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ATPM 4.06
June 1998

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Segments: Slices from the Macintosh Life

by Barry L. Ritholtz, ritholtz@aol.com

iMac Commentary and Media Roundup


"Coca-cola does not win the taste test. Microsoft does not have the best Operating System. Brands win." --Bob Pittman, AOL President, on the importance of marketing. Adam Smith's Money World (May 8, 1998).


As fascinating as the introduction of the iMac was, Apple fans have to be truly heartened by the reaction of the Media this week. As the old marketing saw goes, perception IS reality. If the jaded tech Press get all excited about something besides Apple's "death spiral," then its all the better.


Like a fickle lover, the Media's coverage of Apple (and Microsoft, for that matter) seems to have moved on to a new infatuation. Is it too early to lay claim to a new paradigm?


Personally, I prefer the current focus--replete with phrases like "interim CEO" and "mercurial Apple co-founder"--to the prior spotlight on "beleaguered computer maker" and "continuing market share erosion."


A quick review of some recent headlines confirms how widespread this not-so-subtle shift is:



See links below to find these stories in their entirety.


You Marshall McLuhan-ites out there must be smiling at how Apple's advertising copy and PR releases have found their way into mainstream press coverage.


Take note of the quotes below on the VW Beetle, and on the PowerPC processor speed--Straight from Apple's PR and marketing department. Hey, if the press is gonna take the lazy way out, at least this time it helps instead of hurts.


Even the venerable Wall Street Journal--the leading business media outlet that led the drumbeat of Apple's demise--has started to "Think Different." In addition to the positive coverage of the iMac (see story below), the WSJ ran an interesting story on Friday, May 9, 1998, titled: "Lifeboat Drills: What to Do if Stocks Hit Berg."


It began: "Think Ugly. Really Ugly."


Can we talk Mindshare?


Even C|Net--the Intel funded on-line tech news website--has been affected. Last night, I saw their advertising in one of my favorite e-mail lists. Their slogan?


THINK BIGGER.


The strong showmanship and hype present at the unveiling of the iMac--and the accompanying positive media kudos--underscores the importance of aggressive marketing and advertising by a company that manufacturers consumer goods. Not just to inform and influence the public, but to inform and influence the press, who in turn inform and influence the public. (Duh. Marketing 101.)

This newly receptive press came to be only after Apple's feisty new ad campaigns started running on TV. It seems that ads like the Snail, Toasted Bunnies, and Steamroller are not the work of a dying tech company. Rather, these ads reflect a newly revitalized and focused innovator not afraid to tweak the powers that be. "Hey! We have superior technology! Nyah! Nyah! Nyah!"


When you're seeking legitimacy and credibility, it also doesn't hurt to have your advertising firm win a prestigious award for your television commercials. TBWA Chiat/Day won the 1998 International Andy Award for its Think Different commercial. Steve Jobs even won an award as one of copywriters for the ad.


Even the four page PowerBook magazine ads, titled "We rewrote the book," show off Apple's newfound marketing prowess. It's a killer ad--a full color 14.1 inch screen (actual size!) of a great white shark charging the reader, jaws agape, wicked looking rows of teeth ready to do their damage. The large point, bold, black copy simply reads:


"It eats Pentium notebooks for lunch."


But more than just a great advert, it ran in--of all places--Business Week. To me, this reveals two good things about Apple and Steve Jobs: They understand the importance of developing a good rapport with Wall Street; Secondly, they are no longer just preaching to the choir.


Finally, for those of you who blinked, you might have missed the 1st Apple ad actually starring Jerry Seinfeld. During Seinfeld's much-hyped show-ending finale, right before the closing stand up bit, Apple re-ran the first "Think Different" ad. ("Here's to the crazy ones . . . ") However, in this version, the last person shown was not Hitchcock or Einstein or even the Dalai Lama; Rather, it was a black and white Mr. Seinfeld himself--possibly from his first Tonight Show appearance.


We can only hope that Apple continues this newfound advertising aggressiveness. Opportunities such as the finale of Seinfeld are few and far between; It bodes well for the future indeed that Apple's marketing department not only recognized this opportunity, but took full advantage of it.


Media Roundup
Below are excerpts and highlights of the recent media coverage of the iMac from various media outlets. Where available, URLs are provided.


