Apple has released little strategy information to the public after its widely derided efforts to eliminate the Macintosh clone market. That doesn't mean that we've ceased to talk with a variety of friends within Apple and the Macintosh industry in an attempt to piece together a coherent view of what Steve Jobs is attempting to do with Apple. Of course, with the rumors of Jobs becoming the official CEO and mergers with Oracle flying fast and furious, read TidBITS Updates this week for our take on what happens.
It has become clear that Jobs is "betting the farm," which may be a peculiarly American expression. Having grown up on a farm, I believe the saying involves planting completely different crops or using radical new ways of growing the old ones in an attempt to escape problems with previous crops, whether related to poor soil, bad weather, pests, or market conditions. Farming, particularly on a small scale, is often barely a break-even proposition despite long hours of back-breaking work, so even stick-in-the-mud farmers can be convinced to bet the farm on some new crop or technique. If the bet fails, though, you stand to lose the farm, which is generally everything you have.
The question is, on what is Jobs betting the farm? And, before we get to that answer, is such a radical move necessary?
Why Bet the Farm? The general consensus from within Apple, from at least those people who remain, is that something drastic needed to be done. Apple lost $816 million in 1996 and $1 billion in 1997, and you don't need an MBA to realize that those numbers are problematic. Had Apple been a normal company without the often fanatical loyalty of Macintosh users, it might have been gone long ago.
The revamped history that I've heard is that Jobs considered Apple a goner until he assumed control a few months ago. He took major flak for selling all but a single share of the Apple stock he received for the sale of NeXT, but it seems clear that at that point, Jobs essentially wanted to take the money and concentrate on Pixar. I'm not certain about what changed his mind, but since that time, despite his coyness about the CEO position, Apple employees have considered him the leader of the company, going so far as to refer to him in casual conversation as "SteveEO."
As he learned more about Apple's condition and plans for the future, Jobs seems to have decided that the company was, for the most part, milling around aimlessly. If true, it's no great surprise to many of us; for example, I've been less than impressed with Apple's Internet strategy since I believe that Apple had (and subsequently squandered) a several-year lead in Internet technologies. Thus, Jobs decided to take a slash-and-burn approach to focusing the company on several core markets, notably education and publishing. The moves have been nothing short of draconian at times, and many good people and good projects have been lost in the process, but as a friend at Apple said, "What have we got to lose?" (The glib answer is, of course, "Less money.") My friend also noted that although many of the decisions haven't been popular, especially with people directly affected by them, much of the company has been revitalized by the sense of having purpose and direction once again.
Ante Up with Network Computers -- So what is Jobs planting, now that he's ripped up the still-young orchard of Mac OS clones and thrown away so much seed? As noted, the two focus markets are education and publishing, which have always been Apple's strongholds. In essence, any project that can show how it is specifically important to either of those markets has full approval, whereas a project, however worthwhile, that cannot show its utility to one of those markets are doomed.
The most notable project in this regard is the network computer project. For those that haven't been paying attention to the hype (note that essentially no network computers have been sold so far), a network computer is a computer that accesses both programs and data over a high-speed network rather than storing them locally on a hard disk. The advantages are obvious. A network computer can be cheaper than a regular computer, thanks to the removal of the hard disk, the circuitry it requires, the beefier power supply it requires, and so on. Network computers are essentially interchangeable because (and this is also a negative) they probably can't be customized to the extent of a normal Mac. Network computers require less software maintenance since everyone uses the same applications on the server. Upgrading becomes less of a nightmare, as does version compatibility, because a network administrator can ensure that everyone uses exactly the same versions of programs. In essence, for those of you who have used dumb terminal attached to mainframes in the past, a network computer is similar, although with a sufficiently powerful CPU to perform all necessary processing locally, after the program and data have been retrieved from the server.
(For more details on the original network computer spec, see Geoff's article Visions of a Network Computer in TidBITS-330.)
If you think about it, you'll see that network computers are a silly idea for most individuals, for the simple reason that we don't have high-speed networks. However, schools are increasingly being wired, thanks to efforts like NetDay, and much of what might make a network computer repellant to individuals is attractive to schools. Since every network computer would offer the same capabilities, it wouldn't matter which student (or even which teacher) used which computer, if there was a network computer in every classroom. Thanks to the network, every teacher could have access to the latest student records, including grades, attendance, and so on. And without hard disks, there would be no worry of students messing up computers by moving or deleting files accidentally (a worry which is currently handled well by software like Peter Lewis's Assimilator).
Until now I've spoken of Apple's network computers generically. However, network computers from other companies are being based on Java, whereas Apple plans its network computers to run the Mac OS. In my view, that's a good move, since education has always liked the Mac OS's ease of use, and it means there is a huge amount of mature software ready to run. Such a network computer could run Java programs also, just as they can be run on Macs today.
Keep in mind this new-found network computer religion isn't entirely Apple's idea. Word has it that numerous school districts were coming to Apple and asking about Apple's network computer plans, saying that if Apple didn't provide a network computer solution, the schools would go elsewhere for one. So, even if network computers don't make as much money for Apple than a full-fledged Mac would (and they probably won't), the contest isn't between an Apple network computer and a Mac, it's between an Apple network computer and some other company's product.
When We'll See More -- Of course, even with the frenzy of Jobs-inspired activity at Apple, it takes time to come up with new products and new directions. The word from sources at Apple is that a technology plan will be available by the end of October, and that Jobs will be attempting to knock our socks off with demonstrations at the Macworld San Francisco keynote in January. He's done it before - a smoke-and-mirrors demo of the Macintosh Office (complete with LocalTalk and the first LaserWriter) in the early days of the Mac was what put the Macintosh on the map.
Even aside from technical issues, Apple faces a tremendous uphill battle until the release of these technologies (and perhaps afterwards, depending on how well all this stuff actually works). Here are some of the weak points as I see them now:
Public relations. Apple must do a better job of talking to the press and to users. Stunts like talking about how Apple's newly revamped tech support policies are wonderful because they're like Microsoft's support policies are nonsensical and feel like toadying.
Developer relations. In at least the Internet developer world, cynicism about Apple is at an all-time high, and I doubt other developers are more positive. Without developers, the Mac's evolution will slow even more in comparison with the Windows world, and it won't matter what Apple comes up with. I'm not sure Apple has much goodwill left in the "Trust us" bank.
Innovation and pricing. After the entire clone debacle, Apple must come up with fabulous Macs at great prices and continue to do so for at least a couple of years. Otherwise, the memory of the cheaper, more powerful clones will sour the taste of every new Mac.
Ecosystems -- I want to leave you with a final thought. Apple is essentially in survival mode right now and isn't looking outward. That's understandable, but it means that Apple may do things that are detrimental for the Macintosh community (and in fact, the community may do things that harm Apple). In an ideal world, what would be good for the goose would be good for the gander, but the real world doesn't necessarily work that way. As such, I believe that we Macintosh users and Apple must keep in mind that in the end, we all depend on one another. Apple must do more to support the community in real ways, and in turn, we should give Apple a little leeway to pull itself back up. Without cooperation in both directions, there won't be any more golden eggs for anyone.