Bailing On Macworld Is A Good Thing

Posted by: Arik Hesseldahl on December 16, 2008

The first thing that’s coming to so many minds in the wake of today’s announcement from Apple that CEO Steve Jobs won’t be making his customary keynote address at the Macworld Expo on Jan. 6, is the condition of Jobs’ health.

I don’t think his health has anything to do with it. Though I think the speculation that has come to surround his appearance in recent years is a minor factor in the decision.

First let’s look at the Macworld show itself: Who attends? Well, the media for one thing. BusinessWeek typically has three or four people at MacWorld when Steve is on the stage: Myself, Peter Burrows, Steve Wildstrom, and Cliff Edwards. The Wall Street Journal has two or three, The New York Times, at least two. The LA Times usually has a reporter there, as do the various print and Web outposts of Fortune and Forbes. CNBC usually sets up a remote truck outside the Moscone Center. Then there’s international media, and then there’s the blogs. It all works out to a formidable explosion of coverage, and as such its a big event for Apple shareholders too.

But once Jobs has had his say, what else is there left to cover? Not much. When I go to Macworld, I make a point of making sure I chat with Microsoft to see what the MacBU has in mind for the coming year, and then I spend an hour or two talking to companies on the show floor that get my attention. I highly enjoyed, for instance, meeting the guys from Rogue Amoeba at last years’ Macworld, and I had fun attending the party Gizmodo threw. But that doesn’t mean Macworld has to continue.

Does Apple really need to participate in a trade show that’s owned and operated by a third party to have this kind of impact? Not at all. Apple has throughout the year of 2008 held several events, some at the Worldwide Developers Conference, some just arbitrarily scheduled. And guess what? The same people show up. Apple could throw a bake sale and the international media would show up, because that’s just the way we roll.

But Macworld costs Apple money. I’m told reliably that participating in Macworld costs Apple somewhere north of $2 million, and somewhere south of $5 million. Why spend that much when you can have the same kind of impact for a lot less without the need for a third party?

I suspect that when Apple throws a large-scale press conference at Moscone, it costs a lot less than $2 million, and even less for the announcements it does occasionally at De Anza Community College. Same impact, less money. What about this decision doesn’t make good business sense?

Macworld isn’t the only trade show from which Apple has backed away in recent years. Earlier this year Apple canceled its booth for the NAB show, in 2002 it walked away from Macworld Tokyo, nor did it participate in the Apple Expo in Paris this year.

Apple you’ll recall also feuded with Macworld producer IDG Worldwide over the location of the summer East Coast Macworld and ultimately walked away when IDG moved the event back to Boston, renamed it something forgettable and ultimately pulled the plug. My point is that this shouldn’t surprise anyone as Apple has clearly been working up to this for a few years. Macworld San Francisco was simply the most visible of all these events.

As a veteran of far more Comdex/CES/N+I/CTIA/Macworld events than I care to count, I’ve about had my fill of trade shows, as much fun as I’ve had at the last few Macworlds, I won’t miss it, and I think Apple has done the right thing in pulling out. It’s better to focus more on events you can produce yourself and thus control, like the Worldwide Developers Conference, than on those you don’t control as much.

I may yet go to this Macworld mainly because I think it will be the last one. Don’t be surprised to see IDG try to salvage what’s left and press ahead, perhaps with a new name. But from where I sit, this will be the last Macworld, and that’s not such a bad thing.

Consider all the bad things that tend to happen with Macworld from Apple’s point of view. There’s a lot of speculative emotion built into the stock for one thing As I wrote in January, about half the time Apple’s stock gains on keynote day. (See the table here.)But remove the outlier of the 2007 keynote where Jobs introduced the iPhone, and you get an average drop of 3.6% on keynote day. Apple shorts have a lot of fun, but who needs that?

Better to intro products not a fixed point in the calendar, but when they’re ready to see the light of day. There will be no more disappointed shareholders to freak out on keynote day just because Jobs fails to say “one more thing” or fails to unveil some long rumored product, or because he still looks “thin.”

Finally, back to the health issue for a moment. (I really dislike speculating on this sort of thing.) If you’re an Apple shareholder and plan to sell Wednesday because you think this announcement is telegraphing something about Steve’s health, I personally think that’s the wrong reason to sell. If instead you think it suggests Apple won’t have a lot to announce at Macworld, that to me is more reasonable line of thinking. I’ve argued before that after the iPhone and barring a major re-design of Apple TV, Apple has, strategically speaking, fewer logical product paths lying before it. So maybe Phil Schiller won’t have much in way of Earth-shaking news to make in his keynote. Maybe he will. We’ll have to see. But know this: When Apple and Steve Jobs do choose to shake the Earth again, it’ll be just like Macworld, but it will cost less, and there won’t be as many parties.

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