Twenty years after it changed the world of personal computing, Apple is getting another bite at the . . . er, apple.
It wasn’t long ago that Apple was considered an also-ran, a niche company with Golden Delicious products but Granny Smith sales.
Now, buoyed by a host of winning machines, from the iMac to the iPod, Apple is enjoying a renaissance. It’s even challenging Microsoft in the corporate environment with a new flexible operating system to rival Windows.
These new beachheads have Apple’s fortunes looking brighter than they have since it introduced the Macintosh in 1984.
“It’s really remarkable,” said Michael Gartenberg, an analyst with Jupiter Research. “If you look at where Apple was a few short years ago and where they are today, it’s nothing short of phenomenal.”
It may even be unprecedented. For all its elegance, the Macintosh never dominated any market the way Apple now rules digital music, Gartenberg said.
At the annual MacWorld trade show, which opens tomorrow in San Francisco, Apple will be talking about how to defend its market share, not how to build one.
Its main weapon could be a trimmed-down, lower priced iPod, an approach the company hasn’t used in the past. It may be its best hope to stave off a burgeoning threat from its arch-rival Microsoft.
The question is whether history will repeat itself.
The Macintosh was the most user-friendly personal computer when it was introduced, but it was more expensive and only Apple made it.
Microsoft’s Windows, licensed to cheap PC clones, overwhelmed the Mac operating system and elbowed Apple aside.
Now, Microsoft has enlisted a number of companies, including Wal-Mart, to set up their online music stores using Windows technology, which can play on digital-music players from manufacturers such as Dell and Sony.
“My New Year’s resolution for them is to keep defining the marketplace,” Gartenberg said. “Apple has never commanded the leadership position. With the iPod, it may finally happen. They cannot rest on their laurels.”
The $100 iPod is one way Apple may cement its grip but Gartenberg also believes Apple could use Microsoft’s recent virus troubles to recruit more corporate clients.
The latest version of the Mac OS, the 10th, is built on top of the Unix open standard, making it easier for businesses to link a Macintosh to a PC network.
Its high-powered G-series machines remain favorites of graphic artists and filmmakers.
Rod Bear, an equity analyst with Morningstar, also thinks Apple has a chance to improve both its business and consumer market share in 2004.
But the company needs to make smart financial decisions to please investors.
“The trouble is their operating income has hovered around zero for the past three years,” Bear said. He added that the number of Apple retail stores – the company nearly doubled them in 2003 – could be a problem. “They should be mindful of Gateway’s history there. They shouldn’t overdo it.”
Investors have shown some confidence in Apple’s strategy. While Morningstar rates Apple’s fair value at $19 a share, the stock hit a high of almost $25 in 2003. This week, it closed at $21.28 a share.