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Business Week: Apple's challenge is daunting

updated 04:40 pm EST, Mon December 11, 2000

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Business Week takes a look at Apple's latest financial turmoils with an attitude reminiscent of 1996. "Steve Jobs has no white rabbits left in his hat. Apple appears to be facing a dead end in its business growth, the victim of mismanagement and unmitigated hubris." Readers should note that the article contains several inaccuracies, including comparing in price Apple's Power Mac G4/500MP with Cinema Display to a single-processor 700 MHz Gateway with a CRT, and noting that IBM is to blame for the PowerPC chip, incorrectly stating that the company has stopped spending money on development (also, Motorola, not IBM, is responsible for G4 chip development).

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12/11, 04:55pm | report spam | close Reply | delete
Odd coming from BW

Usually, they're far more upbeat on Apple as a business. Wonder what spooked them?

I think I see where he got the price wrong. He tossed in the 22" Cinema Display; that's $4000 right there. Of course, that does mean the computer itself is $3500, with no monitor. That's still a little high.

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12/11, 04:55pm | report spam | close Reply | delete
I told you so...

Well, I expected that the industry doomsayers would creep out from under their rocks and spell Apple's doom once again from the minor woes Apple has had lately.

Nothing new there. Apple is healthy, just needs to get back in the CPU arena. That's all.

- Peter
titancity.com

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12/11, 05:04pm | report spam | close Reply | delete
Big White Rabbit

It would be interesting to know how the author knows that there are no white rabbits for Steve to pull out of the hat when, with the exception of leaks and rumors, we rarely know what's to be revealed before the Mac shows. Would also be interesting to know why the biggest white rabbit of all, Mac OSX, didn't get any column space? Prehaps unveiling a radically new, but backward compatible, operating system that leapfrogs the competition and was already won praise in its *beta* form would undermine his argument?

Save this article: Its a keeper and will be fun to refer back to it in a year ("Remember that clown who wrote...") Until then, it's a classic rehash of the same arguments we've been hearing for Apple's demise for the past 15 years...

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12/11, 05:05pm | report spam | close Reply | delete
what spooked them

was while all their good reporters were at the supreme court. they let some bigoted-multiple-mistake-idiot write a column that was not error checked.

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12/11, 05:17pm | report spam | close Reply | delete
White _______ r invisible

I agree with the Big White Rabbit post. The best magician is always able to surprise his audience. You'r not supposed to know if he is going to pull out a rabbit or maybe even a donkey (aka Jackass) in the form of microsoft until it's there in front of you so you can say "ooh" or "ahh". The columnist is making a stupid self-defeating statement (or whatever it's called) like "expect the unexpected."

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12/11, 05:22pm | report spam | close Reply | delete
This is great

Cant wait until macnn starts posting messages like

"We have an unconfirmed report that somebody is using a mac in Texas, this would bring the installed base backup to 107 mac users in the US"

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12/11, 05:24pm | report spam | close Reply | delete
no more rabbits

we KNOW what motorola and ibm have in store - 700 mhz at most

you can't even find a PC with less than 700 mhz - apple's margins are already pretty thin - there's no way they can cut prices in half, which is what they would have to do to compete with their PERCEIVED performance gap

we've seen osx and MANY mac users are unhappy - i think what steve doesn't realize is that these users are not just "waiting for osx" - they are waiting for it to MATURE - i.e. they are going to wait another YEAR until it recovers all the UI features that have been removed from os9, or until ALL their software is carbon/cocoa-ized

the rest of the world is not standing still - the pentium4's (idle pipeline) performance problems are solved by a p4-aware recompile, p4 has new altivec stuff, 64-bit itanium systems ship in january, bluetooth-equipped cameras streaming mpeg4 are available now but only compatible with pcs

it's going to be a very rough year for apple - they are basically going to be able to do nothing except finish osx

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12/11, 05:30pm | report spam | close Reply | delete
f*** the BusinessWeek

These idiots at BW should stop writing bad stuff about Apple, where they were when Apple was getting glamour and money for three years?!

