Developers offer advice to Apple

What does the Mac maker need to do to get out of its financial jam? Third-party software makers have some ideas.

Whether it's seen as a bump in the road or a sign of serious long-term problems, Apple Computer Inc.'s recent financial difficulty -- culminating in last week's earnings warning of a $250 million loss for the fiscal second quarter -- has turned much of the Mac community into "armchair quarterbacks" willing to offer advice for restoring the Cupertino, Calif., mothership to sustained profitability.

Many suggest that Apple (aapl) needs to offer new products, such as a subnotebook or PDA. Some believe the solution lies in more-aggressive pricing. Others think that Apple simply needs to get the final release of Mac OS X out the door.

In the first installment of a series, we asked Mac developers to play the backseat driver role and provide suggestions for Apple's leadership. In future installments, we'll look at other key Mac constituencies.

Few topics are more prominent in developers' minds than Apple's next-generation OS. During a conference call with financial analysts last week, Apple CEO Steve Jobs pointed to the anticipated release of Mac OS X as a big factor behind the company's currently sluggish hardware sales.

Paul Nelson, vice president of engineering for Thursby Software, said he believes the key for Apple is getting developers to offer OS X applications with "next-generation usability. There are so many things you can do with OS X," he said, pointing specifically to the Quartz imaging engine with its basis in Adobe Systems Inc.'s Portable Document Format technology.

Thursby is currently working on an OS X version of its flagship software, Dave, which allows Mac users to mount volumes on Windows servers. It was a difficult product to port to OS X, he said, because much of it had to be rewritten from scratch. He said the company is "pretty far along" and plans to show a pre-beta version at January's Macworld Expo/San Francisco. The final product will ship shortly after OS X's release, he said.

Nelson said that while Apple has been highly responsive about providing in-depth technical information, "I wish I knew more about the final direction for OS X and knew exactly what it will look like. But I understand it's under development."

However, Mark Toland of QuickKeys developer CE Software, said Apple has not been responsive to his company's need for OS X information. "We've had excellent relations and help from Apple all the way up to OS 9," he said. "We've had far less cooperation with OS X. It's become a critical issue with us right now." Although CE's engineers can usually figure out how to deal with specific problems, "it takes a lot of time, and it sometimes means we have to spin our wheels," he said.

CE Software President John Kirk expressed doubts about Apple's consumer focus. "We do business software, and we're concerned that Apple is only looking at home market. And about midlevel software developers not getting the support and information they need."

Jarzy Lewak, CEO of Nisus Software, agreed with Thursby's Nelson that new applications are needed to drive users to OS X. "You can't sell a new platform without some incentive for people to move to it," he said.

Lewak believes that software development tools on the Mac "lag far behind those for the PC." Apple, he said, "needs a longer-term strategy to try to foster development of applications for OS X. They're trying to do that. But I think what's really needed is a good development system for people who are developing for the PC to also develop for the Mac."

Apple's original 1997 Yellow Box OS strategy called for such an approach, in which applications developed under the new OS could also be easily deployed on Intel hardware. But Apple abandoned that scheme as its subsequent turnaround reversed the tide of developers defecting to Windows. But Lewak believes that was a mistake. "If developers devote time and effort to make code, they have to do it all over again to make a Mac version," he said. "But the market is smaller, so they're not going to do it. Only big software players can do it. Even those may rebel because of OS X."

Lewak said Nisus is planning a complete native OS X rewrite of its Nisus Writer software and hopes to have an OS X demo version of its Nisus E-Mail client ready in time for Macworld Expo.

Stalker Software President Vladimir Butenko said OS X has the potential to become "the first Unix system for the masses -- something that Linux fans dream about." However, he thinks that Apple needs intelligent marketing to emphasize the strengths of the underlying technology. "No company can win if all it can offer is a nice blinking blue button on your screen," he said.

Several developers agreed that Apple made a mistake by not offering rewritable CD drives with its Macs -- a point that Jobs himself raised during Tuesday's conference call. Another, a former Apple employee who asked to remain anonymous, echoed the comments of many users by calling on the company to offer a subnotebook and/or handheld.

"Steve [Jobs] needs to get over his 'not-invented-by-me' fixation regarding the Newton. He killed it because of a personal grudge against [former Apple CEO John] Sculley. There's lots of cool technology there, and they have the ability to make it smaller."

But he doesn't think that Apple should compete with Palm. Instead, Apple should license the Palm OS, he said, "and add Newton handwriting -- you've got a killer handheld." He added that Apple should embrace Bluetooth wireless technology, and "somehow, some way," make flat screens cheaper.

