MWJ 1997.11.03 (November 3, 1997)

Copyright 1997, GCSF Incorporated. All rights reserved.

Top of the Week
The MWJ Review: "Apple"
Book Typifies Journal More Than Apple
Almost Fully Researched
What's Wrong With the Book
Not Enough Sources In Some Cases
TrueType vs. PostScript
QuickDraw GX
Other Source Problems
Glaring Technical Errors
Uses Same Facts Two Ways
Mixing Hindsight and Foresight

Misses Basic Research
Pre-Judging Apple
What's Right With the Book
Executive Play-by-Play
In-Depth Project Looks
Is It Worth US$27.50?

Top of the Week

Jim Carlton's new book, "Apple: The Inside Story of Intrigue, Egomania, and Business Blunders," officially hits bookstores today. It's the most significant work about the company in several years, and will be one of the most talked about both inside and outside the Macintosh community - inside because of the amazing details it reveals, and outside because Carlton's position as West Coast technology reporter for The Wall Street Journal gives the book some street cred from the start. Unfortunately, although Carlton makes some good points, there are several key areas where the book fails to live up to its promise, or to present a balanced viewpoint, or to just plain get the facts right. Given the likely magnitude of Carlton's revelations, we felt a comprehensive analysis of the book was warranted, and we present our attempt at that in today's MWJ Review of "Apple." By necessity, this analysis focuses more on what's wrong than what's right, even though plenty is right, because it is the errors that need correcting and the unbalanced views that need perspective, not the other way around. We hope you'll find it useful.
Our attempts at being comprehensive have produced a long analysis, and that leaves little room this week for the other items that have made news. Rather than completely swamp you, we've decided to put together a smaller news-focused issue and send it to you later this week. Since almost everyone reading this is a daily MDJ subscriber, we didn't think you'd mind the extra frequency. Look for that in your mailbox later this week.

The MWJ Review: "Apple"

Wall Street Journal Reporter's Book Typifies the Journal More Than Apple

Something seems not quite right from the very beginning of Jim Carlton's new book, "Apple: The Inside Story of Intrigue, Egomania, and Business Blunders." The author is the West Coast technology reporter for The Wall Street Journal, a paper whose coverage of Apple we've had cause to question on several occasions in MDJ.

Sure enough, on page xi, before Chapter 1 even starts, Carlton thanks someone that confirmed something we'd suspected for a long time:

"In my professional life, it was a veteran journalist named Greg Hill who put me onto the path to this book. Greg, a longtime reporter and editor for The Wall Street Journal, hired me as a reporter in the Journal's San Francisco bureau. Greg was one of the first business journalists who understood the severity of Apple Computer's business situation, and in 1993 he asked me to begin covering the company with a sharp eye to that. Greg, who is now the Journal's senior technology editor in San Francisco, proved dead right in his early skepticism about Apple as the company hurtled toward self-destruction through the events chronicled in this book."

In other words, even when Apple Computer was profitable and a few years ahead of Windows in technical leadership, a senior editor of The Wall Street Journal decided that the company was in trouble anyway. He may not have explicitly directed that stories reflect that angle, leading to one of Apple's biggest problems today (lack of consumer confidence), but he certainly directed the reporters to cover that position if at all possible. This explains a lot about what you've seen of Apple in the Journal.

It also introduces us, in a way, to Carlton's book - intensely researched, covering the period in Apple Computer's history from about 1985 through 1997, and even though coverage about Apple is not hard to find, it's rare to find a book that takes the scope and depth of Carlton's new tome. Unfortunately, it suffers from the same problems as much of the Journal's coverage of Apple Computer. Specifically, the book interprets the same facts different ways in different places, depending on which way makes Apple look worse; it misfires badly when discussing items that didn't come from multiple sources; Carlton is in way over his head on technical matters and it clearly shows; the research in some cases is so sloppy it gets things wrong that you could verify with a single phone call. Annoyingly, the book also mixes hindsight with foresight, assuming that something that is clear today was equally clear ten years ago if you were smart enough. But worst of all, like most of the Journal's coverage of Apple since, oh, about 1993, it comes to all material with a presupposition that Apple is screwing up, Apple is failing, and Apple cannot possibly succeed on its own. Even when you find out that some Apple executives agree with this decision, it doesn't justify the twisting of facts necessary to support the treatment.

Those who know Apple Computer will have to wade through all these problems to find some new, useful information - and despite it all, the book contains enough of that to make it worth reading, although we can't unequivocally recommend the book due to numerous problems. We definitely have to recommend that those not familiar with Apple stay away from it, because the picture they'll get is about as balanced as the picture you get of Apple's business position from typical Journal coverags - uot very.

Almost Fully Researched

MDJ has, in the past, been critical of reporting in The Wall Street Journal, although more from Lee Gomes than from Carlton, who took most of 1996 off to write this book. The Journal has, in our view, come to articles about Apple Computer with the foregone conclusion that Apple is doomed to failure or irrelevance. Stories that support this conclusion are considered "balanced" as written. Stories that don't support this conclusion seem to need "balance" from the perspective that Apple, of course, is doomed.

The classic example of this happened last summer, in late June 1996. Gomes, writing in the Journal, took a market research study by Computer Intelligence InfoCorp that said unit shipments through Apple's retail channel (only) fell between 25% and 30% in April and May 1996. Gomes duly noted, near the end of his article, that this channel only covered (at most) a third of Apple's revenues - US dealer sales don't include educational, or international, or direct sales of any kind, just those through "Authorized Apple Dealers." Furthermore, he knew that this channel had been one of Apple's weaker spots to begin with. Nonetheless, he extrapolated from it, and from a quote of an anonymous source at CompUSA (a retailer not known for aggressively selling Macintosh computers), that Apple's entire worldwide sales were off "30% to 50%." Apple's stock price fell through the floor, and talk of a "downward sales spiral" started. Strangely enough, when Apple's official quarterly results were released just three weeks later, that "downward spiral" and the doom and gloom predictions had failed to materialize. However, business customers continued to shy away from Apple, based largely on press indicating that doing so was a wise move. The following quarters, the sales spiral did materialize.

