Wednesday, December 17, 2008

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 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 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), 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’ 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, Sun, Oracle, Intel).

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’ 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’ right-hand man from the NeXT days who knows Apple and its culture. If Palm somehow cheats death with its product and technology announcements next month, his stock will be on the rise.

This week I am praying for Steve Jobs and his family. While his children will not lack for any material thing, if they lose their father, it will (as my own father discovered) influence them the rest of their lives.

No comments: