Year in review: Apple's harvest

Ever bold and innovative, Apple Computer started the year with the introduction of the iMac, an all-in-one computer with a flat-panel screen.

With equal audacity, the company was forced to raise prices for the machine--even as sales began to sag--and then cut them again, despite higher costs for memory and LCD (liquid-crystal display) panels.

Apple's iPod music player, introduced late in 2001, experienced a crescendo in 2002 as the company unveiled devices with more memory, as well as a Windows-compatible version. Even Dell Computer, a bitter rival in the education market, started selling the slick MP3-playing device.

Apple expanded beyond its typical markets, launching its first rack-mounted server. The company's retail store effort came into its own, with more than 50 outlets opened by the end of the year.

On the software front, the company unveiled Jaguar, a new version of Mac OS X. The software included a number of new features such as iChat instant messaging, an improved e-mail program and handwriting-recognition technology.

Customers cried out, however, when the company announced plans to start charging for its iTools service, which it renamed .Mac. Even as consumers rallied to sign a petition protesting the decision, Apple said it managed to attract 180,000 subscribers as of October.

Nevertheless, the Mac maker was not immune to the overall PC malaise, cutting jobs in small numbers during the year. The company did manage to acquire several small businesses, however, mostly in the graphics arena.

--Ian Fried

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