Not surprisingly, Carlton doesn't acknowledge this in his book, but it's generally the level of research you can expect. It's not that he didn't talk to people - he did. Lots of them, and people who know exactly what they're talking about. The list of acknowledgments is truly impressive, and those of us who have been around the Macintosh for many years recognize these people not as historical figures, but those who were involved in some of the decisions and plans that helped shape the Macs we use today, not the original 128K Macintosh of 1984 as so many stories of Apple cover. Seeing certain names, to the experienced, even tips some of the subject matter - Cary Clark almost assuredly means talk about QuickDraw GX (and it's there); help from Greg Galanos and Greg Branche probably means talk about Apple's development tools blunders (and it does); interviews from Dave Burnard almost certainly mean Pink, as interview from Neil Selvin is bound to mean PowerBooks. Sure enough, they're all there, and we settled in expecting bold revelations and a master plan of exactly how things went wrong.

We almost get one, too, and the revelations are juicy and tantalizing on the way to a final analysis that never quite makes it. In the end, the conclusions are based on the facts, and the facts are typical of the reporting we've seen in the Wall Street Journal. The situations as reported almost completely support Carlton's eventual conclusions, but in many cases, that's because you only get half the story, or the other half is so minimized as to not register.

What's Wrong With the Book

Not Enough Sources In Some Cases

As noted, there are about six flawed areas throughout Carlton's book, and we'll try to show why we believe that to be so based on material from the book itself. We'll start with something subtle - Carlton seems to have a problem presenting a balanced picture in many cases because he either got his information from one source, or from a few sources who all saw things the same way, without getting "the other side" of the story. In politics, a story isn't balanced just because it has multiple sources?"Gee, we can't have been unbiased. We interviewed both Bill and Hillary Clinton!" The same is true about a technology story. In some cases it's hard to see multiple sources at all; in others, if they exist, they seemed to have thought alike.

Here are two examples of this from the imaging world which MDJ readers should find familiar.

TrueType vs. PostScript

The history of TrueType fonts was discussed in MDJ 1996.10.17, and also in MDJ Recap #2. At the time Apple and Microsoft announced TrueType, Adobe was charging an arm and a leg for the PostScript interpreter included in every LaserWriter printer, and up to US$300 for each of the Type 1 outline fonts that came with such printers. The Type 1 font standard was closed; only Adobe or its licensees could make Type 1 fonts, and licensing the necessary information cost tens of thousands of dollars. (Even today, those who read the specification can see how hard Adobe worked to protect it - the actual font programs themselves are in a special version of PostScript, and were scrambled to keep them from examination unless you had licensed the decryption key.)

Apple wanted to put such quality on the screen, and on non-PostScript printers, and went to Adobe to license the technology at a more reasonable price. Adobe refused - the standard set of 35 fonts that comes with the System Software would, under Adobe's scheme, cost Apple thousands of dollars per machine. Instead, Apple had worked on its own font technology, superior in many ways, and chose to release it as an open standard that any typographer could embrace. That was called "TrueType."

The next day, Adobe's founder and CEO, Dr. John Warnock, tearfully announced that Adobe would open the Type 1 specification to all comers, free of licensing, which resulted in the more competitive font marketplace we see today. There are several high-quality vendors and hundreds of smaller vendors working with less-capable tools, creating both TrueType and Type 1 fonts. The Type 1 output tends to be a little better in programs like Fontographer - as an early Adobe licensee, Fontographer lets you manually set Type 1 font hints (which control how to make letterforms look better at lower resolutions, like on the screen), but TrueType hints can't be so controlled and are therefore of lower overall quality. However, TrueType is built into all Windows and Macintosh computers shipped since 1991, and has won the hearts and minds of most font users around the world, even though Type 1 remains the preference for publishers.

The way Carlton reports this story, you'd think TrueType was one of the great blunders of the century. He starts by saying PostScript "enabled the printed page to look almost identical to what appeared on the screen." This, of course, is not true - the screen is low-resolution and chunky; PostScript made things appear better than on the screen. The ImageWriter made printouts that looked like the screen, but Carlton is apparently unaware of this, because he says (on the same page, 111) that "Until then, when PC documents unfurled from the printer, they looked as though they had been hammered out on an old typewriter." You can say many things about ImageWriter output, but typewriter quality is not one of them.

Carlton has done his research on the TrueType situation - but it mostly seems to have come from an interview with John Warnock, who should not be regarded as an unbiased observer of this situation, but for some reason is treated as such. The book starts by describing the move as "putting the knife into Warnock's back" and goes downhill from there. After describing the introduction - from Warnock's perspective - Carlton writes:

"Relations between Apple and Adobe were so imperiled that Apple went out and unloaded all of its shares in Adobe, for a gain of US$79 million. That was a great return on its original investment of US$2.5 million. But deep emotional damage had been inflicted on a key ally. Ironically, for all the ill will this generated, TrueType ended up so inferior to PostScript on the Macintosh that it never ended up shipping on many printers...Microsoft, however, pushed TrueType into a rousing success on Windows."

