No windfall for Apple

Next month sees Apple's silver jubilee, and it could be a make-or-break moment in the company's tempestuous affair with users and the markets.

In the quarter century since Apple was founded by Steve Wozniak and Steve Jobs on April Fools Day 1976, it has always been a love-hate relationship.

As Computing went to press, Apple had managed the soft launch of its new operating system, OS X, which will disappoint the company's fans as much as the new-look interface has divided them by departing from the familiar Mac feel.

By committing itself to the deadline of last weekend [25/26 March], Apple bit the bullet and rolled out the core functions of the operating system, leaving out DVD support - something that plagued the iMac at its launch - and some music- and video-related components, which will be available shortly online.

This leaves the company contemplating a full-blown launch in early summer.

OS X had been long-trailed and much delayed. As a Unix derivative, based on the open-source Darwin platform, the operating system in many senses returns to first principles, but risks losing the goodwill of a hardcore fan base weaned on the classic Mac OS.

The last few years have seen a fascinating turnaround in the company's fortunes, followed by precipitous decline. Early last year, Apple's share price hit an all-time high of more than $75. Before year-end, the price had plummeted to just $13. As Computing went to press, its shares languished at $20.

While other companies were warning of a slowdown, Apple reported first-quarter sales, for the period ending December 2000, down more than 50 per cent at just over $1 billion, from $2.3 billion in the first quarter of 1999.

Recent years saw Jobs reintroducing the 'X' factor to Apple. By bringing back its prime mover, Apple has regained its kudos.

But as Oracle, Siebel Systems, Hewlett Packard, Sun Microsystems and others have found, identifying a company too closely with a charismatic leader can be a liability in the eyes of serious business users, just as it can provide a short-term boost to market capitalisation.

When Jobs founded the company with his friend Wozniak, Jobs promoted the company and himself, while Wozniak built the computers. it was Jobs who took the first order for the Apple II, worth $30,000; it was Jobs who relentlessly sold each new idea, and it was Jobs who became the media star.

His return has seen Apple repositioned more as a lifestyle option than a serious business proposition - certainly outside its user base of designers and the digerati, not to mention those households who, in the iMac, saw the first genuinely plug-and-play desktop since the groundbreaking Macintosh.

But two of the major protagonists in the Apple story didn't even work there. Paul Brainerd was an ex-newspaper editor who had moved into computers with Atex, the leader in newspaper systems. In 1984 he had the idea of preparing pages on a microcomputer, and found the solution in the Mac's graphical interface. The company he founded, Aldus, launched its Pagemaker page layout program on the Mac.

At about the same time, John Warnock was working at Xerox Parc on a graphical programming language. After failing to interest his management, he quit Xerox to found Adobe, and took his Postscript concept with him. Pagemaker and Postscript, along with the Mac and the breakthrough LaserWriter, kick-started the desktop revolution and gave the Apple a home in the business market.

It would have stayed that way, had Apple heeded the advice of another outsider, Bill Gates. He wrote a memo in 1985 to Apple's then chief executive, John Sculley, which could have changed the course of IT history. Gates urged Sculley to license the Mac operating system to other hardware manufacturers just as Microsoft had licensed Dos. Apple was not to do this for more than a decade.

Later, dropping the Newton PDA just as the technology to make it viable was being developed, almost certainly paved the way for Palm's success.

Today, the uncomfortable fact is that a generation of users has grown up as technology generations have been and gone. While they see Apple standing out amid the grey boxes of the PC world, few see it providing a genuine option for high-end computing or networking, despite the affection in which the company is held.

Its high-specification Cube range has not sold well and prices are being slashed. Lifestyle items are, by their nature, either aimed at an exclusive niche or at mass-market brand association. The Cube was designed for neither.

But everyone in the IT industry should thank Apple for bringing style and innovation to an industry that often lacks both. Happy anniversary, Apple. Long may you continue.