Apple plans to take byte out of competition with new Macintosh
Cupertino, Calif. — Steve Jobs, the young chairman of the board of Apple Computer Inc., smiles ingenuously and asserts: ''It's like the difference between the telegraph and the telephone.''
He is describing Apple's newest product, the Macintosh, which is being introduced today. The 32-bit computer, priced at $2,495, is far easier to use than are its competitors', Apple's founder says. Macintosh, moreover, is the company's attempt to continue competing with IBM, which last year charged past Apple in the personal computer market.
''Back in the days of the telegraph, there were people who talked about putting a telegraph on every desk,'' Mr. Jobs elaborates. ''But it would never have happened, because people weren't willing to spend the time necessary to learn to use them.''
Many of today's computers require 20 to 100 hours to learn how to use, plus another 3 to 10 hours' study for each new software package. The Macintosh, on the other hand, should take less than an hour to master, and, it is designed so that the majority of the software written for the machine should work in roughly the same way, making it easy to learn new applications.
The ''Mac'' is aimed at the small-business and professional market. Ease of use is essential to reach beyond the limited few - whom marketers call ''early innova-tors'' - who are willing to take the time to learn how to use present-day computers.
''Of the 25 million 'knowledge workers' - those people who sit at desks and process information - we have reached only 5 percent. But we are running out of early innovators. I'm convinced that our industry will reach a crisis point in the next 18 months, a fracture where people will simply say, 'Stop! I'm not going to learn all this stuff!' '' Jobs argues with characteristic intensity.
This is the precept underlying Apple's new machine. It is also the premise on which the company intends to assert itself in a market that has become increasingly dominated by IBM since the introduction of its Personal Computer two years ago. And it is reflected not only in the Macintosh, but in an entire new family of sophisticated supermicros the company is introducing.
Last year Apple lost its first-place position in the microcomputer market to IBM, which took 26 percent of the market, compared with Apple's 21 percent. Still, Apple continues to ship more computers; in December the company sold more than 100,000 of its model IIe's.
''Apple has lost ground to IBM but held steady relative to everyone else,'' remarks Egil Juliussen of Future Computing, an industry analysis firm.
The Macintosh incorporates the basic concepts of its older sibling, Lisa, which was introduced a year ago as a $10,000 business machine. At the time, Apple painted a similarly rosy picture for Lisa. But, although praised for its innovative features and capabilities, the Lisa has failed to sell in the volume Apple hoped. Lisa has been hindered by its price tag, plus a lack of software and marketing support for the machine, acknowledge Mr. Jobs and Apple chief executive John Sculley.
''We got Fortune-500-itis,'' Jobs admits. ''We forgot that we were a retail-based company. We've had to go back to our roots.''
According to Mr. Sculley, Apple has analyzed its failures with Lisa and has corrected them with Mac and the three new versions of Lisa that it is also introducing today. The new Lisas will be aggressively priced from $3,500 to $5, 500. They are desktop machines which are more powerful and have greater storage capacity than the Mac. They will run all the software written for the smaller machine, however. Besides their larger size, the major difference between Mac and its sisters is that the latter will run several applications simultaneously. Together they give Apple a family of machines that span a wide range of price and performance.
''In a new, growing industry like this, market share is not so important,'' maintains Sculley, who nine months ago left PepsiCo to become head of Apple. ''What is much more important is market position.
''In the soft drink field, Pepsi became No. 1 not by going out and beating Coca-Cola, but by identifying emerging markets and getting more than our share. Similarly, our goal here at Apple is not to beat IBM, but to get more than our fair share of the emerging markets.''
For the Macintosh, Apple has aggressively recruited third-party software houses to ensure plenty of software for the Mac. Among the 118 companies producing programs for the new machine are some of the most important names in the industry, including Microsoft, Lotus, and Software Publishing Corporation.
The company has also lined up 24 colleges and universities to take part in what it calls the Apple University Consortium program. These include Harvard, Yale, Dartmouth, Stanford, Cornell, Columbia, Brown, University of Michigan, and 16 others. Consortium members get computers at slightly over cost. To join, a school must agree to buy more than a 1,000 machines. According to Apple, more than $60 million in commitments have been made.
Furthermore, in the next 100 days Apple will spend $15 million on advertising. The company is also completing a new, highly automated factory to produce the Macintosh. This is patterned after the latest Japanese factories, Jobs says: ''In four or five years the Japanese will figure out how to produce a good computer, and we want to be ready.''