Say what? TrueType and the core outline TrueType fonts have shipped with every Macintosh for the past six years, and every Apple printer since 1991 has done the same. Carlton, who claims to be using a Macintosh, probably uses TrueType fonts every day and apparently doesn't realize it. The vast majority of fonts in the world are available in both TrueType and Type 1 formats. If there is any inferiority, it is because Warnock's Adobe has done the best they can to make TrueType output less than optimal, or even less stable, when printing to PostScript printers. It wasn't until years later that Adobe finally licensed the TrueType interpreter and includes it in all of its PostScript products, but Carlton doesn't get that for. Without TrueType fonts, there wouldn't have been an explosion of inkjet printers in this decade, because they can't produce high-quality text without outline fonts, and most inkjet printers certainly do not ship with Adobe Type Manager or Type 1 fonts. Nor does he even seem to grasp that Apple couldn't ship a dozen outline fonts in a system software upgrade and charge US$100 for it at Adobe's prices:

"To this day, [Jean-Louis] Gassée still defends the decision to go with TrueType. 'I know there is a perception of our arrogance, and I am more than ready to admit some mistakes,' he says. 'But in this case, it was about money. We were being charged a lot of money for PostScript fonts. So I don't think TrueType was a bad decision. Sometimes you just do the better thing.' It is true that Adobe was charging a lot for its fonts. And in fact, the TrueType caper did force Adobe to lower its font prices. Still, the episode sent out a chilling message to all of Apple's developers: if Apple could do this to Adobe, it could do it to anybody. 'there were obviously better ways to handle it [Adobe's high prices] than that,' Sculley now agrees."

"The developers would have their payback time in the years to come."

First of all, the TrueType decision was made concerning Adobe as an OEM, not as a developer. By Carlton's logic, Apple shouldn't compete against Windows because Microsoft is a big Mac developer, even if Microsoft controls a technology Apple wants, and Microsoft is charging too much money for it. That's either naive or stupid. Second, the point was about pricing as much as it was about open standards. Carlton even admits that Microsoft would have licensed Type 1 if Adobe had lowered the price and opened the standard for anyone to make Type 1 fonts, but Adobe refused, so Microsoft went with TrueType. Carlton completely misses that Type 1 fonts remain viable today exactly because TrueType forced them to open the standard, not because the prices dropped.

While we're on the imaging front, we'll look at another example close to MDJ's heart.

QuickDraw GX

Shortly before that, on pages 101-103, Carlton endeavors to tell the tale of QuickDraw GX, the high-powered graphics and printing architecture from Apple that's been the subject of more flip-flops than the us Senate on campaign finance reform. QuickDraw GX was originally intended to replace or update QuickDraw, by providing a modern, object-based scalable graphics format that QuickDraw simply does not provide. The entire scope of the QuickDraw GX project is beyond this review, but you can find it covered in detail in MDJ 1997.01.01 and MDJ 1997.01.03, both of which are available by anonymous FTP.

Over the years, it became apparent that without combining projects, a lot of work would be duplicated for no good reason - the same outlines TrueType used for scalable graphics were incorporated into QuickDraw GX, and its memory-management routines leaked back into TrueType. The separate "line layout" project, providing extensive and multilingual typographic control, was merged with changes to TrueType when it became clear that the best way to handle the complexities was to put them in the fonts instead of in the line layout code itself - and without borrowing from QuickDraw GX's new metaphor, the old Mac OS QuickDraw was not up to the textual challenges. Then Tsunami, the new printing architecture, was tied to GX because everyone decided that GX graphics needed to show up on paper somehow, and not just at the same resolution they did on the screen, so translation to PostScript would be necessary for PostScript printers.

Tsunami was a badly-needed fix to the existing, or "classic" printing software, which is basically a bunch of quickly-conceived drivers on steroids. For the first time, Tsunami allowed developers to actually have control over printouts instead of just blasting graphics and hoping it works. It also provided users with desktop printers, spool files that can be moved from one printer to another (and viewed in SimpleText), sharing of non-networked printers, and much more. However, those features wouldn't be available to anyone except in new QuickDraw GX-aware applications, so the Tsunami team decided to encompass the entire old, classic, hacky printer architecture as well, redirecting everything to the new GX drivers, a road fraught with compatibility problems because, as we've said before, there really is no classic printing "architecture." There are just some drivers, and about six bazillion applications that hack around their limitations.

When Carlton discusses the mammoth engineering task that became QuickDraw GX, he scoffs at the sheer number of people involved, but gives short shrift as to why they were bundled together in the first place (although, if later pages are any indication, he incorrectly thinks TrueType wasn't very important). Carlton mostly uses GX as an example of Apple management gone haywire, hinting that the project should have been reined in and made smaller. Consider this passage from page 102:

"At one point, there were as many as a hundred engineers working on the project, often in conflict with one another. Because there were separate hardware and software teams, who communicated as little as possible and reported only to their respective managers, they would work in duplication of each other's efforts. Here was Tsunami, writing its own printer code for GX. And there was Peripherals, a hop, skip, and a jump away, doing the exact same thing. Even worse, there were graphics projects going on just about everywhere else at Apple. Konstantin Othmer, who was then a member of a team making enhancements to the original QuickDraw, counted them one day and came up with seven different teams all working on graphics. They included teams from Newton, ATG, Blue, Pink, GX's Skia, a multimedia project called Kaleida, and a computer acceleration project called GC."

"'They were all working on the same thing. They never combined, never talked,' recalls Othmer, who worked at Apple full-time from 1988 until quitting in 1994 to form a new video-game company called Catapult Entertainment Inc., which later merged with Mpath Interactive Inc., another game company. 'At Apple, the problem was engineers worked in small groups like start-up companies. As an engineer, there was no technical direction.'"

Carlton implies that seven graphics projects is too many, but doesn't seem to grasp that complex systems like GX were not suitable for projects like Newton or Kaleida; to shoehorn one architecture into all cases would have been equally short-sighted. QuickDraw GX and Pink used different architectures because the Pink team insisted on using floating-point coordinates when the hardware wasn't fast enough to support it; the existing system software team went a different direction while, as usual, Pink tried to do everything itself. And so forth - nor does Othmer get credit for being one of the graphics engineers who preferred to enhance his own domain rather than cooperate more fully with the others (although he did come around as GX got closer to completion, and did excellent work on QuickDraw in the interim).

