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Apple sprouts iBook
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July 21, 1999: 3:27 p.m. ET
Laptop, unveiled at NY expo, comes in two 'fruit' colors, has wireless capability
By Staff Writer Randall J. Schultz
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NEW YORK (CNNfn) - It's portable, wireless and comes in two "fruit flavors." It's the iBook, Apple Computer Inc.'s laptop computer, unveiled Wednesday at the MacWorld Expo technology conference in New York City.
Building on the pastel-colored theme of the iMac desktop, which has helped turn around the once-stumbling company, Apple said it will offer the iBook in blueberry and tangerine.
The iBook will ship in September at a retail price of $1,599. The price of the iBook was something of a surprise to many on Wall Street, who were predicting a price between $1,200 and $1,500.
There was concern among analysts that the iBook, with its design similarities to iMac, would cannibalize sales of the iMac if its price were similar to the desktop model. With iMacs retailing for $1,199, price alone may not tip consumers' dollars toward the iBook.
Daniel Kunstler, technology analyst at J.P. Morgan Securities, said components also may have held Apple back from lowering prices further.
"We've got shortages of portable components. That, to an extent, has kept portable prices buoyed," said Kunstler.
Availability of those parts, he said, may have been a key concern for Apple. "They are targeting a consumer market and they want to make sure the iBook is widely available for the holiday season."
The iBook also sports wireless capabilities. With the addition of a $99 card to their laptop and a $299 base station, users can walk around their home surfing the Net without wires in much the way a cordless phone works.
The arrival of Apple's new laptop was a poorly kept secret, subject to the unrelenting scrutiny of Wall Street analysts and rabid Apple enthusiasts alike.
Interim Chief Executive Officer Steve Jobs used a combination of evangelical fervor, old-fashioned populism and a little Hollywood glitz to introduce it to a crowd of Apple supporters and developers.
"There has been a lot of speculation and a lot of rumors and I get to end them today," Jobs said at the unveiling.
Jobs took the opportunity to poke fun at himself a little. Noah Wyle, who portrayed Jobs in a recent cable TV movie, "Pirates of Silicon Valley," appeared onstage first, doing a well-received impression of the Apple leader, before Jobs himself showed up.
As part of his presentation, Jobs also introduced a new service, known as QuickTime TV, which will offer various news, entertainment and sports video and audio over the Internet from its Web site.
Beauty contest
Jobs thinks the key to iBook's success will be the way it incorporates the feel-good designs of the iMac, and he definitely played them up at the conference.
"Our computer is more beautiful than the other guy's computer," said Jobs.
Unlike other notebooks made with hard plastic exteriors, the iBook has a colored, rubberized edge that the company clearly hopes will make it more attractive to ordinary consumers.
With a 12-inch screen and a weight of 6.7 pounds, the computer is definitely aimed at the consumer market, where size is less of a concern than for business people, according to Bruce Stephen, computer analyst at International Data Corp.
"It's kind of big. It's not a thin and light product," Stephen said. "These are not road warrior machines."
Still, Stephen said the computer's specifications, which include a 300 MHz processor, 32MB of RAM and a 3.2GB hard disk drive, match up well to other laptop computers in the price range.
Much of that may take a back seat to the iBook's real appeal, however.
"The sizzle of the iMac is really in the cosmetics and unique design," said Stephen. "That cachet is what they're trying to do with the iBook as well."
Looking ahead at Apple
The iBook finishes up the strategy set out by Jobs when he re-assumed the top spot at Apple two years ago. Jobs wanted to create one desktop and one laptop line for business users, and one desktop and laptop line for consumers.
The strategy seems to have worked. Last week, the company announced its seventh straight profitable quarter, as its G3 business lines and iMacs helped the company get back into the black.
Apple's stock has responded as well, rising nearly 50 percent since April. Its shares climbed 3/4 to 53-5/8 in late afternoon trading Wednesday.
With its splashy iMac and iBook introductions, industry watchers turned their attention to what may be next for the computer maker.
While iMacs and iBooks rest comfortably at the middle class level of pricing, the low end of the market continues to tug at consumers.
"Apple really hasn't weighed in on the sub-$1,000 computer category," said Stephen. "Their next step could be refreshing their current products and making pricing changes."
Indeed, the advent of the "free" computer, where customers are given a free lower-end computer in exchange for signing up for a few years of Internet access, has computer makers revising their current business models.
This has led to speculation that computers may become like cellular phones, a giveaway to entice users to buy a service. Thus far, Apple has not announced such a strategy.
"It's hard to say how this is all going to turn out. Clearly, a computer costs a lot more to build than a cell phone," Jobs told CNNfn.
"So it's going to be interesting to see what happens. All I know is that we sold more iMacs last quarter than any time in iMac's history. So you know, the model that we have right now seems to be working very well."
The company has proven that consumers may pay a little more for Apple products than for comparable brands. Additionally, the market for personal computers remains strong and Apple still has room for growth overseas.
And there's the fact that Apple knows how to generate excitement. "They'll introduce the new iMac at some point and people will be wondering what that will be like," said Kunstler.
Whatever happens, Jobs, who has never relinquished the "interim" part of his CEO title, will probably be around to manage it in the near future.
"You know, we actually stopped that [CEO search] a while ago and I just decided I wasn't going to think about it for a while. So I just go to work every day and as long as they don't kick me out, I'm there for a while anyway."
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