Comeback Kid

This story appears in the May 1997 issue of Entrepreneur. Subscribe »

Apple computer is taking steps large and small to shore up its ailing business. Bringing back founders Steven Jobs and Stephen Wozniak was one of its higher-profile moves. At the market level, Apple is carefully targeting select audiences, such as small business, where it already has a strong presence. Most recently, the company teamed with Microsoft to introduce the Apple Small Business Macintosh Series, a package of new, attractively priced machines targeted at the small-business market.

But while this market looks like a good thing from Apple's perspective, is Apple still a good bet for small-business owners?

The answer is a qualified maybe.

Lower Prices, More Features

Despite a policy of charging premium prices for its machines, Apple has long been the favorite of small-business owners. Because most entrepreneurs don't have the benefit of an information systems manager to set up and maintain their computers, they have always appreciated Apple's Macintosh operating system (OS), which makes it easy to set up and use. Many users, with an attachment built over 20 years, want more than anything to remain loyal. This is certainly a plus for Apple.

For new users, Apple has finally gotten the message that it needs to lower its prices and is now offering small businesses more bang for their bucks. Apple's new Small Business Macintosh Series machines offer more functionality and are stuffed with more software than comparably priced machines from Windows PC vendors targeting the small-business market.

Apple teamed up with Microsoft to ensure the Small Business Macintosh Series would be jam-packed with leading business software. It offers Microsoft Office for the Macintosh 4.2.1, which includes the Microsoft Word 6.0.1 word processor, Microsoft Excel 5.0 spreadsheet software, Microsoft PowerPoint 4.0 presentation graphics program, and a client license for Microsoft Mail or Quarterdeck Mail for AppleTalk networks, which allows a user to connect to an e-mail network server.

These versions are comparable to those available for Windows 95. In addition, this release of Microsoft Office also includes software found in Microsoft's own small business package, which costs an additional $100 on the PC version. This extra software includes 43 templates for Microsoft Office designed to help businesses in the areas of planning, finance, management, marketing, operations and sales. It also includes Microsoft Business Guide, a small-business information resource on CD-ROM with more than 400 checklists, tips and suggestions to help businesses get bank loans, reduce operating costs, develop marketing materials that work, and more. It also includes CD-ROM reference library Microsoft Bookshelf 1996-97, Microsoft Internet Explorer 2.1, and Internet Assistant to help you get up and running on the Net.

Apple has also generously loaded the machine with packages you're unlikely to find pre-loaded on any PC-based system, including Norton Utilities, the Now Up-To-Date & Contact contact management program, Jian BizPlan Builder and MacPublisher.

The hardware itself is beefier than the laBODY PCs targeted at the small-business market. Every system comes standard with a 12-speed CD-ROM drive, a built-in Zip drive, and a fax modem that sends and receives data at up to 33.6 KBps, and sends and receives faxes at up to 14.4 KBps. (You'll be able to upgrade the modem to 56.6 KBps when the technology becomes available through a software upgrade. For more information, check with your Apple dealer or visit Apple's Web site at www.apple.com.) Every system also comes with a built-in speakerphone and digital answering machine, and 12 expansion slots (six internal and six external).

The Small Business Macintosh Series comes with a warranty that includes 90 days of free service and support (call 800-SOS-APPL) and a one-year limited warranty on parts and labor.

The flagship product in the series, and the recommended machine, is the Apple Small Business Macintosh 6500/250. This model comes with a 250 MHz (compared to 200 MHz for a high-end PC) PowerPC 603e RISC processor with 256K level 2 cache, 48MB RAM (as opposed to 32MB on a comparable PC), 2MB video RAM, a 4GB hard disk (vs. 1.3GB on a comparable PC), and a 1.4MB floppy disk drive. The estimated retail price for this model is $2,599 (comparable to the price of a standard PC).

Another option is the Macintosh 4400/200. Priced at just under $2,000, this machine is based on a 200 MHz PowerPC 603e RISC processor with 256K level 2 cache, 32MB RAM, 2MB video RAM, a 2GB hard disk, and a 1.4MB floppy disk drive.

Chasing Small Business

Actually, Apple has been strengthening its hold on the small-business market for some time now. Back in March 1996, the industry journal MacWeek reported that Apple's marketing of the Macintosh to corporate buyers had slowed since the previous year, while programs aimed at small business were racing ahead.

Since then, Apple has introduced a number of programs specially designed for the small-business market. In addition to the new small-business computers, Apple has joined forces with the Small Business Administration and will eventually set up a total of 48 Business Productivity Centers nationwide; at press time, 23 centers were open. The centers will assist small-business owners in starting or growing businesses by giving them access to Macintosh computers and technology, the Internet, and hardware and software from Microsoft, Jian, Claris, Farallon, Big Business and Symantec.

Apple has also set up a Web site targeted to this market (http://www.smallbusiness.apple.com). In addition to providing information about Apple products targeted to small business, the site offers general information of interest to entrepreneurs.

"Apple is shoring up niches where they are well-represented," says Roger L. Kay, senior research analyst in the Personal Systems Group at International Data Corp. (IDC), a market research firm in Framingham, Massachusetts. "They already have a high proportion of the [small-business] market. They feel it's a battle they can win."

Good For Business?

But the real question on small-business owners' minds is this: Is Apple still tops for small business? According to Kay, "The new machines were well-conceived, and Apple has come up with a well-targeted offer."

There is some debate over how superior Apple's Macintosh OS remains now that Microsoft has incorporated many Macintosh-like features into its Windows 95 operating system. Most would argue that the Macintosh OS is still more elegant than Windows 95, which remains rooted in DOS, but that the differences have narrowed considerably.

Apple is working on a new OS, code named Rhapsody (see last month's "Business Bytes" column for more on Macintosh's new developments), but that's not expected to appear for another year. While Apple is promising to offer continuing upgrades to Macintosh OS 7.x while Rhapsody is in development, none of these improvements will feature the pre-emptive multitasking necessary for crash protection and stability that is anticipated to be included in Rhapsody.

Another issue for buyers to consider is the fact that software publishers are consistently abandoning the Macintosh due to its decrease in world market share from 10 percent to approximately 5 percent. If you have specialized software requirements, make sure you can find the software you need before selecting the Macintosh platform.

Still, the Apple Small Business Macintosh Series machines come with all the software most small businesses are ever likely to need. Apple should be around to support them for the life of the machine (which these days is generally about three years). And the company has gone out of its way to make it easy to import and export files to and from other operating systems.

All this means Apple is still a good deal for small-business owners making a purchase right now--as long as the software that comes with the Small Business Macintosh Series meets your current and future requirements.

Contact Sources

Apple Computer Inc., (408) 974-6821;

International Data Corp., 5 Speen St., Framingham, MA 01701, (508) 872-8200;

Microsoft Corp., 1 Microsoft Wy., Redmond, WA 98052, (800) 426-9400.

Cheryl J. Goldberg is a former editor of PC Magazine and has reported on the computer industry for more than 14 years. Write to her in care of Entrepreneur, 2392 Morse Ave., Irvine, CA 92614. You can also reach her via CompuServe at 70641,3632.