Battle of the buzzwords: Apple vs. Microsoft

[Originally posted Sept. 20, 2009 at Fortune.com]

Apple (AAPL) is awesome. Microsoft (MSFT) is muscular. Apple execs speaks in adjectives; Microsoft's in gerunds. Cupertino wants to show us how cool its products are, and how easy-to-use. Redmond wants us to know how hard it's going to compete to grow its market share.

That's the take-away message from the pair of videos pasted below the fold.

The first -- Apple's Sept. 9 "It's only rock and roll" presentation boiled down to just the adjectives -- has been viewed nearly half a million times since it was posted last week by justanotherguy84.

The second -- which we put together Sunday morning at the suggestion of TechFlash's Todd Bishop -- is Microsoft COO Kevin Turner's July presentation to analysts boiled down to just the buzzwords. Turner is, as Bishop promised, a modern master of techno-business jargon.

Let's go to the videos. Each is less than two minutes long.

Microsoft's grinning robots

[Originally posted Sept. 28, 2009 at Fortune.com]

One of the disadvantages of reading American newspapers is that you don't get Charlie Brooker delivered to your doorstep.

Brooker is a British comedian and, as everyone who reads The Guardian knows, the author of the Screen Burn column that appears in G2 every Monday.

He's also Britain's funniest and most enthusiastic Apple (AAPL) basher -- an honorific he secured with a Feb. 5, 2007 column that included this classic paragraph:

"I hate Macs. I have always hated Macs. I hate people who use Macs. I even hate people who don't use Macs but sometimes wish they did. Macs are glorified Fisher-Price activity centres for adults; computers for scaredy cats too nervous to learn how proper computers work; computers for people who earnestly believe in feng shui." (link)

Now, in Monday's Guardian, he offers a sort of bookend to that 2007 column -- a companion piece in which he reveals his true feelings about Microsoft (MSFT) Windows. He still hates Macs and Mac users, but it's not as if thinks Windows is so great. In fact, he writes:

Apple's tablet stoppeth one of five

[Originally posted Sept. 23, 2009 on Fortune.com]

Coleridge's Ancient Mariner had nothing on Apple's (AAPL) much-rumored tablet.

Without even a prototype -- like Microsoft's (MSFT) -- to look at, 21% of 3,100 respondents in a RBC Capital/ChangeWave survey said they'd be interested in buying an Apple tablet computer in the $500 to $700 price range. That's better than the 9% who said they would be interested in buying the original iPhone in an April 2007 survey -- after Steve Jobs had unveiled it, but before it had been released.

"The promising early interest illustrates the market opportunity for a Mac-based Tablet," writes RBC analyst Mike Abramsky in a Wednesday morning note to clients.

Among the other findings in the survey:

Boiling Apple down to its adjectives

[Originally posted Sept. 15, 2009 on Fortune.com]

Last week we counted how many times Apple (AAPL) marketing chief Phil Schiller used the words "amazing" and "incredible" in his presentation at the "It's only rock and roll event." (Answer: an incredible 15 times each.)

Now someone who calls himself justanotherguy84 has taken the exercise one step further. He (or possibly she) has posted a 2-minute YouTube video of the entire Sept. 9 event stripped of just about everything but the adjectives.

Ever wonder how Steve Jobs and company leave the indelible impression that Apple's products are really great, really easy and just plain awesome?

Check it out below the fold.

Apple's amazing, incredible Phil Schiller

[Originally posted Sept. 12, 2009 at Fortune.com]

The day after Apple's (AAPL) "It's only rock and roll" event, Erik Sherman asked on CBS's BNET why the media missed the strategic importance of the gaming announcements that were made that day.

He has a point. Apple spent nearly a third of the hour-plus long presentation talking about the iPod touch -- the "funnest iPod ever" -- and how it stacks up against handheld game machines made by the likes of Sony (SNE) and Nintendo.

Yet the attention of the press seemed to be on everything else: the return of Steve Jobs, the video camera on the iPod nano, the camera missing from the iPod touch.

I went back and reviewed the podcast video of the event and I think I've found the reason: Phil Schiller.

Why are there no Mac viruses?

[Originally posted Sept. 2, 2009 on Fortune.com]

There are, as far as we know, no Mac OS X viruses in the wild.

To prove that assertion wrong, you only have to name one.

Academic proofs of concept and theoretical vulnerabilities don't count. Neither do computer worms, Trojan horses, spyware, adware, spam or any of the other nasty species in the zoology of malware.

That eliminates Inqtana-A, iBotNet, MacSweeper and a handful of other examples of Mac malware usually trotted out at this point by PC apologists. Nor can you count the 10-second Zero Day Pwn2Own Safari exploit that got so much press attention last March. None of these, strictly speaking, were viruses.

The issue comes up anew because Apple's (AAPL) latest Get a Mac ads are once again hammering Microsoft (MSFT) for those "thousands of viruses" to which its operating systems and application suites are heir. And that, in turn, has led to a resurgence of comments in this space to the effect that a) Macs are just as vulnerable as Windows machines and b) the only thing that protects them is their miniscule market share.

