Why I Have to Write about Apple

Innovation and influence -- rather than paltry market share -- are the true measures of this computer company

I'm often asked: Why do I write columns about Apple Computer products? After all, the Macintosh has considerably less than 5% of the market for personal computers, and among the business computer users who are the core of BusinessWeek's readership, the share is even lower. Add to that the fact that secretive Apple (AAPL ) is a difficult company to deal with -- which would make it doubly easy to ignore its products.

That would also be very foolish of me, however. For all of its many faults, Apple is a fountain of innovation in the generally parched landscape of personal computing. That's why its influence -- what's known as the tech industry as mindshare -- vastly exceeds its market share.


  Consider the impact Apple has had on the music industry. Steve Jobs & Co. started by pushing the availability of CD-R burners on Macintoshes and encouraging consumers to create their own music CDs with its controversial "Rip. Mix. Burn." ad campaign.

Then it created the iPod, which when combined with Apple's iTunes music software, became the first really easy-to-use portable music player. Despite numerous attempts at imitation, nothing in the Windows world comes close, including the Windows version of the iPod itself -- because Apple's hardware-software integration is so much slicker than anything available for Windows users.

Now the Apple iTunes Music Store, the first online music service that lets consumers buy and use music with far fewer rules and restrictions than any other service has previously, may revolutionize the music business. By generating millions of paid downloads in its first days of operation, Apple's service presents the first real evidence that for-fee music services can work and can even provide a viable alternative to free, if illegal, downloads. (It's still an open question whether music companies will be bold enough to seize the opportunity and let Apple make the Music Store available to owners of Windows computers.)


  Music is only one of many examples. The iMac, with its beautifully balanced flat-panel display, is the best-designed consumer desktop computer on the market. The widescreen 15- and 17-inch PowerBook laptops set a trend that's now being widely imitated by makers of Windows notebooks. And the 12-inch PowerBook has shown the world how much functionality can be packed into a compact notebook.

To some extent, of course, Apple is making a virtue of necessity. Except for creative departments, Macs are frozen out of the corporate world. But that means Apple is also liberated from the crushing conformity that corporate buyers have created in the market for Windows laptops. Corporate purchases have nearly identical bid specifications, which cause manufacturers to produce nearly identical laptops. And because consumer laptops are generally derived from corporate designs, this sameness pervades Windows consumer products as well.

Corporate conservatism also gives Apple an edge in consumer software. Microsoft (MSFT ) gets grief from corporate buyers any time it tries to change anything in the Windows user interface, which has seen no significant enhancements since the introduction of Windows 95. And improvements in Windows are hobbled by the need to maintain compatibility with thousands of applications and accessories, some of them a decade or more old.


  Apple, however, declared a clean break when it introduced Mac OS X, its latest operating system -- the software that controls the machine's basic functions. At the time it was shipped, OS X could run on only a minority of the Macs in existence. But unlike the incremental improvements that have characterized the Windows operating system, OS X was a true breakthrough.

Apple, of course, isn't without its weaknesses. Its has had serious problems keeping up with the speed of the Intel (INTC ) microprocessors that power Windows PCs. For example, the PowerPC G4 chip used in most Macs has very little room left for delivering more speed. The new G5, custom-made for Apple by IBM Microelectronics (IBM ), is both very expensive and generates too much heat to use in laptops or even iMacs. It's not clear when, or whether, the chip can be made cool and cheap enough to run in anything but Apple's professional desktop workstations.

Apple's software successes have also created strains by putting it into direct competition with the independent software companies that design many of the most popular programs for the Mac -- and help it retain its fan base. For instance, after Apple released Safari, a homemade Web browser, and Keynote, a PowerPoint competitor, Microsoft announced that it was suspending development of the Internet Explorer Web browser for the Mac. And the future of the Mac version of Microsoft Office increasingly is in doubt.

Even in the media business, an Apple stronghold, such former Mac stalwarts as Adobe (ADBE ), Macromedia (MACR ), and Quark have shifted the emphasis of their development efforts to Windows.


  Still, Apple promises to go on being a pacesetter, especially in consumer products. By offering real value, it has maintained a higher average selling price and fatter margins than its Windows-based competitors (it also has the advantage of not having to compete directly with Dell). And there's no reason its small market share should deny it either viability or influence. The personal-computer market is huge, after all. No one questions the viability of BMW, to take an example from another industry, or doubts its ability to influence car design, just because it has less than 3% of the car market.

When co-founder Jobs once again took the helm of Apple in 1996, he promised to return it to a tradition of making "insanely great products." Despite the skepticism of the industry and its observers -- myself included -- he has, to a remarkable extent, delivered on that pledge.

So Apple will go on driving me crazy with obsessive secrecy about its products and its common refusal to make executives available for interviews. And relatively few of my readers will ever use the Apple products I write about. Yet as long as Apple continues to push the envelope and turn out remarkable products, I'll continue to give them a degree of attention that vastly exceeds it minor market share.

By Stephen H. Wildstrom

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