Many users have called on Apple to pressure Motorola and IBM to close the perceived "megahertz gap" with Intel and AMD CPUs. However, Thursby's Nelson disagreed. "For the professional systems, I can't imagine a dual-processor 500MHz G4 is too slow," he said. "For designers and prepress, that is the ultimate computer. I'm not a raving fanatic -- we use PCs and Macs -- but the tools just seem better on the Mac."

Several developers pointed to Apple's pricing strategy, particularly when it comes to the Power Mac G4 Cube, as a factor behind the sales slump.

"Why should someone pay more for a Cube than an iMac, which includes a monitor?" asked Anita Holmgren of Tenon Intersystems. "I think if they reprice the Cubes, finalize OS X, and deliver a titanium laptop, their sales and their stock will bounce back. We're betting our company's future on their success."

Thurby's Nelson again took a different view. "I don't think dropping prices is going to do any good at this point," he said. "And in terms of variety of products, they're in pretty good shape."

Apple's much-discussed plan to open a chain of retail stores got a mixed response. Robert Leeds of Power On Software thinks the outlets could provide an exceptional opportunity to introduce new buyers to Apple products, as long as the stores are not perceived as competing with existing resellers.

"It works for Gateway because they are 100 percent direct," Leeds said. "I think Apple should refrain from selling out of these stores and either refer customers to local resellers or offer buyers the opportunity to order on the Web while in the store."

On the other hand, Keyspan President Mike Ridenhour said the U.S. channel does not need Apple retail stores. However, he agreed that Apple "badly" needs a subnotebook in its laptop line.

Another former Apple employee-turned-developer, Tribeworks CEO Duncan Kennedy, thinks Apple needs to do a better job exploiting its QuickTime technology. Tribeworks' iShell 2 multimedia-authoring software provides extensive support for Apple's multimedia software.

"There is broad agreement that (QuickTime) is vastly superior technically, but from a business point of view, QuickTime is sadly reduced to an amusing and socially awkward stepchild," Kennedy said. "It's the happy little video mascot that gets spiced on top of marketing materials and rolled out for parties and executive demos."

One way that Apple could leverage QuickTime, he said, is by spending some of its $4 billion cash reserve to acquire RealNetworks, which has a market capitalization of about $2 billion. "They would create legions of happy customers, and developers -- such as Tribeworks -- would be delighted with a simpler world that required only two multimedia standards.

Another QuickTime developer, who asked to remain anonymous, said he believes Apple has the potential to "own" the broadband market if it takes full advantage of the technology.

"People are always debating whether Apple should move to an x86 box, offer more Windows compatibility, push harder into the business market, or even allow the clones back into the market," he said. "The way I see it, they already enjoy all those benefits with QuickTime. QuickTime is a fully functioning 'media platform' that can play on any Wintel box. But it can be much more." For example, he believes that the QuickTime Player could function as a browser replacement for viewing rich media content.

"Broadband isn't just about entertainment," he said. "Huge business applications are everywhere. Customer service, kiosks, interoffice communication. (If you) stop looking at QuickTime as an application and more as a media platform, the world begins to change. By licensing QuickTime to be used on an integrated chip, a whole slew of consumer, educational, and professional appliances become possible." Indeed, he thinks a "proper valuation of QuickTime" would add more than $3 billion to Apple's capitalization, "and I think that is still a bargain."

Eric Pollitt of Global Hemp had an offbeat suggestion: Steve Jobs should write a book. "Whether you are a Macster or not, there is no doubt that Jobs puts on a great show when he delivers a keynote address," Pollitt said. The problem, as he sees it, is that Jobs is typically in the public eye only when he speaks at Macworld Expo and other events. "In short: We want more Jobs!"

Other developers made it clear that they are still supporting Apple as it struggles with its latest crisis.

"Apple has done a great job of re-energizing the personal computer, and the current product mix has all the necessary bases covered," said Irving Kwong, product manager for Microsoft Corp.'s Macintosh Business Unit. "Mac OS X looks very promising. Apple has supported our efforts in the development of Mac OS X applications, and we think it's crucial that they continue to further support developers' efforts, so customers will have great Mac OS X products."

Al Whipple, president of utility developer Alsoft, said he was impressed by Jobs' candor during Tuesday's conference call. "What struck me first off was that they were willing to state the problems and accept responsibility," he said. "What you saw in past leadership, they tended to blame other circumstances. Steve said, 'We didn't have the right products at the right price.' "

Whipple asserted that he's willing "to bet on Apple reinvigorating itself. I would literally change professions before developing software for Windows."

Stephen Beale and David Leishman, MacWEEK.com, contributed to this report.

