The OTHER Brain Drain (10/17/00)

Houston, we have a problem. Everyone knows that Apple's recent earnings warning blamed the fourth-quarter shortfall in part on slowing sales in the education market. And longtime viewers are well aware that while Apple once ruled that market as the undisputed king, its share has been dwindling in dribs and drabs over the course of the last several years. Remember about a year ago, when Dell announced that it had finally eclipsed Apple as the number one manufacturer in education? Sure, the company was wrong, having neglected to count Apple's own direct sales to schools, but even then some of us thought we saw the writing on the wall.

So, back here in the present, we're dismayed but not particularly surprised to see that the Wall Street Journal (via Bloomberg News) is reporting that this time it's for real: in 1999, Dell toppled Apple from the education throne, capturing 15.1% of the market compared to Apple's 12.5%. The king is dead; long live the king. But wait a sec-- there's still hope. These numbers apparently come from the Dataquest Gartner Group, the same entity who produced the incomplete data which led Mike Dell to crow to the press about beating out Apple last year. Could it be that these new numbers are just as flawed as those reported last October? Hey, in the market research game, anything's possible. Unfortunately, Apple's not able to refute those numbers just yet, since the company's ensconced in its "quiet period" until tomorrow's earnings statement.

Of course, whether Apple comes in first or second isn't really the issue anyway, Mike Dell's obsession with All Things Steve notwithstanding. Whether or not Apple is still top of the heap, it's losing altitude as schools "phase out" Macs in favor of new Wintel systems, because the "real world" is so "Windows-oriented." There's a nasty feedback loop that Apple's been fighting for years: businesses use Wintels, so employees buy Wintels for home, so their kids grow up on Wintels, so the schools buy Wintels for the kids to use, so the kids graduate and start businesses that use Wintels. It's like an infinite loop of mediocrity and pain. Apple can attack the consumer market all it wants, but until it finally addresses all markets (including the dreaded Enterprise beast it's worked so hard to ignore), it's going to have an increasingly tough time hanging onto its share of any of them. Here's hoping that Mac OS X proves to be exactly the secret weapon that Apple needs.

SceneLink (2617)
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The above scene was taken from the 10/17/00 episode:

October 17, 2000: Fred Anderson prepares for his big performance tomorrow, as Apple warms up the QuickTime Streaming Servers for the live webcast. Meanwhile, Dataquest once again claims that Dell has overtaken Apple in the education market; haven't we heard this before? And Sony introduces a couple of new laptops that may really give the PowerBook's aging design a run for its money...

Other scenes from that episode:

  • 2616: All Ears Are On Fred (10/17/00)   Happy Rebound Eve! Or is it the day before Black Wednesday? Everything hinges on what money dude Fred Anderson says when he hosts that conference call with the analysts tomorrow after the market closes...

  • 2618: Nipping At Apple's Heels (10/17/00)   Anybody who denies that Apple turned the industry on its ear when it introduced the original iMac needs to stop snorting the Windex. Sure, plenty of pundits at the time scoffed at the idea that a translucent, brightly-colored computer would even draw the public's attention, let alone provoke the rest of the beige-box manufacturers to start incorporating style into the equation...

Or view the entire episode as originally broadcast...

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