MacWorld show not quite what Apple had in mind
DAVID E. KALISH
Aug. 05, 1997
BOSTON (AP) _ Apple Computer Inc. is sweating through the worst period in its 21-year history, but you wouldn't know it from the looks of Boston this week.
The city's major hotels are booked solid, with interest high in the biggest trade show for Apple products. MacWorld attendees hope to test faster, more stable new computers.
Too bad for Apple, the attention is mostly for the wrong reasons.
Dogged by leadership turmoil, wrangling with makers of cheap Macintosh PC clones and facing questions about its survival, Apple is putting on a show different than what it may have had in mind.
"Confusing news is great for a trade show," said David Egan, president of MHA Event Management, which runs MacWorld.
Anxious Mac users, investors and high-tech rivals are hoping Apple will announce its replacement for chief executive and chairman Gil Amelio, ousted last month.
Apple co-founder Steve Jobs, the keynote speaker Wednesday, is himself an object of intense conjecture. While Jobs has an expanded role in running the company, he is believed to have rejected offers for the top positions.
Equally challenging, Apple is at odds with companies that license the Mac operating system to make copy-cat computers.
Last week, Apple reached an agreement with Umax Computer Corp. that allows the cloner to use Mac OS8, the latest Macintosh operating system, according to Phil Pompa, vice president of marketing for the San Jose, Calif.-based unit of Taiwan's Umax Data Systems.
While similar pacts are expected with other cloners, uncertainty persists over Apple's willingness to share future advances of its system, fueled by speculation that Jobs is pushing Apple to toughen its stance with clonemakers.
"I'm hearing an awful lot he doesn't like the idea of licensing," said James Staten, an analyst at Dataquest Inc., based in San Jose, Calif.
A call to Jobs at Apple's Cupertino, Calif. headquarters was not returned.
The cloners are understandably nervous. Apple launched its strategy of letting other companies make Macs to help sustain the popularity of the operating system against encroachments by computers running on Microsoft's Windows.
But the clonemakers' tack of selling cheaper Macs has robbed sales from Apple at a vulnerable time. Fighting back, Apple's ambiguity over sharing its latest advances with the clonemakers may be starting to make a dent. According to preliminary figures from Dataquest Inc., unit sales of Apple's Macintosh in the second quarter grew 16 percent to 698,000, while sales of Macintosh clones fell 41 percent to 75,000.
"We were off about 50 percent in the second quarter," said Gary Daily, vice president of marketing for DayStar Digital Corp., a small Atlanta-based company that has yet to sell more than several hundred clones each period.
Clonemakers hope to make their case at the show, where they have quadrupled the space taken up at MacWorld this year. While Apple still dominates the expo, Egan said "the clone guys in recent months have generated the fire and smoke of innovation."
New models from Power Computing Corp., the largest clonemaker, sport technology that allows them to process data more quickly. Stifling such innovations could cost everyone, the clonemakers say.
"The licensing issue is coming to a head," said Mike Rosenfelt, director of marketing at Power Computing, based in Round Rock, Texas. "If Apple is entertaining reversing its licensing policy, it could be disastrous."
To cover its bets, Power Computing has diversified into making computers based on Microsoft Corp.'s software and Intel Corp.'s microprocessors, and is expected to roll out its first systems at the show.
The message may not fall on deaf ears.
About 60,000 show attendees are expected, about the same as last year _ not bad considering the plunge in sales of Mac computers. Macs accounted for 2.9 percent of all PCs sold through retail stores in the first quarter, down from 10.2 percent a year ago, according to Computer Intelligence, a La Jolla, Calif.-based market research firm.