Think different, and Steve has more white rabbits, than the BW has readers!

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12/11, 05:37pm | report spam | close Reply | delete
letter to editor

Here's the letter I sent to the editor of Business Week:

Sir:

I hope Business Week realizes how silly and unprofessional this particular column is.

Jaffe makes gaffes that would embarrass a high-school newspaper. He also demonstrates that he has little or no knowledge regarding the technology about which he writes. Jaffe perpetuates the old misconception about clock speeds by trying to compare Intel and Motorola chips. Clock speeds between Intel and Motorola chips cannot be directly compared, as their internal architecture is radically different. A 450MHz PowerPC chip is faster than a 700MHz Intel chip for most tasks. And yes, it is Motorola who is responsible for the PowerPC chip design, not IBM, although IBM does make PowerPC chips.

Additionally, the price comparison between a 500MHz dual-processor Mac G4 versus a 700Mhzsingle-processor Gateway machine is totally inaccurate. It seems that Jaffe included a nearly $4000 22-inch Apple Cinema Display in the Apple pricing. Shouldn't comparisons be made between similar computers? This is not reporting, gentlemem; it is libel.

Responsible journalism requires that reporters write about topics they know something about and also that they should not impose their personal biases into their reporting. Sam Jaffe, in this column, violates both of those tenets and he, as well as Business Week, should be ashamed.

This kind of inaccurate, one-sided reporting is not likely to enhance Business Week's reputation, you can be certain. Where was the editorial oversight that quality publications exercise?

Now let's see if they have the balls to print it!

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12/11, 06:42pm | report spam | close Reply | delete
What's Motorola's Plan?

From the CBC Newsworld site (http://cbc.ca/cgi-bin/templates/view.cgi?/news/2000/12/11/intel001211):

"Intel said it has built the world's smallest and fastest transistor that will make chips up to seven times faster than the Pentium 4. The company said it can build the new CMOS transistors, the key component in microprocessors, as small as three atoms thick.

The company said that within five to 10 years, it will build microprocessors that contain more than 400 million of these transistors, operate at speeds as fast as 10 gigahertz and require less than one volt to operate. Today's Pentium 4 processor contains 42 million transistors and runs at 1.5 gigahertz.

Within five years it will be possible to build chips than run 10 billion operations a second, compared to the Pentium 4's 1.5 billion a second. "

So how's Motorola planning to beat this?

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12/11, 06:48pm | report spam | close Reply | delete
Re: Jaffe

In my opinion the guy is not very bright. How does he keep his job?

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12/11, 06:55pm | report spam | close Reply | delete
MY EMAIL TO JAFFE

This is what I sent the idiot who wrote the article:
I'm sure you're being blasted by Apple loyalists regarding your latest column, but I am flabbergasted at how little research you did for the article. Where the h*** did you get that $7,598 price for the G4? You obviously added the cost of the Cinema Display which is a 22 inch LCD Screen. Don't you check your facts?

Also, Motorola makes the G4 used in the PowerMacs and Cubes. IBM makes the G3s used in the iMacs. Therefore, its Motorola's fault, not IBMs, that the G4s are behind in mhz. You may have noted though that there are two G4s in the PowerMac you priced. Last I looked 500 + 500= 1,000. It is Apples fault that they are not using higher clocked G3's in the iMac though.

I have many critical comments to make about Apple, especially pricing and a lack of value in some of their products, but your article was nothing but a hack job. A very poorly researched hack job.

If BusinessWeek can allow an article as biased and poorly researched as yours to be produced, I can only be more than happy to cancel my print subscription and discount anything BusinessWeek puts into print.

I can only think of one word to describe your article-Pathetic.

Sincerely,
Steven Golden

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12/11, 07:05pm | report spam | close Reply | delete
Larry

Aren't these the same guys that were singing the praises of the cube just a few weeks ago?

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12/11, 07:28pm | report spam | close Reply | delete
motorola broke the law!

Think Same: Motorola staying at 500 MHz for a whole year!

Think Different: Motorola is the only company who doesn't believe in Moore's law.

