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Apple may sow new seed
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July 20, 1999: 1:45 p.m. ET
Company expected to debut new laptop at MacWorld Expo this week
By Staff Writer Randall J. Schultz
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NEW YORK (CNNfn) - Companies may be showcasing a multitude of minor acts at New York's MacWorld Expo this week, but all eyes are on what Apple Computer Inc. hopes will be a show stopper -- its new laptop computer.
The Cupertino, Calif.-based company is widely expected to debut the computer, known among the industry as P1, at the MacWorld technology show, which runs July 21-23.
Apple officials remain tight-lipped, refusing to comment on whether or not it will be introduced at the show.
The debut wouldn't be just another product rollout for the company, according to Roger Kay, commercial desktop analyst at International Data Corp., a technology research group.
"The success of this is critical," said Kay. "The company is currently living on astounding product introductions but it doesn't have a solid core sustainable business beyond its traditional segments."
Such "astounding product introductions" include the iMac, a desktop computer that hit store shelves in January amid great fanfare.
The iMac proved a hit with computer users, and in its most recent earnings results, released last week, Apple said it sold 487,000 iMacs, almost 40 percent more than the previous quarter.
The iMac is at once funky and functional, coming in such exterior colors as blueberry, strawberry, tangerine, grape and lime. Additionally, they perform well at the functions they're designed for, namely Internet and game applications.
Apple is looking to use some of that iMac buzz for its new laptops, and apparently hopes to send people out into the streets with tangerine colored laptops, as analysts say the P1 will incorporate the iMac's color schemes.
Apple vs. Apple?
But Apple will have to be careful about how it markets the new laptop, according to Jimmy Johnson, personal computer analyst at A.G. Edwards.
"The question will be whether it will cannibalize PowerBooks [the company's current laptop offering] or iMacs," said Johnson.
Key to the equation will be price point. Johnson estimated the price of the new P1 to be around $1,200 to $1,500. At that price it would be lower than the cheapest PowerBook (offered on Apple's site for $2,499) and slightly more expensive than the iMac ($1,199).
One problem the iMacs and the P1 may not run into as much is a smaller choice of applications.
In recent years, Apple computer users found their software options reduced as the industry chose to hitch their wagons to the Windows-dominated computer marketplace.
However, a renewed Apple and, in particular, the iMac, have increased developers' interest in creating software for the new generation of Apple lovers.
Despite the changes, Apple users still find their greatest choice among the core software applications where Apple is most used -- in Internet and graphics content production and in K-12 educational situations.
Additionally, the laptop market is very different from that for desktops, and Apple may find it harder to make the same type of splash among notebook buyers.
While consumers are buying laptops in greater numbers, the market still is dominated by corporate buyers, who are more risk averse and may not want to take a chance on purchasing a large order of computers only to realize they can't find the appropriate software later on.
Still, it would be unfair to say there are no regular business applications that run on Apple computers. In fact, Microsoft has been making software for Macs for years, and popular business applications Microsoft Outlook and Office are available for Apple users.
Full circle for Apple
The introduction of the P1 laptop would mark another chapter in the corporate comeback story that is Apple (AAPL), which last week issued its seventh consecutive profitable quarterly results.
Down and out two years ago, it had seen its chief executive officer Gilbert Amelio resign after a period of lackluster leadership.
Apple went back to the future, choosing co-founder Steve Jobs to take over as interim CEO. Jobs has overseen the company's turnaround but retained the "interim" title, a situation that probably won't change anytime soon, according to Dan Kunstler, personal computer analyst at J.P. Morgan.
"He already is a permanent temporary CEO and he shows no signs of going away," said Kunstler.
"I don't even think they have a CEO search on. So let's just consider him permanent for the time being. He's as permanent as they ever are."
Jobs rolled up his sleeves and set about firming up a company that, according to Kunstler, had lacked direction.
He cut the company's costs and expenses, shined up the Apple brand name, and generally got the company's balance sheet in order.
Perhaps his most significant effort, say analysts, was to simplify the product line to give consumers fewer but more clearly defined choices.
That effort resulted in a four-tiered strategy, consisting of the G3 desktop computer, the PowerBook, the iMac and, finally, the P1 to be debuted next week.
Despite some successes, Apple still faces some tough questions ahead, according to Johnson.
"They need to work on their Internet strategy," said Johnson. "So far, their design has gotten them through, but they need to think about whether to bundle ISP [Internet service] with their computers, as [direct seller] Gateway has done." 
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