Five Biggest Apple Mistakes

by Chris Seibold Mar 22, 2006

Apple is hitting on all cylinders lately, people are enthused about OS X and the switch to Intel. While the iPod, it almost goes without mentioning, is living in what amounts to it’s own cash rich ecosystem. Of course, things haven’t always been so great, it was a scant few years ago that the phrase “Apple Computer” and the word “beleaguered” seemed to be two halves of an inseparable, conjoined twin.

People who remembered the early days of Apple, when owning Apple stock was like printing money and Apple II’s were outselling every other computer around might wonder just what had gone wrong. How did the world’s biggest computer maker go from a market maker to a verifiable has been? They made some mistakes, some really big ones.

When talking about Apple mistakes, it is natural to mention the Lisa and the Apple ///. Those were mistakes, but they were of the quick and relatively painless kind. The Lisa sold so badly, for example, that the repercussions of that particular mistake didn’t last very long. Other mistakes are more insidious. At the time, the missteps seem like no big deal but as the clock ticks forward the mistake is amplified, those kind of errors are much more damaging long term than any failed product introduction. Restated for clarity, the G4 cube was released to rapturous reviews but sold like pancakes filled with bits of tinfoil. The cube, like the moment when tinfoil meets a filling, may have caused a jolt of short-term pain but no long-term detriment was suffered. Conversely, the mistakes that follow are still hurting Apple.


There’s a good chance you’ve never heard of HyperCard, but it was a fantastic program. It was a new way of managing information that relied on a note card metaphor. Users could enter information on the virtual note card and link pieces of the information to another card in the “stack.” Say you entered notes from a meeting on a card. In the notes you might have referenced the presenter and his name might have been linked to a card with his bio. So you could start with one card and magically, um, surf through a wealth of information. If you remember the first Myst, you’ve played with a really well executed HyperCard stack. As the most thick of us can see at this point, HyperCard would have made an excellent web browser. In fact, HyperCard was a large influence on the Hyper Text Transfer Protocol (or, more famililrly, HTTP).

While incredibly popular, HyperCard had a large strike against it, the program was free. In typical late eighties Apple management style the execs didn’t see a reason to pour resources into something that didn’t generate any revenue, so development languished. Compare this to Apple’s later tactics of introducing something for free (iMovie, iTools, iTunes) to derive a revenue stream once the program made Macs more desirable and users became addicted to the funtionality. Then you’ll start to see how badly HyperCard was mishandled.

Original Mac Pricing

Apple products, many opine, are horribly overpriced. People argue constantly if a Mac is really worth a few hundred dollars more than an equivalently equipped Dell. The disparity may seem large currently but, it is nothing compared to the price premium Apple used to demand.

It cost Appl $500 to produce the original Mac. Apple took a look at the price and decided to sell the thing for a cool $2500. That’s a 500% markup for those disinclined to do the math. Steve Jobs was against the pricing, he wanted to charge a paltry $1995 but, Apple President John Sculley overrode Jobs and used the extra $500 per to pay for the marketing campaign.

Marketing is undoubtedly crucial and the price did fund the much-loved 1984 ad. Still, there wasn’t even a hint of price competitiveness when the original Mac was released. Anyone who went to an Apple retailer saw a Mac selling for $2500 and an obviously inferior PC selling for less than half of that price. It was Apple’s chance to build market share, but the Apple’s management stymied the adoption of Macs by asking consumers to pay an exorbitant premium for their hardware.

The Apple II Upgrade Path

For a time the Apple II was the most popular computer in the world. Even though Apple was selling the machines hand over fist they were aware that the good times wouldn’t last forever, so they set out to design a next generation computer. They eventually came up with three: the Lisa, the Mac, and the Apple ///.

The Apple /// was the only computer that would run Apple II applications and it was a dog. Perhaps the worst computer Apple ever made the Apple /// suffered from a multitude of quality problems, many stemming from the fanless design (did someone say fanless? Yep, Steve Jobs was behind that move). The Apple /// was on the market for all of four months and sold as well as a horrid piece of junk could be expected to.

