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No looking back for Apple
Copyright © 1996 to Bruce Simpson
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The story that Apple has hired back one of its original founders Steve Jobs is now old news but only now are the details of the planned new direction becoming apparent.

First a backgrounder - why did Apple, once one of the industry's leading players, fall so far and slip from healthy profit to significant loss?

Simple... they rested on their laurels for too long. They are not alone in falling into the trap of heady-complacency. Lotus did it when they "owned" the spreadsheet market - and then Microsoft's Excel came along and dethroned them. Word-Perfect did when they "owned" the Word Processing market - until Microsoft dethroned them also.

Neither Lotus nor Word Perfect have recovered and returned to those glory-days. The lesson is - it's much easier to retain the high ground through agressive R&D and new product development than it is to try and claw your way back to the top once you've slipped.

Now the original Mac was a huge success and this success was due almost solely to its (at the time) revolutionary operating system. Point and click with intuitive operation which freed the average user from the need to remember arcane and complex commands - and meant you could do many things without even touching the keyboard. At last, the day of the "user friendly" computer had arrived.

From that point on, Apple rested. Sure, they spent some money and effort in "hotting up the hardware" - but the real key to their success, the Mac software, was left virtually untouched. In fact, on the few occasions they attempted to enhance this software they seemed to make such a botch-up of it that people were reluctant to upgrade because the rewards weren't worth the headaches.

All through this time, the Master of the PC Universe - Bill Gates, was busy refining his own GUI environment "Windows". Okay, so the first two incarnations of Windows were little more than toys and developers could not justify the cost and complexity of developing for Windows when DOS programs were still selling well.

Then Windows 3.0 arrived. It looked very smart with 3D buttons, good use of colour and (at last) it ran in just a few megs of RAM. Most significantly, PCs at that time were starting to ship as standard with a couple of megs of RAM, VGA colour displays and 386 processors - just the ingredients to make Windows a viable platform.

Almost overnight the developer community saw the opportunity and within a few short months dealers shelves were filling with Windows applications. Now the PC also had a "real" point and click environment that was something like a Mac - although still nowhere near as functional or intuitive.

It is at this point that Apple should have seen the writing on the wall. The PC platform, powered by Microsoft Windows, was catching up fast - while Apple sat still in the water - a sitting duck.

Move forward to August 1995 - Microsoft launches Windows '95. Not the world's most sophisticated, reliable or powerful operating system but, and this is a BIG "but", very close to the Mac OS in terms of functionality and ease of use.

By this time, many software developers who had previously focused solely on the Mac had "jumped ship" and were now concentrating their efforts on producing Windows software for the PC. This saw the number of new programs for the Mac start to dwindle and although much of the Mac software was still very good, the range of titles was not.

From that point on, Apple's fortunes entered a steep decline. PC hardware was getting continuously cheaper, Windows 95 was very nearly as good as Mac's OS and the market was deluged with very good Win'95 applications. By comparison, the Apple was still stuck in the past and although the hardware was improved, it was still more expensive than a PC and the Mac OS had reached the end of its competitive life.

Suddenly Apple had huge inventories of over-priced, underpowered, machines for which there was a dwindling supply of software. Naturally they weren't making any money out of these - the red ink started to flow.

Their knee-jerk reaction was to slash prices - a move which further eroded their profit margins. Now they needed to sell more machines to make the same levels of profit - and discounting adversely affected the Apple brand which had previously been perceived as "a cut above" the PC.

Facing very dire prospects, Apple restructured and brought in some new blood to try and turn things around.

Fortunately for Apple, the new management went out in search of a replacement for the Mac's weak-link - it's outdated and floundering operating system.

Originally it appeared as if Be would be the OS of choice. A robust and powerful OS offering vastly improved levels of performance and reliability along with the potential to support existing Mac apps made Be appear to be a "sure thing".

Unfortunately the guys at Be got a little greedy and once their asking price hit US$400m, Apple decided to check out their other options a little more carefully. When they looked at Next, an object-oriented operating system developed by one of Apple's original founders, Steve Jobs, they weighed up the options.

Next has been acknowledged as a competent environment. It has been licensed by IBM and other industry leaders which offers some level of endorsement as to its pedigree. Perhaps the most attractive factor in the whole deal would be the chance to appease the sharemarket and investors by bringing Jobs back into the Apple team at the very time that the company again badly needs visionaries instead of beancounters.

Now the deal has been done and Apple has parted with US$400m through its purchase of Next (US$350m) and payment of some of Next's debts (US$50m). Once Be realised their deal was going sour, they reportedly dropped their asking price to just US$200m - but it was too late, Apple had already decided that having Jobs back on the team was worth the extra US$200m and the Be option was now dead in the water. Perhaps there's a lesson to be learnt there.

The biggest problem that Apple now faces is the need to convince users and developers that to move forward, they must sever their ties with the past.

The Next OS won't be backwards compatible with the Mac OS. Existing Mac applications won't run under Next and developers will have to retool and reskill themselves - a not insignificant cost.

The return for this pain however will be an environment which offers the promise of better multi-tasking, improved performance, robustness, reliability and the reduced development times for software. If all goes to plan, Apple have the chance to take a damned good run at the high-ground. Unfortunately, the ultimate success of this strategy lies beyond the direct control of Apple themselves. Will the developers stay loyal? Will the market be receptive to the cost of trading up to a new environment and replacing many of their existing applications over a period of time?

This is a very big gamble - but Apple are used to taking gambles - anyone remember the Lisa? The Apple III?

I expect they're hoping that this move isn't too little too late.


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