Climbing Apple's Hierarchy of SkepticismWhen Phil Schiller, head of world wide marketing for Apple Computer, suggested Nikkei Business Publications rename its World PC Expo to World Mac Expo, he got a thunderous round of applause from the Japanese Macintosh faithful, who packed the Expo's large conference hall at Makuhari Messe this October. What a difference one-year can make in the life of an ailing computer vendor. Schiller, a keynote speaker at the Expo, evoked psychologist Abraham Maslow's "hierarchy of human needs," to analogize Apple's efforts over the past 12 months to get back on track. Maslow, you may recall, posited that in order for humans to reach their full potential, they first have to satisfy an ascending series of needs: physical requirements like food and shelter, then safety, love and self-esteem, before going on to self-actualization, where they can perform at their peak potential. In Apple's case, Schiller said it has had to move up through "a hierarchy of skepticism," the result of some wretched decisions and performances over the past few years. The first stage Apple had to pass through was survival. "Last year, when we started on this path, it didn't matter what products we came out with," said Schiller. "Because if a company could lose a billion dollars, customers didn't trust they'd be around a year later." The first thing Steve Jobs, Apple's interim CEO, did to survive was appoint a new team of managers, while a new board of directors was also brought in. Jobs then repaired the company's relationship with Microsoft, a sensible move given that most of Apple's long-suffering customers rely on applications from Microsoft. Jobs also slashed costs by cutting staff numbers and company perks, as well as throwing out projects like the Newton, in order to stem the billion dollar hemorrhaging. More positive steps included initiating the "Think Different" ad campaign to lets the world know the Macintosh is still a good reason not to make Bill Gates any richer, and launching the Apple Store, the Internet direct sales site now getting 10 million hits a day. All this helped turn around Apple's profitability. Apple's cash-in-hand has also edged up from $1.6 billion a year ago, to about $2 billion today. Similarly, Apple's share value has zoomed to around $4 billion, after hitting a low $1.8 in 1997. If you can convince the cynics you're going to be around, the next step is to make something that's worth buying. So Apple moved up the hierarchy to product strategy. Last November the company introduced its speedy G3 desktop line of Macs aimed at professional users. "In nine months, we've sold over 1.25 million units," said Schiller. "And at a US price starting at $1,599--that translates to about JPY230,000--we've kept the pricing down, because a professional product doesn't have to be an expensive product. Those days are over." New portable PowerBook Macs followed. As Schiller euphemistically spun it, "In the last few years the design has wandered away from being great." Still, it's no exaggeration to say today's stylish G3 PowerBooks are doing much to erase Apple's portable horror stories of yesterday. More recently, Apple has jumped back into the consumer market with its sexy iMac, the curvy, translucent all-in-one Mac that can be set up in a jiffy. And by striking deals with ISPs, Apple has made it as simple as possible for even first-time users to go browsing on the Web in minutes after taking the iMac out the box. The iMac also runs on a G3 chip, which means Apple's entry machine outperforms the fastest Pentium PC processors, and holds its own in running similar applications. Not bad for a consumer computer retailing at JPY178,000. After hardware comes systems. By the time you read this, Apple should be shipping its MacOS 8.5 operating system (OS) upgrade, which includes over 70 new features. A new OS is fine, but doubters will ask about new applications to run on it. Encouraging developers to still care, was Apple's next battle in its climb out of the pit. According to Schiller, in the five-month period following the iMac announcement in May, he counted over 1,000 new applications and devices introduced for Macs. A good start. Okay, Apple may have moved from basic survival to making impressive products that are selling again, and are attracting developers, but can it crash through the final hurdle of skepticism and grow again? Given what it has accomplished over just a year or so, particularly its humungous hit in the cut-throat consumer market, against all the odds, you'd have to be skeptical of skepticism that says it can't. Still skeptical? Convey any half-empty glass opinions to John via boyd@gol.com. |
