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Mac's attack from the back

Mac's attack from the back

Resellers who don't sell Apple computers can be like PC users. What they don't know doesn't stop them from being experts on the subject of Apple. Despite a very large installed base and solid sales, Apple is always being portrayed as 'in trouble'. And yet, Apple often has some of the most imaginative product campaigns, and a very healthy sales lead in the professional graphics and education marketsThe Apple of 1997 will certainly be different to the early days. Operating systems are converging all the time; everyone wants GUI computing; and now there are even clones that work just like Macs. Yet there has been a strong move away from Apple in the corporate world, and there is still a perceived price penalty to be paid on Mac versus PC.

Where there were Mac-exclusive distributors a couple of years ago, most of these now sell more PC products than Mac. Even Apple now distributes PC products. What has the world come to?

"Apple computer is fighting back. You heard it here first." That's what Apple announced in October to reassure and reaffirm its position in the computer marketplace. In 1996 Apple's board of directors appointed Dr Gilbert Amelio to turn the company around. It had been experiencing a lesser share of the worldwide computer market, narrowed margins and big losses. The results for Apple for the fourth fiscal quarter ended 27 September 1996 show revenues were $US2.321 billion, a decrease of $682 million from the fourth quarter a year ago, but an increase of $US142 million from the quarter ended 30 June 1996.

Amelio's explanation is that "by increasing revenues sequentially and fortifying Apple's financial position in each of the last two quarters, we have achieved two very critical goals of Apple's transformation. We remain confident about reaching sustainable profitability by the end of Q2 1997. As we move forward, our challenges will be to extend our competitive leadership in key markets and to reclaim the mantle of industry pioneer and innovator. The question before us is not 'Will Apple survive?' but rather, 'How will Apple establish leadership in the emerging digital area of the Internet and multimedia?' We plan to do so with strong management, a relentless dedication to quality, and a passionate commitment to our role as industry innovator."

Innovations

Apple says new product plans on the drawing board to contribute towards the re-establishment of market superiority include:

The development of products based on future processors, using the PowerPC instruction set, that could potentially run at clock speeds of up to 500MHz; Multi-operating system servers. Apple expects to offer servers capable of running AIX, Windows NT, and Mac OS by Q3 1997; Aggressively pursuing the home market with products at a range of price points; A new Performa system to meet the specific demands of the home and education market; In the second half of next year, Apple is expecting to offer a high-end Performa system configured with a DOS-compatibility card running at 166MHz.

Products just released include the Apple eMate 300, a portable computer designed for school children; and the MessagePad 2000, which uses the StrongArm SA110 processor "to provide business professionals with workstation class computing performance in a hand-held device".

Apple Australia: is it bruised?

Australian Reseller News spoke with Steve Rust, general manager of Apple Australia, about the state of the market, including the new Mac OS machines from other manufacturers. Apple Australia's revenue in 1995 was $345 million, and while the 1996 figures have not been released yet, Rust says that "we have performed better than our parent company".

Rust divides the market for Macintosh in Australia into six categories:

1. Apple-focused resellers. For many resellers, 70 per cent of their business is the sale of Apple products. Some resellers sell Apple exclusively, and for some Apple represents about 40 per cent of their business.

2. Publishing-specialist resellers. The business of these resellers is focused in the publishing marketplace where Apple has more than 70 per cent of the market share.

3. Education. Some resellers specialise in the education market, and Apple claims to be the market leader with a slight increase reported last quarter on its 30 per cent market share.

4. Retail consumer marketplace, providing for the home market. These include specialist Apple and general computer retail outlets, computer superstores and department stores.

5. The business market. There are some large corporate Apple users such as Optus and The Attorney General's department in Canberra, which is exclusively Apple equipped.

6. The general business market. Resellers who operate in this market sell to small to medium businesses. Rust says this is an ill-defined market and has many resellers.

Of course, many resellers sell across two or more of these market segments. When questioned about the importance of mail-order businesses such as Mac Warehouse and Mac Zone, Rust said that their impact was "relatively small in terms of total business".

Rust claims that those resellers with more than 50 per cent of their business in Apple products are most successful for Apple Computer. The reason for this he says is that they have "a concentrated focus on Apple".

He said that, conversely, those who don't concentrate on Apple aren't successful selling the product.

It's early days yet

Now that the "clone" machines are on the market, what impact will they have on Apple? The company obviously hopes that while the clones will find a market, the total Macintosh market will increase and become more powerful.

The organisations involved are Power Computing (distributed by Mitsui), Motorola and New Max. Power Computing has been on the Australian market for about six months and the other two operators are new on the scene.

A smaller competitor is Daystar, which manufactures a very specialised computer at the high end of the market for publishing.

Steve Rust reports very little overall impact from this competition, though he admits they are moving aggressively to establish themselves. He said it is still "early days yet". His strategy for dealing with the competition is to "help the clone companies where they are expanding our market and protect ourselves where they are competing, in which case we're putting on our best front to compete".

Fast Facts

Apple says it has pulled out of the 'bad days' Mac still has a solid market in education and graphic arts Mac clones are here to stay. Whether they grow the market to Apple's benefit or at its expense is yet to be seenThe PC and the Mac are inexorably moving closer togetherApple eMate 300Apple describes the new eMate 300 product as a mobile computer. Designed for even the youngest school student, it is low-cost, lightweight, robust, and is small enough to fit in a backpack. It features the Newton operating system and data can be entered by keyboard or with a stylus.

The Apple eMate 300 works as a companion to the Mac OS and Windows software-based computers. For this reason Apple is marketing this product as a personal companion to existing desktop technologies in the classroom, school and home. It combines the most used functions of a personal computer and the flexibility of a mobile computer with the ability to interact with desktop units, servers and the Internet.

Key Features

Built-in applications: Word processor, drawing program, spreadsheet, graphing calculator, address book and calendar functionsPower and speed: 25MHz ARM 710a RISC processorHigh-speed infra-red (IrDA) port for transferring data wirelessly at up to 115Kbit/second within one metre.

Memory and storage: 3Mb of RAM (1Mb of DRAM and 2Mb of flash memory); 8Mb of ROMDisplay: 480 by 320 pixel greyscale LCD with back-lighting; displays up to 16 shades of greySound: Built-in speaker and sound input/output portsExpansion: PC Card slot for Type I, Type II, or Type III PC CardsAbility for upgrading software, operating system,and memorySerial port for connecting to printers andAppleTalk networksNewton InterConnect serial port for LocalTalk and RS-232-compatible serial connections, modem, power input/output, sound input/ output, and automatic docking to personal computers (cables not included)Size, weight and battery: 305 x 290 x 53mm; 1.8 kilograms; up to 28 hours of continuous use without recharging, depending on usePrinter support: Works with the following Apple printers: Personal LaserWriter LS, Personal LaserWriter 300, and StyleWriter printers; PostScript-equipped laser printers. Works with most popular PC printers using the optional Newton Print PackPrice: Expected to be around $1000 in Australia.

Availability: Early 1997 in Australia


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