Reality Check 2000
- 22 February, 2000 12:01
SAN FRANCISCO (02/22/2000) - A friend recently e-mailed me a hilarious collection of technology predictions. Popular Mechanics in 1949: "Computers in the future may weigh no more than 1.5 tons." Western Union in 1876: "This 'telephone' has too many shortcomings to be seriously considered as a means of communication." And Bill Gates in 1981: "640K ought to be enough for anybody."
The moral: If you think you can predict the future of technology, you're a fool.
Yet during Apple Computer Inc.'s business slump in the mid-1990s, an epidemic of Prediction Flu swept America. Most journalists and analysts were content to report what was actually happening, which was dramatic enough. But the following dime-store Nostradamuses felt moved to tell their readers what was going to happen. The resulting self-fulfilling effect made it even harder for Apple to recover.
I lost a lot of faith in the media during those dark days. In fact, I started working on this column back then. "If Apple ever comes back," I vowed through clenched teeth, "I'm going to come back to haunt these guys. I'm going dig up and reprint every one of their doomy predictions so readers will never again take these fortune crackers seriously."
Apple did come back, so here I am. If you're a Mac fan, forgive this unpleasant flashback to a nightmarish time. It's for a good cause.
February 5, 1996: "One day Apple was a major technology company with assets to make any self respecting techno-conglomerate salivate. The next day Apple was a chaotic mess without a strategic vision and certainly no future."
The company with "no future" has since tripled its market share and is raking in $12 billion a year. (Bonus fact: The author, a venture capitalist, assesses companies' prospects for a living. Scary.)The Boston GlobeMay 14, 1998: "[The new iMac] might have done Apple a world of good if it had appeared a few years ago, when far fewer homes had PCs in them. Today, the iMac will only sell to some of the true believers. [It's] clean, elegant, floppy-free-and doomed."
You want doomed, buddy? Try your career as a psychic. Apple sold over two million iMacs in the machine's first year, making it the best-selling personal computer during most of its first 12 months.
January 25, 1996: "Whether they stand alone or are acquired, Apple as we know it is cooked. It's so classic. It's so sad."
I'll tell you what's sad. This whopper got quoted in the New York Times.
Nathan Myhrvold, Microsoft Chief Technology OfficerJune 1997: "The Next purchase is too little too late. Apple is already dead."
Hey, Nate, if Apple's dead, then Microsoft is decomposing. The Next purchase was a masterstroke, landing Apple great people such as Avie Tevanian and Steve Jobs, as well as the software that underlies Mac OS X.
February 19, 1996: "Apple's erratic performance has given it the reputation on Wall Street of a stock a long-term investor would probably avoid."
Depends on what you mean by long-term. If you'd bought Apple stock the day Fortune published that column, you'd be up about 600 percent right about now.
And then this: "By the time you read this story, the quirky cult company . . . will end its wild ride as an independent enterprise."
For a magazine called Fortune, it was pretty lousy at reading Apple's palm.
Michael S. Malone, Author
March 1999 (in his book Infinite Loop): "Market share up, stock up, hot new products rolling out the door, customer pride once again strong, Steve Jobs had once again pulled off a miracle. . . . [But] for all of his success, all Steve Jobs had really accomplished was a temporary pause in Apple's long-term decline."
Poor Mike must have been looking at the graph upside down. Apple's financial, technological, and marketing positions have rocketed skyward every single quarter since he typed those goofy words.
June 1997 (from the article "101 Ways to Save Apple"): "1. Admit it. You're out of the hardware game."
Good thing editors don't run companies-what actually saved Apple was hardware, hardware, and hardware.
February 23, 1995: "Apple could hang on for years, gamely trying to slow the decline, but few expect it to make such a mistake. Instead it seems to have two options. The first is to break itself up, selling the hardware side. The second is to sell the company outright."
The Economist forgot the third option-recovering, just like any normal company in any normal slump.
The Financial Times
July 11, 1997: "Apple no longer plays a leading role in the $200 billion personal computer industry. 'The idea that they're going to go back to the past to hit a big home run . . . is delusional,' says Dave Winer, a software developer."
Let me see here. Just how many computer companies are rushing to make their computers look like Apple's? Dell, eOne, IBM, Gateway-that sure smells like a "leading role" to me. As for hitting a home run, unless I'm the delusional one, every model released since Steve Jobs returned has been a smash-hit best-seller.
Gaston Bastiaens, Former Apple VP
January 11, 1996: "Within the next two months, Sony will acquire Apple. At its current stock price (low 30s), it is a steal. Sony will be the white knight who will step into the picture."
A white knight? Why not? The notion of Sony buying Apple is definitely a fairy tale.
October 16, 1995: "Having underforecast demand, the company has a $1 billion-plus order backlog. . . . The only alternative: to merge with a company with the marketing and financial clout to help Apple survive the switch to a software-based company. The most likely candidate, many think, is IBM Corp."
What happened-did Sony back out?
The Good Guys
While I'm ordering the plaques for the Tech Journalism Hall of Shame, I hasten to mention that a few people made better stabs at predicting the future. In the thick of Apple's hard times, for example, Prince Walid of Saudi Arabia bought 5 percent of Apple, telling the New York Times that the company "is selling $8 billion worth of goods even in the midst of the confusion. This is a heck of a company."
Analyst Pieter Hartsook also stuck his neck out, telling the Financial Times that "the risk of Apple going out of business and leaving no one to support its products is almost zero." And the former occupant of this very Macworld page, Steven Levy, wrote in Newsweek in 1996 that "Apple is far from a lost cause.
Surely something can be done with a company that rakes in $11 billion a year."
The most surprisingly clearheaded analysis of all, though, came from none other than Bill Gates in 1996. He said that Apple wasn't doomed, Apple just needed to "pick its markets and renew the innovation in the Macintosh."
And that, of course, is exactly how Steve Jobs saved Apple. He focused on specific markets, renewed innovation-and ignored the media.
DAVID POGUE (http://www.davidpogue.com) is the author of Mac OS 9: the Missing Manual (Pogue Press/O'Reilly, 2000). Research assistance was provided by Asim Choudhri, Jay Datema, William Fraunfelder, Stephanie Lane, and Rebecca Luxford.