InformationWeek

November 17, 1997

Apple's Aim: Keep Users

Vendor hopes new machines will stem defections to Wintel

pple Computer announced new systems and sales strategies last week as part of its plan to stem the tide of corporate users switching from Macintosh systems to Wintel machines.

Graphic-design professionals and Web designers continue to be loyal to Apple, but company executives admit that those users are finding it harder to plead their cases to IS managers who are standardizing on Windows. That's bad news for Apple, which earns nearly 50% of its revenue from business-related sales. "Graphic designers are fighting for why they want Macs on their desktops," says Phil Schiller, VP of marketing for desktops and servers at Apple. "Great Macs provide that argument."

Apple is counting on its new systems, based on the newly designed PowerPC G3 750 chip, to give corporate users a reason to keep buying Macs. A backside cache designed for the G3 line improves perfo rmance by up to 300% over ear-lier PowerPC chips, Apple says. Last week, Schiller de-monstrated a Power Macintosh G3 minitower outperforming a Compaq workstation when running graphics and multimedia applications.

Apple showed a 266-MHz G3 minitower, priced at $3,000, beating the performance of a 300-MHz Pentium II workstation, running Windows NT and priced at $4,750.

Users can now buy systems built to order directly from Apple. The company announced last week its Apple Store, available on the company's Web site. The Apple Store will calculate prices immediately; users can purchase systems directly from Apple via a secure Internet transaction, by phone, or by fax. Apple will continue to sell through value-added resellers, distributors, and resellers.

Interim CEO Steve Jobs, sounding hoarse and looking a bit ragged, said at the launch that the company had been working "around the clock" to get the Apple Store and build-to-order options ready. The model for Apple Store was Dell Computer's online st ore, which was created by Jobs' old company, Next Software. "This is the most sophisticated E-commerce site that we know of," Jobs said.

Analysts say one of Apple's biggest challenges in retaining corporate customers is proving that popular Macintosh applications, such as Photoshop, Macromedia FreeHand, and Quark, will perform better on a Mac than on a Windows machine. That's getting more difficult as companies such as Adobe rapidly improve the performance of Windows versions of their applications. "Adobe knows it has to focus more attention on Windows, or else it will give a reason for Microsoft to move into the desktop-publishing market," notes Kimball Brown, an analyst with Dataquest in San Jose, Calif.

Apple's new systems include the Power Macintosh G3 desktop with a 233-MHz chip and 32 Mbytes of memory starting at $2,000; a similar configuration with a 266-MHz chip, starting at $2,400; and a 266-MHz minitower, starting at $3,000. Apple also announced the PowerBook G3, with a 250-MHz chip and 32 M bytes of memory, for $5,700.

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