I can't wait til MacWorld when they release those 533 MHz G4s! Woo-hoo! If they can get the yields up.

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12/11, 07:40pm | report spam | close Reply | delete
osx ignorance

Mr. no more white rabbits a couple of posts up knows the buzz words but is almost as clueless as the BW writer. First off no average user taxes even a 300mhz chip, there are more wasted megahertz in this world than unopened packets of ketchup in McD's garbage. With margins as thin as they are trying to please the WalMart customer�s perception is not a sound long term strategy. Look at the other computer manufacturers earnings. As far as OSX, not MANY mac users know anything about OSX only those who have purchased the demo and that's not many. The few whiners that are unhappy most likely still have the talking moose or the oscar trash can on their systems and they won't work with OSX. (actually the biggest complaint by far is "spring loaded folders", which the dock will do easily). You WILL be amazed at the array of industry standard apps (do MS office, explorer, outlook, netscape, all adobe's products, macromedia�s stuff, filemaker, oracle autocad, lightwave, real player, jesus even napster sound familiar?) that will be fully coded when it is released. It is the unix jockeys who�s systems make up the vast majority of real industrial strength network and internet servers that are floored by it. They hate supporting windows desktop clients and no one's been able to put a desktop capable GUI on unix� until now. Remember that microsoft got in the corporate mainstream door because it came on IBM designed boxes, not because it was good, and that�s where they made their billions. The IT closet is the key to the corporate desktop. Turnover happens and microsoft's .net strategy of forcing all computing to be done in a browser is short sighted and doomed. Their groupware is still exclusionary and their database server can't scale with the big boys, but the big boys will be able to run on OSX! Most executives I know want a cube on their desks and their IT guys want OSX, a very sound strategy for moving forward in today�s business world. I�d rate apple stock a strong long term buy!

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12/11, 07:48pm | report spam | close Reply | delete
osx ignorance

Mr. no more white rabbits a couple of posts up knows the buzz words but is almost as clueless as the BW writer. First off no average user taxes even a 300mhz chip, there are more wasted megahertz in this world than unopened packets of ketchup in McD's garbage. With margins as thin as they are trying to please the WalMart customer�s perception is not a sound long term strategy. Look at the other computer manufacturers earnings. As far as OSX, not MANY mac users know anything about OSX only those who have purchased the demo and that's not many. The few whiners that are unhappy most likely still have the talking moose or the oscar trash can on their systems and they won't work with OSX. (actually the biggest complaint by far is "spring loaded folders", which the dock will do easily). You WILL be amazed at the array of industry standard apps (do MS office, explorer, outlook, netscape, all adobe's products, macromedia�s stuff, filemaker, oracle autocad, lightwave, real player, jesus even napster sound familiar?) that will be fully coded when it is released. It is the unix jockeys who�s systems make up the vast majority of real industrial strength network and internet servers that are floored by it. They hate supporting windows desktop clients and no one's been able to put a desktop capable GUI on unix� until now. Remember that microsoft got in the corporate mainstream door because it came on IBM designed boxes, not because it was good, and that�s where they made their billions. The IT closet is the key to the corporate desktop. Turnover happens and microsoft's .net strategy of forcing all computing to be done in a browser is short sighted and doomed. Their groupware is still exclusionary and their database server can't scale with the big boys, but the big boys will be able to run on OSX! Most executives I know want a cube on their desks and their IT guys want OSX, a very sound strategy for moving forward in today�s business world. I�d rate apple stock a strong long term buy!

