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Jobs sticks to the basics

With the exception that Apple will post a $45 million profit, Steve Jobs shows little of the glamour or surprises that have been Macworld's tradition.

SAN FRANCISCO--With the notable exception of an expected $45 million profit, Apple Computer (AAPL) interim CEO Steve Jobs's latest "state of the Mac" address at the Macworld Expo trade show here provided

Apple interim CEO Steve Jobs
Apple interim CEO Steve Jobs
little of the glamour or surprises that users and observers have come to expect from Apple.

Jobs again took the opportunity to update Mac users on the company's health in another effort to show the company is on its way back. The tone of his comments echoed what he has said in previous Mac events, such as the Seybold SF publishing conference in October of last year.

Jobs updated the audience on initiatives such as the effort to sell systems over the Internet as well as the status of sales of Special coverage: All the Mac's a stage the recently introduced PowerMac G3 systems.

"We forecast we would sell 80,000 G3 machines" in the first quarter, Jobs said. "We were wrong," he chirped, in a jocular reference to the company's historically bad forecasting.

The good news for Apple is that it has shipped more than 130,000 systems in just 51 days, according to Jobs. "This is great," he declared, noting that the new G3 systems already constitute more than one-third of system sales for the company.

Apple's project profit in large part owes to the strength of new Power Mac G3 system sales.

"We're starting to see some results...Apple is coming back," Jobs said to much applause. Jobs did hint that the company might not reach sustainable profitability, noting that the second quarter for Apple is traditionally the company's slowest, but promised "We're going to look to deliver a result you can be proud of."

"The real question for Apple is whether either the hardware or software can attract customers who are not existing Apple customers," said Amy Wohl, editor and principal analyst for TrendsLetter. "Can they expand their market share out of where they are? There isn?t a game plan for growing," she observed.

On the upside, Wohl says she finally has the sense that the company has a better understanding of the technological and market issues that needed managing, whereas before the company was prone to wild swings in strategy.

Wohl says that the company should continue to emphazise its uniqueness in markets that value this quality. "I think that when you look at the tight integration between hardware and software...its only in [this environment] that you can get some unique features that you've ever had the ability to do in the 'Wintel' environment."

Aside from posting a profit, perhaps the most significant component of the keynote was the official announcement of Microsoft Office 98 for the Mac, as previously reported. As much as many of the audience members like to hate Microsoft--they hissed when Jobs mentioned that Microsoft's Internet Explorer is now the default browser on the Mac--it was evident many of them use older versions of Microsoft's products such as Office to do a great deal of daily work.

Audience members applauded wildly at Jobs's description of a number of features that make the Microsoft programs easier to use. Moreover, having a new version of Office 98 suite with features that are not available for the Windows platform could

Gregory Hines and Muhammad Ali
Celebrities Gregory Hines and Muhammad Ali add star power to Macworld.
give current Mac users a good reason not to move to the Windows platform, a concern at Apple.

Jobs also announced that a revision to the Mac operating system will start shipping on systems starting in February. The Mac OS 8.1 upgrade fixes minor bugs, increases performance, and offers support for DVD-ROM drives. As such, it is the first major operating system to have DVD support built in, Jobs claimed. Some minor new options for configuring G3 systems were announced, such as high-performance hard drives and a 128-bit graphics accelerator.

Such options could make buying systems directly from Apple even more palatable--Apple is already offering users the ability to customize the new G3 systems from the factory, an option which Apple's resellers don't currently have. Jobs did promise that resellers will have the ability to order custom-configured systems for customers by the end of the quarter but provided no details of the company's plans.

In an attempt to build revenue, Jobs announced that Apple will now charge $29.95 for a "professional" version of QuickTime, the company?s popular multimedia authoring and playback software. The professional version will have authoring capabilities and other features that the free, "playback only" version will not, including the ability to simply drop a video clip on top of another clip and automatically splice the two clips together for playback.

Reacting to the speech, Jean Bozman, operating system research manager for International Data Corporation said she approved of Jobs' focus on telling how Apple is returning to profitability, getting software partners back on board, and retooling its product lineup. "All of these moves are blocking and tackling to bring the company back in a position where they can move forward again," she said.

Bozman added that she was somewhat dissappointed Apple didn't elaborate on its strategy for Rhapsody, its next-generation operating system. "Steve [Jobs] has been good at not overextending people's expectations, and therefore better able to able to meet them."

But Apple vice president of software engineering Avie Tevanian later noted in a press conference with a certain annoyance that Apple has always said it will continue on the path of the Mac OS, and that "Rhapsody is not in the spotlight [today]."

Other things not in the spotlight today were answers to Apple's network computer (NC) strategy or its plans for the Newton technologies.

Fred Anderson, Apple's CFO, said that the company would continue to ship current eMate and MessagePad products but declined to say that Apple would ship a new MessagePad model, leaving open the possibility that the eMate could continue on in Apple's lineup for some time even if new Newton OS-based products are not forthcoming.

Apple declined altogether to comment on its plans for an NC.