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Text File | 1990-04-25 | 18.1 KB | 349 lines | [TEXT/GEOL]

Market Intelligence Report - Confidential / Apple Eyes Only Written by Ken Lim with Dave Garr, Competitive Analysis *********** COMDEX REPORT ********* EXECUTIVE SUMMARY: COMDEX is the largest, most important PC industry trade show and conference. Apple returned to the main show floor this year at an opportune time. We showed a strong, consistent product line while the rest of the industry worked itself into a state of confusion and frenzy over the following issues: • the Bus Wars (MCA vs. EISA vs. ISA) • the Processor Wars (Intel trying to kill off the 286) • the OS & GUI Wars (OS/2 vs. Windows vs. multiple UNIXs vs. DOS, etc.) This report discusses the most important technical trends and issues arising at COMDEX, describes some selected products and company presentations, and shows how Apple can benefit from the industry’s situation. ************ OVERVIEW ************** ATTENDANCE: COMDEX seemed slightly less crowded this year compared to past shows. Official attendance was quoted at 120,000 for the four days, but these figures have always been badly inflated. Among those attendees was none other than Michael Jackson, who came to visit the Roland and Atari booths. SPIRIT/MOOD: The general tone of the show was cautiously upbeat...people all seemed to be expecting only minor sales increases in 1990 in both units and dollars, with growth rates in the low teens, not the 20s. As usual, business and customer issues prevailed over technology in general. In fact, the daily COMDEX paper polled attendees and reported that laptops were considered the most exciting products but that overall the show was thought to be “ho hum.” The best attended seminars focused on software, service & support and reseller channel issues. (NOTE: This report is a very general overview of COMDEX events & issues. If you need more detailed information on specific products or companies, please contact us. We have several hundred product brochures, spec sheets, price lists and complete company press kits available for your perusal.) ******** BIGGEST TECHNICAL TRENDS / ISSUES ************ The biggest news of the show by far was IBM & Microsoft’s joint declaration about OS/2 vs. Windows. This announcement was analyzed in detail in a previous Link posted in November (please see HOTLINKS Newsletter Folder). PORTABLE PCs: Lots of them. Every major and many minor players were showing them. • Dolch Systems of San Jose showed the first 486-based transportable. • Compaq’s LTEs were very well-received and were definitely one of the “hits” of show. • Color LCDs: AC-powered systems with large, 12-inch 16 color VGA LCDs were shown by Sharp & Hitachi. Both had far better quality, contrast, color saturation and brightness than the NEC unit previously announced. Similarly, IBM displayed a color portable with a 10” TFT (Thin Film Transistor) Active Matrix display with 640 x 480 resolution. Zenith showed a rather unexciting prototype 6 inch color LCD on a TurbosPort. (IBM also showed a monochrome gas plasma display with 1056 x 768 resolution.) The price premium for a color LCD seems to be about $1000 higher than a standard B&W LCD. • The previously announced GRiDpad is a notebook type computer with large LCD and touchscreen. Its handwriting recognition function is easy to use and is about 90% accurate. The product is aimed at mobile professionals who spend a lot of time filling out forms at customer sites. Law enforcement officials are also targeted. NOTEBOOK PCs: There was lots of action in this segment. The most interesting products announced were from a British company, PSION. They introduced new notebooks called the MC-200, MC-400 and MC-600. All three units use 7.68 MHz 80C86 CPUs, measure about 9 x 12 x 2 inches and weigh in at 4.5 lbs. They feature new technologies such as: -- Intel’s Flash EEPROM cards (up to 8 MB of solid state storage configured as four “drives”) -- 640 x 400 CGA LCD screens -- Power technology that allows 8 AA batteries to last up to 75 hours -- Integral touchpads for cursor control -- Up to one hour of compressed voice annotation. The touchpad was awkward to use, especially to a mouse user, and it seemed slow and inaccurate. The 200 and 400 feature a new proprietary GUI and multitasking OS along with spreadsheet, database, calculator, diary, alarm clocks and terminal emulation software in ROM. They sell for $799 and $1499, respectively. The 600 is an MS-DOS 3.2 unit at $2499, does not employ the touchpad and was actually the least interesting of the trio, both technically and market-wise. 486-BASED SYSTEMS: More than twenty new PCs and servers sporting 80486 CPUs were announced for Q1 1990 delivery. Prices all seemed to be in the $10K to $15K range for configured PCs and beyond $15K for servers. BUS WARS: EISA vs. MCA This was the biggest, most obvious battle...EISA signs, buttons and lapel pins were everywhere. The EISA committee even had a small booth. Of course, there is no winner of the Bus War at this time and there probably won’t be. This is not an issue to end-users. It is almost certain that there will be several bus archi-tectures coexisting in the future, just as they have in the past. MULTIMEDIA: This is shaping up to be the KEY buzzword of 1990--everybody is giving it lip-service, many vendors are claiming to do it now and even Jim Cannavino, IBM Entry Systems President, spent his keynote speech talking about it. However, it seems the great majority of attendees are either very confused over what it is and/or how it can be used, or they are very skeptical of all of the pieces com-ing together anytime soon. Most of the “Multimedia” products shown were really desktop presentation tools such as animation packages and LCD projection pads. They don’t combine interactive audio, video, animation, and graphics like Apple’s Multimedia projects do. MULTI-PROCESSING: This is a strongly emerging buzzword that we predict will be one of the biggies in 1991. Novell, Netframe, Compaq and a few Taiwanese manufacturers were demonstrating this capability. This is an advanced computer architecture that allows multiple MPUs to handle certain tasks simultaneously. It is most appropriate for the highly I/O intensive tasks of a server CPU. PRINTERS: Major new laser printers were displayed for the first time by TI and HP that will set new standards at the low end of the market. Both units are very small, light and inexpensive. They will create under $1000 street prices and put lasers on single-user desktops. The TI unit is modular and very expandable. A PostScript version will sell for less than $2500. OPERATING SYSTEMS: • OS/2: This was the most visible product at the show, at least in terms of raw eye contact. IBM paid for OS/2 bags to be distributed to many of the first day visitors and had OS/2 paper cups made for the concessions vendors throughout the entire exhibition area. OS/2 pins, buttons, banners and signs were also widely seen. IBM and Microsoft jointly sponsored an OS/2 booth where 40 developers showed off their latest OS/2 programs, most of which were alpha- or beta-ware or older OS/2 1.0 versions. A catalog was handed out which listed hundreds of programs, with most shipping in 1990. In general, it is widely assumed that OS/2 will be the dominant operating system of the future, the question just seems to be “How FAR in the future?” • WINDOWS: Meanwhile, Windows seems to have turned into a viable OS for today...many of the programs displayed throughout the show, in both hardware and software vendor booths, were running under Windows/286 or /386. Since the great majority of systems sold today are still not OS/2-capable, Windows has become the temporary default GUI. Consequently, there was a lot of concern over the IBM/Microsoft announcement. Microsoft’s VP of Applications, Mike Maples, was allegedly very upset about the IBM/Microsoft announcement as are most Windows developers. • OPEN LOOK: At the AT&T booth, only one computer was showing Open Look (AT&T’s GUI) and the booth personnel took five minutes to locate it! At previous COMSDEXes, it has been a feature of live demos. AT&T is bragging that it only requires 6 MB of RAM now (used to be 8 MB), whereas “other GUIs require 8 to 12 MB.” The product is still very slow, there are only three non-Sun programs available and very few software developers are supporting it. We think OpenLook is becoming less of an issue as time passes. • PROGRAM AVAILABILITY: According to a COMDEX-panel led by industry analyst Amy Wohl, currently available end-user programs for the various OSs number as follows: Windows --40-50 (Microsoft claims 500 in available) AT&T Open Look -- 6 (not including 3 from Sun) OSF Motif -- 3 OS/2 1.2 PM -- 20 (probably really only 10) NeXT -- 6 DECWindows -- 9 • OS FUTURES: -- How “IDsees” it: IDC issued COMDEX estimates for future Operating System Market Share: 19891993 DOS 86% 