Apple Reference & Presen…rary 8 (Internal Edition)/Apple R&P Lib Internal v8.0.iso/3-Presentations/Apple Computer Inc./Industry Competition/ROMs/Apple/Mac IIfx Competition

Text File | 1990-06-24 | 19KB | 370 lines

Apple Confidential / Need to Know

From:  David Garr, Competitive Analysis, GARR1

Mac IIfx Competition

Apple response:  Customers should consider the total cost over the life of the
investment.

•Risk.  Many clone vendors have gone out of business.  Therefore, it can be
risky to purchase a clone vendor's system because that vendor may not be around
to support (service and upgrade) its equipment over the long-term.  For
example, if you buy a clone and OS/2 from a vendor, and that vendor goes out of
business, no one is going to tailor the next version of OS/2 for your clone.
You'll have to buy a version of OS/2 tailored for another machine, and hope
that works.  If it doesn't, then you have no one to call for technical support.

•Support.  Most clone vendors do not offer a complete range of products.
Therefore, a customer is forced to go to other vendors to buy peripherals,
networking, and software.  This can be time consuming, and can potentially lead
to incompatibilities and finger pointing when problems arise.  By contrast, the
Macintosh has lower support costs over the life of the machine.

•Quality.  The quality assurance of some clone vendors is unknown, since their
long term commitment to customers is questionable.  And when a customer finds
clone vendors' equipment to be defective, sometimes those vendors are slow to
replace it.  The time wasted trying to get a replacement can be very costly to
a customer.

•Not a Macintosh.  In addition, PC clones don't have the Apple advantages
provided by the Macintosh.

Bundled hardware features.  High-end PC compatibles come bundled with a
graphics adapter (usually VGA) and a keyboard.  These cost extra on the
Macintosh IIfx.

Apple response:  As shown in Appendix A, the Macintosh IIfx is priced very
aggressively when configured similar to high-end PCs.

Large installed base.  Of the roughly 2 million high-end PCs that Dataquest
expects will ship in 1990, 95 percent are Intel-based machines.  This is a much
larger installed based for developers to target.  And it gives customers
security knowing that when they buy a PC compatible, they have a lot of
company.

Apple response:  Macintosh unit sales are growing at a very fast rate.  In
fact, Jon Shirley, president of Microsoft, stated that Macintosh system sales
are growing at a faster rate than sales of Intel-based systems (InfoWorld,
December 11, 1989).

Appendix:  High-end PC compatible companies

IBM’s high-end PCs

Four high-end PCs.  IBM has four entries in the high-end PC market:

•The new PS/2 Model 80, a tower system using a 25-MHz 386 processor.  Its
configured price is $13,140.
•The PS/2 Model 70-A21, which also uses a 386 processor running at 25-MHz.  Its
configured price is $12,335.
•The 486/25 Power Platform is a $3,995 i486-based daughterboard upgrade which
plugs into the Model 70-A21.
•The PS/2 Model 70 486.

PS/2 Model 70 486.  The Model 70 486 is IBM’s most powerful PS/2.  It is simply
a PS/2 Model 70-A21 with the 486/25 Power Platform already installed.
Configured like Macintosh IIfx, it is priced at $15,040.  It is currently
shipping.

This Model 70 486 machine had been expected, but there were two surprising
aspects to its appearance on the market.  First, IBM didn’t make a big splash
with this announcement.  For example, IBM makes no claim about the Model 70 486
being faster than the 486/25 Power Platform upgrade.  (The trade press has
criticized the 486/25 Power Platform because it is simply an upgrade board for
a 386-based system and therefore not optimized to take advantage of the
increased capabilities of the 486.)

Second, IBM’s pricing offers customers no incentive to buy the Model 70 486
instead of buying the Model 70 386 and upgrading to the 486 with the Power
Platform.

IBM’s tower system lacks performance.  IBM’s fastest tower system, the Model 80
386, with seven slots, runs at a maximum speed of 25-MHz.  IBM’s delays in
bringing speedy server personal computer products to market may be due to
price/performance encroachment on the AS/400 and 9370 rather than technical
reasons.  The company may be protecting the low end of these minicomputer lines
(and their attendant profits) by limiting the performance of the large Model 80
form factor.