In fact, GX is a prime example of another of Carlton's themes, which is "management by consensus." Carlton uses several examples, many of which don't quite fit, to show that it didn't matter what direction Apple's management took because a lone dissenter could wreck the whole show, and GX was a great example of that. The peripherals group had no interest in GX succeeding. Even though the Mac OS platform desperately needed newer graphics and a more powerful printing architecture, the imaging division expressly did not want QuickDraw GX to succeed because it made writing printer drivers easier for third-party developers like Hewlett-Packard and Epson. Printer drivers for the non-GX system were unbelievably difficult to write, and Imaging had spent a lot of time and money doing so. Now that it was accomplished, they had no interest in letting other peripheral manufacturers do the same, even if it meant more printer choices and a stronger Mac OS platform in general.

However, Imaging did want the nifty desktop printing features, and sharing non-networked printers, and other advantages that QuickDraw GX had to offer. So, while the two groups were communicating with each other, Imaging basically lifted the code for such features and adapted it to work without GX, put it in printer drivers, and released it. The QuickDraw GX team cried bloody murder - they knew there would be myriad compatibility problems when they switched to the new architecture, and they were counting on the draw of the new features to bring users into the fold. With two-thirds of the features present without GX, and with fewer compatibility problems, users would have good reasons not to switch. In fact, that's what happened, as we all know too well. The GX printing architecture, despite being designed to solve almost every one of today's problems, never got off the ground and was removed in Mac OS 8.

Carlton, regrettably, misses this point. His explanation of GX's failure is on page 103:

"Unlike so many other fiascoes, QuickDraw GX would actually ship as a real product. But so few customers wanted it that it would end up on only a tiny fraction of new Macintoshes when it was finally completed in 1994. The key problem: the final program had so many new features that it proved too cumbersome to bundle into the Mac's operating system, forcing users to have to install it separately. Adding further insult to injury, in a question for perfection by the Tsunami team, GX was designed so it would not support any of the old Macintosh software programs. This required users to run out and buy new ones. Of course, very few people were willing to do that, especially since the new printing feature was not demonstrably better than the old one. With a total cost of about US$100 million to develop GX, more good money went down the drain."

"'GX was a debacle,' confesses [lead GX graphics engineer Cary] Clark, who quit Apple in 1994. [...] 'It was much, much too late. It should have shipped earlier with less features.'"

That response, which permeates Carlton's descriptions, won't surprise MDJ readers who have read Clark's own statements about the GX project. Specifically, Clark thinks tying the printing architecture to GX was a mistake, which is no surprise since he was working on the graphics long before Tsunami was even started. He also feels that some of the compatibility things they did for developers, like emulation of QuickDraw's outline and shadow text faces, were mistakes. Also not a surprise.

Because Carlton seemed to get his major GX information only from Clark, he didn't know about the printing debacle that would so perfectly have supported his other point, as Clark's focus was on the graphics architecture. In other places, Carlton tries to make the point that Apple was arrogant to developer and customer concerns, and GX showed plenty of that as well, but because much of it came from Clark, that doesn't make it into the book, either. Clark was single-handedly behind adopting a convention for accessing QuickDraw GX that made it much harder to use it in any language other than C, and in a published interview, he admits that it was solely because he wanted it that way, despite developer concerns. The Tsunami team also rejected developer and customer calls to optionally disable GX printing for non-GX applications, coming up only with the lame "QuickDraw GX Helper" when the damage had already been done.

Furthermore, Carlton's points about Apple being unable to make up its mind would have been served by the GX debacle as well. Apple told developers from 1992 onward that the QuickDraw GX Printing Architecture (Tsunami) would be the printing architecture of the future. Don't worry about old-world drivers; they're going to go away. GX is the future, and with Mac OS 8 and later (then the Copland project), only GX would be installed. Then, without much warning, in February of this year, Apple completely reversed itself and discontinued the QuickDraw GX architecture, leaving the old and unenhanced printing architecture in place, woefully ill-equipped to handle the future of desktop publishing. You won't find any of this in Carlton's book.

Glaring Technical Errors

Carlton describes Apple though the history of its projects, because a technology company and its products are intertwined in the public's eye, at least in most cases. The history of Apple is the history of the Macintosh is the history of Macintosh engineering. Many of the projects Carlton describes seem thunderingly stupid, either because good projects were killed, or because bad projects made it. Yet those explanations sometimes lose their luster when you realize how deeply Carlton is in over his head when writing about technical subjects:

When discussing Claris, Carlton refers to FileMaker Pro as the leading "file management" software for the Macintosh. That would be the Finder; FileMaker is, and always has been, a database. [p. 161]
Carlton apparently decided early on that System 7 was a minor, pathetic upgrade (probably based on input from engineers who worked on the rival Pink operating system), and in searching for reasons to support this, he describes the virtual memory feature as a "nifty" feature to "free up unused space on e hard drive and create more memory." If your startup disk gets full, turn on VM to free up space! (Uh-huh.) [p. 166]
Further denigration of System 7 - describing its May 1991 introduction and feature set, Carlton writes: "There was the new 'MultiFinder,' a collection of colorful icons atop the screen that looked snappier than the ones on the old Mac." MultiFinder, as you probably know, is the software that lets the Macintosh run more than one application at a time, and it was originally introduced in 1987 with System 5. Carlton appears to have it confused with the System 7 Finder, which did have more colorful icons, but that was the least of the completely-rewritten Finder's new features. Again, Carlton has already written that System 7 was a pathetic project, so there must be evidence to support it, even if it's twisted. [p. 188]
Discussing the developer tools debacle, Carlton says that MPW was unprepared for PowerPC because it "had not been significantly updated since 1986," a sure surprise to the thousands of programmers who purchased version 2.0 in 1988 and version 3.0 in 1991. [p. 259]
In a raw display of technical ignorance, Carlton writes that System 7, which he knocks throughout the book, "was prone to seizing up and crashing when more than one program was run at the same time" because it has no microkernel. What he means to say is that, like Windows 3.x and to some degree Windows 95, one crashing program can bring down the entire system. Instead, he implies that multitasking simply isn't feasible under System 7, which is about as inaccurate as you could want. [p. 294]
Without citing any proof of any kind, Carlton blandly asserts that Windows 95 is "almost a Mac - and superior in terms of reliability." [p. 300]
Amazingly, Carlton doesn't spend a lot of pages on the Copland disaster (not even meriting an entry in the index), although he does discuss it in some detail. He paints it as a complete disaster, which is no surprise, but doesn't even seem to understand what it was supposed to do. Describing an early demonstration of some features by then-Apple USA president Jim Buckley, Carlton writes, "It could open two files at the same time. It could summarize documents containing the same subject matter in seconds, neatly coalescing them into one file." [p. 349] The latter is a promised Copland feature, but every version of the Mac OS has allowed two files open at the same time. Most programs since 1991 have allowed more than one window open at the same time. Carlton writes more about Copland later, in the Amelio days, and seems to understand that the two primary features were preemptive multitasking and protected memory. However, he writes, "For one thing, [Ellen Hancock] discovered that Copland had been engineered in such a way that the two biggest goals for its improvement over the Macintosh operating system - memory protection, to prevent computers from crashing, and preemptive multitasking, to allow the user to seamlessly use several programs at once - were being included only in the operating system. The software programs themselves would not benefit from these improvements until a later release. This was a huge problem, of course, because users spend almost all their time working on programs." True enough - but Carlton never bothers to tell you that protected memory and preemptive multitasking can't be imposed on existing Mac OS applications because the ground rules for writing them don't make it possible. Apple's engineers thought they could, and tried for years, but eventually failed. Carlton instead implies that this was not much of a problem and Apple's arrogant engineers just didn't bother to put it in, which is not the case at all. [p. 398]

