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ATPM 6.02
February 2000



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Apples, Kids, & Attitude

by Robert Paul Leitao,

Three Kids and an iMac

What’s a parent to do when several members of a family need to share one computer?

I purchased an iMac for my family the first day they were available for sale, August 15, 1998. It’s been a fun family computer. The multiple user features of Mac OS 9 now make it possible to create a uniquely personal computer for each member of my expanding family. My eight-year-old daughter is learning to use the Internet for school research and to learn more about the world around her. My seven-year-old son, who is just learning to read, likes to play educational CD-ROMs and shareware games. The multiple user capabilities allow me, as the “owner,” to assign access privileges to each user of the iMac so my daughter can surf the Internet safely and my son can play his CD-ROMs without the risk of disturbing anyone else’s files. As importantly, he can’t install new software or shareware (one of his favorite pastimes) without my authorization. My fiancée’s four-year-old has a unique desktop comprised of buttons that are easy to navigate and understand. All in all, the multiple user features of Mac OS 9 allows each user to have a specially tailored user environment on an iMac that everyone shares.

KidSafe, one of the new iTool features available on Apple’s Web site, allows parents to control the Internet content their children can access and view. There’s no more keeping one eye on the popcorn popper and the other eye on Web site link your child just clicked in the few nanoseconds you’ve been away from the chair. KidSafe is lock-solid. Only sites that have been educator-approved are available for view. It’s a wonderful tool for parents who want their kids to explore the Internet safely.

Download the iTools software from the Apple site. It’s worth the time and effort. Don’t forget to get your free e-mail address. While you’re on the Apple site explore iTool’s other cool features such as iDisk (a great way to share files across the Internet and with friends and family members around the world) and HomePage (an easy way to build the home page you first promised yourself sometime back in 1995).

No News is Good News

Many veteran Apple watchers were disturbed by the lack of hardware announcements at the recent Macworld Expo. There’s good reason no announcements were made. Wall Street is far more concerned with margins than with megahertz. In order to keep Wall Street’s favor Apple must maintain a high gross margin per unit sold. The past several months have seen big increases in prices for computer components. Coupled with the downward trend in PC prices, profitably selling computers at an attractive price has become both an art and a science. Processors are most expensive when they are first released. Someone has to pay for the R&D and the production runs. Further, until full production begins supply problems are a significant risk.

Apple’s recent decision to introduce the Sawtooth motherboard into the G4 product line, prior to the release of machines with faster processors, was a good one. When the new processors are available in reasonable quantities, rest assured that faster machines will be introduced. In the meantime, Apple is in the business of making money. It can only do so by strictly controlling inventory. Older products don’t sell once their successors have been announced.

Anti-Trust Problems?

No. I’m not talking about our friends in Redmond. I’m talking about the not-so-silent whispers concerning Apple. If the Mac controlled a high percentage of the desktop PC market anti-trust problems would be a real possibility. No other major PC company makes both proprietary hardware and an operating system to go with it. The fact that Apple controls a small segment of the PC market is what is shielding it from anti-trust problems. The benefit to Mac users is that one company is responsibility for the look, feel, and operation of their PC. There are many reasons (smart reasons, too!) that Apple has chosen to eliminate most hardware peripherals from their product line. It increases the level of third-party investment in the platform, allows users to benefit from innovative technology made by others, and helps to reduce the risks of anti-trust actions. Apple doesn’t need to be the top PC manufacturer in order to make money, and Mac users don’t need the Department of Justice raiding the party.

My Predictions For 2000

Below are my predictions for the year 2000:

  1. Apple will end the fiscal year (the period ending in September 2000) with net income before non-recurring items of $3.75 per share.
  2. By the end of the fiscal year Apple’s stock price will reach $150 per share.
  3. Apple’s domestic PC market share during the fiscal year will grow by 25% over year-earlier levels.
  4. The release of Mac OS X Consumer will be a big success, spurring greater interest in the platform among consumers and developers.
  5. Adobe Systems will be among the main beneficiaries of the release of Mac OS X Consumer. Watch for a continued close relationship between the two companies and a few startling surprises.
  6. Multi-processor Macs will be unveiled no later than August 2000.
  7. There will be big fallout from among the nation’s PC manufacturers. The PC market may grow in terms of units shipped, but the number of companies that can profitably remain in the business will shrink. Watch for major moves by Compaq and Gateway to reduce costs and increase margins. Both companies will continue to realign their product and service strategies in order to maintain profits.
  8. Apple will announce new long-term supply contracts with component manufacturers including IBM.
  9. KidSafe will help Apple reestablish itself as the undisputed PC leader in the K-8 education market, outselling Dell for the top spot.
  10. Electronic books will soon become the rage. It will transform the way we access reading material, from comics to classics. Adobe Systems will play a key role in this emerging paradigm.

See you in May!

apple“Apples, Kids, & Attitude” is copyright © 1999 Robert Paul Leitao,

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