BUSINESSWEEK ONLINE : JULY 31, 2000 ISSUE
COVER STORY

The Challenges Facing Apple


INNOVATION
The R&D cupboard may get bare. Jobs killed long-term research three years ago. Now, staffers focus on products due out within a year. If that doesn't change, especially when it comes to software that can take years to percolate, Apple may find itself falling behind rivals with far larger R&D kitties, such as Microsoft and Intel.

NEW MARKETS
The PC has been the primary Net access device, but that could change fast as Web phones and other devices debut. Apple has shunned this market so far, but experts say it will have to follow suit. That will challenge the company to make money on cheaper, sub-$500 devices.

DISTRIBUTION
Jobs cut back the number of Mac retailers to a handful in 1997 to match declining demand. Now, to gain share, Apple needs a bigger presence. Some analysts say it should emulate Gateway and establish its own stores. That would cost a lot, though, and could upend its newfound operating efficiency.

STEVE JOBS
If the Good Steve has many strengths, the Bad Steve has many weaknesses. His mercurial, tyrannical management style burns out some employees. And his hardball tactics with suppliers could come back to bite him should Apple ever take another tumble.



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Apple

COVER IMAGE: Apple

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