Earlier this week former Apple CEO John Sculley claimed that one of the "biggest mistakes I've ever made" was turning down Andy Grove's suggestion, in the late 80s, that Apple switch from the Motorola 68000 processor line to Intel's x86. Not doing this, he said, meant that Apple wasn't able to benefit from the commoditisation that drove prices down in the PC market, and couldn't compete against the likes of Dell.
Sculley is now a partner in investment outfit Sculley Brothers, and is surely well-placed to survey the smouldering, unprofitable ruin that the identikit commodity PC market has largely become. Sure, Dell makes money out of diligent Redmond-shadowing and shmoozing, razor margins and white-knuckle logistics, but what happened to all those happy PC companies that existed back in the late 80s when you made that fateful non-decision, John babe? You think maybe you'd have got lucky?
Actually, Sculley went on to signal to the audience (we suspect, without entirely noticing he was doing so) what he regards as his real missed chance: "Michael Dell had the insight that innovation wasn't just about cool technology. It was also about innovating on logistics." Together with his Intel pipedream, this tells us a great deal more about John Sculley than it does about where Apple might have gone wrong.
Dell's success has come through leveraging relatively small innovations which are made largely by other people and combining this with systems that are sufficiently honed for it to be able to make a profit out of high volume, fast refresh cycle commodity boxes. Dell's chosen leveraging platform is and always has been Wintel, but that neither means it should be anybody else's choice nor the only choice. Boil it down to the essence and you get brand, volume, logistics, and this is the stuff that Sculley, a former salesman of fizzy water for Pepsico, understands.
Actually that particular market seems to have room for two major players, so if we progress the analogy into PCs, what have we got, Doke and Carlico? But we digress.
Sculley's problem in the late 80s was not that he wasn't shipping Intel boxes but that Apple didn't have the brand, volume, logistics advantage. It had - still has - the überBrand par excellence, but it didn't have the volume, nor was there a route whereby it could get there quickly and with certainty. Which is where Sculley's problem at least overlaps with Apple's problem.
Sculley's Intel gaffe (for gaffe, indeed multidecked gaffe, it is) simply reminds us that the fizzy water guy never really grasped the technology. At the time of the non-decision Apple really did have to start thinking about where it was going after 68k ran out of steam, but the x86 line in those days didn't look particularly promising as a platform, the 68k still beat the 386 and PowerPC beat the 486 when it came out.
By the time Intel really could deliver, Apple was committed to PowerPC, and if Sculley had chosen Intel back when he claims he had the chance, he'd have done so solely on the basis of Andy Grove's promise that It Would Be So. That would have been a stupid decision, and is really not one that could or should have been made. Stupid decisions can turn out to be right for the wrong reasons - but not in this case.
If Apple had switched to Intel at almost any time in the last 15 years it would have been making a dangerous, possibly reckless move. The switch to PowerPC has obviously not panned out in entirely the way it was intended, in that it was a component of a volume play that has not worked, but it's had the virtue of aligning Apple with companies who, through lack of other friends, have had little choice but to more or less look after Apple. Sure, Apple has at times been a pawn in other companies' much larger games, but although it's had its ups and downs it's still here, the brand is if anything even cooler, and it's looking pretty healthy for a loser.
And the x86 alternative? OK, you switch to x86, so you're one of a large and growing number of Intel customers, and actually you're one of the smaller ones. In order to preserve your uniqueness you have to continue developing your special software, making a virtue of it not being Windows, so whose crosshairs do you go into now? If your special software turns out to be so much better than the other stuff that runs on x86, do you licence it to everybody, just like the other company does, so you're competing head-on with Microsoft as well as trying to drive down prices, hone the logistics and invent Dell before Dell does? Don't you have problems with people asking what's so special about your software anyway, seeing it runs on just the same hardware? And seeing, indeed, that somebody back in the 80s screwed up by signing a 'give away the crown jewels' deal with Bill Gates. As biggest mistakes go, John, we feel this is a contender...
In addition to all of these interesting conditions introduced by an Intel switch, you could also lob in the likelihood of IBM, Apple's partner in the reality of the early 90s, being a deadly competitor in these imaginary ones. Through into the beginning of that decade Microsoft and IBM were allies, remember, so if Apple had come in with sufficient impact to change the dynamics it's feasible that at least for a period they might have remained so, with the OS wars being Apple versus the Microsoft-IBM axis, rather than the OS wars we actually experienced.
Yeah, and Apple might have won. There really are too many mights in all of this to be worth bothering about - given the number of horrors down that particular trail the probability is that an Intel switch would have rendered roadkill of Apple within a couple of years, and anyway, as we said a while back it would have been a stupid decision that could not and should not have been made.
Should it be made now? Conditions are certainly different, to the extent that the underlying hardware is much less of an issue when it comes to preserving the uniqueness of the brand. And as we're getting to that part of the cycle again, at some point Apple will have to switch. But to Intel? That's really not the only answer, and presuming that Apple still wants a brand/volume virtuous circle there are plenty other things it could do. Any it could do several of them, by sector, by platform, with its brand now being sufficiently strong for this not to be any kind of religious issue.
Think about a current day parallel to Sculley's 80s choice. In ten years time, do you think that we'll be looking at Sony's biggest mistake? Or Microsoft's? If like us you'd rather not put money on that one, then you at least accept the possibility that there's more out there than Intel. ®