One of the book's conclusions is that, through poor management, Apple wound up working on the wrong projects much of the time. That's undoubtedly true, as his stories about Aquarius show. However, getting the technical details wrong on TrueType, and on OpenDoc, and the continued bashing of the System 7 operating system that the Mac-using Carlton had behind him while writing the book, are simply misplaced, and undermine his conclusions for those of us who know what's going on.

Uses Same Facts Two Ways

Apple comes across as an unbelievably stupid company in this book, and as we've said, this is not without reason. However, Carlton is so eager to make the point that from time to time, he twists the same facts into two separate interpretations to make Apple look bad in multiple ways. Consider:

On page 11, Carlton lists Apple's 1980 market share of 16% as "the highest level it would ever attain." However, on page 107, he's more interested in emphasizing that Apple has declined, so he boosts that level by nearly one-quarter when he writes, "[the 1987 level of 9.1%] was a level considerably shriveled from 1980, when Apple had had less competition and commanded nearly one-fifth of all PC sales in the world." One-fifth is 20%; adding even one point of market share is a tremendous achievement. Apple's actual market share was nearly one-sixth. For Carlton to boost Apple's 1980 from sixteen to twenty points (a full 25% gain) is misleading at best.
Throughout the book, in discussing how Apple's revenue is split among organizations, Carlton lists the AppleSoft division as a money-eating sinkhole,: "The AppleSoft division was making no money, because its charter was research." AppleSoft, as Carlton certainly ought to know after extensively interviewing former AppleSoft head Dave Nagel, was responsible for the Mac OS and other Apple software projects, along with developer support and developer tools. Despite that fact that, when discussing licensing, Carlton maintains that it's the Mac's unique software that made it special, he repeatedly slams the divisions responsible for generating that software, and the engineers who chose to work on it. Even as he writes that cloning should have been obviously a benefit, Carlton writes, "Macintosh sales accounted for 95% of Apple's revenue, yet the division comprised just 60 percent of the company's head count. The remaining 40 percent of the employees were tucked away in various projects such as Newton, eWorld, and system software, which were consuming money like a drunken sailor." In other words, the people who sold the hardware should have had the most say, which Carlton then goes on to ridicule when they tried to protect their fat margins by not cloning the Macintosh. He can't have it both ways. [p. 280]
On page 337, Carlton is trying to establish the authority of then-board-member Dr. Gilbert F. Amelio, so later reports of his "strong-willed" personality will make sense: "Amelio was a plainspoken businessman who had gotten a reputation as a turnaround artist by pulling National Semiconductor from the brink. He was new to Apple, having been called onto the board only the previous year, but he was the only outside director who had any experience in actually running a major computer company." (Emphasis added.) Later, on page 362, Carlton is trying to ridicule Amelio's compensation package, and he writes, "Apple Computer had seen some wretched excess in its time, but this took the cake. And all for a man who had no experience running a personal computer company." (Emphasis added.) Amelio had presided over technology companies for years, but not a computer company of any kind. Carlton says he had when he was trying to make Amelio look good, and says he hadn't when trying to make him look greedy.

Mixing Hindsight and Foresight

Another of Carlton's major themes is that of lost opportunities - he continually blasts decisions Apple made which didn't pan out, and laments ones Apple blew. Unfortunately, in many of these cases, his argument that Apple should have taken the other road boils down to "the road they took didn't work, so the other one must have." In these instances, he looks back and confuses his clear hindsight with a lack of foresight at Apple, and that's not particularly fair. It was obvious in 1993 that Bill Clinton was the president, but in early 1991, the thought of a Democrat winning the US White House was actually laughable. Not seeing a Democratic victory two years ahead of time was not a moronic lack of foresight. Some of Carlton's examples boil down to similar problems.

