Apple and Macworld: The End of an Era or Two

Back in 1985, at Brooks Hall, I flew up to San Francisco to attend the first ever Macworld Expo. While the franchise (temporarily) expanded to Toronto, DC and (for almost 20 years) Boston, the San Francisco show was always the main show, and I attended every show for the next 15 years. (I was also a speaker from 1988-1998 until the show management ousted conference manager Peggy Kilburn so they could pocket that revenue themselves).

Yesterday, Apple (AAPL) announced that it’s pulling out of Macworld Expo after next month’s show, and everyone expects that will kill the show that has been produced by Patrick McGovern’s IDG since the very beginning. While Apple no longer needs the show — given its direct consumer marketing power — as Rob Griffiths writes, I wonder if it will damage the sense of community held by the Mac owners.

In particular, I wonder if it will hurt the ecosystem. Third party software and hardware vendors always used Macworld Expo as a way to get visibility for their new product launches, although these third parties too having been dropping out. Tom Krazit speculates they will create their own show (like Oracle’s (ORCL)), but since Apple used to have a show in Paris (AppleWorld) and dumped it, I think that’s even less likely. Apple says its growth demographic — iPod and iPhone carrying teenagers — don’t do trade shows, and I think they’re right.

Of course, the big financial news is Steve Jobs’s decision to skip Apple’s final appearance. The most benign explanation is that Apple wants to put its management bench in the spotlight, and this is the time to do it. The next most likely explanation is that Apple’s products are late and Steve has nothing to announce in January.

However, the stock opened down 7% today on speculation that Jobs is in declining health — reviving the rumors that appeared over the summer. That Apple won’t deny health problems has caused analysts to (rightfully) downgrade the stock until Apple puts out the truth.

If the Jobs II era (1997-2009?) were really ending, then it seems like 7% is not enough of a valuation loss. This would be an end (however temporary) of Apple’s latest run as a growth stock. The current executives could keep the lights on, but without Jobs around to provide the uncompromising vision and the tyrannical leadership, Apple would be yet another middle-aged bureaucratic Silicon Valley company (think HP (HP), Sun (SUNW), Oracle, Intel (INC)).

Losing Jobs is bigger than losing Jack Welch, and we all know how that turned out. It’s bigger than losing Alfred P. Sloan — or Hewlett and Packard — because the impacts will be felt immediately, rather than gradually over time.

The best option is for Apple to acquire an innovative startup with a monomaniacal CEO who can step into Jobs’s shoes. Although it hasn’t worked out so well for Sun, it is what saved Apple back in 1997 from certain oblivion.

The other option would be to steal back Jon Rubinstein, Jobs’s right-hand man from the NeXT days who knows Apple and its culture. If Palm (PALM) somehow cheats death with its product and technology announcements next month, his stock will be on the rise.

Comments

[typopolice:]

when apple was $180 and all the health issues surfaced, it was stated that w/o jobs, the stock would drop 40%...now...with no confirmation of any health issue, and th stock down 55%, you state that it wouldn't be enough in the event of a jobs loss...real intelligent.

2008 Dec 17 02:20 PM

[Murphy Mac:]

I would have liked to have attended one of the last few Macworlds, especially where something like the iPhone was announced. Oh well.

Yes, Apple has many other venues to introduce products. But I've never seen Steve Jobs showcase his star power anywhere like he did at Macworld. Even if you hate the man, you can't deny the charisma and natural showmanship. Especially when compared to Gates.

There's a reason people know his name. He's a selling machine.

2008 Dec 17 02:44 PM

[mrxg4:]

Let's get real, if he were sick enough NOT to do a 90 minute presentation, he would have given up on the CEO role months ago. That position is infinitely more demanding...

People just like to speculate endlessly... I think Jobs loves his position too much to give it up right now.. he's not in it for the cash, he wants to continue his 'rock star' mantra. Ergo, he won't be leaving Apple anytime soon.

Stop this mindless speculation, jeez...

2008 Dec 17 02:45 PM

[stockfan:]

I like what one reporter said about this mess... "It is MacWorld Expo and not Steve Jobs that is on its last legs." Steve will probably even be on stage for part of the keynote. I wouldn't be surprised if he showed up for "one more thing".

