Businessweek Archives

Apple Gets A Little More Help From Its Friends


Information Processing

APPLE GETS A LITTLE MORE HELP FROM ITS FRIENDS

It may well be the broadest product announcement in Apple Computer Inc.'s 14-year history. On Oct. 21, the personal-computer maker is set to unveil six new machines, all with different shapes, sizes, colors, and power levels. But it's the smallest computer of the bunch, the PowerBook 100 laptop, that could eventually prove most important: That machine marks the first time Apple has pasted its rainbow-colored logo on a computer made by another company.

The other company is Japan's Sony Corp., which got the job of building the $2,300 laptop after Apple decided it didn't have the miniaturization skills needed to produce the 5.1-pound computer. This deal shows that Apple's recent linkup with IBM, aimed at developing future technology, is no isolated maneuver. Both Apple and Sony insiders say the PowerBook 100 may be the first in a series of products built for Apple by the Japanese consumer-electronics giant.

RUNAWAY. That's a big change for the chauvinistic Apple. But it's also, Apple executives say, an acknowledgment that in the intensely competitive PC market, they can no longer wait for their internal development teams to do everything. "This is a new-products company," says Apple Chairman John Sculley. "We intend to drive our new-product introductions. That may mean we do it with alliances, with Japanese companies, or American companies." The bottom line is speed: short product life cycles and frequent introductions. Indeed, Sculley predicts that the new computers, plus some printers announced earlier in October, will account for 85% of Apple's revenues -- projected by analysts at $7.2 billion -- for fiscal 1992, ending next Sept. 30. In fiscal 1991, new products accounted for just 35% of sales, he says.

Some of Apple's new products are coming much later than customers would have liked. Due on Oct. 21 are the Sony notebook machine, two larger Apple-made laptops, and some full-size computers (table). But the new laptops arrive two years after similar IBM PC-compatible machines. And just as Apple is announcing black-and-white-screen laptops, Epson, AST Research, and others will announce color machines.

Still, early word of mouth for Apple's slew of new products has been positive. After the failure of the clunky Macintosh Portable, announced two years ago, there remains huge pent-up demand among Mac lovers for laptop and notebook machines. Analysts are already predicting that the company's three new laptops, priced between $2,299 and $4,599, will be runaway hits. The company could sell 300,000 laptops in the next 12 months, says First Boston Corp.

Dealers are predicting shortages of Apple laptops through early next year--in part because of anticipated heavy demand and Apple's warnings that it may not have enough screens to build an adequate supply of notebooks. "Everybody is going to want these and want them right now," says Joe Popper, president of Computer Gallery in Cathedral City, Calif. "They're so hot, they're smoking."

MUSCLE. Apple may also have a big hit with its new $1,899 Mac Classic II, a more powerful version of the Mac Classic. Designed for the home and small-business markets, it is aimed at continuing Apple's market-share expansion. The original $999 Classic, introduced a year ago, muscled Apple's market share from 10.7% of unit sales through computer stores in 1990 to 16.2% today, according to market researcher StoreBoard/Computer Intelligence. But Apple has paid the price in earnings, which analysts figure will be slightly below last year's $474.9 million, despite an estimated 14% jump in revenues, to $6.3 billion.

Apple can expect higher margins from its pricier machines, including the Quadra 900, a $7,199 "file-server" to run Mac networks. That machine is positioned well for an exploding market: Researcher Dataquest Inc. figures file-server sales will jump 88%, to 515,000 units, this year.

But it's the Sony laptop that the computer industry will be watching. If it does well, Apple may follow up with a slew of new machines made by Sony and others, including a smaller notebook PC, handheld devices, pagers, and personal organizers. For now, the company seems to have decided that it doesn't matter which company makes the insides so long as the Apple logo is on the outside.WHAT'S COMING FROM APPLE

QUADRA 900 $7,199-$9,199 Built around Motorola's 68040 microprocessor,

this computer will store data for Macs linked on a network

QUADRA 700 $5,699-$7,699 Apple's most powerful desktop model ever. Based on the

68040 chip

MAC CLASSIC II $1,899-$2,399 Update of last year's low-cost winner. Built

around the 68030 chip, it is twice as fast

POWERBOOK 100 $2,299-$2,499 Made by Japan's Sony Corp., this 5.1-pound machine

has no built-in floppy disk-drive, but it does come with hard-disk storage

POWERBOOK 140 $2,899-$3,499 This 6.8-pound computer runs on Motorola's 68030

microprocessor

POWERBOOK 170 $4,599 Similar to the 140, this machine has a faster chip, so

software runs 50% faster

DATA: COMPANY REPORTS

Kathy Rebello in Cupertino, Calif.


The Good Business Issue
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus