Australasian Apple head reassures local market

There's nothing wrong with the product - it's the business model that was wrong. And that's changing.

Such was the message from Steve Vamos, head of Apple Australia, in New Zealand yesterday for a lightning press briefing. Vamos was fresh from a week at Apple in Cupertino, California and two days closeted with Apple's new chief executive and chairman, Gil Amelio.

Apple's New Zealand distributor, CED, will feel less pain than most branches of the empire, says Vamos, because it has spent the past year making the necessary adjustments to its own business model. CED. has just clocked up its first year in a competitive Mac hardware market and group director Mal Thompson claims the company has faced more pressure from clone makers than any other Apple subsidiary in the world. He expects to see further licensing of the MacOS to the point where there were "hundreds of clones in our market".

Vamos flew back from Cupertino with the MacOS licensing message at the top of his list. He compares Apple's new thrust with the "simple decision" the then troubled Compaq made to build an industry-standard PC in 1992 and even claims Apple is, after a dozen years, moving away from its "garage roots" to become more commercially oriented. It will continue to push five product groups: desktop Macs, servers, Powerbooks, Newtons and the Pippin platform.

CED distinguished itself by having its best-ever quarter to December - just as Apple was suffering its now-infamous US$69 million loss. But if the corporation is truly to follow its local subsidiary's lead, there may be some blood-letting to come. It has warned US analysts that it is heading for another loss in its next quarter, of about US$700 million, as a result of restructuring costs and inventory write-downs. CED's Thompson says his company has managed to transform itself in a year, but at the cost of several staff, including general manager Alex Broughton.

The bulwark of CED's success has been strong demand in the education sector and Thompson hints that education might see some benefits of the anticipated US inventory clean-out of low-end Macs. Vamos cautions against expecting too much of a bonanza, however.

"You don't want to establish unrealistic price points because people only get upset. We did that a couple of years ago with the 180 colour Powerbooks and it caused trouble when the new lines came through." Vamos is emphatic that Apple will not be abandoning any sector of the Macintosh market or increasing prices on existing lines.

"We do expect that we will have products come along which can command a price premium, and we won't be trying to compete on price in selling those. We won't be abandoning any Macintosh customers either.

"The clone market will expand, but the clones will hit channels and price points we can't hit anyway."

Both men are also holding out the prospect of - by any other name - Apple-branded clones. That is, an OEM-style business model which could see some Macs in the Australasian market being manfactured by third parties and badged for resale by Apple. Thompson says that the only consumers who could expect technical support from his company would be those who bought the Apple brand.

"If the Mac clone companies are going to survive, then they'll have to do it properly and establish their own support services."

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