65% Mac 9.6%12% UNIX 3.5% 16% OS/2 & PM 1% 7% -- InfoCorp: “It won’t be until 1997 or 1998 before OS/2 will outsell DOS. 18 Million unit sales in 199l.” -- BYTE Magazine’s COMDEX Opinion Poll Results: Q. “Which Operating System/User Interface will become the dominant force in the personal computer industry by the end of 1992?” (This poll has been repeated at the last four COMDEXes) Asked in ... Spring 88Fall 88 Spring 89 Fall 89 Standard DOS 30% 18% 14% 18% Extended DOS n/a 31 30 31 UNIX 24 23 22 18 OS/2 32 16 20 16 Macintosh 4 3 3 3 Other 1 1 1 1 None 9 8 10 13 Notice how OS/2 has gone downhill as Reality overcomes hype and PR. Also, DOS and Windows (”Extended DOS”) are expected to be half the market even three years from now. Although the question read “which will be dominant?,” the answers look more like large business market share and don’t reflect the whole market. *********** COMPANIES ************* COMPAQ: Compaq’s SystemPro and LTE portables were well-received and among the biggest hits of the show judging from amount of press and shuttle bus conversation they generated. Compaq stuck to its story about minicomputer-like performance for the SystemPro and most of the demos consisted of impressive looking, animated benchmark bar graphs on CRTs. They really ARE comparing the SystemPro to minicomputers and are unwilling to compare it with workstations. IBM: • IBM Demonstration. The very large IBM booth had a live presentation going continuously. IBM intended to show how powerful and easy OfficeVision is by asking for audience volunteers to help out. However, we noticed that the volunteers ended up doing nothing in front of a canned demo. The speaker would “guide them through the tasks” by doing everything for them. • OfficeVision. The DOS version of OfficeVision was shown - it looks ugly, feels slow and acted very slow even on a Model 70. It won’t officially ship until late December and IBM hasn’t announced a release 2 of DOS OfficeVision. IBM is not sure it can support all the functions in 640KB. Upon our questioning an IBM spokesperson said they are contemplating a Windows-based version that would be better (and require more hardware). In terms of functionality, OS/2 OfficeVision is basically just electronic mail with a text processor and telephony at this point. However, it does make for an impressive demo. One can drag a file to the out basket and tell it to go to a VM terminal. Using this, one can send mail to everyone in an organization regardless of where they are or what machine they are using. • Personal System/2 Wizard. This is an add-on RISC processor board using the Intel i860. It supports OS/2, but programs have to be written to take advantage of it (e.g. won’t support 1-2-3 or Autocad). Prices are $7,000 for 2MB, $11,000 for 8 MB. This is very expensive and until developers support it, it is worthless. (Renderman was running on it, and it looks very impressive.) • IBM Operating Systems. There are multiple versions of three different OSs on IBM PCs: MS-DOS, OS/2, and AIX. Then there is also the issue of User Interfaces--IBM supports Windows, Presentation Manager, NextStep, Metaphor and MOTIF. Metaphor and NextStep were not shown. Motif was, and it LOOKS very nice. OSF released a specification and sample code for MOTIF in the 2H89, however, no major vendor has shipped an implementation of it yet. Regarding OS/2, IBM claimed, “The 286 version of OS/2 will be streamlined, while the 386 system will have more features added.” However, IBM also stated that Windows is for 286s and below. Some elements of Metaphor will be added to PM. Both Motif and NextStep will be added on top of AIX. AIX is primarily for the RT platform, but will also run on 386s and 486s. If these paragraphs seem confusing to you, welcome to the World of IBM Operating Systems Strategy! INTEL: Intel’s “Technology Theater” had a multimedia and live actor presentation complete with audience seating that rotated through four topics. -- The first part talked about the fast pace of change and evolution of microprocessor technology. -- The second showed the terrible confusion in the “Average User/Buyer” as he tried to decide between all the competing CPU technologies. -- The third section was an obviously manipulative act with three actors representing the 80286, 386 and 486 chips. They showed how they handled tasks by juggling balls (or not juggling in the case of the 286). 