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ATPM 4.05
May 1998


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Apples, Kids, & Attitude

by Robert Paul Leitao,

It's 10:00 PM on Monday night. My kids are finally in bed. It's been a long day for each member of the family. The recent switch to daylight savings means Matthew and Jessica remain active well into the evening. To help them fall asleep, I often read books by candlelight. Tonight we read the first few pages of Josephina's Surprise. The book and accompanying doll are from the Pleasant Company's American Girl Collection <>.

The American Girl Collection is based on the lives of six fictional girls, each growing up at a different time in American history. The stories are well-researched and provide an interesting look at what it was like to live in a particular era. There's also an interactive CD-ROM available that allows you to create your own stories using characters from the books. Although some of the items can be a little "pricey," I recommend the collection to anyone who has a daughter between the ages of seven and twelve.

Ironically, while bed-time marks the end of the day for Matthew and Jessica, it's often the beginning of more work for me. There are school lunches to be made, laundry to be folded, and a kitchen to be cleaned. It's quiet, routine work for a single parent.

Recently I gave up the responsibilities of owning a Hollywood Hills house for the convenience of a rented apartment in Burbank. I enjoyed the extra square footage in the house when the kids were with me, but on the days they were not in my care the rooms were filled with what can only be described as "the deafening sound of silence." I spent many sleepless nights traveling the world via an Internet connection and my Macintosh. Using a 1710 AV monitor, my late-night Web travels were like taking an electronic magic carpet ride. It often eased a bit of the loneliness.

I've come to appreciate the rich, intuitive elegance of the Mac OS. It's something that just isn't matched by Windows 95. It's one of the reasons so many artists and educators continue to use Macs. But it's not just educators and graphic artists who are partial to the Mac. There are many other people who prefer the elegance and ease-of-use of the Macintosh and the Mac OS. Sadly, personal preference for the Mac has been overshadowed by a general concern that Apple Computer is going out of business or the widespread fear that purchasing a Mac is the equivalent of buying the "Betamax" of PCs.

Thankfully, Apple's new ad campaign comparing the speed of the G3 to the Pentium II is raising a lot of eyebrows and changing people's preconceived notions about the future of the Mac. This is because Apple has again positioned itself as an innovative market leader. The fact that processing speed has not traditionally been a Macintosh strong point only increases the amount of consumer interest.

Since its release in 1984, the Macintosh has always been the computer that was "easy-to-use." The introduction of Windows 95 closed the ease-of-use gap in many people's minds much the same way the new G3 Macs are changing the way consumers look at processor speeds.

At the same time, the release of software that allows users to run Windows 95 applications on their Macs is eliminating concerns about the lack of software availability for the platform. It also does away with the argument that a Macintosh is incompatible with the Wintel machines people are compelled to use at work. Any way you look at the matter, G3-based desktop and mini-tower Macs provide the best
price/performance value for personal computer buyers, even for current Wintel users with a substantial software library.

I suspect many software developers are wondering about the efficacy of porting their applications to the Mac when software is available that allows Mac owners to use Windows 95 applications. This issue will be addressed in a decisive manner at Apple's upcoming Worldwide Developers Conference (WWDC). I believe there will be many surprise announcements during the conference. If rumors are true, Rhapsody will be widely licensed to hardware manufacturers. This, of course, will be in sharp contrast to the licensing strategy (or lack thereof) employed by Apple with regard to the much-coveted Mac OS.

It's no secret that the underpinnings of the Mac OS are quietly being replaced by the core technology used in Rhapsody. In addition, Rhapsody's Yellow Box will have a profound effect on the way we look at platform-dependent software. The extent to which Apple can effectively communicate its software vision to developers will not only impact the future of Macintosh computing, it will effect the computer purchase plans of school districts in the United States and school systems around the world.

The computer lab at my daughter's elementary school is exclusively Macintosh. The majority of machines are 680x0-based Macs, and the lab continues to use System 7.x. The lab recently purchased several previously owned 7200/90s. Needless to say, the school has made a large investment in Macintosh computers. Budgets are limited, so the school upgrades piece-by-piece, as funds become available.