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12/11, 07:50pm | report spam | close Reply | delete
osx ignorance

Mr. no more white rabbits a couple of posts up knows the buzz words but is almost as clueless as the BW writer. First off no average user taxes even a 300mhz chip, there are more wasted megahertz in this world than unopened packets of ketchup in McD's garbage. With margins as thin as they are trying to please the WalMart customer�s perception is not a sound long term strategy. Look at the other computer manufacturers earnings. As far as OSX, not MANY mac users know anything about OSX only those who have purchased the demo and that's not many. The few whiners that are unhappy most likely still have the talking moose or the oscar trash can on their systems and they won't work with OSX. (actually the biggest complaint by far is "spring loaded folders", which the dock will do easily). You WILL be amazed at the array of industry standard apps (do MS office, explorer, outlook, netscape, all adobe's products, macromedia�s stuff, filemaker, oracle autocad, lightwave, real player, jesus even napster sound familiar?) that will be fully coded when it is released. It is the unix jockeys who�s systems make up the vast majority of real industrial strength network and internet servers that are floored by it. They hate supporting windows desktop clients and no one's been able to put a desktop capable GUI on unix� until now. Remember that microsoft got in the corporate mainstream door because it came on IBM designed boxes, not because it was good, and that�s where they made their billions. The IT closet is the key to the corporate desktop. Turnover happens and microsoft's .net strategy of forcing all computing to be done in a browser is short sighted and doomed. Their groupware is still exclusionary and their database server can't scale with the big boys, but the big boys will be able to run on OSX! Most executives I know want a cube on their desks and their IT guys want OSX, a very sound strategy for moving forward in today�s business world. I�d rate apple stock a strong long term buy!

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12/11, 09:16pm | report spam | close Reply | delete
Business Week Deja Vu

In1996, Business Week put Apple in the front page. Titled "The Fall of an American
Icon", it showed the multi-colored Apple logo on a black background. They basically
said that Apple would go under in 1997.

I'm glad that rag puts out articles like this -- the mere fact that Apple will survive
(maybe not get 50% market share) will prove them wrong.

The writer is an idiot.

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12/11, 10:45pm | report spam | close Reply | delete
PowerPC and P4 mistakes

In the "Letter To The Editor" post, someone stated that the PowerPC is Motorola's and IBM just makes the G3. You couldn't be more wrong (BTW: I do think the rest of your post is good and pretty accurate... it's just this one statement that is wrong). The PowerPC is a decendent from IBM's Power architecture (the most current is the Power4). IBM also owns the trademarks. Motorola and Apple are partners. So the reverse of your statement is true.

As to "No More Rabbits" and a few other posts... All of the specs that I've seen concerning the Pentium 4 show it to be basically slower than the P3. Yes, it's true that a recompile for the P4 improves it, but the only available software that has been recompiled for the P4 was reported to only run about 30% to 40% faster even though there is a 50% clock rate increase (plus some functions are supposed to run at double that at about 2.8 to 3 GHz). The P4 won't be any good until it exceeds 2 GHz and is paried with DDR RAM. Also Altivec is a Motorola technology and is only used in the G4. The Intel P4 does have a related technology though (on this point you only got the name wrong... I'm not sure what Intel calls it, but in general it's called either vector processing or SIMD) Also, I've been hearing a launch date of March for IA-64 with it ONLY trickling out. The big roll out won't come until McKinley in 2002.

Finally to "What's Motorola's Plan" I hope they have one, but you should note than IBM anounced similar breakthroughs tiday as well. They expect to produce similar speed chips as well, and they are going to be using much of this tech next year (though the 10 GHz won't come until later). We can expet IBM to break the 1GHz barrier next year with its Power 4 and PowerPC chips. The question is will Apple use it (Apple likes the Altivec from Moto, but IBM doesn't like it... will Apple switch or convince IBM to adopt in some chips?)

Expect some Rabbits from SJ's hat... Expect some of them to be BIG and REAL. Expect some of them to be illusions. He has a way of doing both! After he has always had that "reality distortion field" that goes right along with his genius to innovate.

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12/12, 12:16am | report spam | close Reply | delete
I say

Take his sorry but to the supreme court and demand a recount!!! I want those meghertz recounted by hand!!! and the price too!!!

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12/12, 07:48am | report spam | close Reply | delete
Mine's better than yours

Yeah when I read this BW article last night I completely dismissed it...I just assumed it was your typical biased article. At first, I thought about writing to the author, but basically figured he couldn't really be that ignorant and was trying to stir up the Mac world.