At the beginning of a chapter excerpted in this month's Wired Magazine, Carlton points out how Apple became marginalized on hardware. The rest of the computer industry started making IBM clones, using Intel processors, but Apple was using the Motorola 68K part, at the time a much more powerful chip. Carlton confuses the present with the past and somehow thinks the decision to use a chip more powerful than the competition was wrong, particularly strange when the Intel 8086 didn't have the power to move graphics around like the Macintosh needed. Somehow, because Intel's chips went on to dominate the market later, Carlton implies Apple was wrong to use the more powerful chip at the time, using phrases like "Joined at the hip" to describe Apple and Motorola, but using more complimentary language for the relationship between IBM cloners and Intel. [Chapter 3]
During a fascinating discussion on a potential IBM purchase of Apple Computer in 1993, Carlton makes no secret that he feels Apple should have done anything it could to facilitate the purchase. He writes, "Given Apple's increasingly precarious situation, Mike Markkula and Michael Spindler should have gotten down onto their knees ... begging [IBM CEO] Lou Gerstner to save Apple from destruction." That's a strange argument coming from a technology business reporter - he's saying Apple should have taken an offer that, by his own reporting, represented almost no market premium over Apple's then-current stock price, and should have given IBM the source to the Mac OS before the deal was finalized because IBM wanted to get started in the year-plus it might take for regulatory approval. There's merit to the source-code argument, but Carlton is naive if he trusted IBM's promises of forbidding any engineers who saw the Mac OS from working on IBM system software if the deal fell through. The recent experience with Intel and Digital shows that these talks often do fall through, and even the prosperous Intel found itself in court for allegedly using trade secrets from Digital that it examined but decided not to buy. Intel admitted no wrong in the recent settlement, but is purchasing Digital's chip fabrication plants and paying other licensing fees that are expected to be worth more than US$1.5 billion. Intel doesn't typically spend US$1.5 billion if it can avoid it. [p. 298]
One of Carlton's major themes, throughout the book, is that Apple should have licensed the Mac OS in 1985, and points out that Bill Gates even volunteered to help Apple do it. Gates points out, as have we on many occasions, that Microsoft makes its money on applications and not on operating systems. If Windows hadn't existed, Microsoft wouldn't have that revenue, but they were a leading Mac developer and would have sold more high-priced Macintosh applications. Either way, Bill would be rich, he figures. Unfortunately, Carlton's only proof that licensing was the better idea is the present reality that not licensing the Mac OS didn't work. He makes a big deal of the memo from Bill Gates lining up clone partners for Apple, but look at the list in question - AT&T, Wang, Digital, Texas Instruments, Hewlett-Packard, Xerox, Motorola, Harris/Lanier, NBI, Burroughs, Koka, Siemens, Bull, Olivetti and Phillips. Gates recommended three to five of these as official "Mac Compatible" licensees, but note that none of these companies is a major worldwide player in personal computers today (except Hewlett-Packard, perhaps), and none was at the time, either. There is no guarantee that this strategy would have worked.

In fact, Carlton does point out, in a "yeah, yeah, other side" section that had other companies come in and sold on the Mac's home turf, Apple's sales probably would have dropped by half (according to Jean-Louis Gassée) and dropped Apple's revenue by 30% "nearly overnight." Gates says Apple could have worked around this by structuring licensing so that just a few companies could make Mac OS machines, which would have created more Macintosh momentum and created more applications and more sales. Perhaps so, but there was plenty of graphical Macintosh software at the time, and the recent experiment with licensing showed very clearly that adding a few carefully-controlled companies to the mix didn't accelerate momentum significantly. Furthermore, as noted two weeks ago (MDJ 1997.10.20), Carlton does not address the issue that the current Mac OS is a different animal from the original, and that the original machine was much more hardware dependent than today's models are, creating the possibility that the Mac would have evolved into the same configuration nightmare the PC became with several companies vying for differentiation with new features. We were hoping Carlton would address these issues; he does not. He only goes as far as saying that because not licensing didn't work, licensing must have. It's just not that simple, except in the book.
The same scenario is repeated over and over. Carlton is the first book author to write in depth about the mysterious "Star Trek" project to put the Mac OS on Intel chips. Apple killed the project out of concern that such an operating system would bring in about US$40 in revenue per copy and eliminate the sale of a computer that brought in US$400 or more. Carlton glosses over that as well, spending most of his time moaning that Mac OS on Intel would have neutered Windows 95 and kept Apple relevant. But again, his "proof" seems to be that not doing Star Trek let Windows 95 take off. He gives short shrift to serious Star Trek problems - like, for example, that Apple would have been responsible for drivers for all popular PC peripherals, just as NeXT was when they put their operating system on Intel (another one that was demonstrably better but which didn't catch on); that hardware revenues very likely would have plummeted, eliminating the funds necessary to support such a herculean driver development and tech support effort; and that all developers would have to recompile or rewrite their Mac OS programs to move them to Intel, in a move that would have been seriously more complicated than the PowerPC transition. Windows 95 runs Windows 3.1 applications; anyone buying Mac OS for Intel would need to scrap all their old programs and start over with new ones. Carlton leaves these points out, making the end of "Star Trek" seem idiotic, when it was a painful decision that left bitter feelings among almost all involved. Carlton certainly can't believe that Apple's engineers didn't want to see their work in the hands of millions more people; it's largely that doing so would have left many of those same engineers unemployed. Remember, Apple doesn't make its money off applications like Microsoft does. Apple makes money on hardware. Claris's annual revenue for 1996 was a record-high amount that was still under US$300 million; even tripling that wouldn't make up for a 30% loss in hardware revenue that Gassée once predicted if the Mac OS became widely available on non-Apple hardware.

Misses Basic Research

It's not just the complex issues that Carlton occasionally misses, either. There are plenty of examples in the book of errors in areas that could have been easily checked with a phone call:

