day 60




behind apple's blunder 2: the worm in the apple

by Philip Machanick

Yesterday, we described the advantages Apple

had in mid-1995 when Windows 95 was released by

Microsoft.

Apple was poised to expand market share -- or

so it seemed. Apple had the potential to

deliver competitive performance. The old

excuses for buying a Mac despite the higher

price should have fallen away.

I expected Apple to move fast to consolidate

their advantage by pushing high-end systems

wherever they could. I also expected Apple to

rapidly move the low-end Macs from the old

Motorola 68040 line to a PowerPC 603e. The 603e

was likely cheaper to make, and was already

shipping at clock speeds faster than 100MHz.

What did Apple do instead?

The underestimated the demand for high-end

systems. The margins on these systems could

have sustained more competitive pricing at the

low end. Instead, Apples failed to drop the

68040 line.

The result? Coming tomorrow.

behind apple's blunder 1



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