And after reading some of the posts here and on other sites ... I just wanted to say...

Are some people so unhappy with the choice they made that they have to attack the Mac platform to make themselves feel better. I mean honestly, if you're happy with what you have, why are you so against something you don't have? If you like using Windows good for you. If you like using a Mac, that's cool. What do I care? I don't. And why? Because I'm happy with the choice I made. :)

Which computer system someone chooses to use is a matter of personal preference. I've used DOS, Windows 3.1/95/98, MacOS (since 1988), and various flavors of UNIX. I prefer MacOS. But so what?

Is it human nature to want to have the best? Let's see... Intel CPU's are running at 1.5GHz, Intel based systems are cheaper, Microsoft Windows is the most stable, fastest and easiest to use operating system, Wintel users have a ton more software and hardware options available to choose from ... There. Your system has the best stats ... now can I have my pathetic Mac and leave me in peace? Unfortunately the answer to that is, probably not.

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12/12, 09:24am | report spam | close Reply | delete
re: Motorola's Plan

Actually IBM just released info for PowerPCs of comparable abilities. See: http://www.theregister.co.uk/content/3/15376.html and http://www.3dnews.net/onearticle.x/7|4|20|0||PC%20Gaming,Hardware,Technology,3Dn%20Rants,Other/25039

HTH
Kage

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12/12, 10:29am | report spam | close Reply | delete
G4 vs. Gateway

Sam Jaffe wrote:
"The 500-megahertz dual-processor G4 with 256 megabytes of memory costs
$7,598 from Apple. A 700-MHz Gateway with a single processor boasting the same memory goes for $2,549."

The price listed is for a G4 500 mhz with cinema display. A G4 500MHz is listed at 3,499 and a 17" studio display is $499. This would make the cost $3998.

Jaffe did not mention that the G4 dual processor 450MHz is going for $2499. This would make it $2998 with the 17" monitor, more in line with the Gateway mentioned.

This is still more than the 700Mhz Gateway, but remember the cost of the G4 is for a dual processor with much more efficient chips. Mhz is only one measure of the value of a computer. A dual processor G4 running an application designed for it will run circles around a single processor Wintel machine. The Apples also run at much lower temperatures. Jaffe did not menition the problems with reliability that Intel is having with its higher speed chips due to high operating temperatures.

I am the "computer guy" for a small office. I am sure my job duties would require one or two more people if we were using Wintel machines. We recently purchased a G4 450 dual with a $300 rebate. I eagerly await OS X which will make the G4 a great server for our small business.

Apple is having problems but so is the whole computer and internet business world. If Jobs has made a mistake it is not stressing the greater efficency of the Macs in their ads. A better informed public would be more likely to choose Apple computers for their next purchase. Jaffe is not helping by comparing the highest priced computer listed on Apple's on-line store to a medium priced Gateway.

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12/12, 11:07am | report spam | close Reply | delete
If the content disturbs..

If the content disturbs you all, then good; it should. Never forget that we Macintosh fans are not a universally loved group. PC fans cannot understand why we look down at an Intel box running Amateur 98 or Amateur 2000. A PC power user assumes that they are the masters of the computing universe, something which is reinforced by lesser PC users, and are offended by the sheer lack of respect demonstrated by Macintosh users, who look at this person as a priest might look upon a barbarian. As we carry ourselves with this rightly deserved hubris, we must accept that when Apple stumbles, those people displaced by our arrogance will rise up and point, yelling the most destructive and hateful phrases they are capable of. But understand that we brought this upon ourselves; it is the price we pay for our uncompromising view of excellence in computers. Our only defence is to make sure Apple doesn't stumble, and we cannot control that.

iGeorge

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12/12, 11:59am | report spam | close Reply | delete
1.2 Ghz G4 coming by Feb.