With the Apple /// gone, users were forced to stick with the Apple II if they wanted to save their investments in software. When people finally got tired of their Apple II’s and went to the store for a new computer they found that there was no model that would run its library of software. Both the Mac and the Lisa treated the Apple II as if it had never existed. Faced with the Mac’s price, the more familiar command line of the PCs, and the fact that either way they were going to have to shell out for new software, a lot of people chucked any Apple loyalty and opted for a PC.

John Sculley Licenses Mac OS to Microsoft

If you ever have the chance to ask a group of Applephiles who the first Mac licensee was they will tell you it was Power Computing. They’ll all be wrong and you can sit back and gloat. The first Mac OS licensee was Microsoft.

Apple gave Microsoft a perpetual license, royalty-free, to use some Mac technology. In exchange for this largesse, Microsoft would hold off shipping Excel for Windows and update Word for the Mac. As Vista has shown, yet again. Microsoft doesn’t view tardiness as a major problem but the license was a huge boon to Microsoft—It was free to develop its own version of the Mac OS.

Failure to License the Mac OS until the Moment was Past

Bill Gates wrote a pleading letter to Apple begging them to license the OS. The letter outlines several reasons why Apple should pursue the path and some partners they should approach. Apple, again with John Sculley at the helm, rejected the idea. Bill Gates, realizing that the GUI interface was the interface of the future decided to do what Apple wouldn’t, and he went about developing the best Mac OS rip-off on the planet.

It seems to have worked out for Microsoft. The usual rationalizations about Apple’s reluctance: companies saw hardware as the keys to profits, standardized OSes weren’t around yet, are well taken. Still, Apple was supposed to be the forward looking, cutting edge computing entity of that time and it missed its opportunity completely.

This is the moment when any article of this ilk must, seemingly, wax panglossian. After outlining mistakes, authors generally note that if not for those mistakes, we wouldn’t have slick Macs with OS X. Everything, after all, worked out for the best. That, as Voltaire noted, is the purest form of bovine excrement. It isn’t that everything worked out for the best, it’s just how everything worked out. One suspects that if Apple had a chance to call “do over” they most certainly would.


  • Well, I don’t know about you but I think Apple’s 30 year mistakes are nill at this point in time. It’s the next 30 years I’m excited about. Besides that, if things didn’t pan out the way they did I wouldn’t be into Macs. I would bet we’d all still use an OS that locked up all the time (yes you, Windows 98 and Mac OS 9), couldn’t properly shut down a frozen app, and Microsoft would’ve developed an OS X-esk system that wouldn’t have been as cool.

    toadkicker had this to say on Mar 22, 2006 Posts: 10
  • As a point of fact, the original Apple /// was withdrawn from the market and replaced with a model that fixed the initial problems.  All of the original purchasers had their machines replaced free, and the machine was manufactured for 2 or 3 years and accomplished its original goal.  I owned 3 of them at one time, with Profile hard drives; I am aware of many others that were in use until the Mac took over the market.  They ran Apple II software well, and their own software, particular the precursor to Appleworks, was quite usable.

    Heepa had this to say on Mar 22, 2006 Posts: 2
  • According to a friend who worked for both Apple & IBM at that time, the Apple software development team were a group of mainly 20’s developers. Imposing their views led to problems for older people. I ran into this at courses I then taught which included older typists who claimed:
    1) The letters on the screen were too small for 50 yo typists (they said while Microsoft’s were fuzzier, they were bigger &  easier to read).
    2) The mouse was fine for three-handed typists (the early Macs had no KB: equivalents for menu items - not good for typists who were used to pounding away on their KB: all day; Microsoft had KB: equivalents at that time).
    3) The menu items required holding the mouse button down while moving down to select a menu item. Many of the typists had developed something akin to arthritis in their fingers, and literally could not reliably use Mac. menus! Those in my classes had uniformly demanded their empolyers get PCs, (Microsoft had presumably researched this & only required a click on the menu heading and the menu item). Apple later fixed this by changing to a similar system to Microsoft’s, but by that stage much of the damage had been done.
    4) I thoroughly agree about HyperCard. A brilliant system at the time. However it seemed Apple was mainly interested in selling boxes, and didn’t know what to do with this marvellous software. It didn’t promote it. It split it off into a separate company, and then bought it back. What a waste! :-(
    5) I found the Lisa was for my purposes the most reliable and useful computer I used (mainly for development), until Windows NT came along. In my opinion it was well before its time. What a shame Apple did not sell it at a reasonable price &  develop it - this was a computer that was well ahead of anything else at the time. Seems to me that Apple squandered a marvellous lead over its rivals. :-(
    6) Making the Macs. closed systems meant that most of the experimental interfacing that used Apple ][s was transferred to the PCs which conntinued the Apple ][ tradition of easily-accessed expansion slots. More lost market.