IBM offers little direct competition to the Macintosh IIfx.  IBM does not offer
a high-performance PC with many slots; therefore, it doesn’t really have an
offering that competes directly with the Macintosh IIfx.  The Model 70’s three
slots are limiting for many high-end applications.  For example, adding a high
resolution video card and a network interface card, and going beyond the 8MB of
RAM on the motherboard, would take up all three slots.  That leaves no slots
left for other devices, such as an external hard disk drive, a scanner, or a
CD-ROM drive.

Compaq’s high-end PCs

Compaq’s products have long been positioned as the high performance PC
compatibles.  Compaq is usually one of the first vendors to ship product that
incorporates a new Intel processor, and its products are usually priced at the
high end of the PC-compatible market.  Until November 1989, its high-end PCs
were the Compaq 386/25 and 386/33.  National Software Testing Laboratories
recently benchmarked seven popular 33-MHz systems and found that the Compaq
386/33 was the fastest.

Compaq’s November high-end announcements.  Compaq’s announcements in November
of the Deskpro 486/25 and the Systempro substantiated that high-performance,
high-price positioning.  These systems will be Compaq’s first to use the new
EISA (Extended Industry Standard Architecture) expansion bus.

The announcements underline Compaq’s drive to be perceived as the technology
leader in the PC industry.  The company is adopting much more aggressive
tactics, including product preannouncements and performance claims that skirt
the edge of believability.  We think Compaq will act aggressively throughout
1990, though its main competitive focus will probably continue to be IBM and
not Apple.

Deskpro 486/25 specifications

•25-MHz Intel 486 processor
•Cache memory controller with 128K static RAM
•4MB of RAM standard (expandable to 100MB)
•11 slots (7 EISA and 4 memory expansion)
•Connector for optional Weitek 4167 coprocessor
•Hard disk drive options 120MB to 650MB.  1.3GB maximum internal storage.

Comments on the 486/25.  It is claimed that this system can operate at up to
three times the speed of a 25-MHz 386 system, or “15 VAX MIPS.”  We think that
its actual performance will vary tremendously, depending on the application
being used.  With the prices Compaq quoted, we think this machine will sell in
limited quantities to very aggressive power users.

Systempro specifications.  This is the tower server.  Configurations announced
include only 386 processors; however, the company says that 486 processors will
be available later.

•33-MHz 386 processor
•Machine can be configured with a second CPU
•33-MHz cache memory controller
•64 KB cache memory (25ns)
•4 MB of RAM (expandable to 256 MB)
•Up to 4.28 GB hard disk storage
•Six EISA slots
•Intelligent Drive Array Controller (allows user to treat several hard drives
as a single drive)

Aggressive benchmarks and positioning.  The positioning of the Deskpro 486/25
is fairly straightforward: It’s the ultimate power PC.  However, some of the
power claims for the machine are a little tough to swallow—in particular,
Compaq’s claim of up to 15 MIPS, which would put it ahead of even some
RISC-based workstations.  For the Systempro, Compaq claims an amazing
performance range of 8 to 40 MIPS.

Because announcements like this one tend to focus customers on clock speeds and
hardware specifications, we think that it’s important for Apple to continue to
articulate its commitment to maximizing the functionality of Macintosh, rather
than just adding features.

486-based PC compatibles

The high-end PC-compatible vendors usually follow Compaq and IBM to market with
machines that perform similarly to the Compaq and IBM systems but are priced
much lower.  The leading high-end PC compatible vendors are ALR, AST, Epson,
HP, NEC, Tandy, and Zenith.

Some of the first 486 machines will probably not take full advantage of the 486
architecture.  For example, the IBM Model 70 486 has been criticized for using
the memory management scheme of the 80386.  The ones that begin shipping later
in 1990, such as Compaq’s 486/25, will take more advantage of the 486 and thus
should be faster.