2008 Dec 17 03:19 PM

[iNeal:]

Whatever this is, it's time for Apple to shake things up. Ironically, their policy of absolute secrecy has made them more predictable. Analysts, hungry for news, literally have to make it up - and it's always more than Apple can possibly deliver. Therefore, every new product launch makes the stock go down because it's never enough to satisfy the hysterical expectations. It has become a joke. A more transparent Apple would not be a bad thing. Today's downgrade was obvious payback by an analyst who wasn't given the information he wanted.

2008 Dec 17 03:33 PM

[Doug, Mtn. ...:]

Rubenstein? Surely you jest! He has the charisma of a Dell Inspiron owner's manual.

2008 Dec 17 03:37 PM

[carey_jim:]

The contemporary computer industry is a cross between the automobile industry and the telephone industry of the 1920s and 1930s.

Microsoft corresponds to AT&T but without the Willis-Graham Act of 1921 which exempted AT&T from the Sherman Antitrust Act and allowed it to be a monopoly for 60 years before it was finally broken up in the 1980s.

Microsoft also appears to be a "natural monopoly" but apparently doesn't need a Willis-Graham Act to remind the FTC.

To change the analogy to the automobile industry, Apple and Linux correspond to Packard and the Cord of the 1930s, and like them, are destined to disappear unless Microsoft is broken up by the FTC.

Apple, Linux and Microsoft are, basically, operating systems. Hardware is interchangeable, so Microsoft is Vista.

Paradoxically, Apple, Linux and the other variations of Unix, which are essentially public domain operating systems (just as the Internet is based on public domain software) are still superior to the closed and proprietary operating system Vista even after billions of dollars have been paid to the best computer scientists in the world to improve the Microsoft Windows operating system.

If the FTC would do its job and break up the Microsoft monopoly you wouldn't need to worry about Steve Jobs' health. Allowed to stand, God himself as CEO of Apple wouldn't be able to save Apple or Linux from the fate of the Packard and Cord automobiles and the Dodo bird: extinction.

Even though Apple is now running on a supercharged V8 version of the Unix operating system it is no match for the monopoly power of Microsoft.

AT&T was finally broken up after more than 60 years. Do we have to wait that long for Microsoft to be broken up?

2008 Dec 17 04:01 PM

[carey_jim:]

Did Steve Jobs write the Tiger operating system all by himself? (Or is it called Linux Bear now? It's so hard keeping up to date on all the names.)



On Dec 17 04:14 PM deasys wrote:

> @carey_jim: "Apple and Linux correspond to Packard and the Cord of
> the 1930s, and like them, are destined to disappear unless Microsoft
> is broken up by the FTC"
>
> And how does that assertion jibe with Microsoft's continuing loss
> of OS market share, browser market share, and mobile market share?
>
>
> It's hard keeping up, isn't it? It's almost 2009, Jim, not 1995...

2008 Dec 17 04:33 PM

[brewer:]

How do you know the shares are off 7% based on speculation of Job's health? Or do you just THINK you know that?

2008 Dec 18 09:49 AM

[mollytjm:]

Jobs shoes are already filled by the company he co-created and brought back to life. Now he can do what he does best, savvy business and design and Apple will forge ahead with the brilliant innovators they already employ. teens do not go to macworld, on the whole. and programmers are now teens...designing apps for the app store! Steve is good at seeing the future..and they are the future.
May the skinny white guy live long and prosper...even more.

2008 Dec 18 09:57 AM

[mollytjm:]

ps...by skinny white guy i mean that he's pretty pale looking...always. and it's not an indication of his health status, which is probably stable. maybe now he can take a vacation and get catch some rays:)

2008 Dec 18 09:59 AM

[Timeline St...:]

@carey_jim: I couldn't finish your longish post because it was too complicated, and you shouldn't assume that readers know anything about antitrust history. I also don't know what the connection is to anything the article attempted to cover.

PS to Joel - Rubinstein would be a HORRIBLE idea that would never ever happen. We'll get confirmation of that tonight when it's proven that Palm lost even more money than they were predicted to lose.

2008 Dec 18 03:10 PM