Light at the end of tunnel for Apple

Despite the fact that Apple shed yet another executive last week, there's a general consensus of opinion across the IT industry that things are looking up for the long suffering Mac maker.

Apple board member, Delano Lewis, resigned last week citing pressing time demands, less than a month after CEO Gil Amelio and executive vice president of technology, Ellen Hancock handed in their shock resignations.

However, as the appropriately titled firm of headhunters Heidrick & Struggles, helps Apple find a replacement for Amelio, life at the company carries on as usual.

In fact, since Amelio left, Apple is seeing the beginning of what could be a much more rosy chapter in the company's turbulent history. A new operating system and much better than expected third-quarter results have followed Amelio's departure.

Last month, Apple released the most significant upgrade to its operating system since the software was first released in 1984.

Among the system's new features is the multitasking PowerPC native Finder, which allows users to launch applications while copying files in the background.

The Finder also includes folders that open automatically and windows that pop-up from the bottom of the screen.

Internet services are integrated in the upgrade so users can connect, browse and share information from their Mac desktop environment and MacOS 8 includes built-in support for Java and Internet push technology - previously Mac users were forced to use third-party Java products.

Apple is so confident of the success of its new operating system that it has actually delayed US shipments of its PowerBook 2400c sub-notebook in order to pre-install MacOS 8. The 2400c, which weighs in at only 4.4lbs, is now expected in the middle of this month, a few weeks later than planned.

Alan Hely, marketing director for Apple UK, is convinced that in recent months things have definitely taken a turn for the better at Apple: "When you look back, you can see the evidence. The restructuring at the beginning of April was the last restructure at Apple and created a worldwide marketing organisation. One of the main objectives of this division is to get confidence and credibility back in the company.

"For a while, we were hit by bad news after bad news and we had lost the confidence of the industry, customers, even our own staff. The Only Apple campaign back in May kicked-off an offense to that and was very well received."

He went on to say that a "breath of fresh air" had been circulating the company since Amelio's resignation last month. "He did an enormous amount to address quality issues, set a clear MacOS strategy and restructure the company but surrounding his departure were the rumours that Apple would face third-quarter losses of between $70 million (#43 million) and $110 million. When the $56 million figure was announced this was the good news we needed and was the recognition that we are moving in the right direction."

Apple co-founder Steve Jobs will be playing much more of an active role in the running of the company following Amelio's departure - which, according to Hely, has installed great confidence among staff.

Despite his confidence, Hely is still cautious: "There are steep stairs but we are climbing them. No one will be happy until we turn in a profit.

That's our objective."

Mac clone maker Motorola is also confident of Apple's return to success.

Samer Roumieh, who heads the Motorola's Mac clone division for Europe, Middle East and Africa, said he believed Apple's operating system roadmap was clearer now than it ever has been and will be a major factor in Apple's future.

"The roadmap for the MacOS has been overhauled and is very good. I believe Apple has a great future ahead," commented Roumieh.

He explained that despite the release of MacOS 8 last month, it will be a while before the new operating system is available on Motorola's Mac clones.

At the end of last month, Guerrino De Luca, a vice president at Apple, had confirmed to the US press that no agreements had been signed with clone vendors to license the new software. However, Roumieh was able to confirm that it would be available on Motorola's machines.

MacOS 8 is a very important release for clone vendors, said Roumieh, as it is part of the Common Hardware Reference Platform(CHRP) and CHRP-compliant hardware will allow Mac clone vendors to enhance system performance and bring new products to market much quicker. "It looks good to us," he said.

"We're keeping our fingers crossed."

Although Apple has lost some business to the Mac clone makers, it still holds the lion's share at 94.6%, according to market researcher Dataquest (See graph below).

According to Roumieh, the clone makers' success is also a bonus to Mac users. "It has prompted Apple to reduce prices. When you open up the market, more competition improves the situation for the end users."

Motorola has not felt the need to move to building Intel-based machines (unlike Power Computing, the largest of the Mac clone makers).

Early last month, Power Computing announced it would begin selling Wintel PCs and servers early next year, although it will still pursue its Mac compatible business "aggressively".

The news is yet another hurdle for Apple to tackle as analysts believe it signals a further decline in the Mac market. Michael Gartenberg, research director at the Gartner Group in the US, commented: "It's bad news for Apple as Power Computing obviously feels it can't make enough money selling Mac clones alone."

Meanwhile, the hunt for a new Apple CEO continues. In a statement released late last month, Heidrick & Struggles said it was assisting Apple in looking for a "world-class technology industry executive, both a strong leader and a hands-on manager, with a successful sales and marketing background," and expected the search to take around 90 days. With those expectations, and bearing in mind Apple's turbulent past, it could take significantly longer.

Despite the fact that the company now looks like it is on the right track, whoever takes over at the helm has still got a long, hard fight ahead.

Apple: recent events

April 1997

Apple reported a second quarter loss of $708 million.

Oracle CEO Larry Ellison drops his much-hyped bid for Apple.

May 1997

Apple knocked off Dataquest's top five worldwide PC vendor list.

Apple spins off the Newton division.

June 1997

Apple's ad agency broke off its contract with the company.

1.5 million block of Apple shares were sold, with rumours rife that the seller was co-founder Steve Jobs.

Mac clone maker Power Computing decides to make machines that use Intel processors and Windows operating system.

July 1997

Apple stock hits a 10-year low.

Apple CEO Gil Amelio and executive vice president Ellen Hancock leave the company.

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