Apple Unveils Consumer Macintosh
by Michael J. Martinez
ABC News.Com
<http://www.abcnews.com/sections/tech/DailyNews/appleimac0506.html>


May 6--With a strong dose of hype, fanfare and attitude, Apple Steve Jobs today unveiled a new consumer-oriented Macintosh that uses Apple's G3 chip technology and is priced at $1,299.


And, perhaps most importantly, it looks like a Mac. Sort of....The iMac certainly strives to be different from its predecessors. The model unveiled today has a translucent white-and-teal case (actually, Apple calls the color "bandi blue") and an amorphous design. The keyboard is also slimmer, and Jobs called the new iMac ergonomically-friendly mouse "the coolest on the planet."


Apple Fans: Stand By Your Mac
ABC News.com
<http://www.abcnews.com/sections/tech/DailyNews/
appleusers980505.html>


...Indeed, many Mac users are feeling upbeat again, feeling that their sorely-tested loyalty is paying off thanks to the return of Steve Jobs as interim CEO, the introduction of the G3, and the impression, no matter how ephemeral, that Apple cares once again.


"The reality of people's attitudes have changed, especially in the last six months," says Stan
Flack, publisher of the Web's MacCentral site. "They're happy with Steve and what he's accomplished."


The company's profitability is one such accomplishment, alongside the introduction of the G3 computer. And there are other signs of Apple's comeback, some subtle, but still significant.


And as Apple gears up for increased competition in the home computer industry once again, it appears that the Mac users are ready to march into battle again...


Retailers Think iMac Will Sell
By Jim Davis
C|Net
<http://www.news.com/News/Item/0,4,21902,00.html>


Apple Computer yesterday took the wraps off its most innovative-looking computer in years, placing a big bet that style will help distinguish the Mac from the pack of PC systems.


The iMac's all-in-one design is reminiscent of the original Macintosh, but adds a curvy, wedge-like look, a two-toned see-through case, and even a round mouse. The question that remains is, will it boost Apple's fortunes in a manner also reminiscent of the first Mac? The initial reaction from some retailers is yes.


"We'll sell lots of them. This is the sexiest computer I've ever seen," said Jim Halpin, president and CEO of CompUSA, in a phone interview today with CNET's NEWS.COM. Halpin thinks the new Macintosh might even be able to persuade buyers of Windows-based computers to buy a Mac instead, simply because the styling is so dramatically different from other PCs.


"There's a huge segment of our customer base looking for something simple to install and use," said Michael Koidahl, president of Westwind Computing..."We've been selling Umax systems for our low end. On the downside, they're not quite the same quality as Apple, and they are not quite as glamorous," he noted.


CompUSA's Halpin doesn't think the lack of internal expansion options will hinder sales. "My 13-year-old daughter won't ask about expandability. She will just want to buy one because it's cool," he said.


Mac Momentum Mounting
By C|Net staff
<http://www.news.com/News/Item/0,4,21870,00.html>


Faster notebooks, a radically revised desktop model called the "iMac," and a rising stock price are revitalizing Apple Computer, a company that had long been buffeted by falling market share and quarterly losses. Is interim CEO Steve Jobs turning Apple around?


Retailers think iMac will sell; Will the iMac boost Apple's fortunes in a manner reminiscent of the first Mac?


Apple passes $30-per-share mark update It's the second time this week that the company hits a 52-week high.


Mac Operating System Designed For Ease And Speed
By Jon Swartz of San Francisco Chronicle San Jose
The Edmonton Journal
< http://www.southam.com/edmontonjournal/computers/
051498stor3.html >


"It is the biggest leap in Mac software since 1984," the year the Macintosh was introduced, Jobs told developers at the Apple worldwide developers conference in San Jose...


Since replacing the ousted CEO Gil Amelio last summer, Jobs has performed a remarkable turnaround at the company he co-founded two decades ago.
Apple has registered a profit of more than $100 million this year after losing nearly $2 billion while Amelio was in charge. Its stock price of $30.94 US is near a 52-week high after bottoming out in the teens a year ago, causing its market value to more than double to $4.1 billion from a year ago. . .


Nonetheless, its market share, which has inched up to four per cent, is still dwarfed by that of PCs running Microsoft Windows. "When I arrived 10 months ago, a lot of things were broken. They have been fixed," Jobs told a partisan crowd of Mac developers. "Apple is back on track."