For up-to-the-minute Mac news, check out MacCentral.com. Whether it's seen as a bump in the road or a sign of serious long-term problems, Apple Computer Inc.'s recent financial difficulty -- culminating in last week's earnings warning of a $250 million loss for the fiscal second quarter -- has turned much of the Mac community into "armchair quarterbacks" willing to offer advice for restoring the Cupertino, Calif., mothership to sustained profitability.

Many suggest that Apple (aapl) needs to offer new products, such as a subnotebook or PDA. Some believe the solution lies in more-aggressive pricing. Others think that Apple simply needs to get the final release of Mac OS X out the door.

In the first installment of a series, we asked Mac developers to play the backseat driver role and provide suggestions for Apple's leadership. In future installments, we'll look at other key Mac constituencies.

Few topics are more prominent in developers' minds than Apple's next-generation OS. During a conference call with financial analysts last week, Apple CEO Steve Jobs pointed to the anticipated release of Mac OS X as a big factor behind the company's currently sluggish hardware sales.

Paul Nelson, vice president of engineering for Thursby Software, said he believes the key for Apple is getting developers to offer OS X applications with "next-generation usability. There are so many things you can do with OS X," he said, pointing specifically to the Quartz imaging engine with its basis in Adobe Systems Inc.'s Portable Document Format technology.

Thursby is currently working on an OS X version of its flagship software, Dave, which allows Mac users to mount volumes on Windows servers. It was a difficult product to port to OS X, he said, because much of it had to be rewritten from scratch. He said the company is "pretty far along" and plans to show a pre-beta version at January's Macworld Expo/San Francisco. The final product will ship shortly after OS X's release, he said.

Nelson said that while Apple has been highly responsive about providing in-depth technical information, "I wish I knew more about the final direction for OS X and knew exactly what it will look like. But I understand it's under development."

However, Mark Toland of QuickKeys developer CE Software, said Apple has not been responsive to his company's need for OS X information. "We've had excellent relations and help from Apple all the way up to OS 9," he said. "We've had far less cooperation with OS X. It's become a critical issue with us right now." Although CE's engineers can usually figure out how to deal with specific problems, "it takes a lot of time, and it sometimes means we have to spin our wheels," he said.

CE Software President John Kirk expressed doubts about Apple's consumer focus. "We do business software, and we're concerned that Apple is only looking at home market. And about midlevel software developers not getting the support and information they need."

Jarzy Lewak, CEO of Nisus Software, agreed with Thursby's Nelson that new applications are needed to drive users to OS X. "You can't sell a new platform without some incentive for people to move to it," he said.

Lewak believes that software development tools on the Mac "lag far behind those for the PC." Apple, he said, "needs a longer-term strategy to try to foster development of applications for OS X. They're trying to do that. But I think what's really needed is a good development system for people who are developing for the PC to also develop for the Mac."

Apple's original 1997 Yellow Box OS strategy called for such an approach, in which applications developed under the new OS could also be easily deployed on Intel hardware. But Apple abandoned that scheme as its subsequent turnaround reversed the tide of developers defecting to Windows. But Lewak believes that was a mistake. "If developers devote time and effort to make code, they have to do it all over again to make a Mac version," he said. "But the market is smaller, so they're not going to do it. Only big software players can do it. Even those may rebel because of OS X."

Lewak said Nisus is planning a complete native OS X rewrite of its Nisus Writer software and hopes to have an OS X demo version of its Nisus E-Mail client ready in time for Macworld Expo.

Stalker Software President Vladimir Butenko said OS X has the potential to become "the first Unix system for the masses -- something that Linux fans dream about." However, he thinks that Apple needs intelligent marketing to emphasize the strengths of the underlying technology. "No company can win if all it can offer is a nice blinking blue button on your screen," he said.

Several developers agreed that Apple made a mistake by not offering rewritable CD drives with its Macs -- a point that Jobs himself raised during Tuesday's conference call. Another, a former Apple employee who asked to remain anonymous, echoed the comments of many users by calling on the company to offer a subnotebook and/or handheld.

"Steve [Jobs] needs to get over his 'not-invented-by-me' fixation regarding the Newton. He killed it because of a personal grudge against [former Apple CEO John] Sculley. There's lots of cool technology there, and they have the ability to make it smaller."

But he doesn't think that Apple should compete with Palm. Instead, Apple should license the Palm OS, he said, "and add Newton handwriting -- you've got a killer handheld." He added that Apple should embrace Bluetooth wireless technology, and "somehow, some way," make flat screens cheaper.