The machines based on the 80486 are fairly similar to one another, with cache
memory and standard RAM on the motherboard being places where vendors can
differentiate themselves.  The 486 chip itself includes 8 KB of built-in cache,
and some vendors provide 64 KB or more in additional cache to improve
performance.  (Cache memory is much faster than main memory, and it holds data
that is used frequently, for faster access by the CPU.) Furthermore, vendors
that allow lots of standard RAM on the system board will have a speed advantage
over those that limit on-board memory and force users to extend memory using
EISA or Micro Channel cards.

Besides the IBM and Compaq 486 machines, the major 486 announcements have been
from Acer, ALR, AST, Hewlett-Packard, and NCR.  All are using 25-MHz processors
in their 486 products.

Appendix B:  Workstations vs. High-End PCs

The distinction between personal computers and workstations is blurring.
Personal computers are becoming more powerful and workstation prices are
dipping to below $10,000, creating an overlap in prices, processing power, and
other features between these two classes of machine.  For example, HP has
announced a $3,999 workstation (the Apollo DN2500) that it rates at 4 MIPS, and
Compaq has announced a $13,999 personal computer (the 486/25) that it rates at
15 MIPS1.  In addition, many workstation software developers are porting their
applications to PCs and vice versa.

However, major difference still exist.  Despite this increasing overlap, there
are still some clear differences between personal computers and workstations.
The following chart lists a few of the broad differences.  (Note: These
classifications are generally true, but there are exceptions; for example, some
personal computers are sold direct.)

Differences          Personal Computers     Workstations

Distribution         Retail                 Direct, VAR
Applications         Horizontal (broad)     Vertical (narrow)
Application avail'yRetail                 From hardware or
                                            software vendor
Application price    Lower (<$1,000)        Higher (>$1,000)
Customers            Commercial             Engineering/
                                             scientific
Support from vendor  Less                   More
Price Sensitivity    High                   Low

One of the key differences between workstations and personal computers is in
how they are used:  workstations are generally used for vertical/technical
applications, and personal computers are generally used for business
productivity applications.  Another key difference is the larger market
potential for high-end PCs.  As shown in the following pages, unit sales of
high-end PCs are expected to be about eight times larger over the next four
years than unit sales of entry-level workstations.

Macintosh IIfx Positioning—A High-End Personal Computer

Based on the above classification, the Macintosh IIfx falls into the personal
computer category.  As such, it will compete primarily against personal
computers—general tools that enhance professional’s productivity.
Workstations, on the other hand, tend to be bought on their technical merits by
technical people with specialized needs, for specific applications.  Many
workstation users also want to run productivity applications, and may purchase
a Macintosh or a PC compatible for that purpose.

Because the Macintosh IIfx is so fast, we expect some industry analysts and
customers to compare it with workstations.  Therefore, we have listed some of
the generic advantages and disadvantages of Macintosh IIfx when compared with
workstations.

Macintosh IIfx Advantages over Workstations

Easier to set up and configure.  Workstations have traditionally been designed
for a technical audience.  As a result, a system administrator is often needed
to set up and configure them.  For example, the Sun SPARCstation comes more
than 2,000 pages of reference manuals.

Easier to use.  The Macintosh was created from the ground up to be intuitive to
use.  Workstation vendors are now adding different graphical user interfaces to
attempt to shield their users from the complexities of UNIX, but it isn’t clear
how well they will accomplish this, or how intuitive the interfaces will be.
As PC Week stated in its May 22, 1989 issue, “Shrink-wrapped software is rare
for UNIX machines, and relatively few dealers have committed to UNIX, which
still lacks a compelling graphical interface.”

More productivity applications.  Thousands of productivity applications exist
for the Macintosh, and virtually all of them have a consistent user interface.
In contrast, there are few productivity applications for most workstations, and
those that exist are usually character-based and lack consistency with one
another.  For example, the Sun Catalyst software catalog, which lists more than
400 SPARC-based software packages, lists only one spreadsheet, Q-CALC, and no
low-end word processors (only electronic publishing packages).

Less expensive applications.  Most Macintosh applications range in price from
$100 to $500.  In contrast, many workstation applications cost thousands of
dollars.  For example, a QuickBASIC compiler for Sun’s SPARC machines costs
from $1,195 to $2,995, depending on the system.

