What's ahead for Apple?

Summary:Has the company crested? or will it rise higher?

NEW YORK -- With the wave of a Hula-Hoop at last week's Macworld Expo, Steve Jobs answered the last question about Apple Computer Inc.'s product line and raised a new one: What comes next?

Jobs used the Hula-Hoop to introduce the company's iBook consumer portable, running it through the hoop to show that it was indeed wirelessly connected to the Internet. With the iBook, Jobs, Apple's (Nasdaq:AAPL) seemingly permanent interim CEO, jumped through a daunting business hoop of his own. He needed one year to create products in four quadrants (professional and consumer desktops and portables) and just two years to make Apple a comeback king, a feat perhaps unduplicated in tech history.

Now the question becomes: how does the company sustain its momentum?

The question makes Phil Schiller, Apple's head of product marketing, roll his eyes. "Can't you guys give us break?" he said. "We haven't even started to ship the iBook and now everyone wants to know what's happening after that."

Not that Apple doesn't have a plan for sustaining momentum, Schiller continued. He ran down a laundry list of plans for the coming year: Releasing the iBook in time for the school season, shipping OS 9 this year and OSX Consumer after that -- plus a new line of G4-powered computers, due early next year.

Tim Bajarin, president of Campbell, Calif.-based Creative Strategies Inc., says that "the fact that he's filled the quadrants doesn't mean he can't keep innovating in those quadrants. There's lots of stuff he can still do."

The straight and narrow
But most importantly, Schiller said, the company's future depends upon avoiding the mistakes that got it into trouble the first time around.

"We can't be arrogant again," Schiller said. "We need to keep setting high goals. We have to keep the pedal to the metal."

Apple's rise in the late '80s was thwarted in part by the company's complacency and loss of focus. But Jobs, master of suspense and surprise, seems determined not to let that happen again.

A pocket Mac?
Though Apple executives remain mum on plans for additional classes of computers, company watchers fully expect handhelds to be among Apple's future offerings.

"What's next for Apple? One space is the handheld," said Jimmy Duvall, a marketing manager at Lotus Development Corp., who was showing off his company's new Notes 5 for the Mac. "Is that the next thing for Apple? I think it's logical."

Bajarin also believes the handheld holds appeal for Apple, especially after seeing the crowds that flocked to 3Com Corp.'s Palm booth at Macworld.

"I'm looking for what I call the 'pocket Mac,'" Bajarin said. "Steve has to realize these PDAs have gone past the novelty phase."

Bajarin said Apple has to decide whether to build its own device from scratch or license from another company.

And it would make sense. The company christened the handheld market in the early 90s with the Newton, a portable computer featuring then cutting-edge technology such as infrared. Apple ditched the Newton two years ago, with Jobs criticizing the strategy behind it, but Jobs later offered to buy Palm -- an indication of his continued interest in handhelds. He was rebuffed.

Add business
Others would like to see Apple push beyond its core markets of publishing, consumers and schools, and into the corporate world. After all, why should those groups get the frisky new iMacs and PowerMacs while corporate America is stuck with boring gray boxes?

That's a question Macworld attendee and tech support worker Keith Cooper had for the company.

"Apple needs to evolve with the technology, get into other markets," Cooper said. "It needs to attract more business software. That's the need I've seen."

A move into the business market could be a big chunk of change for Apple because most computers sold today are sold to corporations. But as recently as two years ago, Apple was reeling from an unwieldy corporate product line -- which Jobs cut as he returned focus to Apple's core markets.

Other people would simply like to see lower prices. Apple's troubles a few years ago stemmed in part from its determination to keep prices high while competing PCs became less expensive.

It's an issue Apple still faces -- especially as PCs drop below $1,000, or even $500. Apple responds that its computers are simply worth more because they're faster and easier to use. Plus, lowering prices would cut deeply into Apple's bottom line, which has depended heavily on iMac sales since the machine's debut last year.

But price is an issue in at least two of Apple's markets: education and consumers. While Apple is racing to get the iBook out before school starts, Ryan Cuprak, a 20-year old university student who attended Macworld, said he just bought an iMac and therefore can't afford a portable just yet. "I'll wait a while," he said. "I'm still purchasing stuff for the iMac."

And it's unclear exactly who will buy the iBook, if some iMac users don't plan to. Though one-third of the iMac users are brand new computer buyers, Apple is unlikely to repeat that statistic with the iBook. After all, the market for portables geared strictly toward consumers and schools doesn't exist. But then again, that's how Apple did things in the early days, when it struck out into areas no one else had thought to pursue. Back when Jobs started the firm, there was no PC market.

Michael Fitzgerald contributed to this story.

Topics: Apple, Hardware, PCs

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