What does the future hold for Apple?
By Dan Vanderkam

Recently, there has been quite a bit of turmoil at Apple Computer Inc. A CEO unexpectedly
resigned, and was replaced indefinitely by a co-founder of Apple who had left over a decade ago.
Apple made a deal with Microsoft. A new operating system was released after 3 years of delays.
Several popular technologies were canceled to save money. In the 1st fiscal quarter, Apple
announced a surprise profit, which was their first in years. All these events and more raise one
question: What is the future of Apple?

Steve Jobs was an original founder of Apple, but left the company in 1985. About a year
ago, Steve Jobs returned to Apple. At first, he had little power, but when former CEO Gil Amelio
resigned, he took over as the head of Apple.

Although he has only been in charge of Apple for 3 months, he has already made some
drastic changes. One of the first things that Jobs did was to fire the entire board of directors. He
then placed friends of his on it. This board of directors is paid less, and accomplishes more than
the previous ones. This is just one of the many things that Steve Jobs has changed.

Another thing that Steve Jobs did was to announce a deal with Microsoft. This deal had
three main components. Two of them benefited Apple, and one benefited Microsoft. The first
agreement was that Microsoft would invest $300 million in non-voting Apple stock. Because they
had such a large amount of Apple stock, this ensured that a good future for Apple would be in
Microsoft's best interests. This also ended a lawsuit that said that Microsoft had copied the
Macintosh Operating System when they created Windows. During this lawsuit, Apple had wanted
$150 million as a payment from Microsoft. Investing $300 million was Microsoft's way of saying
"Yes, we did copy your operating system, so we'll give you some money."

The second agreement was that Apple would make Microsoft Internet Explorer the default
web browser on all new computers. What this means is that when you specify a web page that you
want to go to, it opens in Internet Explorer. Currently, most Mac users use Netscape, a rival
browser. This deal will give Microsoft an extra advantage over Netscape.

The final agreement was that Microsoft would release version of Microsoft Office for Macs
at the same time they released the program for Windows. Microsoft Office is a set of four
programs. It includes a word processor (Microsoft Word), a spreadsheet program (Microsoft
Excel), a program for making presentations (Microsoft Powerpoint), and an e-mail program
(Microsoft Mail). Before this agreement, the version of Office for Windows was released in 1998,
but the version for Macs was released in 1995. This deal will correct that.

Overall, the deal with Microsoft benefits both companies. Microsoft will have more people
using their software, and Apple will have more recent software for Macs. This agreement has
received quite a bit of publicity recently. It was even on the cover of Time magazine.
In his keynote speech at a recent Mac conference, Steve Jobs made a surprising
announcement that Apple had actually made nine million dollars in the last quarter. This was the
first profit that Apple had turned in three years. This can largely be credited to the penny pinching
of Steve Jobs. He canceled several popular Apple technologies, and reworked how Apple pays its
employees. For example, under Gil Amelio, members of the board of directors were paid $2,000
just to attend. Under Steve Jobs however, the board members are paid nothing if they attend a
meeting.

Some people however, think that Apple is too far gone even for Steve Jobs to save. As
Larry Ellison (who is now a member of the board of directors) said, "The only person who could
save Apple was crucified 2,000 years ago."

In my opinion, Steve Jobs has already proven that this statement is false. If you define
'saving' as making Apple profitable again, he has already succeeded. However, Apple has had a
dwindling market share in the past few years, which has gotten many people worried.
Before the return of Steve Jobs, Apple's market share had fallen from above 20% to below
five. There are several reasons for this. One is that the only way to get new macs for most of this
decade has been through mail-order catalogs. If you go to a retail store, you will, in most
likelihood, not see any macs that have been released in the past year. This has all changed recently,
however. One of the things that Steve Jobs has done is to open The Apple Store
(www.store.apple.com). This site allows visitors to buy any of Apple's products with a single
mouse click. The immense success of this store has been a sign that Apple still has many
customers. They made five times as much money in the store's first 12 hours than they had
expected. The Apple Store now brings in about $17,000 every hour.

The second thing that Apple has done is to change its retail strategy. Recently, Apple
demanded that CompUSA stores give Apple more of a showing in them. CompUSA agreed to the
deal, and Apple's 'Store within a store' campaign was launched. Apple has given several computer
retailers the option to give Apple more space in their stores, or not sell macs at all. In refitted
stores, almost five times as many macs are sold than before. This strategy allows Apple to focus
more of its resources on the places where it stands to make the most money.

Because of the changes that Steve Jobs has made, the future is looking up for Apple. If
they continue to have more profitable quarters, and sell more computers, the Macintosh market will
be strengthened, and enlarged. This will attract more programmers, which will make the market
even stronger. As long as Apple continues to be led as well as it has been, the future of Apple is
bright.