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On The Flip Side
by Michael Munger




Why Rumor Sites Hurt You And Apple
March 28th, 2000

Creativity is not something that you can develop. It's in you. You have it or you don't. Not only is it scarce but even creative people's efforts are not always rewarded.

To create something original is very difficult. To make it popular is even harder. Especially in the world of publishing, whether it's online or printed.

Those damn Mac rumor sites. It's hard to do research and analysis about current events or to write an opinion column every week. It's easy for some of us but we do it because we have the skills and more importantly, the opportunity to do so. It's easier to let people e-mail you, possibly breaking an NDA about a future product and "pass it on" to your readers. It's far easier to invent rumors - think about the rumors of Pismo being released at MACWORLD Expo last January - than to innovate with in-depth reports or brilliant and visionary perspective. It pays more too.

But you know something? It hurts Apple. We all know that. Many people refuse to buy a new Mac because rumor sites tell them that a new unit is coming tomorrow. Sometimes, rumor sites write checks that Apple can't cash when promising a product that Apple doesn't even plan to conceive. That hurts Apple's image, stock and profitability.

Before you slam me for defending the corporate line, let me go beyond the anticipated reaction and tell you how this hurts you too. It will take a few minutes to explain but it will be "good to the last drop."

Do you contribute to a Registered Retirement Savings Plan (RRSP) or Individual Retirement Account (IRA)? I just started contributing to one myself. Imagine, an RRSP at my age. I faced the facts and realized that an RRSP would be better than government money or company plans to enjoy comfortable retirement. A while ago, the very principle made me understand why the individual's interests and the company's interests do not have to conflict, but converge at some point!

If you have an RRSP, you need your money to grow as much as possible to enjoy it to the fullest when you decide to retire. Want growth? Think stock market. Sure, bonds and similar financial products are safer, but if you signed up for a plan that's worth it, a good proportion of your investment targets company stock. That's where the big bucks are.

Do you contribute to this kind of retirement plan? Then forget the socialist leaflet proclaiming that corporations are evil, it's time for a reality check! You're an investor, buddy! An indirect shareholder! That car or software company you despise so much for making millions of profits every year is a part of your investments. Its very profitability can help your wealth to increase.

You don't understand why companies, in a world of mergers and global economy, aren't satisfied with an annual 500 million profit? It's because the stock market is busier than ever. More money circulates with one clear intent: growth. As more people get into investment, that brings higher expectations for companies to deal with. Thus the obsession over performance.

That's why they always push everything further and, in part, that's why it meets your interests. While I'm not singing the praises of capitalism, you are closer to all those CEOs than you think.

So where's the problem? Your consumer interests and armchair investor interests diverge. You always want the best product at the right time and at the best price, but you want your investments to grow as much as possible for a golden retirement.

Which brings me back to Apple. What you want is the best Mac at the best price. You need to buy it at the right time and you may feel the temptation to read rumor sites to keep track of all the future releases. The perspective of a profitable Apple doesn't get you excited. As long as they don't close shop because of major losses, who cares, right?

If you have any luck with you, it can be hoped that whatever retirement plan you are in included Apple stock during the last 12 months. That served your interests well enough, didn't it?

My point is twofold.

1- Rumor sites mislead you as a consumer, they hurt Apple and its stock. They certainly did for a while (in 1997) before Apple got its act together, though rumors were not the only problem of course.

2- Company interests and consumer interests, while not exactly the same, are not as opposed as popular opinion suggests.

Point number 1 and point number 2 can sometimes even meet each other.

When a bunch of important companies, including Apple, take a beating at Wall Street, your investment is probably ailing. When they prosper... you may think of going to Cancun at 67 without financial worries.

When rumor sites talk about future releases and tell us how Apple will impress us with a network computer, it creates hype and expectation. When the next big event features a Steve Jobs keynote without an NC announcement, the expectation turns into disappointment. It stains Apple's image and Wall Street often reacts negatively.

Oh yeah, those Wall Street folks... don't you think that THEY, more than anybody else in the world, know where to find rumors? They have Internet access too! Though I don't want to overestimate how much attention the rumor sites get, increasingly Apple rumors have filtered up from the Mac web to the mainstream.

So before you think that you're serving your primary consuming interests when reading or writing Mac rumor sites, think about what I said. Before you do anything that can hurt a company's interests, remember what this loud mouth columnist said about how you and companies meet at some point.

This isn't a pro-capitalism manifesto. Believe me, I am more pragmatic than capitalist. It is, I hope, a good dose of common sense.

Your comments are welcomed.

Michael Munger is a French Canadian living in Montreal. He discovered the Mac in 1994 while studying journalism, the profession he loves and practices. He also studied history and communications. In addition to his work at The Mac Observer, he authors the iBasics tutorial column at Low End Mac, and cofounded MacSoldiers in 1998.

You can find more about him at his personal Web site.

You are welcome to send me your comments or you can post them below.

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