The plan has been wrong, said Steve Jobs, giving his status report on Apple Computer Inc’s business four weeks after CEO Gil Amelio was ousted. People want to fall in line behind a good strategy – they just haven’t had one. Key to the company’s turnaround will be its ability to capitalize on the Apple brand, with MacOS restored to center stage in the company’s product plans. (It claims to have surpassed its best expectations and shipped 1.2 million copies of MacOS 8 in two weeks). Not that it’s shying away from the next-generation Rhapsody operating system, but the majority of the products that will be instrumental in the planned turnaround will be based upon MacOS, it says. Currently at a revenue run rate of around $7bn this fiscal, down from $9.5bn in 1996 and $11.1bn in 1995, the company may yet have to dip below $7bn before the upswing, but says there are no further layoffs planned, even though cost-cutting measures will continue. The object of Apple’s eye going forward therefore, will be its key education and creative content markets, according to Jobs. With around 7% of the PC market and between 20 million and 25 million users in total, hosting a $1.5bn third-party software industry, Jobs estimates Apple owns 80% of the publishing, pre-press and graphic design markets and that 64% of internet sites are created on Mac. He claims 10% of users buy Macs just to run Adobe Photoshop; but when was the last time the company built a products tailored for Photoshop or did joint marketing? In education, 60% of computers used in schoolrooms are Macs, Jobs claimed, business worth $2bn a year to it. Although the educational IT market is growing at 20% a year, Apple’s share is sinking. So will it exit other markets as a result? No, its says.
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