Only once in its eight-year history has Wired magazine featured a product logo on its cover. The logo was that of Apple Computer.
Behind the familiar multicolored icon glowed a halo-like red starburst. Encircling it was a wreath of thorns. Below, a bold black caption read, simply: "Pray."
It was the summer of 1997, and Apple had definitely seen better times. With both sales and market share at all-time lows, many an analyst saw doom on the horizon for the company that made "personal computer" a household word.
Apple's then-CEO, "turnaround king" Gil Amelio, had brought Apple founder Steve Jobs on board as a consultant, and purchased Jobs's NeXT Inc. for its OS technology. Still, faith in Amelio's ability to rescue Apple's flagging fortunes was waning.
And the rest, of course, is history.
Flash forward to 2000. This time around, it seems it's the PC industry itself that's run aground.
Neither Compaq nor Dell seems likely to meet original profit estimates this quarter. Gateway is warning of revenues $500 million below expectations. In turn, chip vendors like Intel and AMD now expect to feel the effects of less-than-anticipated demand for PCs.
Like the others, Apple now predicts a $600 million shortfall, along with the first unprofitable quarter since Steve Jobs became Interim CEO in September of 1997. And once again, the question that seems to be on everybody's mind is: "Can Apple survive?"
Jobs says there's no question. In a December 5 conference call, he described Apple as having an "Arnold Schwarzenegger balance sheet," with a greater percentage of its worth in cash and short-term investments than any of the other big PC makers like Dell, Compaq, or Gateway.
Nonetheless, of the four, Apple is skewered worst by the media, and Jobs takes the blame. Funny how that works. Let's not forget, Steve Jobs hasn't exactly been a slouch these last three years.
In that June '97 issue, Wired offered up an article entitled, "101 Ways to Save Apple." Some of the advice was serious, and some not so. (One wag suggested the company try "a very large bake sale.") Even some of the "serious" suggestions contradicted one another.
To Jobs' credit, however, to date he has actually implemented (by my own count) no less than 45 of the ideas in that list. Skipping over ideas like "sell [Apple] to IBM or Motorola," he's consolidated the product line, solidified the management team, reformed manufacturing and focused on core markets. He's even revamped the corporate logo.
Even some of Wired's less-than-serious proposals have been taken to heart, albeit briefly — like the suggestion that Jobs re-grow the beard he sported in the early 80s. (And yes, to whomever penned suggestion #101 — it really was Netscape you should have been worrying about.) Let no one say Jobs hasn't been listening.
So why then are the vultures once again circling above Apple's head? Has Job's uphill fight to make Apple a world-class computer company finally run out of steam?
Hardly, insists Apple's CEO; Apple's financial situation will allow it to weather this industry crisis, even should the entire economy take a downturn next year. Further, he says the company is already taking steps to correct a few "Apple-specific problems":
- They'll close the perceived "megahertz gap," with faster models to arrive soon.
- A brand-new education sales force should win back the #1 spot in the education market from Dell.
- They'll address the mistake they made in not shipping models with writeable CD drives — possibly with a first, in the form of a combination CD-RW/DVD drive rumored to be in the works.
- In early 2001, they'll release the powerful Mac OS X, which should increase demand for high-end machines.
Looking ahead, Apple's iCEO echoed the sentiments he first gave in October, saying, "I am more excited now about our future products and programs than I have ever been."
But what about the overall industry downturn? How will Apple remain afloat in the face of a general decrease in new PC sales?
The most troubling sign to analysts has been the poor showing of Apple's most recent product release, the stylish G4 Cube. Though Jobs says sales levels for the Cube are now "respectable," by any estimate it's hardly been the iMac-level success that was hoped for. In fact, though sales of all PCs this quarter have been lackluster, some see the Cube as an out-and-out bomb.
The two biggest criticisms of the Cube have been that it was priced too high at the onset, and that it lacks expandability. As such, some say the Cube has no clear target market, and was doomed to fail. But on the contrary; the G4 Cube is a natural progression of the experiment Jobs first began with the iMac in 1998.
The iMac took a leadership role in the low-end PC market, presenting the consumer an easy-to-use, affordable all-in-one unit with few expansion options. It replaced traditional peripheral ports with USB, and eliminated the floppy drive. Most strikingly, it introduced us to Apple's unique, visionary industrial design.
The iMac asked questions. How important was expansion to the low-end consumer? What old habits would they give up? How important was aesthetics? Could a strong Apple brand steer the low-end buyer away from cobbled-together collections of off-the-shelf PC parts, toward the idea of the home computer as a consumer electronics device?
By and large, the answer was a resounding "yes," as record sales of the iMac have demonstrated. And so, Steve Jobs and company went on to Phase 2: the G4 Cube.
The questions are the same. Does design and branding matter to you? How important are add-on cards and upgrades? What price will you pay for a product that's unique in its market? Only this time, the target market is one rung further up the ladder: the mid-level PC buyer.
And this time, initial feedback has been less encouraging. But let's not be too hasty to start prophesying doom for Apple. Jobs has steered the company back from the brink of disaster before, and under much more dire circumstances.
Successful or no, experiments like the G4 Cube are precisely what today's computer industry desperately needs. And I, for one, applaud Apple for being one of the only companies with the moxie to keep experimenting.
The majority of PC makers out there are still trying to play a numbers game: How big a hard drive can I give the customer? How much RAM? How large a monitor can I bundle with the system and still drive the price down?
Meanwhile, few machines are truly differentiated from one another, and the PC has practically become a commodity product. Today, faster processors or different combinations of parts no longer seem to mean enough to the consumer to justify buying a new machine, when their software already runs fine on the one they've got. The result is the very slow-down the industry is facing now.
And then, there's Apple. No matter what we think of the results, there's no denying that Apple is still trying to blaze trails in the PC marketplace. While skittish Intel clone vendors pump out iMac and Cube knock-offs, Apple is releasing not just new products or better-looking products, but new types of products, aimed at opening up markets for PCs where none existed before.
So sure, it's fun to knock Apple. But while others lament poor sales figures, Apple is one of the few that's really trying to do something about it. It's exactly this daring approach that the PC industry needs right now.
