John Dvorak reverses entire career, says Microsoft should copy Apple
October 24th, 2009
Daniel Eran Dilger
John Dvorak needs your attention for his latest prediction: something new that should out-troll his previous efforts to rile up tech enthusiasts and send them streaming to his blog to explain exactly why his latest idea is so ridiculous: Microsoft needs to apply its Xbox 360 hardware savvy to produce its own PCs to rival Apple’s Macs.
This is the man who decided that the 1984 Macintosh’s “computer mouse” was a dumb idea, then two decades later urged Apple to “pull the plug” on the iPhone in order to avoid looking stupid for delivering a product that was “trending against what people are really liking in phones nowadays, which are those little keypads,” and that “there is no likelihood that Apple can be successful in a business this competitive.”
In between these staggeringly tall pillars of outrageousness, Dvorak has strung a career arc that rivals the Golden Gate Bridge in its unique blend of ballsy engineering laden with tons of superfluous adornment; both also share the same business model: draw in the dumbfounded to marvel at an uncanny ability to connect wildly separated things and then earn a fat toll on the traffic generated.
John Dvorak Concedes 2007 was a “Crappy Year” for Windows Enthusiasts
Apple as a software vendor
Dvorak’s most consistent position has been his decades of insistence that Apple should get out of the hardware business and begin selling its Mac OS just like Windows. Never mind the fact that in order to make as much money from selling software as the company made from Macs back in 2002 (when it wasn’t selling that many Macs), Apple would have had to minimally sell over 32 million copies of Mac OS X to PC users every year (according to an estimate provided at the time by John Kheit).
That’s more than the global number of users who have downloaded Linux to use for free, and those users don’t all grab a new edition every year. Apple’s $129 annual fee might have some impact on Mac OS X’s relative popularity amongst those same PC users who already have a free license to Windows thanks to Microsoft’s monopoly position. This is why Apple doesn’t license its OS.
In 2003, Dvorak also insisted that Apple would port Mac OS X to Intel that summer, something he likes to take credit for today as a prescient sage. Unfortunately, what Dvorak actually wrote was that Apple would port its OS to Intel’s Itanium in 2003, not its x86 chips in 2006.
Itanium, for those who forget, was Intel’s failed 64-bit processor with an entirely new ABI, meaning that porting Mac OS X to Itanium wouldn’t also result in its being able to run on standard x86 PCs. Instead, Dvorak predicted Apple would make Macs that had both PowerPC and Itanium processors during the transition. This sort of thing would cost several thousand dollars and require a heat sink bigger than Dvorak’s ego.
In 2003, Itanium was already clearly a dud and nobody with any clue was even still suggesting that it had any real potential in the mainstream workstation market. It wasn’t until this year, ten years after Itanium was regarded as dead by knowledgeable people, that Dvorak wrote up its eulogy with 20/20 hindsight, saying he’d “never seen anything like it before or since” in terms of wasted investment and dramatic failure resulting in massive industry consolidation.
Really? Wasn’t Dvorak also around for IBM’s spectacular decline following PS/2 and the OS/2-Taligent microkernel supernova that nearly destroyed it and Apple too; or the massive collapse of commercial Unix in the face of Windows NT; or the wildly ecstatic promise of PowerPC that fizzled into obscurity in less than a decade; or how about Pen Computing; or the implosion of Vista; or the rapid collapse of Gateway from the third largest PC vendor to an Acer brand name in the space of four years; or the failure of PDAs parallel to the prima donna face plant of Palm; or how about Motorola’s $5 billion dollar Iridium space odyssey in satellite phone failure; or the celebrated premise of satellite radio that resulted in Sirius and XM merging into a black hole; or Sun’s client side Java paired with Netscape; or Segway; or Zune; or HD-DVD; or any number of other companies, products or technologies hyped into the stratosphere by pundits like Dvorak before ultimately crashing down to earth in failure? Weren’t those all sort of like Itanium?
In 2006, Dvorak explained to his readers that Apple had transitioned to x86 because it wanted to get out of the Mac OS X development game and become a generic PC vendor selling Windows. “It would help the bottom line and put Apple on the fast track to real growth,” he wrote, saying that Steve Jobs would champion this transition to Mac users.
Second verse, entirely different from the first
These days, with Microsoft having hit new lows in growth in its existing cash cows and having completely failed to deliver any new market opportunities in its decade of investment in consumer products within its Entertainment and Devices Division, Dvorak has a new line of reasoning: rather than Apple trying to copy Microsoft’s business model, Microsoft should be copying Apple’s. While completely different on the surface, this new idea is just as absurd.
Apple has been making hardware for over 30 years. It has just figured recently out how to successfully sell software, but still makes the vast majority of its revenues from hardware sales. In fact, despite setting up the blockbuster iPhone App Store and creating popular suites of Pro Apps, iLife, and iWork apps, it’s pretty clear that Apple’s entire software business is merely frosting on top of its core competency as a hardware seller, and quite intentionally so.
Over the same three decades, Microsoft pioneered software sales and subsequently earned vastly more money than Apple over the last two decades. It has similarly been a recent development that Microsoft has begun selling its own hardware. However, rather than making some additional profits that help sell its software, Microsoft’s hardware products have resulted in just eating up billions of the company’s extra profits and casting a cloud of failure over the future of its software business.
