The Review

Watch me Pull a Rabbit Out of My Hat:

Steve Jobs Keynotes the WWDC
May 11th, 1998

Today Steve Jobs addressed the faithful. And it was worth the wait.

The good news is in the hardware, in the OS, and in the financial performance of the company. In fact, there isn't much bad news. He has pulled the rabbit out of the hat, and Apple seems to be on the right course for the future. It's undoubtedly been a painful process to trim operating expenses and abandon technologies that held some promise, but what has emerged is a strategy for the future, a new direction for the company, and a rank of hardware that smokes the Wintel alliance.

Last June I visited Apple HQ in Cupertino as the editor of Digital Output magazine. I've seen better morale in the drunk tank on Sunday morning. There was an air of gloom that permeated the place. Some fought it, but it was obvious. Apple had all of the signs of a company that had lost its way. Clearly, it had lost its focus. In a followup editorial I took a shot at those who criticized Jobs' return. I thought he could return Apple to a focused course. I knew he could rally the troops.

Today a relaxed and confident Steve Jobs did exactly that as he addressed the critical developer audience and excited them about Apple and its new direction. From the moment that he appeared on stage, appropriately attired in jeans, it was obvious he was in charge of both the company and the audience. Some Apple employees call him "Interim CEO for Life," and they smile when they say it. Jobs has grown as a leader, beginning his presentation by giving credit to the people within Apple that really made "the rabbits." In his moves, in his gestures, and in the broad range of new things he presented, it's clear that the spirit is back at Apple. So is the financial performance.

Apple has had back-to-back profitable quarters. Operating expenses have dropped from $313 million to $298 million. Sales from the previous quarter are up eight percent from the same quarter last year. Cash reserves for Apple are $ 1.8 billion. The book value of the company has gone from $1.8 billion to $4 billion in ten months. And I think the stock is still undervalued, since current cash reserves are equal to the book value of only a year ago, and the new hardware rollouts and the new OS strategy only foretell a stronger future. Perhaps the best financial news is that Apple has increased its sales of CPUs through CompUSA from 3 percent to 15 percent of CompUSA's total CPU sales. But the real steamroller is the new equipment (aka "cool toys").

The product line is finally rational. I don't know anyone who could give a cogent explanation for the difference between all of the models that were on the market recently. (Jobs said he couldn't make sense out of it either.) The current line is essentially four products. The professional line is a desktop, the G3, and a Powerbook, the new, rationally priced, Powerbook G3, which starts at $2299. The other side of the equation is the consumer line which will shortly consist of the new iMac and a yet-to-be-announced portable. And these puppies scream. The latest and greatest Pentium II/400 is officially smoked by the current G3 desktops, and it appears that the fastest Wintel desktop will be slower than any of the G3 laptops. But where the real butt kicking will happen looks like the consumer market. The iMac is a real piece of work. With a G3/233, 66MHz bus, 32 megs of SDRAM, 24x CD-ROM, 100BASE-T, modem, and SRS sound, it's a home dream machine. And it all fits in one case, including the 13.8 inch monitor. The best news is this puppy is going to sell for $1,299. The president of CompUSA thinks the only problem they're going to have is keeping them on the shelves. Sanguine news indeed!

So what about the software side of the house? Steve began with Quicktime, which has just been selected by ISO for MPEG 4. The new quicktime will hold, according to Jobs, a position similar to what PostScript language holds for the graphics industry. It is increasingly becoming an interpretive standard for all digital media. (It's about time, there are so many "standards" out there in the video industry alone that it is becoming confusing to edit a simple video.) And the new Quicktime 3 Pro supports streaming and rtp (real time protocol). He also announced unified JVM, a Java-compatible virtual machine. And he pointed out that Apple needs to increase their performance in Java well beyond their recent gains. But the real news was the announcement of a coherent OS strategy.

After having heard about Copeland, Rhapsody, Allegro, and a few other variants, I was glad to see a single strategy for the OS. The next version of OS8 will be Allegro (8.5). But the real news is OSX (OS10). It will be a modern operating system with protected memory, preemptive multi-tasking, multi-threading, high-speed I/O, and it will be fully PPC native. They showed off a demo version of OSX, running a QuickTime video in one window while they brought up a "bomb" application that was designed to crash. It did, and the system stayed up. In fact, the movie kept right on playing with nary a burble. Then they brought up a graphic program and had it constantly shift a color wheel while the movie played on. Both ran simultaneously and smoothly. My only comment is, "Please send me a copy."

The draft specification for OSX is available now, and the Beta is due Q1/99, with a release version out Q3/99. Most current apps will run under it, but without the "modern" OS features. Fortunately, the transition to a "native" OSX format should be relatively easy. The reason for this is that a critical part of the development of OSX was identifying the appropriate API set. The current version of OS8 has about 8,000 APIs. Two thousand of these were referred to as "bad news". The new API set, named "Carbon," will have about 6,000 APIs, of which a few will be new. It is estimated, by Apple, that you can bring your application up in OSX in one to five days and have it ready to ship in one to two months.

Frankly, I though he was blowing smoke at that point, until a gentleman from Adobe got up and demonstrated PhotoShop 5.0 running under OSX. They readied it for OSX native in nine days. And, last I recall, PhotoShop is a relatively demanding application. He also said that the process was speeded up by the fact that they could crash PhotoShop without having to reboot the system. (Boy, would I love to be able to do that.)

So that's a quick and dirty on Steve's floor show at WWDC. I left out the new cool commercials, and I know there's much more tech info that the hard core wants. It's all up on the site. For me, as one of the faithful, I was glad to see Apple reemerge as a dynamic company with a vision, a strategy, and a coherent plan for executing that strategy. Welcome back, Steve. And you really did pull some rabbits out of your hat.

- Francis Clark

© 1998 The Review