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Apple Hopes New `PowerPC' Will Be the Next Macintosh

APPLE Computer's next-generation machine may do for the company and its loyal customers what the Macintosh did a decade ago. The new computers - called PowerPCs - could catapult Apple into a new era of growth and expanding market share.

``Apple's going to do OK,'' says Mel Phelps, senior technology analyst at Hambrecht & Quist in San Francisco. ``They have a nice new platform in PowerPC.''

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The company wowed users last week when it showed off prototypes of its new systems at the Macworld Expo in San Francisco. Apple plans to introduce PowerPCs perhaps as early as mid-March. ``If Macworld is any indication of the fervor of the market toward PowerPC, it's pretty high,'' says Dave Harding, a product manager at WordPerfect Corporation in Orem, Utah. ``Without a doubt, PowerPC was the item at the show.... It was like 1984 all over again.''

That was the year Apple introduced the Macintosh computer, which solidified the company's status as the main alternative to the dominant IBM-compatible machines. In 1984, the Macintosh stood apart because of its graphical, easy-to-use operating software. Now, as the IBM-compatible world catches up on the software end, Apple is poised to jump ahead in hardware.

``They're going to be offering - in $2,000 to $3,000 systems - very competitive performance,'' says Michael Slater, publisher of Microprocessor Report, an industry newsletter in Sebastopol, Calif. The PowerPC will be the ``first time in history they offer the pure, raw performance of mainstream IBM PCs.''

With its aggressive pricing, Apple is targeting the middle market of users. It can afford to do that, in part because the Motorola chip that powers the new computer costs about one-half of Intel's top-of-the-line Pentium microprocessor.

BUT Apple's strategy is conservative and potentially confusing. It is confusing because the PowerPC is a consortium in which Apple has joined forces with chipmaker Motorola and IBM. IBM has begun selling its version of the PowerPC. But the two PowerPCs share only their chip and their name. The IBM version will not communicate with the Apple machine because they run on different operating systems.

The strategy is conservative because Apple will dominate its current niche rather than break out into a broader market for desktop computers. The IBM personal computer became the industry standard in the early 1980s because IBM allowed anyone to build compatible machines. Many IBM ``clones'' appeared, setting off a ferocious pricing battle that made the machines affordable. But no one outside of Apple manufactures the Macintosh. The company gives no indication that it will act any differently with the PowerPC.

The first priority is the company's new System 7 operating software, says Betty Taylor, spokeswoman for Apple's personal computer division. ``We will deliver [PowerPC] systems beginning in the first half of this year that will run System 7,'' she says. Future PowerPCs will be able to operate on PowerOpen, a brand of the Unix operating system. The result is that Apple's PowerPC will coexist with the dominant PC architecture, rather than challenge it directly.

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The niche is large and comfortable. By dropping prices dramatically on its Macintoshes, Apple has become the second-largest desktop-computer vendor behind IBM. ``It's OK to be in niche markets,'' says Mr. Harding of WordPerfect. ``The consumer market is a fairly large chunk of the pie.'' Analysts expect Apple to sell 1 million or more PowerPCs this year.

Microsoft, a leading softwaremaker in the PC and Macintosh worlds, committed to creating Apple PowerPC applications more than a year ago. It has not yet decided whether to build applications for the IBM version of the PowerPC. WordPerfect plans to offer its leading word-processing program on the Apple PowerPC as soon as the machines are shipped out. It, too, has not made any commitment to the IBM PowerPC.

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