Many users have called on Apple to pressure Motorola and IBM to close the perceived "megahertz gap" with Intel and AMD CPUs. However, Thursby's Nelson disagreed. "For the professional systems, I can't imagine a dual-processor 500MHz G4 is too slow," he said. "For designers and prepress, that is the ultimate computer. I'm not a raving fanatic -- we use PCs and Macs -- but the tools just seem better on the Mac."

Several developers pointed to Apple's pricing strategy, particularly when it comes to the Power Mac G4 Cube, as a factor behind the sales slump.

"Why should someone pay more for a Cube than an iMac, which includes a monitor?" asked Anita Holmgren of Tenon Intersystems. "I think if they reprice the Cubes, finalize OS X, and deliver a titanium laptop, their sales and their stock will bounce back. We're betting our company's future on their success."

Thurby's Nelson again took a different view. "I don't think dropping prices is going to do any good at this point," he said. "And in terms of variety of products, they're in pretty good shape."

Apple's much-discussed plan to open a chain of retail stores got a mixed response. Robert Leeds of Power On Software thinks the outlets could provide an exceptional opportunity to introduce new buyers to Apple products, as long as the stores are not perceived as competing with existing resellers.

"It works for Gateway because they are 100 percent direct," Leeds said. "I think Apple should refrain from selling out of these stores and either refer customers to local resellers or offer buyers the opportunity to order on the Web while in the store."

On the other hand, Keyspan President Mike Ridenhour said the U.S. channel does not need Apple retail stores. However, he agreed that Apple "badly" needs a subnotebook in its laptop line.

Another former Apple employee-turned-developer, Tribeworks CEO Duncan Kennedy, thinks Apple needs to do a better job exploiting its QuickTime technology. Tribeworks' iShell 2 multimedia-authoring software provides extensive support for Apple's multimedia software.

"There is broad agreement that (QuickTime) is vastly superior technically, but from a business point of view, QuickTime is sadly reduced to an amusing and socially awkward stepchild," Kennedy said. "It's the happy little video mascot that gets spiced on top of marketing materials and rolled out for parties and executive demos."

One way that Apple could leverage QuickTime, he said, is by spending some of its $4 billion cash reserve to acquire RealNetworks, which has a market capitalization of about $2 billion. "They would create legions of happy customers, and developers -- such as Tribeworks -- would be delighted with a simpler world that required only two multimedia standards.

Another QuickTime developer, who asked to remain anonymous, said he believes Apple has the potential to "own" the broadband market if it takes full advantage of the technology.

"People are always debating whether Apple should move to an x86 box, offer more Windows compatibility, push harder into the business market, or even allow the clones back into the market," he said. "The way I see it, they already enjoy all those benefits with QuickTime. QuickTime is a fully functioning 'media platform' that can play on any Wintel box. But it can be much more." For example, he believes that the QuickTime Player could function as a browser replacement for viewing rich media content.

"Broadband isn't just about entertainment," he said. "Huge business applications are everywhere. Customer service, kiosks, interoffice communication. (If you) stop looking at QuickTime as an application and more as a media platform, the world begins to change. By licensing QuickTime to be used on an integrated chip, a whole slew of consumer, educational, and professional appliances become possible." Indeed, he thinks a "proper valuation of QuickTime" would add more than $3 billion to Apple's capitalization, "and I think that is still a bargain."

Eric Pollitt of Global Hemp had an offbeat suggestion: Steve Jobs should write a book. "Whether you are a Macster or not, there is no doubt that Jobs puts on a great show when he delivers a keynote address," Pollitt said. The problem, as he sees it, is that Jobs is typically in the public eye only when he speaks at Macworld Expo and other events. "In short: We want more Jobs!"

Other developers made it clear that they are still supporting Apple as it struggles with its latest crisis.

"Apple has done a great job of re-energizing the personal computer, and the current product mix has all the necessary bases covered," said Irving Kwong, product manager for Microsoft Corp.'s Macintosh Business Unit. "Mac OS X looks very promising. Apple has supported our efforts in the development of Mac OS X applications, and we think it's crucial that they continue to further support developers' efforts, so customers will have great Mac OS X products."

Al Whipple, president of utility developer Alsoft, said he was impressed by Jobs' candor during Tuesday's conference call. "What struck me first off was that they were willing to state the problems and accept responsibility," he said. "What you saw in past leadership, they tended to blame other circumstances. Steve said, 'We didn't have the right products at the right price.' "

Whipple asserted that he's willing "to bet on Apple reinvigorating itself. I would literally change professions before developing software for Windows."

Stephen Beale and David Leishman, MacWEEK.com, contributed to this report.

For up-to-the-minute Mac news, check out MacCentral.com.