Apple Touts New System, To Retain Mac OS Core
CNN.com
<http://cnn.com/TECH/computing/9805/13/mac_osx.reut/>


SAN JOSE, California, (Reuters)--Apple Computer Inc said on Monday it would combine the core of its Macintosh operating system with elements of its high-end Rhapsody software in a new operating system that would be Apple's biggest leap in technology since 1984...


The new operating system--Mac OS X (10)--is due out in 1999. Apple said its advantages will include memory protection when the system crashes, much faster networking and a faster launch time...


"The core of the announcement makes a lot of sense," said Lou Mazzucchelli, an analyst with Gerard Klauer Mattison & Co. But he said he still had questions about how Apple will address the market for handheld devices to compete with Windows CE and very high-end powerful servers that connect networks."


Apple Unveils New Space-Age Mac That Glows
By Tom Abate
©1998 San Francisco Chronicle, page B1
<http://www.sfgate.com/cgibin/article.cgi?
file=/chronicle/archive/1998/05/07/BU78538.DTL>


Steve Jobs yesterday took the wraps off Apple's secret weapon to re-enter the consumer market: a $1,300 Mac with a space-age, translucent plastic case that glows when the power is turned on. The new machine, called the iMac, will be available in August. It targets the 10 million consumers who own Macs today but have been slowly defecting to cheaper Windows PCs.


...But with its 15-inch color screen, 233- megahertz G3 processor and large disk drive, the iMac is a rounder, turbo-charged version of the old, square Mac. "It looks like it's from another planet," Jobs told an audience of 2,000 people at the Flint Theater in Cupertino. "A good planet."


...The iMac carries about the same price as many comparably equipped systems using Pentium-class chips and Microsoft Windows. And it has some technical advantages over other low-priced PCs. The Apple PowerPC chip is said to be more powerful than an Intel Pentium rated at the same speed, and the iMac benefits from extra memory for storing frequently used information.


Apple's New Crop

By David S. Jackson
Time Magazine
<http://www.pathfinder.com/time/magazine/1998/dom/980518/
business.apples_new_crop7.html>


Depending on your point of view, the translucent blue iMac computer introduced by Apple last week is either the coolest or the weirdest-looking personal computer ever made. It's fast, it's cheap, and if you're looking for a cute little PC to go with one of those new Volkswagen Beetles, this is the one...An eye-catching vengeance it is...


Apple Rolls Out Bold Answer To The Sub-$1,000 PC Market
By Jim Carlton
The Wall Street Journal


CUPERTINO, Calif.--Apple Computer Inc. unveiled a translucent, one-piece computer that finally lives up to the company's "Think Different" slogan.


...Grabbing Eyeballs
Some analysts immediately began comparing the iMac to the new Volkswagen Beetle, both for its ability to attract attention and prospects that Apple might finally begin to win some sales outside of longtime Macintosh users.


...One Step In A Long Haul
In any case, the iMac should at least give Apple a psychological boost as it prepares for the rest of the year. When the machine starts shipping in August, as planned, company officials say they will target sales to existing Mac customers as well as schools and new users. "I can't imagine anyone going into a computer store and not being drawn like a magnet to this computer to check it out," said Phil Schiller, Apple's vice president of product marketing. "We certainly believe there will be more demand for it than we'll ever meet initially."


Apple Polishes The OS
Wired News Report
<http://www.wired.com/news/news/technology/story/12247.html>


Apple Computer has put some polish on its crown jewel operating system in a bid to make it, in the words of an Apple marketeer, the best Mac OS ever.


Apple's new strategy, announced Monday at the Apple World Wide Developers' Conference in San Jose, California, is an advanced version of the Macintosh operating system called Mac OS X. The updated operating system, which should ship late in 1999, will combine core elements of both the current Mac OS 8.1 and the Rhapsody operating system, which has been in development since Apple bought Steve Jobs' NeXT Computer in December 1996.


Apple Unveils Jetson-like Mac For Consumers At $1,299
By Therese Poletti
Copyright 1998 Reuters Limited


CUPERTINO, Calif., May 6 (Reuters)--Apple Computer Inc. on Wednesday unveiled a $1,299 Jetson-like computer aimed at consumers called the iMac, in a bid to regain its lost position in the consumer market. Apple also introduced a new line of sleek, black PowerBook notebook computers designed around its powerful G3 microprocessor, starting at $2,299 and available now.


