Colourful iMac provides foundation for Lazarus-like corporate revival at Apple

"The geek shall inherit the earth," read the grey T-shirt on one eager MacWorld attendee this week at MacWorld Expo in New York, the annual summer love-fest for Apple Computer fans. But whether or not Macintosh users will be among them still remains a tough call, although the odds are considerably better than in recent years for the survival of the once-ailing computer company.

With seven consecutive profitable quarters, including $200 million for the quarter just ended, a $3 billion cash reserve and a plan to buy back $500 million in its own stock, "Apple's become a very focused company," said interim chief executive officer Mr Steven Jobs on Wednesday.

The past year has been, by any measure, a fortissimo performance for a computer manufacturer that most analysts had written off. For several years the company had bled both money and top employees, who seemed to find almost any pasture greener than working for the firm that had once personified innovation in computing.

But in the past 12 months, the company has consolidated gains it has made slowly but surely ever since the return to the helm of charismatic Apple co-founder Mr Jobs at the end of 1996. Initially controversial decisions now seem adept rather than, as some believed, clumsily miscalculated, including those to cut staff, guillotine many Apple products, end licenses that allowed partner companies to build Mac "clones" and - to the horror of many Macintosh fanatics, who also tend to be vigorously anti-Microsoft - accept investment and closer ties to Bill Gates's company.

Apple also began to restructure its product offerings, which once sprawled across so many convoluted categories that consumers found it hard to know what to buy - and therefore, did not. Now, there are two lines only: one for professional users who need higher performance, and one for consumers.

However, it is during the past year that Apple has had, in every sense of the word, visible success. The launch of boldly-designed and colourful computers that also had greatly improved performance (sluggish performance was always a downside to owning a Mac) captured the public eye. As Mr Jobs did so well back in 1984 with the introduction of the Macintosh, he captivated the public with a product it had not realised it wanted, cannily anticipating consumer boredom with bland, lookalike machines and the need for easier Internet access.

Thus, the company's saviour has been the little iMac - the "i" standing for Internet - marketed as a low-end, consumer-friendly, Internet-ready Macintosh. Initially available in translucent blue and white, last January the company introduced five new colours, what it calls "flavours", of iMac.

Presciently, Apple codenamed the machines "lifesavers" after the multi-hued American hard sweet. As shipments approach 1.9 million for the computers, the codename is apt.

As Mr Jobs said during his keynote speech, in a fair assessment of the iMac's influence on design and consumer trends: "The iMac has become almost pervasive in our culture and yet it's only one year old." America is now awash in products, mostly unrelated to computers, which come in translucent coloured plastic casings. At MacWorld, iMac owners could buy nearly every accessory, from modems to computer tables to mice to ergonomic wrist rests, in multicoloured, clear plastic.

Following the success of the iMac's design, the company gave its professional line of computers, called G3, a translucent blue and white livery, a major boost in performance and an innovative design that again, reset consumer expectations for what a computer should look like - and could look like.

With the presentation on Wednesday of the iBook, a colourful consumer portable computer that Mr Jobs dubbed "an iMac to go", Apple has completed its product line with both desktop and portable machines in its consumer and professional categories.

And, the company is also once again setting trends. But Apple's overall market share remains tiny at under 10 per cent. The good news is that, according to Mr Jobs, 33 per cent of iMac buyers globally say the iMac is their first computer purchase.

This is a crucial development for the company since, for years, Mac buyers had atrophied to comprise mostly Mac owners replacing old machines. Rather than gaining converts, Apple was losing Mac users to so-called "Wintel" machines - computers based on the Windows operating system powered by Intel microchips.

The bad news is that developers seem reluctant to design programs for the Mac and software companies frequently exclude a Mac version when releasing new products. Apple constantly cites the rising number of developers working on Mac products and claims more than 14,000 Mac products, but many of these are not the ones widely available in Windows versions that Mac users would like to see.

Recently, Mr Jobs himself has had to have a persuasive word with some of the software companies which forged their reputations on Macintosh products but announced plans to drop their Mac lines - companies like Macromedia, Adobe and most recently, Avid. He has kept them in the fold but the fact that they were planning to drop the Mac at a time of growth at Apple indicates a reluctance to commit resources to this small market and an uncertainty about Apple's sustained growth.

On the other hand, IBM announced on Wednesday that it will release its popular voice recognition software, ViaVoice, in a Macintosh version. Mr Jobs will certainly be hoping that the commitment from the computer giant will inspire other companies to follow.

Another crucial software market which is expanding for the Mac, albeit slowly, is computer games. The Mac was once the platform of choice for games designers, and Windows users had to wait months for a PC version of massive hits like Myst. But, as Mr Jobs acknowledged in his keynote address, "For some reason, Apple forgot gaming."

Games are now a consumer market which rivals that for films, and Mr Jobs has been wooing some of the top games companies to jointly release Mac and PC versions of new products. He's also upped the performance of G3 and iMac machines specifically to accommodate the demands of gaming programs.

The effort has paid off with some high-profile releases and MacWorld for the first time had more than a token gaming corner. Still, it was a small area in comparison to what would be seen at a comparable Windows show. But games demonstrations drew some of the largest crowds on the opening day of floor exhibits. Apple's future may well rest eventually in the hands of the younger computer users who buy computers in order to play games.

The most noticeable absentee at MacWorld was Mac OS X (pronounced OS 10) - the long-promised, next generation operating system that will completely overhaul the ageing Mac OS. While Mr Jobs briefly demonstrated some innovations coming in OS 9 - the upgrade to the Mac OS due in October - most Mac users want to see OS X, promised in 2000. The company's medium to long-term success will hinge on what it delivers when OS X is unveiled.