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There was a pair of excellent articles in the current (Feb. 28) issue of Business Week. The first was on Apple and the second was on Coca-Cola. Both articles can be found online at http://www.businessweek.com/. However, you'll need to be a registered subscriber to view the articles (at least until a week from now, when they should open up to the general public).

The Apple article was a short, 1-pager about OS X. What surprised me was the incredibly positive attitude about the article. In essence, it said that OS X was going to give consumers a "friendly and easy to use version of the powerful UNIX operating system." Even more surprising, they said that it's going to make Microsoft's consumer version of Windows 2000 (not due until some time NEXT year) look weak in comparison.

BW felt that Microsoft made the choice to retain full backward compatibility with their previous OS, and (as I'm reading it) that choice has hurt them in terms of how good an upgrade Windows Millenium and Windows 2000 will be.

Apple, on the other hand, chose to give the operating system real improvements at the sacrifice of requiring users to upgrade their software to get the full benefits (it does note, however, that users WILL be able to run their existing software on the new OS, just without all the extras it gives). In BW's opinion, this was the better move, since users will get a much more powerful and stable OS out of the deal.

If this isn't a sign that Apple is finally regaining its position as a real and major market player (if not yet a true Rule Maker), I don't know what is.

The article about KO was a real Rule Maker statement for the company, and a good reassurance to me that the new CEO "gets it" when it comes to what needs to be done to make Coke competitive again.

In a nutshell, Coke has really been losing out to non-soda beverages (bottled water, teas, fruit juices, etc.) produced by Pepsi (who owns Tropicana) and Quaker (who owns Gatorade and Snapple). Their response to this so far has been to put "second rate" products of theirs (Minute Maid, Fruitopia) out with little promotion and and little care for the quality of the product. As far as they were concerned, "Coke is, has been, and always will be IT".

The new CEO recognizes this is no longer true. He has moved up several execs from the non-carbonated beverages departments, and plans on beginning an agressive campaign to expand Coke's market to these other beverage categories. No, it won't be an overnight transition, and it'll probably take a few (or many) years for Coke to regain dominance, but given their cash situation and other strong Rule Maker abilities, I think that with this new CEO they have a good chance to start regaining the throne these pretenders have attempted to steal (to use the metaphors scattered throughout "Rule Breakers, Rule Makers").

Looks like I picked a good time to buy into both of these stocks. :-)
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JL,
Thanks for the post.I was glad to read the article about Coke - maybe good things are ahead....

Now a little rant....

Apple, on the other hand, chose to give the operating system real improvements at the sacrifice of requiring users to upgrade their software to get the full benefits

For what it's worth, this is exactly why I stopped buying Apple's products. In my case, I had purchased one of the first Macintosh computers. A few months later I had to upgrade it with more memory (I'm an Engineer, so I did it myself) and a few months later they released a new version with more memory and a new ROM. I found I could no longer upgrade without a new motherboard. Apple chose not to offer any significant cost savings to do the upgrade, and I couldn't afford to do it. That left me making payments on a machine that wouldn't run the latest software.

I've since been tempted to buy one of those nifty rainbow colored marvels, but I know that next year, it will be on the junk pile, and the next new Apple product will be all the rage.

Meanwhile, the PC I'm using to type this on is 3 years old, and still runs fine. With the exception of a few game programs it still can run just about anything I can buy.

Windows may stink, but it least it sticks around for awhile.


Z1

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zathrus1 wrote:

I've since been tempted to buy one of those nifty rainbow colored marvels, but I know that next year, it will be on the junk pile, and the next new Apple product will be all the rage.

Meanwhile, the PC I'm using to type this on is 3 years old, and still runs fine. With the exception of a few game programs it still can run just about anything I can buy.


Not to turn this into the Apple board instead of the RM Companies board, but I'd like to make a counter to that.

