Just a year ago, Apple was riding a wave of glory. The company had paddled back from the brink of bankruptcy with increasingly profitable returns and a stream of innovative products. There was the compact iMac, supercomputer-class G4 desktop machines, the unique iBook consumer laptop concept and the promise of Mac OS X, Apple's new operating system, which more than one enterprise manager has referred to as 'the friendliest Unix ever'.
But today, Apple is treading water after posting a US$195m loss for the last quarter of 2000, while recent product launches have received a lukewarm reception. The PowerMac G4 Cube is not selling particularly well, PowerBook sales are low, new floral iMacs are receiving negative publicity and the Mac OS X will not even be pre-installed with new computers until July. Has Apple started to lose its way?
In common with most personal computer manufacturers, Apple suffered negative growth over the past year. Initially buoyant sales at the beginning of 2000 trailed off sharply for PowerMac G4s, iMacs and iBooks after the summer. PowerBook sales Ã, before the launch of the Titanium G4 models in January Ã, practically halved over the course of 2000. Gartner Group reports that a mere 2,700 G4 Cubes were sold in the UK during the last two quarters.
In fact, the cracks in Apple's sheen began with cracks in the Cube. These turned out to be injection mould lines in the casing, but user complaints continued regarding the poorly regulated touch-sensitive power switch, which led to random shutdowns and restarts. 'Don't use it in a hot room,' quipped Nick Dring, production manager at Connaught, a print and design company. '[The Cube] looks nice, but that's about it. It was a product that nobody was asking for.'
The same could be said for the Blue Dalmatian and Flower Power case designs of the latest iMacs. Apple has always kept track of which iMac colours sold the most units, but having admitted that the best-selling models were the more restrained Indigo (dark blue) and Graphite (dark grey), it recently delivered uncalled-for psychedelic schemes in what could well be iMac's final incarnation.
Brian Gammage, principal analyst at Gartner Group, agrees that Apple is more susceptible than other companies to marketing gimmicks. 'When Apple is innovative, it succeeds,' said Gammage. 'More recently, it has simply been tweaking old products Ã, the iMac is a good example.'
He went on to state that this allowed the PC market to catch up and then overtake Apple on features. This was certainly the case with the craze for MP3 music and low-cost digital video editing, where even Apple chief executive Steve Jobs was forced to admit: 'We're late to this party, but we're here.'
Most puzzling of all, however, is the gap between the 24 March release of Mac OS X and its planned inclusion with new Macs several months later. This will probably cause potential Mac buyers to delay purchasing until the new operating system is available. Neither Apple nor any commentators IT Week spoke to could explain the reasoning behind this, yet software developers with their own late summer release plans have been astonished to hear Jobs refer to them as 'laggards'.
Mac OS X will arguably be the first truly innovative product Apple has launched for a long time, and it looks like it will need more if it wants to ride that wave again. 'Apple's catchphrase is 'Think different', but the products are no longer different,' noted Gammage. 'It needs to renew itself.'