Those ideas, while widely promulgated on the Web, are wrong. The fact that Mac OS X represents less than 4% of the worldwide installed base of computers might explain why there are fewer Mac viruses. But it wouldn't explain why there are none.

So what's the answer?

First, let's define some terms.

Apple's Q2: A test of fundamentals

[Originally posted Aug. 22, 2009 on Fortune.com]

When Apple (AAPL) reported its fiscal 2009 first-quarter earnings, exactly three months ago, the stock opened the day at $78.20, its lowest point since October 2006.

On Wednesday, when Apple is scheduled to report its second-quarter results, the same shares opened at $122.27 -- a 56% increase.

While that's still below the price targets set by most analysts -- many of whom revised their targets upward in just the past week -- some think Apple's share price has got ahead of itself.

RBC Capital's Mike Abramsky (an Apple bear) said as much in a note to clients Tuesday. "Valuation has risen faster than peers ... and while we expect near term upside around the refreshed iPhone, we continue to see elevated challenges ahead to valuation."

Still, Apple is not in the same kind of trouble as its competitors -- like Dell (DELL) for example. Apple still has rich cash holdings ($25 billion, or $29 per share), enviable profit margins (34.7% last quarter) and the deferred revenue from seven quarters of iPhone sales (which could add 30 or 40 cents to its earnings per share).

But the company has a basic problem with its fundamentals: two of its three primary engines of growth have stalled.

As Silicon Alley's Dan Frommer points out, the Street is expecting Apple to report that it shipped 2.1 to 2.2 million Macs in the second quarter -- a year-over-year decline of 4% to 9%. That would represent the first time in five years that Mac sales have shrunk. Moreover, it's being compared with a quarter (2008 Q2) in which Mac sales grew by more than 50%. (See chart below.)

Arrington to Apple: Liar liar pants on fire

[Originally posted Aug. 22, 2009 on Fortune.com]

"A total lie." "Untrue." "Misleading." "Complete fabrication." "Way beyond misleading."

Those are some of the nicer things Michael Arrington had to say about Apple (AAPL) in his analysis of what he calls "Apple's long rambling letter to the FCC."

Arrington, for those who don't have Techmeme on their morning reading list, is the former securities lawyer and serial entrepreneur who runs TechCrunch, arguably Silicon Valley's most influential tech blog.

The letter he's referring to is Apple's formal response to an inquiry by the Federal Communications Commission into the role AT&T (T) played in Apple's rejection of Google's (GOOG) powerful Google Voice app. See here.

AT&T's answer: we played no role. Google's answer: redacted. Apple's answer: we never rejected the app; we just haven't, for various reasons, approved it yet. (link)

Arrington's response: Apple is lying through its teeth. In particular, he writes:

Why Google's CEO had to leave Apple's board

[Originally posted Aug. 3, 2009 at Fortune.com]

Much has changed since Eric Schmidt joined Apple's (AAPL) board of directors in August 2006, almost three years ago.

Schmidt, the former chief technology officer of Sun Microsystems (JAVA) and now the CEO of Google (GOOG), brought to Apple's board deep expertise in Web search and advertising, a shared distrust of Microsoft (MSFT) and almost no conflicts of interest.

But in the past three years the areas of overlapping interests -- from smartphones to browsers to operating systems -- have grown so great that the Federal Trade Commission in May opened discussions with the two companies about whether Schmidt's presence on Apple's board constituted a violation of the Clayton Antitrust Act. (link)

And on Friday the Federal Communications Commission launched a pointed inquiry into Apple's decision to bar a powerful Google voice mail management program from its iPhone App Store -- an inquiry that put Schmidt and Apple CEO Steve Jobs on opposite sides of a Federal investigation.
Finally Jobs announced on Monday what had come to seem an inevitability: that Schmidt was off the board.

Putting lipstick on Microsoft's pigs

[Originally posted Aug. 6, 2009 on Fortune.com]

At the end of a long report on the Apple Stores -- and the corner he believes they have turned -- Needham analyst Charles Wolf turned his attention this week to Microsoft (MSFT) and its plans to launch a fleet of company-branded stores of its own, complete with wall-sized digital screens, spaces for free public events and "Guru" bars to deal with customers’ software complaints.

Let's hope Steve Ballmer isn't on Needham's mailing list, because Wolf's two-page description of Microsoft's efforts and its products may be most dismissive ever produced by a Wall Street analyst. He even goes so far as to evoke the old lipstick joke that got Barack Obama in so much trouble with Sarah Palin during the primaries.

"Microsoft has always touted itself as an innovator," Wolf begins in a section entitled The Sincerest Form of Flattery. "But the company’s true genius has stemmed from its ability to copy the ideas of others."

And the company it's most fond of copying, he says, is Apple (AAPL).