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Apple's digital dreams waft past consumers

Great technology, but why restrict it to the high end?

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Analysis Apple CEO Steve Jobs may have been standing in front on thousands of MacWorld Expo San Francisco attendees when he outlined his vision for the company yesterday, but his real audience was over on the East Coast, in Wall Street.

Jobs kicked off his spiel with the admission that the last seven months had been pretty ropy for the manufacturer. Indeed it has, and so poor has Apple's sales performance been over the period that observers - the financial analysts in particular - have once again questioned the company's future viability.

Jobs' goal was to persuade them otherwise. It's rare to get a long strategy and market outlook spiel, but that's what Jobs offered yesterday. As expected, his focus was on the way Apple can leverage software solutions bundled with hardware to address users' needs, a break away from the emphasis on box-shifting the company has had for the last few years.

Apple's scheme centres on the digital world. Jobs described the Mac's role over the next few years or so as the hub of the digital home. We're all going to be spending millions on digital cameras, camcorders and media. We'll all have PDAs. The personal computer is the only device that can connect all these items together to allow them to interoperate.

It's a good perspective on the way the consumer electronics market is going, and it shows Apple is thinking about the opportunities open to it. The only question is, can it actually capitalise on this emerging market?

Getting the goods

Certainly it has the solutions to do so, as Jobs demonstrated yesterday. Both iTunes and iDVD, announced at the keynote, are neat consumer-friendly tools that will provide digital music fans and home movie buffs with some great toys for free. So does the already-shipping iMovie.

In the professional space, there's Final Cut Pro and now DVD Studio Pro. Those, along with the new five-slot Power Mac G4s (graphics and video professionals have been asking for more slots for years, and yesterday Apple finally responded positively), will tickle Apple's traditional users.

MacOS X, meanwhile, will provide a very solid, easy-to-use and, with the incorporation of some of the most popular MacOS 9 interface features, easy to adopt (a nod toward existing MacOS users, this, rather than folk totally new to it) operating system platform on which to stack all this functionality.

It's clear Apple can provide the technology, but can the company deliver it? Certainly not in the short-term and not to the market it most needs to address: the consumer space with all its thousands of new customers.

Take iDVD. Coupled with Pioneer's combo CD-R/DVD-R drive, capable of writing DVDs that can be read by in consumer DVD players, it's a great consumer technology. The snag is, both software and hardware are only available with Apple's top-of-the-range Power Mac, hardly a mass-market machine.

To be fair, Apple has no choice here. SuperDrive is very new, so units are both hard to come by and expensive, so the company can't even offer then across the Power Mac range let alone with the iMacs, the technology's ideal home, given Apple's vision of the digital home.

Incidentally, the 733MHz Power Mac G4 is going to be hard enough to buy as it is, given the evidently very low yields of its PowerPC G4 Plus processor.

Consumers? What consumers?
So where was the iMac in Jobs' speech? Nowhere. He reiterated his admission that Apple had "missed the boat" on CD-RW technology, but Apple's solution is simply to make that technology standard across its professional range. Yet iTunes is a so clearly a consumer product - why was there no move to offer CD-RW across the iMac line too?

We hope Apple is saving this one for later, a tacit admission perhaps that the consumer market is so depressed right now, little can be gained by making its consumer machines a little more tempting. Perhaps it's also an admission that Apple can't compete here at all. Certainly, Jobs' comments about the megahertz myth suggest that he's well aware that iMac's - even ones with CD-RW drives and bundled to the hilt with cool applications - still appear woefully underpowered when compared to Wintel boxes.

Essentially, then, yesterday's keynote was about showing that Apple knows where it want to be, even though right now it's some distance from its destination. Fine, but it needs to get there quickly. If, by the time Pioneer is shipping SuperDrive in volume, Dell and Compaq are offering SuperDrive-equipped machines too, there's no real benefit to be gained from being the first one to do so. Equally, Apple needs to get Macs out there with iTunes and CD-RW drives before everyone else realises it's a good idea and does the same.

Having the right plan isn't the same thing as achieving the goals of the strategy. In that respect, Wall Street is unlikely to be overly impressed with Jobs' speech - though today's trading will show what the market thinks of it. ®

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