Apple's playing in the big leagues now

It's easy to get sucked in by Apple's "wow" factors -- the appealing design of Mac hardware and the unparalleled enthusiasm CEO Steve Jobs injects into everything he pitches. Apple's combination of strengths adds up to a great PR strategy, and Apple has a compelling technology story to tell. That has always brought the tire kickers and window shoppers out in droves.

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Now that money is slowly returning to the wallets of IT buyers, the showy schemes that turned heads early in 2003 may not be enough to raise Apple's share of the corporate market. It will all come down to engineering and building relationships with partners and customers. If Apple can't hit both targets squarely, it will get smothered by its ruthless competitors.

Recent announcements firm up Apple's leadership in engineering. Even if you're not swayed by Apple's efforts, you have to admit that Apple's tech wizards are giving it everything they've got. Their technology is sure to attract a lot of attention, but will Apple's approach reel in the fickle IT audience? The question that remains unanswered is whether IT is willing to bite.

Putting Technology First

At its June Worldwide Developers Conference in San Francisco (at which I spoke as an independent journalist), and at IDG's July Macworld Creative Pro Conference & Expo in New York, Apple laid out a sumptuous buffet of new technologies, with many pointed straight at IT. The next major release of the OS X operating system bears the fierce code-name Panther. It is a huge update that, according to Apple, makes OS X the finest blend of standards-based Unix and unique usability enhancements of any commercial operating system.

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The next desktop Mac, the 64-bit Power Mac G5, was unveiled with an uncharacteristically boastful tag, "the world's fastest PC." This claim has not gone unchallenged -- indeed I'm on record questioning both Apple's testing methodology and its categorization of the Power Mac G5 as a personal computer. However, later independent tests by NASA's Langley Research Center show that the Power Mac G5 outperforms Pentium 4 and Xeon systems on several tests. And Apple is certainly free to call its new workstation a PC if it chooses.

Apple's new Xcode programming environment is key to drawing new developers into writing Mac software. Xcode improves OS X's standard set of tools, originally developed for the NeXT system, by adding a great many modern features, particularly in the editor, help engine, and debugger. The iSight FireWire Webcam and the iChat AV instant messaging client offer affordable, high-quality, point-to-point video conferencing.

These fresh announcements follow quickly on the heels of several other milestones, including the shipment of Xserve RAID, Final Cut Pro 4.0, the 12-inch and 17-inch PowerBook G4 and the redesigned dual 1.33GHz Xserve.

Gathering all of these developments together leads to some fascinating conclusions. First, Apple is shoveling revenue directly into R&D at a time when tech companies are nursing their cash piles, filing lawsuits, or declaring bankruptcy in lieu of innovation.

Second, this latest product push respects current customers. Rather than de-emphasize existing

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systems in favor of the technology in Panther and the Power Mac G5, Apple is ensuring that all of its software runs well on established hardware.

Third, the company's efforts target traditional and new constituencies equally. The usability and aesthetic enhancements to the Panther client OS will grab the fancy of desktop and notebook users across the board. Panther Server sports a huge assortment of new services, administrative tools, and open source hooks, including the BSD Ports collection and a development interface to the Safari browser. All of this, plus Xcode and the JBoss J2EE server, adds up to a hearty embrace for Unix developers and administrators.

The Server Value Equation

Apple is testing an imaginative way to blend power with value: Price hardware to maintain margins that support Apple's high manufacturing and distribution costs, but bump the customer value way up with software. By Apple's estimation, bundling an unlimited-user OS X server license with the Xserve rack server amounts to a $1,000 rebate on the hardware's price (Apple's retail price for OS X Server is $999).