The Mac Is Back -- Or Is It?Is Apple on its final deathbed, or in the midst of a spectacular comeback? On first glance, it's difficult to tell. Recent weeks and months have seen a lot of news and developments, much of it bad. However, some surprising announcements at the San Francisco MacWorld have not only boosted Apple's stock price, but the hopes of Mac users and developers as well.
by Forest Linton The bottom line: Apple is not dead -- yet. It's clear, however, that the company has its work cut out for it, and it may never recover to the size and prestige of its former glory days. If we look at the fundamentals, Apple isn't in very good shape. Revenues have been decreasing by the bucket load, and Apple's worldwide market share has fallen to an all-time low of 3.1%. The company has lost more than $1.5 billion over the past two years.
Japanese market woes The economic uncertainty throughout Asia has caused shipments to fall in Japan, traditionally one of Apple's strongest markets. Not only was Apple's market share in Japan relatively high compared to the rest of the world, but Japan was also one of its more profitable markets. The decision to stop licensing its operating system has probably hurt Apple the most in Japan. There were several clone vendors gearing up for big Mac business, but January saw the departure of Akia, the last clone vendor in Japan to give up on Apple. Further, Apple is neglecting important segments where it was formerly strong -- such as the Internet. Just one year ago, the Macintosh commanded 25% of Internet client share in Japan (three times its overall market share). Today, that is below 15%, and still dropping. While Apple's recent commitment to bundle Internet Explorer with the MacOS may help to spur Internet use among Mac users, that may be too little, too late. On top of all this, Apple's lack of focus with its Newton PDA (personal digital assistant) product was a missed opportunity. Japan has always been a very PDA-friendly market, and Apple could have capitalized on that with an aggressive Newton strategy.
Working hard to fix the bottom line The news isn't all bad, however. First, Apple's new G3 machines have been well received by the market. Fast, powerful, and cheap -- Apple is finally getting it right. In addition, Apple reported a surprise quarterly profit at MacWorld in San Francisco. That did a lot to boost morale amongst Apple developers, and garner some support for the company. Steve Jobs seems to be doing a pretty good job at turning things around and getting people excited about Apple again. There still is no sign of a new CEO, so Jobs may stay at the helm for a while. This might not be a bad thing, as he seems to be the only person capable of whipping Apple's demoralized developers into action. In late January, Apple announced that it would break up Claris by spinning off the FileMaker group, and folding the rest back into Apple. In the process, about 300 jobs will be cut. This, too, may help bolster Apple's bottom line. Finally, although I mentioned that Apple isn't doing enough to compete in the Internet space, there has been one bright star -- the Apple Store. Sales from the online store are very high, and Apple reports that it sold more than $12 million of products in the first 30 days of operation. Although Apple may simply be taking a page from Dell, it seems to be working.
MacWorld Tokyo -- Can it save the Mac in Japan? For years, MacWorld Tokyo has been the biggest Macintosh show in the world. Although the 1998 MacWorld features slightly fewer exhibitors than last year, Apple's recent good news may boost attendance. Independent software developers are a critical factor in the success of Apple, and Apple's biggest developer, Microsoft, will announce two big products at this year's show: Internet Explorer 4.0 and Mac Office 98. The final version of Internet Explorer 4.0J (Japanese) was to be released on February 18, the first day of the show. IE4 for the Mac offers almost all the same features as are found in the Windows version, but with a very Mac-like look and feel. In addition to being the fastest Web browser, it is also the smallest (running in a 4MB RAM footprint). IE4 can be run on any Mac with a 68030 or faster chip. Microsoft is also announcing the release of the Japanese version of Mac Office 98. Although the product won't ship until early summer, MacWorld attendees will get a first look. Mac Office 98 is the first major revision to the popular Word and Excel applications in several years, so Mac users are sure to rejoice at the increased features and speed. Other major developers, like Adobe and Macromedia, are still in the game and still shipping good Mac apps. Many smaller developers, however, have started disappearing. Keeping developers developing for the Mac is one of Apple's challenges. Only time will tell, but I wish them luck. In between writing his monthly Digital Forest column for Computing Japan, Forest Linton works on the Internet Explorer development team at Microsoft Japan. You can reach him at forest@gol.com.
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