386 and 486 bragged about all the wonderful things they could do while the meek 286 sulked. The scene ended with the audience actually being rotated away from a whimpering 286 crying after his big brother and sister to let him join them in the glorious “Future of Computing,” the fourth act. Of course, they told him no. -- The final scene showed people in the future sitting back with their feet up, talking to their computers and ordering them around like personal slaves. Then the first wall opens up to reveal the Technology Showcase where the audience received demos of i860 and i960 third-party products, Flash EEPROMs and Digital Video Inteactive (DVI). MICROSOFT: Microsoft did a lot of fast talking regarding the directions and validity of both Windows and OS/2. They claimed that 500 Windows applications are available today. They have clearly stated that Windows is a viable, important product. However, they refused to say just when Windows 3.0 will be available. (We believe it will show up in Q2 ‘90.) Windows will apparently be aimed at home and education markets as well as small business, whereas by 1991, OS/2 will be THE corporate standard. As we noted earlier, there is much dissension among the ranks of Microsoft officials regarding the joint announcement with IBM. NOVELL: This leading networking company had one of the most impressive displays/demos at COMDEX. It demonstrated quite dramatically the value of 32-bit busses, disk caching and multiprocessing. The Novell suite had two stairstepped towers holding a display of 250 PCs of all types and sizes including about 20 Macintoshes. All of the systems were networked to two servers, a Compaq DeskPro 386/25 with ISA bus and the new SystemPro with EISA, high-performance disk drives and caching. Both systems were running Novell’s latest version of NetWare 386. While two humans in front explained all the animated benchmarking graphs and did the sales pitch, two Mac IIs counted down the total time taken for all 125 PCs attached to each server go through a network boot and a whole series of network and file server processes. The EISA system finished in a bit over 3 minutes while the ISA system took nearly 7 minutes. Then the whole process was repeated with all 250 PCs connected to just the EISA server. This took a little over 5 minutes. APPLE PRESENCE, IMPACT & IMPLICATIONS: Apple’s booth was very near the center of the main hall and attracted better than average attendence. Our booth was medium sized, very practical and non-glitzy. A large hands-on area was designed to let the whole product line speak for itself. After our long absence from COMDEX, being on the main show floor helped Apple gain mindshare and press attention. Major Macintosh developers also displayed their wares to an appreciative crowd. Just as important was the large number of Macintoshes and even a few II GSs at many booths throughout the show. It seemed clear that most major software and hardware developers believe in Macintosh as a solid platform for expanding their product lines. With everyone else moving to GUIs nowadays, its obvious that Apple has won the interface battle decisively. However, the Wars rage on.... COMDEX is the most important industry convention by far. It is where most of the major issues are clarified or further confused. COMDEX is where Technology clashes with the User and where Engineering gets beat over the head by Needs. It is oftentimes where many little perceptions are kneaded into Perceived Reality. This particular COMDEX intensified much of the industry debate and gave Apple some real opportunities in the form of: • the Bus Wars (MCA vs. EISA vs. ISA) • the Processor Wars (Intel trying to kill off the 286) • the OS & GUI Wars (OS/2 vs. Windows vs. multiple UNIXs vs. DOS, etc.). • the “SoftWhere Question” (where IS the software?) • the “What’s Multimedia Question?” Apple can take advantage of the confusion because our story is very clear: • Macintosh uses one integrated hardware & software architecture from top to bottom. • Macintosh is much better than Windows, much easier than UNIX, and much cheaper than OS/2. • Macintosh has more commercial applications than Windows, OS/2 and the GUIfied UNIXes combined! • Macintosh IS multimedia. Therefore, with lots of the proper positioning, Apple could actually be perceived as the safest choice in the industry. ------------------------------------------------------------------------------- For further information, please contact Ken Lim at LIM.KEN. As always, we welcome your comments and suggestions.