Apple hurt Apple in the mid-1990s, and Windows just came in to clean up the mess.
But that's really a subject for another time.
The Apple of today is different, however, and I have every confidence that the Mac platform will be very competitive, to say the least, with Longhorn, once it finally ships.
Linux's Strength Is Also Its Weakness
I love Linux. The Mac Observer is served on a mixture of Linux and FreeBSD servers. I think Linux is dandy, and that it will keep getting better.
It will not, however, be as easy to use, set up or maintain as the Mac OS. Its very strength --the open-source community -- is the same reason it won't be able to match the Mac OS for end users. There's no one in charge. Just as with Microsoft's development efforts, there is no one person to say: "We shouldn't do this at all."
And that's just fine. There is plenty of room in the marketplace for Linux and the open-source community. Millions of people -- indeed, a growing number of people -- love and want everything that Linux offers. Indeed, in developing nations, Linux promises to eventually become the predominant power in operating systems, eclipsing both Windows and the Mac OS.
In fact, there is simply no way for a change in intellectual-property (IP) law to kill Linux, as Enderle vaguely suggested. Linux is just plain here to stay.
But can it ever be the kind of OS that Mac users want? The kind of OS where things just work, and where you have consistency across the platform's software? No. Again, that's because of its strength, the open-source community.
The Widget Factor
Remember, the Mac's vaunted ease of use comes in part because Apple controls the hardware and the software. That's not possible for Windows or Linux.
It is the chaos and near-anarchy of the Linux community that makes Linux possible, and makes it what it is. I celebrate that -- but I want to get my work done on a Mac. There are millions of people like me, and as with Linux users, that number is growing.
Though Apple's refusal to go after market share frustrates and annoys me, the reality is that Apple is selling an increasing number of computers. Apple holds less market share than it used to, but it has a growing user base. Why would Apple exit that business?
No, Linux will not do in the Mac platform. The growth of Linux only helps the Mac platform by making the Mac an alternative to Windows, instead of the alternative to Windows. The more that becomes the case, the more people there will be who will consider something other than Windows. For many of those people, the Mac will be their choice.
The Jobs Factor
Don't forget Steve Jobs. Steve Jobs wants to work on a Mac -- a Mac of today, not the Mac of yesteryear.
We're talking about a man who had his software developers design Keynote rather than use Microsoft's PowerPoint for his presentations. Releasing Keynote was supposedly an afterthought, not a precept to developing it in the first place.
Do you think that Jobs is the kind of person who is going to exit the PC business? What would he then use? Windows? Linux? Steve Jobs the perfectionist using Linux?
It's not going to happen. Heck, when he first came back to Apple he used his own OS, NeXTStep, on an IBM ThinkPad rather than use the Classic Mac OS of old on a PowerBook. Today, Apple products dance to Steve's vision, and I just can't see him giving that up, except under the direst of circumstances.
Pixar and Apple
Ironically, Mr. Enderle and I agree on something; Apple's future relies very much on Jobs. Perhaps more ironically, I disagree with Mr. Enderle about which of his two companies, Pixar (Nasdaq: PIXR) or Apple, Mr. Jobs would choose if push came to shove.
Though, he once said he had left Apple in the care of a Bozo, and that he didn't intend to do it again (that's a paraphrase), Jobs also has said that making movies was more important to him than making Macs. If, at some point, he was forced to choose between the two, I think he would choose Pixar.
However, who would force him to make that decision, and why? Steve rules Apple through his extremely capable lieutenants, while John Lassiter manages Pixar's day-to-day activities. Jobs is there to make the big deals happen.
Both companies are doing very well, and are reportedly happy with the arrangements with Steve as they are. Indeed, I imagine that both companies prefer it this way. Everyone knows that too big a dose of Steve Jobs can be fatal, at least to your career.
I believe Jobs will remain at both companies for some time to come. I think it feeds his ego --his need to create cool technology and movies, and his desire for influence. Every day he gets to eat huge helpings of cake, while more lies waiting in the background. He's not going anywhere -- except, possibly, Disney (NYSE: DIS), but that's a whole other conversation.
Closing the Door on Janus
Janus will be a flop. Well, perhaps not a flop, but I don't foresee it becoming the predominant technology in the music download services.
As with all other things Microsoft, Big Redmond is developing a product that offers music the way Microsoft wants people to buy that music. It puts Microsoft in control, and offers new ways for people to do things like subscribe to music. That in turn means residual income for Microsoft, the king-daddy goal for the company.
Some folks want to rent their music, but most don't. Janus will allow subscriptions to grow, to be sure, but will not supplant the iTunes Music Store-iPod combo. That's because Apple is more or less designing both products the way the people inside Apple want to use those products. The product is the god that Apple worships -- and that's why iPod and iTMS have been such a huge hit.
Mac as Content-Creation Platform
Looking at Mac as a niche content-creation platform, both Enderle and I agree that Apple is likely to become a bigger player in the content-creation business. Where we disagree is what happens to Apple in the wider consumer space.
As noted above and in my original response, Apple's sales to the consumer space are growing. There's little need for Apple to exit a growing business. I believe Enderle's predictions will prove to be wrong on this front.
Apple and HP: We're Just Friends, Thanks.
Apple will not be merging with HP. There's no point. Apple's culture would have a massive culture clash with Fiorina's company, just as it would with just about any other company.
If Apple were to be bought by a larger company, I think it's more likely to be a company like Microsoft, IBM or even Intel (Nasdaq: INTC), all of who would have more interest in Apple's patent portfolio and other IP than in acquiring the company or its brand.
If I am wrong about that, however, I can foresee no need for Apple to be bought out. Apple is growing, has more new products in its pipeline and in most ways, is more successful today than it has been in the last decade. I can't find any doom and gloom in that, unlike my Redmond-centric antithesis.
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