Apple Computer formalised its product strategy this week by introducing its G3 PowerBook line and introducing its new iMac consumer line.
The company's permanent interim CEO Steve Jobs first told the crowd of Apple employees and developers that Apple is back on track after the new management team has been in place for 10 months. The attrition rate at Apple was 33% last July, but is now down to 15% - under the Silicon Valley average - Jobs said.
The partnership with CompUSA to build stores within a store has shown an increase from October of last year, when Apple accounted for 3 percent of its revenues to March, when Apple revenues accounted for 15 percent of computer sales, Jobs said.
Jobs also noted IDC''s recent market share increases, putting Apple at 4%, up from 3.4% one year ago. "We're not thrilled with that number," Jobs said, but hopes to keep increasing the market share annually.
Then Jobs delved into the new product strategy. He related a story of when he first returned to Apple, and how people tried to explain to him the company's product line, which was a myriad of model numbers.
"I had people explaining this to me for three weeks and I couldn't figure it out," Jobs said.
The company now has three product focus areas, providing desktop and portable products to both consumer and professional user bases.
Jobs then introduced the new G3 PowerBooks, which have up to seven hours of battery life and two hot-swappable bays.
He also related a story of how Intel went to Byte magazine to dispute the accuracy of its processor benchmarks, which pit the PowerPC G3 chips at twice the performance of Intel Pentium II chips with the same megahertz. Byte stood by its numbers.
"(PowerBook G3s) eat Pentium notebooks for lunch," Jobs said.
To show an example of the performance difference, Jobs pitted the G3 PowerBook against the Compaq Armada 7800, which has a Pentium II 266-MHz chip inside. An Apple vice president warned Jobs that he was about to pit his new G3 against the fastest Intel notebook on the market.
"I'm scared," Jobs said sarcastically, before completing numerous Photoshop tasks noticeably faster than the Intel box. In several demos, the demo on the Intel machine was stopped to save time, since the Apple boxes had finished much faster.
"And we are going to aggressively price these things, unlike the days of old," Jobs said, noting they are priced as much as US$1,500 below a comparable Intel machine, despite its increased performance.
Jobs also showed a rough cut of a new television commercial Apple will begin running in a few weeks. Entitled "Steamroller," the clip shows Pentium notebooks in a row being run over by a steamroller, to demonstrate that "the entire Pentium notebook world has just been flattened."
The consumer line will feature a portable unit based on the Mac OS, which Apple will introduce in early 1999. And then Jobs finally unveiled the system under a curtain on center stage, Apple's new consumer line called iMac. Jobs noted that Apple ignited the consumer market, but "somewhere along the way we got lost."
iMac combines the excitement of the Internet with the simplicity of the Macintosh, Jobs said.
iMac features a G3/233 MHz, with a one-half megabyte of backside cache, a 15-inch monitor, 32Mb of RAM, a 4GB hard drive, a 24-speed CD-ROM, a 100Mbps Ethernet, 33.6Kbps modem, infrared capabilities, a 12Mb Universal Serial Bus, and stereo surround sound.
The unit is translucent, glowing with a green fluorescent body, and contains all of the hardware in the monitor, with only the keyboard and mouse external to the computer.
"The back of this thing looks better than the front of the other guy's systems," Jobs said. "It looks like it's from [another] planet, a planet with better designers."
Jobs said the unit will also benefit from Apple's powerful marketing presence and strong brand.
"Have you seen great marketing out of the Compaqs and Dells of the world? I haven't," Jobs said.
In a benchmark test that drew thunderous applause from the crowd, Apple's $1,299 iMac consumer product outperformed the fastest K6 and Intel boxes available on the market.
The iMac will also come bundled with Mac OS 8.1, Microsoft Internet Explorer 4.0, America Online 4.0, AppleWorks (the new software suite formerly known as ClarisWorks), Quicken Deluxe 98 and FileMaker Pro 4.0 The unit will ship in volume in August of this year.
Jobs then showed a video in which the president of CompUSA said "this is the first product that will make PC buyers switch to the Mac. We talk internally wondering will we have enough volume to meet demand."
Longtime Mac analyst Pieter Hartsook said iMac isn't targeted for corporate users, but it could definitely find its way there, due to the fact that it is already network-ready.
"If a company's applications are already in HTML or Java, this is a great box to run those things," Hartsook said.
Tim Bajarin, president of Creative Strategies in San Jose, California, said Apple is clearly not positioning its products in the corporate market.
"Steve is never getting broad corporate acceptance again and he knows that," Bajarin said. "I don't think Apple's going to try and push it into that space."
Bajarin did note that this meeting reminded him of the Macintosh's initial launch in 1984.
"It had the same excitement level," Bajarin said.
Apple also announced yesterday that it is opening a new online store for its education customers.
Apple Computer Inc., of Cupertino, California, is at http://www.apple.com/.