Exposed

Monday, 21 October 2002

There seems to be a lot of confusion over the IDG-Apple Macworld Expo spat. Many people seem confused about why this happened.

Why would Apple pull out of a major trade show that is dedicated to their company and its products, and which generates a ton of press for any announcements they make?

Why would IDG forge ahead with plans to move the summer show back to Boston, without making sure Apple would agree to come along?

Most people seem to think the Expos are a win-win for both Apple and IDG: Apple gets lots of press coverage, IDG gets a headline act. But it’s not that simple, at least from Apple’s perspective. A few reasons why the Macworld Expos are a pain in Apple’s ass:

  • They’re expensive. Most estimates I’ve seen put the grand total at well over $10 million per show. It could be more, but the exact cost doesn’t really matter. Suffice it to say, Apple pays a lot of fucking money for these shows.

  • Timing. Every six months, there is a Macworld Expo. (Well, at least there was.) That means every January, and every July, Jobs delivers a keynote, and at each of these keynotes, the Mac community expects to hear about Great New Things. This is doubly troublesome for Apple. For one thing, people have learned not to buy new Macs during the month before each Expo, because there’s a decent chance that something brand new is going to be announced at the upcoming keynote. Obviously, that’s not good for sales.

    Worse, however, is that the schedule for keynotes is set in stone: January and July. The schedule for new products, however, is unpredictable. It would be much better for Apple if they could simply announce new products — especially major new product lines — when they’re ready to sell them. The January show in particular is badly timed. December is prime holiday buying season, but many Mac users are wary of buying new hardware so close to the San Francisco Expo.

  • Control. Contrary to widespread belief, Apple does not run the Expos. (As of this week, of course, this belief is probably no longer widely held.) Effectively, Apple is just another exhibitor. They just happen to rent an acre of floor space (expensive), pay for a ton of signage (expensive), and man the floor with a bunch of their employees (expensive). Their CEO also just happens to get invited to deliver the keynote at every single Expo.

    But the shows are run by IDG. Apple pays a lot of money and provides most of the sizzle, but they don’t run the show. They also take on a lot of the risk, since the publicity from a bad show (e.g. no news, unappealing product announcements, poor attendance) reflects mostly on them, not on IDG.

So, to sum it up, the twice-yearly Expos (1) cost Apple millions of dollars; (2) put a lot of pressure on the company to make major product announcements on the Expos’ schedule, not when the products are actually ready; (3) are not under Apple’s direct control.

Whose Keynote Is It Anyway?

The peanut gallery’s response is, Yeah, but what about all that great publicity the Expos generate for Apple? For example, this comment from a MacInTouch reader, posted over the weekend:

[“David S.”] I just read the PR release from Apple with utter astonishment. You have to know that no PR or marketing department in their right mind would come up with an instantaneous decision to make this kind of an idiotic statement.

This is ALL Steve Jobs ego expressing itself. He’s not getting his way, so he pulls out of the premier show that sells his product and gives him the power he has. Unbelievable.

Screw the rest of us - Apple is back to being all about what Steve wants. Speaking of “regime changes,” maybe it’s time.

This entire line of thinking — not just the silly “regime change” bit — is wrong. The Macworld Expo keynote address is not inherently a big deal. There are dozens of large computer industry trade shows each year, and they all have keynote addresses. No one (in the mainstream press) gives a crap about most of them. And no one (in the mainstream press) will give a crap about Macworld’s keynote if Steve Jobs isn’t delivering it. Remember the Macworld keynote addresses prior to Jobs’s return? Neither do I.

The Macworld keynotes are not special events which Apple should be thankful for. They are special events because of Steve Jobs, and IDG should be thankful for him.

Jobs is not a humble man, and that irritates many people. But whether you like him or dislike him, and whether you agree or disagree with the direction in which he is steering the Mac platform, it cannot be disputed that he’s a gifted orator. He obviously loves the products in Apple’s line-up, and he has an amazing gift for making his personal enthusiasm contagious. When he talks about iMovie, for example, it makes people want to buy digital video cameras.

That’s not to say CEO arrogance isn’t at the root of this Macworld Boston fiasco. It’s just that Jobs isn’t the arrogant CEO to blame; IDG chief Charlie Greco is. Greco, stunningly, is apparently so out of touch that he thinks he’s in the position to continue negotiating, having told Boston Globe reporter Hiawatha Bray that IDG might kick Apple out of the upcoming San Francisco show:

“You know how badly they want to do San Francisco,” [Greco] said. “We don’t have to let them. We might not let you cherry-pick which Macworld events you do … that’s currently under discussion here.”

This is like being faced by a gunman, and threatening to shoot yourself first.

Apple is not merely the biggest company in the Mac industry. It is the hub around which the entire industry revolves.

Bray seems to think Greco actually has leverage, writing:

It’s a threat with teeth. Apple CEO Steve Jobs’ keynote speeches at the Macworld shows are among the most widely publicized media events in the computer industry. Because Jobs often uses the speeches to introduce major Apple products, they are covered by leading newspapers, TV networks, and news magazines, giving Apple a publicity bonanza. Barring Jobs from the Macworld stage would force Apple to develop a new high-profile venue.

What Bray misses is that it wouldn’t be hard at all for Apple to develop their own high-profile venues for major announcements. In fact, they’ve done it in the past. Remember the original iMac introduction? It took place in May, and it was huge news.

It’d be even easier today, because Apple has built venues all over the country: Apple Stores. The scenario isn’t hard to imagine. Apple announces that they’ll be debuting Something Big in one week, simulcast live to every Apple Store. They put a teaser up at apple.com. One week later, Mac enthusiasts cram into Apple Stores everywhere, and in Cupertino, Jobs steps on stage and unveils Something Big.

Not only would this not be difficult, but it would be much simpler and much cheaper than Apple’s current participation at the Macworld Expos. Major announcements would come when they’re ready to be made, not just because the calendar says January or July.

I’d Like to Play Poker With Charlie Greco

Greco has it backwards — it’s IDG that needs Apple, not the other way around.

It’s unclear at this point whether Apple actually blindsided IDG, or if they had privately warned IDG in advance that they didn’t want the show to move back to Boston. No matter — IDG (and Greco) look foolish either way.

Apple’s participation is central to the success of each Macworld Expo. That IDG did not secure Apple’s continuing participation, in writing, indicates that the company’s executives are either incompetent or delusional. A Macworld Expo without Apple is like an airport without any airlines. The duty-free shop isn’t going to keep the lights turned on.

IDG’s only reason for running Macworld Expo is to turn a profit. If the shows weren’t profitable, they’d pull the plug on them. Apple, on the other hand, spends tens of millions of dollars each year to participate. You can argue that Apple is rewarded with millions of dollars worth of publicity, but whether the publicity is commensurate with the cost is, like any marketing endeavor, a matter of opinion, not science.

It’s absurd to think that Apple should blindly allow IDG to dictate the terms and venue of Macworld Expo.