Apple Gives Tech Good Name

For most tech companies 2001 was the worst of times, but for Apple it was often the best of times. Despite the nose-diving stock market and sluggish economy, Apple gave fans reasons to cheer. Farhad Manjoo reports from San Francisco.

SAN FRANCISCO -- People will call you a fool if you say this, so you'd better keep it quiet. The analysts will say you're a dreamer, Linux fans will tell you to get with the program, and Windows users will accuse you of living in the past.

But if you're a Macintosh user and you've been thinking this, you're right: Apple was one of the most successful tech companies of 2001.

It was AOL Time Warner that got the glowing profile in The New Yorker, and Microsoft that -- thanks to a couple of big product debuts and a stable of good lawyers -- ended the year as the top-performing Dow stock.

But while other PC makers sunk their prices and hemorrhaged workers, Apple, with a mere 4 percent of the worldwide market, pushed the envelope technologically. It released about a half-dozen dazzling new products as well as recovering from a financial blight -- all while getting no respect from tech watchers.

Now the company is poised to make another splashy announcement or two at the Macworld Expo, which begins Monday. Speculation about what CEO Steve Jobs will debut in his keynote address -- which always runs high -- has been frenzied during the past week, with Apple itself fanning the enthusiasm. But even if this announcement is as big as Apple promises, will the company get its due in a world that increasingly sees Windows as the only way to go?

"They've done some pretty amazing things over the year," said Matthew Rothenberg, who writes a weekly Mac column for eWeek magazine, "but of course when you're Apple you're constantly battling with a minority market share, and it's hard to be taken seriously as a player if your market share is in the single digits."

The dawn of 2001 found Apple in the doldrums, its stock price scraping bottom after the pricey molded-plastic G4 Cube, the company's big release of 2000, flopped on arrival. People who'd bought the machine for its beauty were finding that its clear exterior was developing a fine web of unbecoming cracks -- making the whole experience rather ugly for Apple.

Many were counting out Jobs' company, but in no time, Rothenberg said, Apple released a couple of machines that once again made Mac fans feel all warm and fuzzy about their company.

The first was the world's thinnest portable computer and perhaps the most powerful, the Titanium Powerbook G4, which debuted at last year's Macworld. The other machine, released in May, was a redesigned iBook that Jobs claimed was the smallest "consumer" notebook on the market.

"Those portables really helped them get on the right footing," Rothenberg said. "It really got them strong, and the sales of that new iBook helped to spur their education sales, which had been a worry before."

In addition, the company launched a chain of retail stores, 25 of which opened last year. And it discontinued that ill-fated Cube. These moves brought the company back into the black in the first quarter, something that had seemed impossible a few months before -- and it has stayed profitable since.

To hear him talk at speeches and during his occasional surprise announcement, Jobs' favorite product of the year was the one that was initially most misunderstood by users and the press: Mac OS X, a completely revamped operating system that aimed to marry a Unix core with a Mac look and feel.

When it was released in March, the consensus among users was that the OS looked great and that many of the improvements in the interface were stellar, but that the released version definitely had some major flaws. Some parts of it were slow, and applications that were meant for older operating system sometimes had problems running under X. The fact that many third-party, X-specific apps had yet to be released compounded the problem.

An upgrade of the upgraded OS, version 10.1, was put out in September, and that went far in curing some of the X's ills.

Around the same time, Microsoft released its new operating system, Windows XP, which the company billed as being nothing short of revolutionary. But compared to the changes Apple made in its OS, many saw Microsoft's newest OS as somewhat staid. Sales of XP are reported to be OK, but nobody's rushing out to get it.

Nobody's really rushing out just yet to get Apple's OS X, either, but Nick dePlume, the editor of the Mac site ThinkSecret, said that slowly, it's becoming a Mac institution.

People realize that OS X is the future, he said, and "users have started using OS X or switched over to it as applications that are important to them are released as OS X native." One of the most anticipated applications, Adobe's Photoshop for OS X, is due out this year and many people expect Adobe executives to demonstrate it during Monday's speech.

Apple had one more product up its sleeve at the end of the year -- the iPod, a tiny, deck-of-card-sized MP3 player that initially left Mac lovers a bit puzzled but eventually seemed to have gotten the better of them.

According to Steve Baker, the director of research at The NPD Group, which tracks retail sales, the iPod was among the top five best-selling MP3 players of the past couple months. This despite the fact that it's more expensive than the others and it only works with Macintoshes.

The iPod is regarded as a kind of harbinger of other consumer electronics products that might come from Apple in the next few months. Jobs has said he wants the Mac to be at the center of peoples' "digital lives," and such products -- like PDAs or cameras, which would presumably only work with Macs -- could make that kind of lifestyle attractive.

But the iPod was criticized by some Mac users for not being revolutionary enough -- for being just a slight cut above your standard MP3 players. That's one of the reasons why ThinkSecret's dePlume believes that above all else, this year Mac enthusiasts are expecting something that will make the other PC makers' wares seem tired, and they don't just want a "Mac version" of an already available consumer electronics device.

DePlume thinks the answer is the flat-panel iMac. "A lot of people will be very disappointed if they don't release that," he said. "At this point, users want something more. It's about the form factor. They want to see some industrial design, like when the iMac was first released. It was revolutionary, and now users are waiting for the next one."

Earlier this year, Jobs told Fortune magazine, "A lot of companies are great at making money, but there aren't that many that are great at opening new doors. We're building the best personal computers that anyone has ever built."

He may be right -- when the G4 PowerBook was released, for example, several reviewers wrote that it was the best notebook they'd ever used.

If it keeps on at the same pace it did in 2001, and if its Macworld debuts do really offer a "backstage pass to the future," as it has promised, perhaps people outside of Apple's passionate followers will take notice. Then again, maybe they won't.