As Apple's annual Macworld show drew to a close last week, the company appeared to be riding the crest of a wave of renewed optimism and an enthusiastic welcome to a range of new products.
However, despite the renewed faith in Apple from both users and industry watchers alike, it is clear the company still has some tough challenges ahead to maintain its recent run of success and continue profitability.
Apple interim chief executive office Steve Jobs opened the show on a positive note, talking about the "resurgence" of Apple.
"You're going to see a lot of that today," he said. Jobs went on to catalogue Apple's recent successes: the posting of $203 million profit for its third quarter 1999 (see Newswire 15 July), its seventh consecutive quarter of profit to date.
He attributed the 40 per cent growth rate over the prior year mainly to strong sales of its colourful consumer desktop - the iMac, which it launched last August. In a few weeks, said Jobs, Apple will have shipped almost 2 million iMacs.
Jobs made a series of announcements: the launch of Quicktime TV, that its next generation operating system, Mac OS 9 will ship for $99 in October this year and the launch of the company's long awaited consumer notebook launch - the iBook(see Newswire 22 July).
Jobs dubbed the laptop, "an iMac to go" and claimed the machine is the second fastest laptop in the world, second only to the company's professional notebook.
The iBook, which comes in tangerine and blueberry, is also the first consumer notebook to feature wireless Internet access through technology Apple jointly developed with Lucent.
The Airport technology includes an Airport card, which fits inside the iBook and the Airport Base station, which contains a 56K modem and a 10Base-T Ethernet port for connecting to a phone line, cable modem, DSL modem or local area network for terrestrial Internet access. Airport is based on the industry standard IEEE 802.11b, and operates at 11 megabits per second.
Analysts were upbeat about the iBook, saying it showed the company's innovative approach to its products.
Andy Brown research analyst with IDC commented: "All credit to Apple, they have fresh and exciting ideas. iBook has a lot of benefits, one of which is the Airport technology.
“The fact that they have introduced wireless technology into a mainstream product is good, a lot of other companies have been working on this but Apple is the first to put it into a mainstream line."
He also said that the colourful and attractive design could also spark other more mainstream PC vendors to make their own system designs more appealing.
Brown added that although, on the whole, the iBook is an attractive product, some aspects of its specification could cause problems.
"It is a little bit big from what I can see and a bit heavy. The screen is only 12.1 inches when notebooks usually feature a 13.3 inch screen, this is a little puzzling. And the price is still a little prohibitive for the education market.
“I’m not sure what the European pricing is going to be yet, but $1599 is quite a lot of money for students. Most students are going for desktops as there are some really good deals at the moment on Intel Celeron machines."
He said that unlike the iMac, which won Apple a lot of first time users, the iBook is a little expensive to entice many first time buyers.
"Apple did this with the iMac very well, but I don't think they're going to get too many first time users with the iBook," added Brown.
He said that Apple, along with other PC vendors are going to have a tough job competing against manufacturers like Sony and Sega (see Newswire 13 May) who are planning to offer Internet ready games consuls this Christmas for around £300.
Brown, and other industry analysts were agreed that the main reason for Apple's turnaround over the last couple of years is the re-instatement of company co founder Steve Jobs as Interim chief executive officer.
"Since Jobs came back, the company has been recording much more positive results," he said.
"What Apple seems to have finally realised is that it is never going to be a top five player. But it will always be a strong niche player, particularly in the education and publishing markets and has a very loyal install base."
He said that the company currently holds around a 3 per cent total PC market share in the EMEA region which while not huge, is strongly guarded and most Mac users, replace their outdated machines with new Macs, rather than switching to a Windows based PC. "Mac users are extremely loyal," said Brown.
US based research company Gartner Group agreed. Company analyst Michael Gartenberg commented: "Apple has resisted the temptation to chase the traditional corporate desktop market in the short term and has focused instead on segments where it still maintains competitive advantage - including graphics arts, publishing, education and home user and has an extremely loyal install base."
He said that Apple's Internet streaming video standard is hugely popular in the professional market and the company's recent collaboration with LucasFilms in promoting the new Star Wars film gave both Quicktime and Apple a big boost in the market place.
However, Gartenberg warned that Apple's problems over the past years have damaged its position.
"Its weakened position in recent years has given Microsoft Windows NT the opportunity to gain a foothold in the graphics space. Today all major graphics applications have been ported to the Windows platform where they perform adequately and Apple has become a prime target for most PC workstation vendors."
He said that Apple's server efforts will also come heavily under attack from NT and Linux and this will remain an area in which it will be difficult for the company to extend its reach.
Gartenberg said Apple should also watch its position in the education market very closely, a market which it has traditionally dominated.
He said that many schools have begun to re think their decision to use Apple platforms to educate children, when most businesses and a large part of the consumer market use Windows based systems.
However, he said the loyalty of Apple's existing customers should mean that the large majority of its graphics an publishing users should stay with the platform.
He added: "Apple does not seriously threaten Microsoft's dominance of the business end user computing space, but it is a viable system provider in the small business and consumer personal computer markets where software availability is not an issue."
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