iMac, therefore I Might Be

iMac, therefore I Might Be

Apple management must wonder just what the company has to accomplish for Wall Street to consider it successful. In spite of doubling its market share by selling some 800,000 iMacs since August of 1998 and despite introducing a ramped up, colorful, and cheaper version of the same model, there are industry analysts who still see problems on the horizon.

It’s apparently not enough for Apple to continue to exceed Wall Street’s performance expectations; and it matters little that the company has a slew of dynamite new systems on the market. Some investment firms want assurance that the good news will continue.

Part of the problem stems from the volatility of the industry as a whole and part from a few analysts’ perceptions that Apple will make the inevitable blunder. Success, after all, can act as an intoxicant, and there’s at least some evidence that the company’s past blunders stemmed from complacency and arrogance attributable to short-term achievement.

Specifically:
• The company’s most significant mistake was its failure to license the Mac OS after it was assured of some success. The whole computer landscape would be different today if the Apple managers hadn’t been so hooked on proprietary systems and the large margins they ensured.
• In addition, there is the almost legendary “port” blunder where Apple insisted the Macintosh would not support the industry standard printer interface, thereby precluding the use of the millions of dot matrix printers already sitting in offices throughout the land. Thus, in order to switch to Macintosh, users were required to buy a $500 ImageWriter Printer from Apple.
• The failure by Apple to incorporate a hard drive in the Apple IIGS doomed that machine while the company continued to sell thousands of these cash cows to K-12 schools. This crippling by omission had ensured the color Apple IIGS couldn’t compete with the successful grayscale Macintosh, but effectively opened the education market to competitors.
• Then, there was Sculley’s Knowledge Navigator and the Mac with a thousand names. The former sucked R&D monies into hyperspace while the latter was an attempt to sell customized Macs to every end of the market. Someone in marketing thought that if you changed the specs and renamed the machine (Performa, Centris, Quadra, etc.) you could sell Macs to everyone at remarkably different prices. Instead, Apple had a hard time predicting demand everywhere and frustration and confusion grew.

Many of these mistakes could have been avoided if Apple had only listened to feedback from its customers. In that light, I’d like to offer Apple ten positive suggestions to minimize potential pitfalls for 1999:

1. 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. We all know that the iMac is significantly superior to any sub-thousand PC, but that’s not enough. You have to get Joe Public’s attention first before they look at the details.

2. 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. Now that Microsoft is under considerable pressure from the government suit, it might be a great time to share technologies and perhaps convince Gates that Microsoft Access on the Mac is a profitable proposition.

3. Begin 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. When you consider that Ken Brown, recently signed pitcher for the Dodgers, will make over $300,000 per game, you have to wonder why Apple doesn’t reward Jobs for his accomplishments.

4. Introduce the nMac for education. To me, the most important product revealed at the January Macworld show was one that has yet to be marketed and was only shown incidentally as part of a demonstration. In order to show the power of Apple’s new System X Server software, Mr. Jobs booted a large number of stripped down or ‘immaculate’ iMacs directly from the server and ran some intensive graphics software. 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.

5. Fix technical support. It’s 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 support. It’s not enough for Apple to offer industry standard support when that standard is woefully inadequate. We expect more of Apple and suspect that the company could break some new ground in support of its users.

6. Get the system software right BEFORE it is released. As was noted in a previous column, the System 8.5 (and 8.5.1) release was flawed and caused significant problems for hundreds of users. There’s never an excuse for releasing any software that can destroy data and if that is somehow inadvertently done, Apple should make it up to those who suffered (like me, for instance!). I would have settled for a proper fix that would restore my corrupted drive, but none was forthcoming. Instead, I spent several hundred dollars downloading utility software and buying an additional cartridge drive to restore my files.

7. 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 like. Of course, a long lead-time and a minimum number of systems might be required, but such orders could result in real long-term commitments to Apple technology.

8. Bundle a floppy drive as an Apple option. 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 floppy. If the truth be known, of course, there are third-party USB drives that can happily serve the same function, but they don’t have an Apple logo on them and they aren’t automatically recognized by procurement organizations as an Apple option. C’mon Apple – get your collective head out of the sand.

9. 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 nMacs for education mentioned above are just one example. Home Macs could also be modified to meet individual requirements. I can envision kMacs (Kitchen Macs) with small screens and a rugged keyboard, gMacs (game Macs) with high speed accelerators and special input devices, tvMacs providing Internet access on the TV, and even bMacs (bedroom Macs) offering their own unique services. These could all sport iMac cores with customized add-ons providing the differentiation.

10. In order to accomplish #9, 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 client. This will require Apple to ‘think differently’ about the way it does business, but offers a way to leverage its hardware and software in the face of intense competition.

•Mick O’Neil• <mickoneil@mymac.com>