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So, Is Apple Cheating?

So, Is Apple Cheating?

Given the absolute failure of companies ranging from Microsoft to Motorola to field competitive offerings over an extended period of time, it seems at least likely that there has been some improper activity. From the iPod through the iPad, no one has created a credible competitor. The most heavily funded attempt was the Zune, and Microsoft initially fielded a product that looked like a square brown turd.

By Rob Enderle
04/11/11 5:00 AM PT

Last week, another iPad competitor bit the dust, and so far no vendor has even come close to bothering Apple in the tablet space. In the smartphone space, the only thing that seems to hurt Apple is the carrier and the anticipation of its next phone, which is due shortly but rumored to be delayed.

If this were a poker game or any kind of sport, this kind of winning streak would have us wondering if the winner were cheating. I've joked about Apple's 5th column before, but doesn't it seem like Apple's competitors are increasingly doing brain-dead stupid things?

Don't get me wrong -- Apple is executing brilliantly, but in any competition, you rarely get just one good player unless someone cheats. Now if Apple isn't cheating, some of these companies need to reassess their practice of hiring idiots for key positions, because that simply isn't working. I'll explore that.

I'll end with my product of the week: one of the first AMD Fusion-based laptops on the market, the sweet HP Pavilion dm1z, a product that does a nice job of signaling what is coming this year.

Is Apple Cheating?

My 5th column theory -- granted, tongue-in-cheek, at least initially -- was that Apple had infiltrated competitors with people who interviewed well and found their way into key spots where they made crippling decisions.

This was based on an experience I once had: An executive I worked with turned out to be working for a competitor from his position as head of sales. He slipped that competitor confidential information, and it was clear in hindsight that he was making decisions that crippled our efforts. He got caught leaking the information, which initially appeared accidental, and was fired for poor performance. He ended up as head of the intelligence unit at the competitor he was leaking information to, which seemed to confirm our suspicions.

Since then, I've seen unconfirmed reports that Oracle, which is run by one of Steve Jobs' closest friends and an ex-Apple board member, at one time placed people in competing companies. Their mission was largely to feed Oracle information on the competitors' future products and confidential bids, suggesting this practice may still be alive in the tech industry. (As I was writing this, news broke that HP found one of these folks.)

Given the absolute failure of companies ranging from Microsoft to Motorola to field competitive offerings over an extended period of time, it seems at least likely that there has been some improper activity. From the iPod through the iPad, no one has created a credible competitor.

The most heavily funded attempt was the Zune, and Microsoft initially fielded a product that looked like a square brown turd. Now, in that case, I did look at the cause extensively, and I concluded it was the result of some of the most incredibly stupid decision making by now ex-Microsoft employees I'd ever seen.

However, there was a predecessor at HP that was so secret, even my community didn't know about it. Somehow, Steve Jobs found out about it, though, and convinced HP to license his iPod instead of building its device. In the process, HP signed a deal with Apple that locked it out of the market -- a deal that no competent attorney would have approved. After it collapsed, there was some executive movement from HP to Apple.

Or Are There Too Many Idiots?

Let's look at two of the most recent contenders to knock Apple off its perch -- the Palm Pre and the Motorola Xoom. Now follow the pattern: Both products owned CES the year they were launched; both had massive marketing budgets.

The Pre was largely brought to market by ex-Apple employees who hated Apple, and the introduction of the product was done with near Apple-like precision at CES. The Pre wasn't tied to AT&T, the iPhone's biggest weakness. The Pre had a keyboard, making it far more attractive to BlackBerry users who had made up the majority of the first smartphone wave. The Xoom had both 4G and Flash, which the iPad lacks, to its detriment. Both of these products, on paper, should have done at least some significant damage to Apple's dominance.

But what happened? Well, the marketing team for the Pre gave secret exclusives to reporters who had historically been owned by Apple and put those of us who were far more positive about non-Apple products on the second tier, deeply upsetting the very people most likely to review the product positively. As a result, most of the initial reviews were moderately to extremely negative.

They then rolled out a very expensive high-concept advertising campaign in the face of massive historical information that campaigns like this are incredibly expensive and unsuccessful. They did an exclusive with Sprint, the only carrier that people disliked more than AT&T. That turned their biggest competitive advantage -- not being on AT&T -- into a disadvantage. In short, they effectively threw the fight, and the company ended up being sold to HP.

Now let's look at the Xoom. The iPad is perceived as a premium product with high brand recognition. For most, it represents the ceiling, in terms of price, of what they would be willing to pay for a similar product. The Xoom was priced substantially above the iPad, which alone should have caused the product to fail to sell well -- but someone wanted even more assurance.

The two big advantages it had -- 4G support and Flash support -- didn't ship with it, and the software load wasn't complete with regard to video, forcing buyers to find applications to get a complete experience.

Now let's jump to the RIM PlayBook. What is the one thing you would think RIM would get right on its tablet? Email, right? That is what it is famous for; it is the mobile email king. So what do you think the PlayBook will launch without? Email. Apple did apparently cause this product to be delayed, in a brilliant move.

Wrapping Up: Is Apple That Smart or Are Competitors That Stupid?

Is it really more credible that people are so colossally stupid, or has Apple stacked the deck? What are the odds of every Apple competitor being an idiot vs. a very smart company having an incredibly proficient and active intelligence organization?

I really think every Apple competitor should step back and decide to either compete aggressively or give up competing with Apple. It matters to me less whether Apple and Oracle have advanced intelligence-gathering organizations and have placed people to torpedo competitors than it does that there are people who seem to keep their jobs making horrid decisions that someone should be reversing before they are executed.

In the end, it matters less why these firms are failing than it does that these firms are failing. In short, I think every tech company should regularly review important decisions for obvious idiocy and -- I don't say this lightly -- fire the idiots who are making them before they kill the company. Then watch them to see if they end up at a competitor, like Mark Hurd did. Finally, if you are playing a game that seems rigged, and you don't either correct the game so you can compete or leave it, well, to quote Bill Engvall, here's your sign.

Product of the Week: AMD Fusion-Based HP Pavilion dm1z

Product of the Week

The notebook market is kind of amazing, because you can increasingly get a ton of performance for less than most pay for an iPad. The AMD Fusion-based HP Pavilion dm1z is a case in point.

Currently on special for $399, it sports AMD's brand new Fusion technology, which weds good graphics to a decent mobile processor.

HP Pavilion dm1z
HP Pavilion dm1z

For a combination of performance and battery life (estimated at 9 hours), this is one sweet box.

Typical configuration includes 3 GB memory, 320-GB 7200 drive, and a 720P LED backlit screen. Upgrades include a Blu-ray drive, 3G, 128 GB SSD and extra batteries. It is thin, it is sexy, it can be found for well under $500, and it is cutting- edge. Is this notebook market great or what?

I've always been a fan of light, thin, sexy and cheap. As a result, the new AMD Fusion-based HP Pavilion dm1z is my product of the week.


Rob Enderle is a TechNewsWorld columnist and the principal analyst for the Enderle Group, a consultancy that focuses on personal technology products and trends.


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