Brian Bailey Preface to the Revised Edition

Timing the Mac Market

When does corporate secrecy harm customers?

This week, Apple announced two brand-new machines featuring Intel processors. The debut of the Intel-powered iMac and brand-new MacBook was great news for the Apple customers who've been anticipating the new models, including me.

Not only did Apple deliver, they delivered six full months ahead of schedule. In June of last year, Steve Jobs announced the move to Intel and promised that the first Intel-based machines would be shipping by the next developer's conference in June 2006.

Every technology company faces the danger of the Osborne effect: how do you preview the new stuff that's coming without devastating sales of the old stuff? Apple invests a lot of time, energy, and lawyer's fees in secrecy. If no one knows that a new iPod is about to be announced, people won't stop buying the old one while they wait for it.

What Apple has accomplished in this situation is almost unheard of in the industry. They have truly achieved the best of both worlds - a terrific holiday quarter focused on existing machines followed by a triumphant New Year's launch of the new ones. Christmas spending has a built-in deadline that encourages purchases that would otherwise be delayed; once that passes, most people can afford to wait. In other words, sales were likely to plummet once December passed and June approached.

So, how did Apple do it? Did they actually overestimate how long it would take to build an Intel-based product? Or did Steve Jobs know that the true target for release was January when he chose to emphasize June?

Every purchase decision involves risk, especially ones involving technology, and yes, there is always something better just around the corner. In this case, though, with such a dramatic change in products and performance, I believe that Apple took advantage of its customers and chose profits over fairness.

Where is the line between secrecy and deception? How many people bought a new iMac or Powerbook during the holidays who would've waited one short month if they knew Intel-based machines were 30 days away instead of 210?

For many of us, the rumors are a  part of our daily lives and they often, rightly or wrongly, influence our decisions. But most customers don't double-check all of the rumor sites before they walk into an Apple store.

Of course, the people who bought iMacs and Powerbooks in November and December still own great computers that will serve them for many years. The simple fact is, however, that most of them would rather have a different computer, but they didn't have enough information to make a truly informed decision. Why is it okay, even celebrated, for Apple to withhold that information from its customers and, possibly, mislead them about it? Many great technology companies provide product roadmaps that help customers and protect them, and they remain great and successful companies. Apple can do better.

Business Week's Byte of the Apple:

As great a company as Apple computer is -- I'm often as guilty as anyone of falling for the hyperbole -- the pointed, skeptical, analytical, dispassionate, and yes, uncomfortable questions about this unusually influential outfit and its unique, legendary, brilliant, and complicated chief don't get asked often enough. And they should be, more often than they are now. Great companies deserve nothing less.

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