Although the Apple campus occupies about three streets, Carlton can't seem to figure out where they are, listing Bandley Drive as "a side street just north of De Anza [Boulevard]," an interesting trick since De Anza Boulevard runs north and south. (Bandley Drive is one block west of De Anza Boulevard.) [p. 30]
On page 155, Carlton tries to say that Microsoft was more hungry for developers than Apple was, which may have been true - Apple's arrogance is hardly disputed. However, he writes, "Microsoft programmers were available to help with any problem the software developers might encounter. With Apple's persistent reorganizations, many developers didn't know who to go to with questions or problems." If that's so, they're just not very bright. Apple's developer support E-mail address has changed twice in 13 years - from <macdts@applelink.apple.com> in 1984 to <devsupport@applelink.apple.com> in 1991, to <devsupport@apple.com> in 1996 when AppleLink went away. In each case, there was plenty of mail forwarding. The telephone number for the developer hotline has changed once in fifteen years - from (408) 973 - 4897 to (408) 974-4897 when changes in Apple's phone system forced a change in outside line prefixes. This is basic research.
Most of Carlton's knowledge of QuickTime comes from original lead engineer Bruce Leak, who is described as almost single-handedly creating the multimedia software. Carlton acknowledges that QuickTime was a hit, but like Apple's other successes after 1984, it's minimized as a fluke. In discussing the team, though, he mentions the man who's currently QuickTime Principal Architect - but incorrectly calls him "Peter Huddie." (It's Peter Hoddie.) [p. 184]
On more than one occasion, Carlton lists Global Village Communications as a "software firm," despite the fact that he seems to understand they're the leading supplier of Macintosh modems. Maybe he just doesn't get that modems aren't software. [p. 189]
The author says that one of the problems with getting new PowerPC software out the door was Apple's "dearth of technical support for developers." Carlton explains this by saying that the engineers who create developer tools like MPW were mostly laid off in 1993. True - but they didn't provide technical support. He then says that Spindler nearly wiped out the company's corps of evangelists in that year. That's also true - but evangelists don't provide technical support, either. In the years since 1984, the position, which was often touted as a combination of marketing and technical skills, turned into an almost purely marketing position. In fact, technical support, from Apple's developer technical services group, was also affected by layoffs, but continued to answer questions, review documentation and produce both sample code and host developers in small "kitchens" to help with transitions to PowerPC. Carlton has no clue about this - but, then again, he wrote earlier that no one could find this group anyway, even though they haven't changed phone numbers or addresses but a few times. [p., 272]
Carlton says that the lack of Apple's penetration in business markets is why Lotus decided not to "rewrite its best-selling 1-2-3 spreadsheet for the Power Mac." He neglects to tell uninformed readers that Lotus didn't manage to release 1-2-3 Mac at all until 1991, by which time Microsoft Excel had a lock on the Macintosh spreadsheet market. "Best-selling" applies to the overall product, not to the Macintosh version. [p. 273]
Carlton lists Apple's famous six-week sabbatical as being eight weeks long. [p. 334]

Pre-Judging Apple

However, the biggest problem with the book, by far, is that Carlton comes to the party having already concluded that Apple is a screw-up company, and this point of view manifests itself throughout the book, even before he's shown you bad decisions, or at least decisions that appear to be bad with the evidence he presents. Some examples of this bias:

Carlton tips his hand that he doesn't consider Apple a "mature" company because people don't wear suits. "In many ways Apple was as juvenile as ever. The first tip-off was the dress code, or lack thereof. Taking a stroll on Apple's campus in those days [circa 1985] would have been akin to walking the hallowed grounds of Stanford, just a twenty-minute drive away up nearby Interstate 280." [p. 29]
Despite listing Apple's technical success to engineers many times, Carlton disdains the days when the company was engineering driven, implying such a move was crazy because the "patients were running the asylum." Engineers worked at Apple because they had talent, not because they were a danger to others; without engineering-driven products like the Macintosh, which even Carlton admits no one saw coming, there would have been very little Apple Computer at that time. [p. 84]
Carlton isn't even happy with Apple's facilities choices, implying it was a bozo move to keep large hardware and software divisions in separate buildings, even though each group had radically different facilities requirements (software groups rarely need chip testing labs, for example). [p. 85]
When discussing Apple's allegedly out-of-control spending, he errs by comparing Apple's R&D expenses, at 6% of yearly revenues, to Compaq's rate of 3%. If he intended to show that companies like Compaq are leaner and more ready to compete because they rely on Microsoft for their operating systems, that would be fine - but instead, he's trying to make the point that Apple spent too much money on research. To reduce to Compaq's levels, Apple would either have to abandon hardware (which he just pointed out was bringing in all the revenue) or system software, which would turn them into another Wintel clone maker. He never advocates anything like abandoning the Mac OS, effectively neutering his own attempts to ridicule Apple's cost structure. [p. 280]
The author gets a bit defensive when he notes that Apple "complained vociferously" whenever he "pointed out" that Apple's prices were higher than those of similarly-configured Pentium systems in The Wall Street Journal. Apple's complaints, if history is any guide, were most likely that Carlton didn't point out that 60MHz PowerPC systems with native code run circles around 60MHz Pentium systems, so pure price comparisons aren't completely valid. The Journal rarely makes that point, and Carlton didn't do it in the book, either. [p. 281]
Later on, Carlton does straighten out that Apple has double the R&D expenses of clone makers, but he says it's because "Compaq - and every other PC manufacturer - could depend on Microsoft and Intel to fund almost all the rest [of the R&D]." Although Intel does design motherboards from time to time, Carlton makes it clear later on that the big companies don't like to use them because it doesn't let them differentiate their product. What Intel develops is the microprocessor, and Apple doesn't pay for that R&D either. IBM and Motorola do, despite Carlton's implications. Apple bears the same hardware development burden as Compaq plus the Microsoft-like OS development costs, not the Intel-like chip development costs. [p. 299]
Carlton tells the story of Apple's PowerBook 5300 recall, noting that battery circuits didn't meet specifications and caused production units to catch fire twice. He also noted that only 1,000 of the machines were shipped, and that only one of those actually made it into customer hands before they were pulled from distribution, making it an extremely minor problem indeed. However, he writes, "But immeasurable PR damage had been done. 'there were stories of us bringing down an airplane, and covers of trade magazines showed an exploding PowerBook,' says a former executive, sighing heavily. 'It was an incredible press nightmare.'" Carlton glibly forgets to mention how much press coverage his own Wall Street Journal gave to this recall of a single PowerBook - just as much as other publications.
In some areas, though, Carlton finds Apple lacking no matter which strategy he pursues. He notes that Apple let its technical leadership in operating systems lapse to Windows, and complains in a few places about Apple's famous "release-then-abandon" policies. So Carlton must love the Newton, right? After all, it's 1.0 release was a typical 1.0 release - underpowered and buggy - made worse by Apple having horribly overpromised its capabilities. Yet Apple stuck with the project all these years, making a 1.1 and 1.2 and 2.0 version of the Newton OS, which all comers today say is pretty good. It has more memory, faster RISC processors, an optional keyboard, a screen that can be viewed either vertically or horizontally, backlighting, Internet capabilities and much more. It's still a bit pricey for some, but Apple has actually stuck with the product over the years and improved it. Good example? Not for Carlton, who seems unwilling to give Apple credit for any good moves without describing them as flukes. Despite complaining that Apple doesn't stick with plans, Carlton crucifies Apple for not killing the Newton after its originally flawed introduction, saying Apple should have dropped the entire product line and used the money for other projects. He never bothers to point out that would have eliminated today's profitable US$700 eMate laptops - but, then again, he never actually admits they exist, either.