    So many lost opportunities… :-(

    JosephG had this to say on Mar 22, 2006 Posts: 2
  • Apple later fixed this by changing to a similar system to Microsoft’s

    Several heads around here just assploded, I’m sure.  Prepare to be eviscerated, or at the very least inundated with links to daringfireball editorials about how your statement simply isn’t possible.  smile

    Beeblebrox had this to say on Mar 22, 2006 Posts: 2220
  • Big mistake - the “bomb” icon for system crashed.

    I was doing a sales demo of a $10,000 management system on a Mac SE in the late ‘80 when the software crashed.

    The bomb appeared on the screen to a sharp intake of hissing breath - “What’s that?” the clients exclaimed in unison.

    “Oh, that’s just the bomb.” I replied nonchalantly.

    “THE BOMB!?!?!” they all gapsed.

    I was cursing the software engineers under my breath. I did make the sale, but not that day.

    vaporland had this to say on Mar 22, 2006 Posts: 2
  • Strewth, Chris, after all the lessons I gave you in Australianese, I woulda expected this to be titled “Five Things Apple Totally Buggered Up. The Stupid Buggers.”

    Chris Howard had this to say on Mar 22, 2006 Posts: 1209
  • Great and interesting comments. Though, Beeb, I’m a bit dissapointed in you. When Apple does something after Microsoft it is always an obvious step. When Microsoft does something after Apple it is stealing. This is first grade stuff!

    Chris Seibold had this to say on Mar 23, 2006 Posts: 354
  • I also have to note the liguistic irony of vaporland’s comment. In the 80’s it Apple’s bomb message was considerd a big mistake. Now, if you read vaporland’s comments with the right inflection, it sounds like a winning presentation.
    “That’s the BOMB!” they gasped “We’ll take 50!”

    Chris Seibold had this to say on Mar 23, 2006 Posts: 354
  • It might be relevant to also comment on Apple’s markup which now seems high because we are now used to mother boards coming out of Taiwan at super-market style paper-thin markups of about 2% to 4%. At that time IBM was reputedly charging 20 to 25 times (2000% to 2500%) the hardware price for their mainframes. DEC was gaining market share by “only” charging about 15 times hardware prices. Hence, Apple’s 4 times or 5 times hardware price seemed like a relatively good bargain at that time.

    I agree Apple would have sold more at a markup of 400% rather than 500% - but at least Apple did look after students. Due to Apple’s discounting (yes, they did do that once upon a time) I purchased my Apple ][ retail (all taxes paid) for less than the local dealers could get their Apple ][s wholesale. I was really pleased – but the local dealers weren’t (some changed to sell IBM PC compatibles when these came out). :-(

    One other item may be of interest. My memory was that “LISA” was officially an acronym for “Locally Integrated Software Architecture” – it was just pure co-incidence that it was also the name of Steve Job’s only daughter! grin

    JosephG had this to say on Mar 24, 2006 Posts: 2
  • I think linux with kde really looks cool ....I am really pissed of apple premium and proprietry shit

    trught had this to say on Mar 25, 2006 Posts: 1
  • ^ Wait, what… I don’t understand how that’s relevant :S

    So Chris, lemme get this straight? It’s basically all John Sculley’s fault?

    Luke Mildenhall-Ward had this to say on Mar 26, 2006 Posts: 299
  • And how you think that’s pretty, trught, I do not know. I mean yeah, it’s prettier than linux usually looks, but it’s just so… uglily done.

    Oh and what’s that you say? You don’t have photoshop? Aww, poor guy.

    Luke Mildenhall-Ward had this to say on Mar 26, 2006 Posts: 299
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