Sunday, July 20, 1997
Apple its own worst enemy

BY CHARLES BREWER
The Cincinnati Enquirer

What's with Apple Computer?

Let's forget about Apple's management problems or that it reported losses of $1.6 billion during the reign of recently fired Chairman Gil Amelio.

Let's not debate the size of Apple's tiny market share or the motive behind Steve Job's return to the company he founded. (Is he really a ''shadow'' CEO?)

And let's not yet write Apple's obit or speculate on if it can rise from the ashes on the wings of its new operating system.

Let's talk about products, or how Apple sells - or doesn't sell - its products.

This is at the core of Apple's seemingly interminable problems. Apple was once considered the most powerful marketing force in the computer business. It was the top personal computer maker, with the most loyal customers.

What went wrong?

Marketing mistakes

Everyone who's had any dealings with Apple has a story. Here's my latest:

I recently attended a newspaper technology show. Apple had a large booth.

Part of the booth was devoted to Newton products, including a little notebook computer called the eMate 300.

The $800 eMate is a simple, inexpensive Newton with a keyboard, housed in a rugged, pillow-shaped plastic case. It was designed for the ''education market'' - that is, kids.

For many who need a laptop only for writing memos and checking e-mail, the eMate is perfect. It's cheap, simple and runs a couple of weeks - yes, weeks - on a single battery charge.

The eMate was the hit of the Apple booth. It's perfect for traveling reporters. Newspapers were trying to buy them right there; one newspaper wanted 200.

Sorry, the Apple reps said, we haven't decided how to market them outside schools.

You can buy them directly from Apple, the reps said. But no one seemed to know where to call to buy one.

So I checked the Newton Web site http://www.newton.apple.com when I returned home. I finally got the number to call to buy an eMate (1-800-443-4512).

Success at last? Not quite. Sorry, the salesman said, you can't buy one. The eMate is back-ordered for weeks.

''We're selling them like crazy and just ran out,'' he said. Ran out?

These are tough times for Apple.

Apple has lots of good news: on Tuesday it's releasing a major upgrade to the Macintosh operating system (OS 8). Apple makes some of the fastest desktop and laptop computers. And its completely new operating system, called Rhapsody, scheduled for next year, could be the revolutionary OS that Macintosh was more than a decade ago.

Even it's third quarter financial results aren't all bad: revenues are up, losses are less than predicted, and Apple still has $1.2 billion in cash reserves.

Good news and bad news

Apple's in the news, all right, but the news we consumers hear is all bad. The CEO's out, the company is gushing red ink, customers and staff are leaving.

And few dispute that Apple has good products. But where do you get them?

Oh, sure, you can find them if you use mail order or look in the back of the computer store. You can buy that super-powerful Mac workstation if you're willing to wait, since Apple never makes enough.

Apple is losing money and market share because Microsoft and Intel are far more capable and aggressive marketers.

Apple might have had the best commercial of 1984 (the one introducing the Mac), but Intel had the best in 1997 (the dancing MMX chip workers). And for better or worse, it's marketing that sells computers.

The average consumer - the one who isn't rabidly faithful to Apple products, the one who shops for a computer based on price and availability - either knows nothing about Macintosh or fears Apple is on the brink of extinction.

Today's computer shopper thinks that the only choice is between a P-166 or P-200 chip, between Compaq or Gateway or Packard Bell. Not between a PC or a Macintosh.

The official word from Apple is that Mr. Amelio was ousted because Apple needs a leader who understands marketing, selling product to the consumer.

If so, it can't come too soon for a company that looks to be in a crash dive.

E-mail Charles Brewer with questions, comments and suggestions at CBrewer@enquirer.com Charles Brewer's columns can be found athttp://enquirer.com/columns/brewer