From what it sounds like, you purchased your first Mac back around 1984 -- 16 years ago. As I recall, this was not only a time when the Mac architecture was changing monthly (and I'm not denying that's a crime they were guilty of for a long time -- look at the short-lived Mac IIvx in '93), but the PC architecture was changing fairly rapidly as well, going first to the new 286, then the 386, then the 486. Never mind going from a command-line interface (DOS) to a GUI (Windows) years after the Mac had the GUI down pat.

The fact is, buying a computer has always been and will always be a case of knowing that in 3 months tops your machine will be out of date. It's only in the last five years (maybe 7 or 8 for PCs, depending on when the Pentium, PCI and AGP became standard) that it stopped meaning that you would also have to replace all the stuff you bought to work on that machine.

Your current PC, you say, is 3 years old and runs just about anything you can buy. To be fair, a Mac bought 3 years ago can do the same thing; and like the PC, it just won't run those apps as fast as the newer machines.

(As an aside, my previous computer was a 5-year-old Mac Quadra 610 I bought back in '94; even in 1998, most software I could buy -- except for games -- would run on it. But by '99 the software vendors stopped supporting non-PowerPC machines, and I switched over to a blue-and-white PowerMac G3 for the massive speed bost and software support -- and those awesome new games ;D)

However many years before that, Apple scored a PR coup when it released the PowerPC, because it didn't require you to upgrade all your software in order to buy one. You could keep your old software, and the computer would emulate the old hardware to let everything run properly. Then you could upgrade your software as your budget allowed, slowly letting you gain the advantages of the new platform. (And yes, emulation was painfully slow with some programs, but at least the option was there)

The switch to OS X will be a similar deal -- the older software WILL still run on it (and without any speed loss this time), you just won't have protected memory or pre-emptive multitasking for those apps. But as your budget allows (and as the software vendors phase out support for the older OS like they did for the older hardware) you can upgrade your software and gain the new benefits.

To me, that's a win-win for everyone.

Sorry for the lengthy reubuttal, but I wanted to be clear on where I was coming from.
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Thanks for the links... I won't be able to look at them till next week. But I just wanted to congratulate you... I bought the same stocks (+CMGI) last month!

BetsBillabong
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But I just wanted to congratulate you... I bought the same stocks (+CMGI) last month!

Well, unfortunately I haven't bought them yet -- I'm waiting for my blasted broker to clear the IRA rollover checks so I can actually start buying shares. But AAPL and KO are definitely going to be members of my portfolio.
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Thank you for the link to the Apple and Coke in BW articles.

I'll have to agree with you that Apple is getting stronger, but my understanding of the Rule Makers is that Apple has no chance to reach rule making status.
That doesn't keep me from holding it as an investment, but it isn't because I would dream of it becoming a Rule Maker.

Alexa
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I'll have to agree with you that Apple is getting stronger, but my understanding of the Rule Makers is that Apple has no chance to reach rule making status.

I'll agree that Apple isn't a Rule Maker YET -- I actually consider Apple to be a revived Rule Breaker that has re-entered Tweener status (a MOST unusual event, since I can't think of too many companies that got hit with the Tweener Death Rattle and actually came back to the land of the living).


That doesn't keep me from holding it as an investment, but it isn't because I would dream of it becoming a Rule Maker.

I do think it has potential to be a Rule Maker, but it will require years and that Apple not make a single mis-step during that time.

If you look at the recent Rule Maker rankings (click the link at the bottom of this post), Apple actually scored in the 2nd tier for the last several quarters, and its total score has been moving up slowly but steadily. (NOTE -- I will say that when I ran my own ranking for the most recent quarter I got a Tier 3 score, but I think this is either a seasonal blip on the radar, an effect of the Taiwan earthquake that happened during that quarter, or due to my not using the most recent changes to the Ranker system; I'll be keeping eye out to see if that's true or not)

I'm looking forward to holding Apple for several years, and whether it really becomes a Rule Maker or not won't matter much to me. I believe that Apple is a great company that's finally learned from its mistakes, that Steve Jobs is a guy who finally learned the lessons of business and can apply them well to Apple, and that if they continue to make the right moves they've been making the last two years, there will be many years of enjoyment between myself and this company.
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