The Apple Report Card

In the February 1999 Mac Factor I suggested ten positive steps Apple could take to solidify support, improve sales, and offer a more realistic alternative to Microsoft Windows. Most of the suggestions were based on common horse sense and I hold no illusions that Mr. Jobs and company actually listened to my advice. Still, it's remarkable how Apple's actions paralleled my recommendations. This column assesses Apple's progress and offers even further guidance. (Note: text from the earlier column is in Italics.)

Lower the price of the iMac to $999. The thousand-dollar mark represents a marketing flashpoint and if Apple is to compete with the even lower priced Windows PCs, it's necessary to grab the momentum...
Apple did indeed lower the price of the entry-level iMacs to $999 and certainly got the attention of the public. The iMacs now come in three levels: entry level ($999), mid-range ($1299), and Special Edition ($1599). When you consider the ease of use, style, and software bundle, the entry-level machine competes well with anything in the PC world, while the higher levels take advantage of new technologies like FireWire, DVD, and iMovie. Apple gets and A for design and marketing.

Make another deal with Microsoft. Though I condemned the original deal in a column entitled 'Dancing with the Devil in the Pale Moonlight,' I was wrong. The development of Office on the Mac and a new version of Internet Explorer are important reasons for owning a Mac...
No further deal with Microsoft was consummated though the symbiotic relationship survived some rocky moments. Wired Magazine implied that Mr. Jobs was a sort of wimp for not helping the Feds tear Microsoft apart and Jobs allegedly said some not too pleasant things about Microsoft. Still, Office 2000 will soon be released for the Mac as well as a new version of Internet Explorer. Apple gets a B for steering through the Microsoft minefield.

Start paying Steve Jobs what he's worth. Whether you classify him as an interim CEO or a petulant patriarch, Jobs has made an enormous difference...
Apparently, the Apple Board recognized this need and generously compensated Mr. Jobs for his accomplishments. There has been more than a little backbiting from a former Apple CEO who rightly or wrongly, claims credit for Apple's present course, but there is no question that Apple is just not as exciting without Steve. Score an A for Apple removing the 'i' from the iCEO.

Introduce the nMac for education. A driveless, modemless, nMac could be priced aggressively and Apple could market classroom sets along with server and software solutions. Similarly, school-wide nMac networks could save school systems enormous costs in maintenance and support personnel.
Apple has established itself as the leader of the education market with about a third of all new education sales and the company seems to be inching closer to the introduction of a nMac for the classroom. The future might bring classroom iBooks pulling system software and applications off a building server.

Fix technical support. It is time for Apple to 'think different' about technical support. Users still find themselves in long telephone queues, interacting with robot voices, and struggling to get appropriate advice or supportŠ
It appears that there has been some progress in this area, but technical support still needs attention. Apple gets full credit for expanding Internet support and providing AppleCare service at relatively reasonable prices. AppleCare customers are treated with respect and defective hardware is often replaced within days rather than weeks. Apple also deserves praise for the implementation of a worldwide warranty--a program that makes a difference to those who purchase equipment in the US and work or travel in Europe.

I last tested the technical support system back in July of 1998 soon after I purchased a G3 Powerbook and accidentally spilled a tiny amount of soda on the keyboard. I knowŠI know, that was not a very bright thing to do, but life goes on and I was hoping for a quick fix. Alas, the Powerbook died and so I took it to the local Apple Dealer who in turn shipped it to a technical support center. After hearing nothing for a couple of weeks, I called the dealer who suggested I phone the center. The technician there informed me that I needed another logic board and since this was a new computer, there was a shortage of spare parts. He confirmed, however, that the part was expected in real soon. As expected, he also explained that since the problem was my fault, I would have to pay for the board. Around ten days later, I received the system along with a warranty guaranteeing the new parts for a year. Unfortunately, I experienced intermittent problems with the computer failing to boot and losing date, time, and setup information. For some reason Apple also had replaced my internal battery and charged me for the replacement.

Since I was headed back to Europe, I asked if Apple could repair the unit and ship it to me in Spain. Technical support explained that the company could not ship the unit from the US to Spain without inordinate costs associated with shipping and customs. When I arrived in El Puerto de Santa Maria, I contacted an Apple Dealer in Seville who seemed willing to look at the problem. I rather despondently dropped off my 'hot new system' along with copies of my original warranty and paperwork associated with the repairs. Within a couple of weeks, I received the system back and it has worked perfectly since. Under the terms of the company's worldwide warranty, I was charged nothing for the service.

