The State of the Mac

by Forest Linton

This month, I deviate from my usual topic to bring you this special report.

The announcements that we were all waiting for finally hit. At first glance, Apple's situation looks grim indeed. Apple has always been one of the most closely watched computer companies, but the past couple of troubled quarters have brought armchair analysts out of the woodwork in force.

Most of you have probably read more Apple-related news stories than you ever wanted to, so I'll refrain from giving yet another report. Instead, I will offer some opinions and best guesses on what this means for Apple in Japan.

Market share
CEO Gil Amelio has announced over 4,100 layoffs (2,700 of those full-time employees), with about 45% taking place outside of the US. But it was made clear that Japan wouldn't be touched. This is good, because Apple Japan is already running on a skeleton crew of 260 full-timers.

Japan represents an important and successful market for Apple. Although its market share has been dropping, according to IDC Japan it is still around the 10% mark, which is significantly higher than in other markets.

Despite Apple's woes, CNET recently reported that the overall market share for Mac OS machines is actually increasing. Why? Because of the Macintosh compatibles. Although clone sales may cut a bit into Apple's market share, it so far has had the effect of raising the overall share of MacOS computers.

Japan has two Mac clone makers: Pioneer and Akia. Pioneer got off to a shaky start two years ago, but a recent redesign may breathe new life into its line. Akia, meanwhile, has announced a very attractive lineup of slim PowerMacs. It is too early to determine if clone sales will help Apple, or ultimately cannibalize Apple's own sales, but my guess is that clones won't do as well in Japan as they have in the US. Japanese consumers are fans of Apple just as much as they are of the Macintosh, and won't buy into the Mac-compatible concept so quickly.

Internet opportunities
On the Internet front, Apple has scaled back many of its projects (like Cyberdog, Open Transport, and other networking technologies). This may be a good thing, assuming the technologies newly acquired from NeXT are superior; projects like Cyberdog were never really embraced by consumers or developers.

Apple seems poised to more fully embrace third-party technologies like Java and ActiveX, and to offer its customers a choice of Internet clients from Microsoft and Netscape. This will allow Apple to focus on its core mission of creating a great box and a new version of its OS.

One interesting opportunity is WebObjects. Apple has always been strong on the publishing and authoring front, and the WebObjects technology acquired from NeXT is well respected by website authors and creators. If properly handled, WebObjects could be leveraged by Apple into a successful franchise to keep a foothold in the Internet market.

Meanwhile, the Newton lives! The Newton has quite a loyal following here in Japan, and there is now a localized Japanese version available. Newton fans surely breathed a sigh of relief when it appeared that, at least for now, the Newton division will remain untouched. I think that the Newton remains a compelling opportunity for providing personal Internet and communication services - as the Sharp Zaurus has proven.

What should Apple do?
Apple needs to embrace third-party developers more. As it trims its own lineup of technologies, it now must rely more than ever on developers to provide cool functionality for the Macintosh. A great example of this came at MacWorld San Francisco, when Gil Amelio and Ellen Hancock appeared on stage with representatives from Microsoft to promote Internet Explorer.

Apple also must manage its OS licensing business very carefully, so that it can grow its market share without cannibalizing its sales. How it does this in Japan will be a great test of its abilities.

And I think that Apple should expand its Newton efforts in Japan. This is a market that loves PDAs (personal digital assistants), and there is a great untapped opportunity for Apple here.

In the end, I think that we all want to see Apple survive - which is why we are so critical of its problems. But they probably don't have too many chances left to get it right, so let's hope that 1997 does it for them.