Xtrem is coming out at the end of January with a 1.2 Ghz G4. Now imagine the PC world trying to conquer what effectively is a 2.4 Ghz Pentium IV by that time (note that the Pentium IV is slower than the Pentium III) I think not...Xtrem needs to publicize it as an equivalent 2.4 Ghz Pentium IV, and not publish the Mhz rating of the G4 itself when it puts it to market. Same with Apple. 486DX 100 Mhz PCs were slower in many instances than Pentium that were 75 Mhz. If we can see slower PCs that have higher Mhz than another PC, why can't we see slower PCs that have a higher Mhz than a Mac? Potential PC users have got to look at the history, and they will notice that not always is Mhz a determination of how fast the machine is. In fact an AMD of the same Mhz as a Pentium often is faster. Mhz is so old a rating, they ought to only advertise MFPS (millions of floating point instructions a second), and be done with the Mhz rating at all chip makers, and let the computer manufacturers advertise only those same ratings. Only then will we get true speed comparisons. The same rating should be used on the cache on the processors.

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12/12, 02:05pm | report spam | close Reply | delete
Business Week

Ah, to expect that a run of the mill journalist can rise up intellectually to the process of reasonable relevant research is a expectation that simply is untainable. As an ex-journalist I saw my colleagues creating 'c*** from c***,' as they say, all of the time. Not that all do, indeed there are fine minds in the journalistic medium but... Business Week needs fodder for its pages.

In my view, Apple creates machines that are easy to use, with simple interfaces, and are very powerful particularly in the arenas of photography, graphics and in my case film. Those users of computers who do not indulge in these areas of need generally live in a vision of computing that requires no more of a machine than the ability to do spreadsheets, write whatever, and calculate 'stuff', or play games hour upon hour. The Apple systems are extraordinary in the world of creative visual programs such as Photoshop, and After Effects and Final Cut Pro to name a few. Most intertesting is the fact that fundamentally, a 10 old with an iMac and Final Cut Pro can actually make an entire movie. All of a sudden, these platforms and programs have created a visual form of story telling that anyone can access. No longer is film the province of the very elite with lots of money. Entire films are being constructed using simple Apple computers. Indeed, there are other machines upon which some of these programs and others like them run, however, one only has to go to people who do this for a living... like myself... to see which one works best. We would still have our banks of Windows machines in here if they worked better... in our experience they do not. Of course, everthing is arguable, however our dollars are focused on machines that work without massive amounts of maintainance, obtuse gui's and so on. We let our dollars work for us in the most useful and positive way and for the near future Apple provides us exactly what we need in this regard. What I fail to understand I suppose is why there is so much animosity towards a company that strives to invent new ideas and machines. Can anyone out there in computerland tell me why this negativity is so . I say, hurrah, keep trying, build better machines. Cheers

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Business Week: Apple's challenge is daunting

updated 04:40 pm EST, Mon December 11, 2000

Odd coming from BW

I told you so...

Big White Rabbit

what spooked them

White _______ r invisible

This is great

no more rabbits

f*** the BusinessWeek

letter to editor

What's Motorola's Plan?

Re: Jaffe

MY EMAIL TO JAFFE

Larry

motorola broke the law!

osx ignorance

osx ignorance

osx ignorance

Business Week Deja Vu

PowerPC and P4 mistakes

I say

Mine's better than yours

re: Motorola's Plan

G4 vs. Gateway

If the content disturbs..

1.2 Ghz G4 coming by Feb.

Business Week

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Business Week: Apple's challenge is daunting

updated 04:40 pm EST, Mon December 11, 2000

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Odd coming from BW

I told you so...

Big White Rabbit

what spooked them

White _______ r invisible

This is great

no more rabbits

f*** the BusinessWeek

letter to editor

What's Motorola's Plan?

Re: Jaffe

MY EMAIL TO JAFFE

Larry

motorola broke the law!

osx ignorance

osx ignorance

osx ignorance

Business Week Deja Vu

PowerPC and P4 mistakes

I say

Mine's better than yours

re: Motorola's Plan

G4 vs. Gateway

If the content disturbs..

1.2 Ghz G4 coming by Feb.

Business Week

Login Here

Register for our weekly email newsletter:

Connect tools:

Subscribe

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Follow us

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Most Read

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MacNN Marketplace