Macworld Expo: Setting the Stage

When Steve Jobs took the stage to deliver his Macworld Expo keynote speech at the Jacob Javits Center in New York last July, Apple was riding high. The day before, the company reported a quarterly profit of $200 million -- its eleventh consecutive profitable quarter. Apple's stock price -- while down from the dizzying heights of March -- was still chugging along at around $50 a share. And the company had a new operating system waiting in the wings, building excitement for future development on the Mac platform.

It was the ideal atmosphere for a stirring speech to inspire the Mac faithful -- and Jobs delivered. The Apple CEO announced new Power Mac G4s, redesigned iMacs, even a new mouse and keyboard. He showed off an updated version of iMovie and three new monitors. And then he pulled back the curtain on the G4 Cube, a sleek-looking, slimmed down Mac that brought the audience to its feet. All told, it was the most product announcements Apple had ever made in a single day.

It also proved to be the one of the last bright days for a company about to join the rest of the high-tech world in an industry-wide funk that rivaled the sulk sessions of even the moodiest teen-agers.

By the end of 2000, Apple was on its way to its first quarterly loss in three years. The company's stock, which plunged 52 percent in a single day, had fallen under $20 a share. Despite glowing reviews, sales of the G4 Cube fell well below expectations. And Apple wound up doing something it hates more than walking into a roomful of Windows machines -- admit that it missed the boat on some of its product decisions.

That's what makes Jobs' biannual speeches at the New York and San Francisco Mac trade shows such must-see events. The Apple CEO's pronouncements don't just reveal new applications and redesigned hardware -- they set the tone for the direction the company will take over the next six months, for good and for ill.

So as Jobs prepares to return to the Javits Center for next week's Macworld Expo, it's important to look back at some of the products that made their debut last year and the role they played in Apple's subsequent fortunes.

Enter the Cube

By far, the biggest news to come out of last year's Expo in New York was the launch of the G4 Cube. Visually striking and physically compact, it drew immediate raves as the Mac of the future.

But even amid the plaudits for how Apple managed to pack a processing wallop into a tiny, elegant package, some questions arose about the Cube. The cube-shaped Mac had a big price, but no expandability. And it wasn't clear just who exactly made up the Cube's target audience.

"A lot of pros wanted the simplicity of an iMac," Jon Rubinstein, Apple's senior vice president of hardware engineering, told Macworld . "A lot of consumers were buying G4s to get the power."

But few consumers were apparently willing to pay $1,799 for a monitorless machine that cost $200 more than a 400MHz G4. Cube sales fell far below expectations -- $90 million under projections for its first three months on the market. Apple tried slashing prices and adding a CD-RW drive. It didn't perk up sales. Apple wound up suspending production of the Cube last week.

Double Your Pleasure

The revised Power Mac G4s Apple unveiled at last year's Expo fared better -- but not by much. Apple updated the desktop to feature dual processors. But since Mac OS X -- and its built-in support for multiprocessing -- had yet to ship, Mac users didn't bite. G4 sales fell $30 million below expectations in Apple's fiscal fourth quarter, a shortfall that Apple attributed to customers opting for the less expensive 400MHz configuration.

More important from a PR perspective, the revised G4 line still topped out 500MHz -- where it had been since the fall of 1999. While processor speed isn't the only factor that influences performance, it certainly is a major selling point to consumers. And many computer shoppers saw Intel chips get faster as the PowerPC processor remained at 500MHz. It wasn't until this January that the G4 saw its top speed get bumped to 733MHz.

A Fistful of iMacs

The iMacs unveiled a year ago had less to do with boosting processor speeds and more to do with revising the desktop machine's look. Apple introduced four new colors -- indigo, ruby, sage, and snow, which joined the existing graphite shade -- and four configurations. It was possible to buy eight brand-new iMacs and never get the color or specifications twice -- a curious move since Jobs had declared that the Mac line had become too convoluted when he returned as CEO in 1997.

But a more crowded iMac lineup didn't hurt Apple -- a missing feature did. While other PC makers included CD-RW drives in their machines, Apple continued to ship hardware with built-in CD-ROM and DVD-ROM drives. The decision proved costly -- Jobs cited it as one of the reasons Apple failed to turn a profit in its fiscal first quarter. The company has since added CD-RW drives to its iMac, iBook, and G4 offerings.

Apple's fortunes have since brightened. The company scored big with the Titanium PowerBook G4 -- one of just a handful of focused product announcements at January's Macworld Expo in contrast to the slew of new releases at the New York show six months earlier. The redesigned iBook has won raves and helped Apple regain its lead in the education market. And while the tech market remains choppy, Apple has at least returned to profitability.

Mac users and developers may be more upbeat than they were a few months ago, but times still aren't as rollicking as they were last year when the Cube was still a gleam in Steve Jobs's eye. For that reason, look for next week's keynote by Jobs to grab more than its share of attention.

After all, the impact of what Jobs has to say is felt long after the Mac developers and Expo attendees pack up and head home.

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