Looking at this isolated chain of events, there are clearly ways that Apple could have improved its support. First, the company should not ship products unless there is a sufficient supply of spare parts in the chain to provide timely technical support. Second, quality control needs to thoroughly test equipment that has been serviced before returning the unit to the customer. Third, the company should ensure that only repairs that are necessary are accomplished. That is, it was unnecessary to replace the internal battery as I had already swapped batteries with the local Apple dealer who had determined that the battery was fine.

On the other hand, throughout this process I was never placed in the interminable telephone queue, Apple technicians were always polite and responsive, and the willingness of the Apple dealer in Spain to honor my warranty without question was laudable. Because of a sea change in attitude towards technical support, Apple's grade has improved from a D to a C+ in this important area.

Get the system software right BEFORE it is released...
I was fully prepared to give Apple a good grade in this area as System 8.6 and System 9 seemed thoroughly tested prior to their release. Recently, however, it has become apparent that the system software for the iBooks included a serious data-threatening bug. Because of the limited number of backup options, data loss on an iBook is particularly hazardous.

Though the company identified the problem and noted that it occurred in only rare circumstances, it still seemed reluctant to issue the requisite warning to iBook users, perhaps fearing that the publicity would interfere with its sales momentum. Clearly, Apple could have handled this situation more responsibly. Still, in comparison to the enormous problems associated with Windows, Apple's system software is solid as a rock and the company deserves an A for delivering dependable system software that continues to improve.

Extend the color iMac scheme. The colored iMac was a brilliant marketing ploy and if the company can resolve the associated logistics problems, it could add even more impetus to the iMac's success. Universities, K-12 schools, and businesses should also be able to order customized iMacs with school/business colors, logos, and the likeŠ
In retrospect, this was an impractical suggestion and I'm happy to see that Apple didn't get mired into such a logistics quagmire. Apple did, however, extend the color iMac scheme to include a more business-like graphite system and deserves an A for sticking by the color schemes that it can profitably manufacture.

Bundle a floppy. There's no doubt in Job's mind that the floppy is an expensive nuisance that has had its day, but like the port fiasco mentioned above, the lack of a floppy drive in Apple's new equipment presents another blind spot in Apple's marketing effort. My own school system, for example, turned down a significant Mac requisition simply because the iMac lacked a floppy drive and I can't tell you how many times I've heard the system derided because of the lack of a floppyŠ C'mon Apple -- get your collective head out of the sand.
Steve Jobs was right: the floppy drive is dead. On the other hand, for the vast majority of users it is still a ubiquitous part of the computer landscape. It makes no difference that an Iomega Zip is almost as cheap and holds a much higher capacity. For a group of people on the cutting edge of technology, computer users are amazingly conservative and the fact that the iMac has no floppy is simply one more reason to bash Apple.

Begin the transformation. The margins on standard desktop CPUs will continue to shrink as prices decline and so Apple needs to offer specialized solutions that differentiate Macs from the long beige line...
The transformation has begun. Apple has identified four key technologies including the G4 mini-towers, the iBooks, the iMacs, and the PowerBooks and now offers a small range of systems in each area. Though there is a functional overlap, the consumer can find a Macintosh system to meet almost any need. Apple deserves an A for focusing on core technologies but expanding the breadth of each to meet a variety of requirements.

Apple has to deliver solutions to the education, home, and small business markets much the way IBM delivers solutions to corporations. That is, Apple and its subcontractors must fully assess a local need, offer a Macintosh solution that includes installation, training, and maintenance, and establish a real working relationship with the local clientŠ
In a report dated February 23rd, 2000, IDC (a division of International Data Group and one of the world's leading research organizations) concluded that "While hardware has become a commodity, what differentiates IT companies is the added value they can provide through services." Though the IDC study may have referred to corporate IT solutions, there is little doubt similar conclusions can be drawn about the consumer and education markets.

Apple's iMacs, iBooks, and G4s resulted in a style-driven breakout for the company that started the microcomputer revolution. Though Apple's sales and stock price skyrocketed, there are some clouds on the horizon. The box shifters like Dell, Gateway, and Compaq are all introducing stylish new chassis and will soon be offering a choice of Microsoft's new operating systems: Windows 2000 or Windows Millennium Edition. In order to compete, Apple must bring something else to the party.

System X with its Aqua interface certainly offers a way forward, particularly if it's shipped in a robust, error-free release, but slick hardware and software is no longer sufficient. Again, I urge Apple to design solutions for the school, home, and small business and provide services to support these solutions and solidify its customer base.