Jobs, Apple are down, but not out

The man most synonymous with visionary thinking and product hype came to San

Francisco this week, humbled by a stock market that has pounded Apple Computers

shares into the ground and a PC market that suddenly appears to have lost its

appetite for Apple’s creative computer designs.

An unusually reserved Jobs this week spelled out his latest vision, hoping

millions of buyers in the personal computer market of 2001 will buy his idea of

an evolving "digital lifestyle" in which the personal computer will

play an increasingly central role.

But the speech lacked the hype and optimism radiating from Jobs during the

past MacWorlds. Ironically, Steve Jobs’ vision was a near carbon copy of the

one delivered just days earlier at the CES show in Las Vegas by Intel chief

Craig Barrett. In nearly identical terms, Jobs described how he sees the role of

the personal computer.

"What is our vision?" Jobs asked himself in his keynote address at

the annual MacWorld Expo in San Francisco. "We don't think the PC is dying

at all. We think it's evolving. Just as it has since it was invented in 1975-76.

People are asking ‘What's going to happen to the PC?' We think the PC is

entering the age of the digital lifestyle. We believe the PC — more

importantly, the Mac — will become the digital hub to add value to other

digital devices."

Barrett told his CES audience that the PC sits at the core of a big digital

universe. "The PC is rapidly becoming the central nervous system for the

entertainment system of the home. The PC is the digital brain, capturing

information in one place and delivering it in another. And the value of the PC

to the user grows exponentially as we have more tools connected to the PC."

If Apple wants to see its new vision realized in the market, it will have to

start selling products, and soon. Apple’s sales were down more than 30 per

cent in the fourth quarter from the previous three months.

To do so, Jobs unveiled a number of key new products, some of which won’t

be available until later this year.

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One is the stylish new PowerBook notebook build around an ultra-stylish

1-inch-thick Titanium casing. The system will start at $2,600 for a 400 MHz

version and up to $3,500 for a 500 MHz G4 PowerPC one. The notebook weighs 5.3

pounds, has a 15.2-inch screen and an internal DVD-ROM drive.

On the desktop side, Apple is increasing the top speed of its G4 PowerMac

from 500 to 733 MHz, the biggest percentage performance increase in PC industry

history. And, 733 MHz is still far behind the 1.2-1.4 GHz speeds of Intel

Pentium processors. But because Apple’s systems process data in 64-bit chunks

as opposed to the 32-bit Pentiums, they require far less processing speed to

process the same amount of data. A 450 MHz G4 PowerMac, for example, can

outperform a 1.2 GHz Pentium III in graphics-heavy applications. At 733 MHz, the

PowerMacs will be able to compete with 2-3 GHz Pentium, which are still a year

or more away from market entry. The new PowerMacs will range in price from

$1,699 to $3,499.

The 733 MHz Power Mac will also sport a new DVD/CD-ROM SuperDrive, which lets

users burn their own music and movie discs. The new iDVD software allows users

to make their own DVD movies. Jobs showed off a new, free application called

"iTunes" that will make it easier for Apple users to download and

write music CDs, organize a personal music library and transfer music to digital

MP3 players.

"There is a music revolution happening now. We're late to this party and

we're about to do a leapfrog. IMovie, iTunes and iDVD are going to be the

passport to this digital lifestyle era and that is where we are going."

Jobs also said the launch of Apple's Mac OS X is scheduled for March 24 and

the software will be available for $129. The Unix-based OS will be installed in

Apple computers in July. Some of the new features of Mac OS X include Silicon

Graphics’ OpenGL 3-D graphics technology, as well as QuickTime for video,

editing and streaming technology. Additionally, a redesigned finder gives users

different options to view their file systems.

"Mac OS X is laying the foundation for the next decade, decade and a

half of our software efforts here," said Jobs. But while the usually upbeat

mood at MacWorld will raise morale of the Apple faithful, demand for Mac systems

is not expected to pick up significantly any time soon. Apple’s sales plunged

in the fourth quarter, a trend Jobs painfully acknowledged. "The last

several months of 2000 were particularly challenging for Apple and our industry.

We've decided to start 2001 with a bang."

That bang is likely to be in the form of a big loss. Apple is expected to

announce a loss of $225 million to $250 million for the past quarter.