Companies are not automatically good at doing things their competitors do; Sony couldn’t even rival the iPod, despite being far more experienced and historically successful in consumer audio products than Apple had ever been previously. Apple’s ability to waltz into the MP3 market and then chassé into smartphones is not typical, but rather extraordinary and unprecedented. Microsoft has failed miserably in both categories, even in its attempts to beat Apple via software, following its Windows licensing model.
The fact that Sony failed to beat Apple via hardware and Microsoft failed to beat Apple in software does not suggest any hope for Microsoft beating Apple in hardware. But that didn’t stop most of the world’s punditry from continually betting on the Zune, even after it was clearly dead.
Microsoft as a hardware maker
This makes Dvorak’s latest idea, that Microsoft needs to crank out its own PCs, not all that much different from his previous flurry of wrongheaded advice. But let’s examine for a moment just how backwardly inane this notion is.
Whenever I write about Microsoft’s disastrous attempts to sell hardware, I get hate mail from people who like Microsoft-branded mice and keyboards. So let me point out that a) Microsoft doesn’t really develop these products, it just stamps its name on them and b) the only reason Microsoft has a mouse and keyboard business is because it could leverage its monopoly software licensing program to tack its branded mice and keyboard sales onto most every PC sold. If anything, the company found out how to sell accessories according to its OEM software licensing model.
Microsoft’s real hardware business is typified by the Xbox. It spent billions developing the first version, which was about as heavy and successful as QuickDraw GX and didn’t live as long. It then turned around and spent more billions to develop the Xbox 360. While many hate mailers will be itching to impress me with tales about how much they like to play video games on it, the fact remains that even in Microsoft’s best quarter ever, it made less money on the Xbox and all of its other consumer offerings combined than Apple makes every quarter from its loss leader software sales. The company has, however, thrown many, many billions into creating it, money Microsoft will never make back before the current version reaches the end of its lifespan.
It’s also interesting to note how terrible the Xbox 360 is in terms of engineering. It has a spectacularly high failure rate, in large measure because Microsoft wanted to poop out the hardware as cheaply as possible because it knew it would not be making any profits on the hardware itself (if you look at Microsoft’s financials, game software licensing has not in any way paid for these losses as planned; it has only helped to cover some small portion of the jaw-dropping billions invested).
Microsoft’s product management and marketing of the Xbox 360 have also been disastrous. Despite wielding its entire PC monopoly to back the Xbox’s HD-DVD offensive against Sony’s PS3/Blu-Ray strategy, Microsoft completely failed to even remain in the game against Sony’s rival disc platform despite that company’s own incompetence of false starts, a selection of more expensive and not quite ready technology, relatively terrible initial sales of the PS3, and a minority installed base of Blu-Ray disc players outside of the PS3.
If Apple’s iPod trouncing of Sony’s Walkman legacy is impressive in terms of hardware, the company’s ability to marginalize Sony’s Blu-Ray efforts (which enjoys an installed base around 25 million) using iTunes (100 million credit cards on file) is even more surprising. Pundits all presumed Microsoft would be the winner with Windows Media; Microsoft barely remains in that game as an also-ran. Again: Microsoft’s consumer software has failed, not just its consumer hardware. It was supposed to at least get the software side to work.
Dvorak: the people who said what I said were all idiots
Despite all this, Dvorak wrote that Microsoft needs to get into the hardware PC business as an extension of its stellar work on the Xbox. “Microsoft needs to go to its Xbox360 factories and design a computer and a laptop that it can brand and sell at the [company’s retail] stores. There is no reason to open stores to sell the Xbox and the Zune and no branded computer.”
Well actually there’s no reason to open stores to sell the Xbox and Zune at all, as Microsoft already has thousands of retail partners that stock its products. In fact, Microsoft retail stores promise to do nothing but irritate its retail channel partners. Selling its own PCs would simply add Dell, HP, Acer, and every other PC maker on earth to this list of angry partners. This is what Microsoft did to destroy its PlaysForSure franchise with the Zune, and is also what the company threatens to do with its Pink Windows phone, if this ever manages to escape from the company’s ironically named Premium Mobile Experiences group.
Dvorak then expunges his entire career as an Apple-naysayer and attempts to pin his losing streak of prognostications upon unnamed idiots in adding, “A majority of pundits over the years have begged Apple to release its operating system, or OS, to the wild, saying that the company could benefit from becoming more like Microsoft with what many perceive to be a superior OS. For some reason nobody notices that if Microsoft brought out a Microsoft computer it will now have this desired business model.”
If that didn’t sink in, take care to note that Dvorak just erased the reality of his own career-long insistence that Apple needed to license its OS to other makers, and that Mac OS X was such a problem that the company moved to x86 to order to jettison it for Windows, and that Microsoft’s business model was what everyone else in the industry should be following because it worked out so well in combination with the company’s monopoly hold over generic PC makers worldwide.
“For some reason” it appears that Dvorak still hopes that “nobody notices” that Apple has the “desired business model.”