What's Right With the Book

This kind of reporting typifies the book, which doesn't help. We can chalk up problems like introducing every engineer by saying when he left the company, or the portentous foreshadowing that appears on just about every page (we're not kidding), to the writing of a first-time book author; we have no idea if we could do better if necessary. But Carlton's writing presupposes that Apple had to fail if they adopted the course they did, and finds reasons in hindsight to justify this even when such thinking would have been perfectly illogical at the time.

We think we've shown enough examples from the 450-page book as to why those who don't know where to find fault would come away with seriously inaccurate views of Apple - just as they do from reading The Wall Street Journal. That doesn't mean the book is worthless. In fact, there are many parts of the book that are gripping reading, and which don't fall prey to the six major problems listed above.

Executive Play-By-Play

When it comes to describing the actions of Apple's top management, Carlton seems to do pretty well. In most cases, it's obvious that he talked to multiple sources, although there are still a few areas that look fishy and are cause for concern given the TrueType and QuickDraw GX examples cited earlier. When those concerns are out of play, though, you're still left with stories that are eye-opening:

John Sculley told the board of directors in 1992 that he wanted to leave in one more year, and that he thought Apple should be purchased by a large, healthy outside partner before he left, to give more strength against the Microsoft-Intel duopoly.
Jockeying for position in the executive suite led men like Allen Loren, Jean-Louis Gassée, Kevin Sullivan, Jim Buckley and Michael Spindler to torpedo sensible plans for expansion and acquisition that could have made a significant difference in Apple's situation today.
Twice, Apple nearly considered buying Sun Microsystems - and in 1996, according to Carlton, was nearly acquired by Sun but declined at the last minute when Gil Amelio was named CEO.
Apple was paying nearly US$800,000 a year to a highly-placed executive who did no work and had no defined job.
Apple turned down licensing plans at least four times, including a novel idea to let Claris sell Mac OS-compatible machines in PC boxes so that all the revenue would come to Apple as they tested the waters to see what cannibalization would do.
As noted earlier, IBM very nearly purchased Apple in 1995, but talks bogged down over price and timing of Apple's release of Mac OS source code.

There's much more, of course, but while it's fair to give intricate details about mistakes, revealing all of Carlton's juicy stories would be cheating.

Apple took a forecasting system that had worked amazingly well, instituted by then-COO Del Yocam, and trashed it to save money during layoffs, creating inaccurate forecasting that has since cost Apple billions of dollars in lost sales opportunities.
Apple was ready to sign the paperwork in 1995 to make Gateway 2000 - yes, that Gateway 2000 - a Mac OS cloner, and reneged at the last minute out of cannibalization concerns.

In-Depth Project Looks

While Carlton often gets the details or the implications about Apple's projects wrong, it's not for lack of trying. Super-secret projects like "Star Trek," "Pink," "Aquarius" and even Copland are dissected in varying degrees of detail, usually with profiles of the engineers or managers involved. There are also looks at projects that never got off the ground, like the original 88000-based "Jaguar" RISC-based Mac, the ignominious start of the Power Macintosh project, the disaster that was Apple's PowerPC tools project, how personalities drove the IBM/Apple alliance, and much more.

Is It Worth US$27.50?

The real questions about Carlton's book are - is it worth US$27.50, and can you recommend it to friends? Like so many things, it just depends on your perspective.

While the book is engagingly written, for the most part, and is guaranteed to tell you things you didn't know, it also has serious problems with accuracy and presentation of facts. Many times, as we've shown, these undermine Carlton's own points, but in the end, his most major point stands - Apple Computer is where it is today because it was run by people who couldn't control its workforce and who didn't have a clear vision of how the company would grow into the next century. What's regrettable is that Carlton spends so much of the book not-very-subtly moaning about lost licensing opportunities and discontinued engineering projects without credibly showing they would have changed the situation for the better.

It's also unfortunate that, like The Wall Street Journal, Carlton finds it necessary to twist the facts or miss one side of the story to paint Apple in a negative light. Combined with basic inaccuracies, both technical and non-technical, and several blatant misunderstandings we believe stem from a lack of perspective (as on TrueType, QuickDraw GX, and OLE), "Apple" will leave the uninformed reader with a grossly inaccurate perspective of the company. For that reason, we would have difficult recommending it to friends as a general business book.

For serious Macintosh users, however, you may very well find it worth the US$27.50, especially with discounts from large resellers like Border's and Amazon.com (whose CEO, by the way, is quoted on the book jacket praising the work). Now that you know how to step around the informational land mines, you may find "Apple" to be a treasure trove of insight as to how mostly well-meaning people could take a company they loved and screw it up so badly.

Our grade for "Apple: The Inside Story of Intrigue, Egomania, and Business Blunders": Roughly 6.8 out of 10, or a D+.

MWJ, The Weekly Journal for Serious Macintosh(TM) Users, is published by GCSF, Incorporated.

Publisher: Matt Deatherage

GCSF, Incorporated.

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