Apple's New Core

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Yet the Internet, which was engineered so that every kind of computer could connect, has gone a long way toward making Apple computers compatible with everyone else's. And while it's true that most computer programs come out for Windows machines first and Macs second (if at all), that's not so important as it once was. All bread-and-butter programs, such as Microsoft Office, are available for the Mac. And in the entertainment category, the trend is to do one's video gaming on dedicated consoles like the GameCube, Xbox and PlayStation2, not on the computer.

Indeed, Carl Howe of Forrester Research believes the Internet has helped Apple make headway in the platform wars. "I think Apple doubling its market share is entirely possible," he says, citing a Forrester report that shows Apple had the highest satisfaction and buying index among large companies in North America. The premium they paid to own an Apple (one that is now shrinking) didn't seem to matter much. "Price is the last refuge of the marketer. It's what you sell when you don't have anything else to differentiate you," says Howe. "If prices were all that we cared about, we'd all be driving Hyundais." As Jobs likes to point out, BMW and Mercedes-Benz occupy a similar niche in the automobile market, but no one dismisses them as niche players.

"Every time we've brought innovation into the marketplace, our customers have responded--strongly," Jobs says, claiming that it might not be so hard as it sounds. "We only have to attract 5 out of the other 95 people who use PCs to switch, and Apple doubles its market share." That, of course, would buy the company that much more breathing room.

The original iMac did bring converts into the Apple tent. Besides, if all goes according to plan, merely by surviving Apple could grow into other areas. Jobs believes the shake-out in the computer industry will result in Apple's being one of four computer makers left standing. The other three? Compaq and/or Hewlett Packard, Dell and Sony. The rival he's pursuing most aggressively is Sony, which not only makes stylish computers ("They copy us like crazy!") but also makes plenty of digital lifestyle products. "I would rather compete with Sony than compete in another product category with Microsoft," he says. That's because Sony has to rely on other companies to make its software. "We're the only company that owns the whole widget--the hardware, the software and the operating system," he says. "We can take full responsibility for the user experience. We can do things that the other guy can't do."

One example is the iPod, Apple's stylish music player and its most recent foray into the consumer-electronics business. Jobs says Apple is on track to break analysts' best estimates and sell $50 million worth in the last quarter of 2001 alone. The cigarette-pack-size MP3 player is so popular that people have been coming into Apple stores to buy their first Macs, just to use the iPod, he says. (The company launched its own retail stores last year--Jobs redesigned the floor plan at the last minute, of course.)

Are other noncomputer appliances on the horizon? "We have some ideas," says Jobs, adding that Apple would enter the marketplace "where we think we can make a contribution." For instance? Jobs sits back, smiles and declines to elaborate. Clearly, he's already working on something new. You can bet it's the best thing that Apple has ever done.