...It's like the New Beetle. I think people will feel the same way," said Lou Mazzucchelli, an analyst at Gerard Klauer Mattison & Co., adding that this system will play into some nostalgia for the old Mac among current Mac owners who have not upgraded their system, and want a sleek, new, innovative design. "They nailed the price point. I want one. ... It's way cool."


"I think it's exciting," said Tim Bajarin, president of Creative Strategies Inc., a consulting firm. "The Mac users waiting to upgrade will gobble it up."


A Low-Priced Mac May Renew Apple
By Catalina Ortiz
The Philadelphia Inquirer


CUPERTINO, Calif.--Apple Computer Inc. is returning to its roots, once again laying claim to the consumer market with an innovative machine. On Wednesday, the company announced its latest Macintosh, an all-in-one box with a $1,299 price tag to compete with low-price rivals. "This is iMac," Apple cofounder Steve Jobs said, as he pulled a drape off the new desktop machine.


He called iMac, which encloses monitor, fast processor and hard disk in a translucent teal-and-white case, "a totally new take on what a consumer computer should be."
Industry analysts praised iMac's features, price and innovative spirit. They predicted that consumers and schools currently using Macs would eagerly buy the new machines and that even people with rival PCs would be intrigued.


"The iMac clearly is a departure from everybody else in the computer space--head and shoulders above everybody else there," said independent industry analyst Pieter Hartsook.


Apple Aims iMac At Low-price PCs
by Catalina Ortiz (Associated Press)


CUPERTINO, Calif.--Apple Computer Inc. declared its re-entry into the consumer market Wednesday, unveiling a $1,299 Macintosh enclosed in a single cuddly box.


The computer, to be available by mid-August, takes Apple into low-cost consumer territory--the hottest segment of the personal computer market--where it has been conspicuously absent.


Extras for New PowerBook Arrive
By Jim Davis
C|Net
<http://www.news.com/News/Item/
0%2C4%2C21932%2C00.html?sas.mail>


While Apple Computer garnered a lot of attention this week with the introduction of new Macintosh notebooks, a number of other companies were busy introducing their own Mac-related products.


Buyers of the brand-new PowerBook G3s are being offered a number of add-on peripheral devices....


C|Net's E-mail Advert
THINK BIGGER.


To reach the largest online tech audience, you have to advertise with the biggest online tech publisher. According to the industry's most respected research firms, CNET delivers a larger tech audience than the competition.


Visit:


<http://www.cnet.com/bigger/?ad.iconocast.0.e2>


for the numbers and you will see: CNET is bigger.


New iMac Steals The Show:
Apple's Next-Generation PCs
by Lisa Picarille
Computer Reseller News
<http://www.crn.com/sections/news/789/789pg131b.asp>


"Apple Computer Inc. is back. Or at least that is what interim Chief Executive Steve Jobs said at a press conference earlier this month...


But Apple's re-entry into the consumer market stole the show: These futuristic-looking machines have a bulbous quality highlighted by translucent outer layers. The all-in-onemachines, which also will be aimed at the education market, have a starting price of $1,299. Jobs showed demo after demo of the new machines--dubbed iMac--that blew away the fastest Pentium notebooks available today...


Apple's Appealing Pie
by Rebecca Eisenberg
© 1998 San Francisco Examiner
<http://www.sfgate.com/cgi-bin/article.cgi?file=/examiner/archive/
1998/05/17/BUSINESS15477.dtl>


Who says you can't please everyone? Certainly not Apple Computer interim CEO Steve Jobs.


While Microsoft fights in court to defend its monopoly-created power to force-feed its crummy products to unhappy users, Jobs has been busy giving everyone what they want.


Apple programmers and consumers, both expert and new, finally have reason to cheer about the computer company formerly known as beleaguered.


Blue AppleBarry L. Ritholtz works in a NYC investment bank where he mockingly laughs at the IT department's daily Windows mishaps. Send thoughtful responses to thesemusings at: <Ritholtz@aol.com>.

The Lawyers insisted: Under no circumstances do the information or opinionscontained herein represent a recommendation to buy or sell any of the stocks inany of the companies discussed. None of these discussions should be consideredinvestment advice.

Commentary Copyright 1998 Barry L. Ritholtz. All rights reserved.Media roundup © by the articles' respective authors/publishers.

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