From MacWeek (reprinted without permission):
Apple execs ready to 'eat margins'
Apple's top two executives, vowing to "eat margins" to make the Mac'sd
installed base grow, last week promised to deliver new low-cost and portable
machines over the next year.
"Our major focus will be on high-volume, low-end, aggressively prices
products. We have already reduced prices on compact Macs, and we will
introduce new, low-cost Macs in calendar 1990," Apple CEO John Sculley said to
the cheers of developers attending the Worldwide Developers' Conference here.
"We are ready to face lower gross margins for high-volume products," Sculley
said, admitting, "we clearly underestimated the market for new low-end and
laptop Macs. We will catch up with both in the next 12 to 15 months."
...
In a separate speech, Michael Spindler, Apple chief operating officer, also
told developers that Apple will aggressively be going after volume "in the
next couple of months" in a bid to woo new users.
"It is easier to market to the installed base," Spindler said. "The trick for
us is to reach and create new users and hook them early. I think that we have
enough volume in the product line now to make decisions that are business
decisions, not technology decisions, to eat low margins at the low end to go
for volume."
Spindler said Apple plans to offer machines that compete "in every price point
of this marketplace." Abandoning the "no compromise" philosophy held by Apple
Products President Jean-Louis Gassee, Spindler told developers, 'Sometimes the
question is "Is good good, or is good enough good enough?' Sometimes we have
to make choices between very, very expensive components and something that
gives us the price points we nedd to increase volume."
In addition to lower prices, Spindler said that Apple will invest in marketing
strategies that emphasize the Mac's strengths. "We have to add something
distinctive," he said. "We have to develop a marketing strategy that is
consistent over time, more compelling, and that goes far beyond the easy
things called ease of use - the graphical user interface."
Sculley goal: Sell More Macs
...
Sculley attempted to clear the "not invented here" cobwebs from Apple's
collective consciousness. Declaring that "we don't have to invent it all for
our products to be innovative," Sculley said that in the future Apple will
"selectively license-in some outside technologies, and we will selectively
partner some of our proprietary technology beyond Apple." He did not comment,
however, on the possibility that Apple may license the Mac ROMs to outside
vendors for the creation of inexpensive clones.
Stressing that Apple must take a larger share of the personal computing market
in the next two years, the company's chief outlined a new emphasis on bringing
products to market in a more timely fashion, with a particular emphasis on
taking innovative technologies out of the research and development labs and
putting them into the product-development process.
...
Tesler, formerly head of Apple's Advanced Technology Group,...will lead an
advanced product team that will be "on the leading edge of ... combining
object-oriented programming with miniaturized computing," Sculley said. He
also confirmed tht Apple is working on several new laptop Macs.
...
Casey, vice president of Networking and Communications, ...will be in charge
of all multimedia products,...introduced QuickTime, a new multimedia document
architecture composed of software services, application programming interfaces
, and Apple defined standards. QuickTime's purpose is to provide developers
with a common interface for controlling media devices, as well as for
communications between various media-data streams...He also outlined Apple's
plans to incorporate sound input and output into every future modular Mac."
He also demonstrated a replacement for Macintalk, Apple's current speech
driver, which many have criticized as crude. Casey added that Apple will
work to lower the entry cost of CD-ROM drives and to improve CD-ROM
performance.
So what do you all think? about Gassee? about Macintalk? about sound?
about QuickTime? I read elsewhere that Apple is working with Sony on enabling
the Mac to record video (animation, still, etc) directly onto videotape.
about laptops? about low-cost Macs? (yes, maybe we can say it, Apple and
lower prices in the same breath!!!!)
Kevin Fong
k...@mbunix.mitre.org
MITRE Corporation
Disclaimer: MITRE does not know that I read MacWeek.