alexis@ccnysci.UUCP (Alexis Rosen) (03/01/89)
I've heard bad news about Apple before. When they didn't announce an '020 in 1986, I knew that that was bad. When they announced a Mac II with lots of wait states at 16MHz I wasn't thrilled. When they proudly announced that they were going to rest on their laurels for the duration of 1988, and not trouble their souls to bring out a better Mac, I was really upset. But this latest announcement surely brings Apple to astonishing new depths. The announcement I'm referring to, of course, is the decision to trim back the R&D budget as a percentage of sales. (While this may not imply actually reducing R&D spending, that depends on how well they do in the next few quarters.) Regardless of the actual dollar figures, this means major changes in Apple's R&D efforts. Products will get shelved, or floated out into an unprepared marketplace to "sink or swim" on their own. Product Managers and engineers, working under short-term contract, may not be retained for the long term, and this will worsen the already chaotic state of employee affairs. I could say that this showed a lack of marketing wisdom, or poor judgement, or bad timing, but that doesn't _begin_ to describe my dismay and _fury_. I think that this decision is _abysmally stupid_. It demonstrates a feeling for this business roughly on a par with that of my six-year-old cousin's. These are very harsh words [net readers may recall that the last time I was so unequivocal was quite a while ago, over the trashed hard disk caused by the first bugridden version of SUM]. Nevertheless, I feel that they are fully justified. Now more than ever before, Apple cannot afford to reduce its R&D efforts. The products that Apple needs to introduce over the next year are legion. Token Ring, Laptop Mac, Tower Mac, FourSquare, new Monitors, new display cards, the MacAPPC board, the QuickDraw accelerator, the multi-user Mac, I/O boards, new printers. AppleTalk 2.0, MR-DOS 2.0, System 7.0, a new Resource Manager, A/UX 2.0, HyperCard 2.0, Protected-mode MultiFinder... the list is endless. The Apple engineers can do the job- all of the technical people at Apple that I know are excellent. The question is, can marketing figure out what to do with these products? If not, they will never be released, and both we and Apple will suffer. More distressing to me than any single consequence of this decision to cut R&D is what it tells me about Apple's most senior management. In a typical business, it would be natural (and wise) to seek to reduce your cost of goods if your gross margin went down. In fact, this policy change is exactly what you would expect from a maker of de margin. This made me feel very good, until I noticed that the _last_ company, with only half of Apple's R&D, was Sun Microsystems. And the second and third companies, right after Apple, were Lotus and Ashton-Tate. Alexis Rosen alexis@ccnysci.uucp