Apple Marks 30 Years of Innovation: Page 2

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But darker times were soon to come with Steve Jobs leaving the company after a reported internal power struggle. Jobs went on to form a new computer company, Next, and later he invested heavily in movie-maker Pixar Animation Studios, Inc.

While Jobs worked on his new projects, Apple lost some of its steam during his 10-year absence from the company, say industry watchers. There were missteps, such as the Newton, a handheld computer that failed to catch on.

''The beginning of it was when Steve Jobs left,'' says Welch. ''He wanted the Mac to sell for $1,400 and [company president John] Sculley jumped that up by about $1,000. Sculley was the reason you had $10,000 Macintoshes. They could do it because they were the only game in town with a GUI for a long time. And then Windows got more than good enough. Sculley left and then the next two guys they brought in were salesmen really. They were just trying to sell cheap, beige boxes. They lost track of their customers and what they wanted.''

Margevicius says these were Apple's dark ages.

''A lot of the creative minds, creative forces became disenfranchised with the company and left,'' he says. ''There was a series of so-what products and Apple-doesn't-matter products... Apple wasn't inferior. They just weren't aggressive.''

Without Jobs at the helm, Apple faltered while Microsoft surged ahead with Windows building marketshare and taking a dominant position in the enterprise and consumer space.

''There was a lot of competition and as Microsoft grew, it became the de facto standard, especially for industry,'' says Craig. ''Apple kind of went by the wayside. It's kind of a natural evolution toward standards. Creativity and change can be a good thing but you have to draw your line in the sand and have a standard and stick to it. The Windows standard, for better or worse, gained popularity... For so long, Apple was focused on going their own way and they didn't tow the windows line, and they lost market share because of it.''

Apple Reinvents Itself

Jobs' return in 1997 heralded a revitalization for Apple.

A year later, the company shipped the first iMac, which reignited consumers' devotion. And Apple again turned its attention to design, delivering the iMac in a myriad of shades -- indigo, sage, ruby... and even Blue Dalmation.

In 2001, came the OS X, a powerful player in the server market. Then in 2003, Apple dove into the music world with the iTunes Music Store, an online music service where consumers can legally download songs for 99 cents each. They also brought out the iPod, a portable music player that holds songs downloaded from iTunes. The iPod has caught fire, becoming a cultural, as well as a marketing, phenomenon.

''They've really reinvented themselves in the last five years,'' says Craig. ''It's one of their unique abilities... Steve Jobs definitely seems like he's a creative force. There's a personality there. He's a good marketing person and a creative genius. It looks like his coming back and being active in the company again helped with the advent of the iPod.

''The personal device side is going to be a huge growth area for them,'' she adds. ''They've come out with the video iPod that's going to be enormous.''

Michael Disabato, a service director for the Burton Group, a Salt Lake City, Utah-based analyst firm, sees Apple moving forward with Jobs firmly guiding the company's course.

''A lot of it comes from Jobs,'' he says. ''I don't think you can do much at Apple without him getting involved with it. Some would call that micromanaging... Look at iPod sales. I rest my case. It works.''

Disabato also says there's talk of Apple coming out with another handheld, taking its first stab at the market since the Newton. There's also talk about Apple coming out with its own cell phone, and doing more with the movie market.

Whatever the company comes out with, it ultimately will be focused on driving attention and sales to the Mac, says Welch. The press, the hype and the advertising is all about the iPod. But he says for Apple, it's still all about the Mac.

''The Macintosh is never going to go away for Apple,'' says Welch. ''It's the center of that company. They may sell a ton more iPods but they make more off the Mac. Their 80 percent marketshare in the music area is going to go down at some point. The purpose of the iPod is as an extension of the Mac. It's another way to use your Mac. Everything they do is centered around it.''


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