Apple Computer Puts Priority on
China MarketLori Valigra, Boston
From the bustling display floor and flood of product introductions at August's MacWorld exhibition in Boston, it was hard to imagine that Apple Computer Inc had such a difficult 12 months a year of management shake-ups, a failed attempt to sell the company, defective laptop computers that literally burst into flames and financial losses topping $841 million.
But new Apple chief executive Gilbert Amelio told cheering attendees at MacWorld that Apple is here to stay. He outlined a series of less ambitious, but what he painted as more stabilizing plans for the troubled computer maker.
Key Upgrades to System 7
Among the plans is scrapping a major upgrade to the Macintosh operating system, code-named Copland, that was scheduled for next year, instead rolling out key upgrades to the existing System 7 operating system every six months.
"We will continue to improve System 7," Amelio said. "And we will be increasing our level of compatibility with the Windows world."
Copland, or System 8, was originally scheduled for release earlier this year, but its complexity and Apple's revenue slide reportedly delayed the project. Apple thus was not able to counteract Microsoft Corp's release of Windows 95, a Macintosh lookalike operating system for Intel processor-based personal computers.
Amelio confirmed Apple and Microsoft now are strengthening their relationship, but he said Apple has not signed a license yet for Microsoft's operating systems.
China Has the Attention of Apple Computers
Market research firm Dataquest Inc predicts there will be 5.4 million copies of the Macintosh operating system sold this year versus 4.8 million in 1995. That compares with 45.7 million copies of Windows 95 predicted this year versus 18.5 million in 1995.
Amelio said a major focus is in the Asia/Pacific region, where Apple, along with partners like Motorola Inc, will push Power PC-based RISC computers and peripherals. "The Asia/Pacific is our real growth market," Amelio said. "China is a priority, in cooperation with Motorola and others."
Pushing Power PC RISC Microprocessor
Motorola, along with partners Apple and IBM Corp, is pushing the Power PC RISC microprocessor for use in powerful personal computer and server applications. For Motorola, much effort is targeted toward Taiwan, which has a consortium working on motherboards, systems and related devices like set-top television boxes using Power PCs; Kuala Lumpur, where the Power PC chips are assembled onto boards and tested for worldwide consumption; and China, potentially a huge market for Power PC computers. Motorola also has a technical support center in Taiwan.
The Power PC should get some help from Apple clone makers as well. UMAX Corp, a key third-party maker of Power PC computers, showed a new Power PC system at MacWorld. UMAX is headquartered in Taiwan and has a branch office in the United States.
Software for the Power PC systems is being localized for the Chinese market. China has planted the seeds for growing the Power PC system market, said Phil Pompa, director of worldwide marketing for the Power PC in Motorola's RISC microprocessor division in Austin, TX.
Pompa said a Power PC computer association was formed in China in June. Motorola is working to move the Macintosh and NT operating systems into China.
To date, most Power PC chips have been sold in Apple Macintoshes rather than by IBM or Apple-compatible makers, Pompa said. However, Pompa expects to see more growth from Apple-compatible makers like UMAX and Power Computing Corp in the future.
Pompa figures that the Motorola name has actually helped Apple in China because Motorola has long-standing and diverse ties and joint agreements with the Chinese government and local companies. Included is a forthcoming semiconductor fabrication facility and a new joint venture for Power PCs. Late last year, Motorola announced a joint venture with Panda Electronics Co of China to develop, produce and sell Power PC systems. Motorola holds a 60% interest in the new company, Nanjing Power Computer Ltd, and Panda holds 40%. Nanjing Power Computer eventually plans to sell the RISC systems both in China and elsewhere in Asia. The first products of the joint venture are scheduled to reach Chinese markets this year.
The systems will be made in the Jiangning Economic and Technology Development Zone in a factory capable of producing 100,000 systems a year. Pompa said the operating system still is being ported to support the Chinese language. "China represents a huge market for us over the next five to 10 years for the Power PC," said Pompa.
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