Broader choice of peripherals.  High-end PCs support a large variety of
peripherals and add-ons.  Many of the workstation add-ons are provided by the
manufacturers rather than by third-party vendors, greatly reducing the range of
choices for the consumer.

Broader distribution channels.  Apple is already entrenched among computer
retailers.  Workstations have little presence in the retail channel, which
limits their exposure to customers.

User-centered design.  The Macintosh was designed to give the user the highest
priority.  In contrast, many workstations were designed to give the task the
highest priority.  This difference in philosophy reveals itself when an
individual performs an action such as clicking on the mouse:  The Macintosh
provides immediate feedback, whereas workstations may perform other tasks
before giving the user feedback.

Workstation advantages over the Macintosh IIfx

When Macintosh IIfx competes against workstations, workstation vendors may
claim the
following advantages.

More MIPS.  Many workstations have been optimized to run standard benchmarks
very fast, and so will often beat the Macintosh IIfx in dhrystones, whetstones,
etc.

Apple response:  The Macintosh IIfx, like other Macintosh systems, has been
crafted so that all of its elements work together harmoniously.  Therefore, the
Macintosh IIfx will often run graphical applications faster than workstations
with many more MIPS.

Powerful networking.  Networking is a strength of workstation vendors, with
Ethernet and TCP/IP  standard elements of even entry-level workstations.  In
addition, workstations have been on the cutting edge of client/server
architectures.

Apple response:  The Macintosh IIfx comes configured with AppleTalk.  When
using the $75 LocalTalk connector, the Macintosh IIfx network will admittedly
be slower than workstation networks.  However, a Macintosh IIfx with an
optional EtherTalk or TokenTalk card is priced lower than many entry-level
workstations when both are fully configured and yet provides comparable speed.
Furthermore, connecting the Macintosh IIfx to a network is often easier than
connecting workstations to networks.

Optimized for high-end graphics.  Many workstations are optimized to manipulate
two- and three-dimensional images.

Apple response:  Many workstations are more optimized than the Macintosh IIfx
to work with complex images.  However, the Macintosh IIfx with the Macintosh
Display Card 8•24 GC is often more responsive when working with graphical
productivity applications.

Variety of high-end technical applications.  Some workstations offer a wider
variety of high-end technical applications, such as mechanical engineering and
electronic design automation, than is available on the Macintosh.

Apple response:  Some of these high-end technical applications can be run on
the Macintosh under the A/UX operating-system.

More robust operating system.  Most workstations use UNIX, which provides some
operating system features not found in the current Macintosh operating system,
such as

•Virtual memory
•Interprocess communications
•Preemptive multitasking with protection

Apple response:  Many of these robust operating-system features will be
included in Macintosh System Software Version 7.0.  Also, these features are
available today on the Macintosh with A/UX 2.0.

Direct sales and support.  Workstation vendors usually provide direct support
to customers.  Workstation vendors also have very technical salespeople that
call on customers directly.

Apple response:  Workstation vendors need to provide direct support, since
workstations are more complex to set up and administer then the Macintosh.
Apple relies on its dealers to provide service and support for the Macintosh
IIfx.  Many of these dealers are becoming better able to service and support
high-end Macintosh systems, and are offering specialized applications and
support.

1The only exception is IBM's new 25-MHz Model 80 that does include SCSI
support.

1Some PC compatible graphics accelerators are designed to speed up a certain
application (such as Autocad).  These accelerators can offer greater
performance improvements for that one application than the Macintosh Display
Card 8•24 GC.  Therefore, it’s important to emphasize the compatibility of the
Macintosh Display Card 8•24 GC with all applications, and that it is not an
application-specific processor.

1MIPS stands for Million Instructions Per Second.  MIPS is used to measure the
execution rate of a computer.  However, MIPS rates are not consistent across
different vendors machines.  As a result, MIPS has been referred to as
“MisInformation to Promote Sales.”  MIPS rate, which is tied to the computer’s
clock speed, is only one factor in overall performance.  Bus speed and
bandwidth (8-bit, 16-bit, 32-bit), disk and memory speed, and system software
also determine total throughput of a computer system.