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Gates Squirms, Jobs Chuckles

Written by Brian Hicks
Posted June 15, 2007

When it comes to taste in all thing digital, Steve Jobs is a man with an uncanny knack for the pulse of consumers everywhere. It's a simple fact that's not lost on his biggest rival, Bill Gates .

Speaking before the "All Things Digital" conference two weeks ago, PC Guy had this to say to Mac: "I would give a lot to have Steve's tastes. He has an intuitive taste for both people and products that is very hard for me to explain."

The two tech heavyweights squared off that day, appearing together on stage for the first time in ten years, much to the delight of techies everywhere.

Needless to say, the unusual pairing was really not that much different from those famous commercials. Jobs drew the chuckles, while Gates seemed defensive. As could be expected, Apple's PC Guy ads were part of the give and take.

"The art of those commercials is not to be mean," said Jobs, drawing a laugh. "It's for those guys to like each other."

"PC Guy is what makes it work," continued Jobs. "PC Guy is great."

To which Gates replied, "Well, at least his mother loves him," which raised even more chuckles.

But while the two tech giants kept it cordial, it was quite clear that their entirely different visions in regard to their industry hadn't just melted away. Jobs and Gates are still as different as the characters in the commercials.

At the Apple Worldwide Developer Conference on Monday, Jobs continued to turn up the heat on Gates's Microsoft. In a keynote speech, Jobs highlighted Apple's latest operating system, called Leopard, providing a reminder to everyone that Apple is still also about computers.

Leopard's goal? Creating an environment where Macs and Windows PCs really are compatible, in the hopes of driving more consumers to Mac from the PC camp.

An upgrade to the Apple OS X operating system, one of Leopard's standard features is called "Boot Camp ." It allows users of Macs with Intel chips to install and run Windows on their machines.

The Boot Camp feature removes one of Mac's toughest barriers: the consumer's natural reluctance to part completely with their familiar Windows software.

Leopard's price? A reasonable $129.

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The endgame for Jobs, though is to win converts, and test versions of Boot Camp released in 2006 and earlier this year appear to have contributed to an increase in sales already.

In fact, analysts believe that based on the release of both Leopard and the iPhone, Mac sales will continue to grow by double digits, continuing a trend that goes back to 2003. Three million Mac computers were sold that year, compared to the current pace of over six million units.

But despite his usual rock-star performance at the developers' conference, shares of Jobs's company sold off in the aftermath. A lack of punch in his now famous "one more thing" ending disappointed the markets.

But the slight selloff merely dented what has been a great year for the stock. Since our first Apple story appeared in January, shares of the company have risen as high as $127.61 from about $96.00. That's a six-month return of over 32%.

Apple's eagerly awaited iPhone, however, could put the company under further pressure, since some investors surely believe that its upside is already priced into the stock. In fact, pre-release iPhone rumblings are already causing some anxiety that the new gadget may fall short of its hype.

On top of that, sales of Apple TV have been disappointing since its March release, even though many still believe in its long-term potential. These two new items played a pretty big role in the company's recent run up.

In the short term that means smart investors ought to be thinking about taking some money off the table on this one, at least until the dust settles from the iPhone debut, which is slated for June 29.

In the longer term, though, Apple is still a great story in every respect.

The Mac attack on PC Guy has really just begun.

By the Way: As promised, Sam Hopkins will be sharing his insights with us from his most recent trip to Israel. His plane landed in New York this morning, and barring any lost luggage and the like, you'll be hearing from him in these pages on Tuesday.

I kept up with Sam as best as  I could while he was away and I can tell you that you're going to be as interested in what he learned on his trip as I was. Of particular note, was his attendance at the Israeli Venture Association 2007 Conference, but I'll let Sam tell you all about that.

Sam's portfolio is killing it by the way. To date he's up almost 20% this year.

 

Wishing you happiness, health, and wealth,

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Steve Christ, Editor

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