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Apple to focus on pro users during 2001

Jobs bets consumers will come back next year

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Analysis Consumer Mac owners won't be offered Apple's SuperDrive CD/DVD writer - and, by extension, its consumer-oriented iDVD software - until next year, CEO Steve Jobs admitted yesterday at a meeting with financial analysts.

In fact, consumers won't factor too highly in Apple's plans this year as the company focuses instead on its installed base of professional users.

According to Jobs, it's all down to economics. "Entering 2001, with the economic climate the way it is right now, we and a lot of our compatriots in this industry are going to be looking to drive sales to our installed base, as well as pulling customers from our competitors," he said.

"We're spending a lot of energy on reaching our base of pro customers with exciting new products. And this will be an important part of our strategy this year."

Jobs' strategy makes sense given the degree to which the PC market has shrunk, but it highlights the schizophrenic nature of Apple's business. Jobs wants Apple to be the PC industry's answer to Sony, a company known for its brand and its consumer focus. And, indeed, that's where he's taken it, with some success, most notably the iMac. It's also the course Apple continues to pursue - it's the basis for Jobs' vision of the Mac as the core of the digital home. The only snag is that consumers are refusing to play ball.

To be fair, that's not only Apple's problem, but few other PC companies have so tightly tied their future to the consumer market. Apple has some great consumer technology, but simply can't exploit it in that arena because the target audience just isn't listening.

Hence the need to fall back on the Mac faithful, by providing the products - PowerPC G4-based notebooks, high speed desktops and, to a degree, MacOS X - they've been asking for for some time. That probably explains Apple's decision to ship the new Power Macs with five add-in slots, after so long proclaiming that three was two too many.

"We'll have to wait and see what hand we're dealt, but, fortunately, we have a loyal customer base and a segment of that is our pro customers," Jobs said. "Hopefully, they'll hold up better than many."

Not that they have been of late. Power Mac sales appeared to decline through the last few quarters as buyers have held off upgrades because recent releases haven't offered much of an incentive to do so. All that 'two brains are better' than one nonsense and, before that, the clock speed farrago that marred the launch of the Power Mac G4 - Apple was forced to cut chip speeds across the range - will hopefully have resulted in pent up demand for high-speed machines... like the 733MHz Power Mac G4. Assuming, of course, Apple can get enough chips to meet that demand.

Kit like the SuperDrive and iDVD should help too, Jobs hopes. "I think that it's possible to bring the SuperDrive down into our consumer products next calendar year," he said. "I think we have to make enough of them and bring the cost down. Standard stuff, but it takes time."

Jobs is crossing his fingers that the consumer market will rebound by then and buyers will not only be willing to buy, but pay more for Apple kit.

"Innovation costs a little more, but our customers have signalled to us that innovative products are the kind they want to buy," said Jobs. "Our goal isn't to be the cheapest in the market, but the best. If this means that [Macs] sometimes cost 10-15 per cent more, then they will be."

In other words, Apple has to charge more because, so it had damn well better make products that are worth the extra. Like... er... the Cube. Here's a machine that Apple hoped people would be willing to pay "a little more" for because of its styling. Trouble is, they didn't, as Jobs admitted again yesterday.

"It's a disappointment to us that this market isn't as big as we thought," he told analysts. "It's smaller than expected, but is a definite market."

In other words, a niche product. Which is pretty much what Apple has become, no matter how well the iMac has sold. Of course, that doesn't matter if the company can make money out of it, as it has been for almost all of Jobs' time at its helm. However, as recent events have shown, it leaves the company very vulnerable to dips in demand.

If Jobs really wants Apple to be like Sony, he needs new opportunities that can generate revenue while demand other areas weaken. Right now, that appears to mean balancing pro sales against the vagaries of the consumer market. That should ensure the company's ongoing stability, but it's not a recipe for growth. ®

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