In contrast, one of my largest clients is a private, non-profit elementary school. The school's computer lab, classrooms and administrative offices use Pentium-based Wintel boxes. Despite my prodding, the school doesn't see a need for Macs; Apple's financial performance over the past couple of years hasn't helped matters. At this school, Macs are viewed as the computer of the past, not the computer of the future. That said, Apple's new ads have been noticed by the school's teachers and administrators.

In the case of my daughter's school, they would like to use Macs for many years to come. Because of budget constraints and the age of the hardware, it may be awhile before the school upgrades to Mac OS 8, and it may be years before they fully benefit from today's hardware technology. For this school and many like it, Apple needs to provide clear and concise information about upgrade options and the best way to integrate new technologies with old ones. There is a lot of pressure on schools, from parents and computer companies wishing to gain market share, to move away from Macs and embrace the Wintel platform. Not only does Apple have to differentiate its products on a price/performance level, it must also provide educators and administrators with timely information about its software strategy.

Due to the manner in which municipalities develop and approve their school budgets, purchasing decisions are often made months before the school year begins. In districts where multi-year budgets are employed, the time difference can be even more pronounced. Can Apple reverse the current migration away from the Mac platform? Yes. But it will take time, hard work and a desire to provide lots of information to decision-makers.

Apple's recent return to profitability will do more for the company's sales than an additional $100 million spent on advertisements. The fact that Apple has been able to cut costs, introduce new products, increase unit sales, and earn a profit while simultaneously lowering prices is an extraordinary accomplishment. The word "turnaround" is frequently appearing in press reports about Apple.

What is not mentioned in many of the press stories is that Apple's most recent quarter ended not only with a $55 million profit, it also ended with $100 million less in channel inventory than when the quarter began. This means that Apple's earning were high quality earnings that did not come about by aggressively pushing product into stores. This means an end to "fire sale" prices on bloated inventories of Macintosh products. It also means higher margins and better inventory control.

Apple's unit volume was up for the quarter, but dollar sales were down. Much of the reduction in Apple's dollar sales is because the current G3 models are less expensive to make and can be sold at more attractive prices. Dollar sales were also impacted by Apple's decision to discontinue making many hardware peripherals such as digital cameras and scanners. An increase in dollar sales is the final demand Wall Street has placed on Apple before it declares that a bonafide turnaround has occurred at the company.

It's my view that the current quarter will, in hindsight, represent Apple's defacto return to sustained profitability. I also believe that Apple will achieve year-over-year dollar sales growth by the end of the September quarter. G3-based desktop and mini-tower Macs should continue to sell at a torrid pace and the rollout of the new G3-based PowerBooks should be very well-received by the marketplace.

Where does all this leave me? In the kitchen making hot buttered popcorn. My kids are asleep, I've finished my work, and I'm making a late-night effort to complete this column! Earlier today my kids and I ventured to the local mall. In between our first stop at Sears for their clothes and our final stop at In-N-Out Burger for my dinner, we made a pilgrimage to CompUSA.

I must admit my adjustment to apartment life (and the subsequent reduction in living space) has been more awkward than I first expected it would be. It's nice to have a heated swimming pool outside my front door, but it's also nice not to have every square inch of floor space covered by things that just a few months ago seemed "essential."

I'd like to upgrade to a G3 Mac, but there isn't room in the apartment for a new computer. Unfortunately, CompUSA's attractive store-within-a-store Macintosh display tempts me to try and make a new computer fit. My eyes have been fixed on the new 300 MHz mini-tower Mac while my wallet keeps humming something about a desktop 233 MHz machine.

Tonight I think I came up with a solution. I'm going to wait...for the new line of G3 PowerBooks! It looks like there will be a configuration that will make both my eyes and my wallet happy. I'll get the freedom to use a Mac wherever my day takes me, and my daughter's school may get her old Macintosh to add to its collection. I'll also repatriate several square feet of desk space. It sounds like a win-win scenario.

I can see the day when I'll be at work humming through my projects on a screaming fast G3 PowerBook. If need be, I'll even be able to run those Windows 95 applications we're sometimes compelled to use.

What will I tell people at work who ask me why I'm so happy? Thanks to the G3 "Get a Mac" may have a brand new meaning!

"Apples, Kids and Attitude[TM]" is © 1998 Robert Paul Leitao, <>.Blue Apple

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