The scene at Creative Computers, a bustling store on Wilshire Boulevard in West Los Angeles, resembles a party. Blue and yellow balloons hang from the ceilings. The place is crowded and the air is charged.
Although Creative Computers sells many brands of computers and accessories - Compaq, IBM ThinkPad, Toshiba laptops, even the snazzy new wafer-thin Sony VAIO laptop weighing 2.9 pounds - it is one particular computer that is creating the buzz here.
It is the iMac, the translucent teal-coloured little machine that is leading the revival of Apple Computer. Some 200 boxes of the iMac - and with built-in modem, monitor and computer, the whole ready-to-go operation does come in a single box - are stacked near the door of the store. Every few minutes last Sunday afternoon, another one was sold and wheeled out the door.
On the display floor, an elderly white-haired woman, her handbag delicately beside her, is sitting hunched over the iMac. She is staring at the screen over her bifocals, and cautiously clicking the mouse.
"Are you familiar with computers?" asks another customer.
"No," says the elderly woman. "I've never even touched one before."
Therein lies part of the reason behind the smashing debut of the iMac. In the vision of Apple founder Steve Jobs, the iMac would be a first computer for millions of people around the world, people for whom a computer was just too intimidating or too expensive. It would be an easy to use machine but also a fast and powerful one. It would also be affordable, starting at $1,299. While its original target market might have been college students and kids, the fact is that even people like this elderly woman have decided the iMac makes computers and the Internet finally accessible.
The market numbers support Mr Jobs's view of the iMac potential. Although Apple currently has a meagre 4 per cent share of the computer market, the fact is that some 10 million Mac users have not upgraded their systems in four years. At 233 Mhz, with a 24xCDRom drive, 32mb of memory and a 56k modem, the iMac is a serious upgrade for those folks. In addition, Apple is aiming for the 100 million US homes still without a computer. Add the under-wired homes of Europe and Asia and the potential of the plug-in and use immediately Internet-ready iMac becomes clear.
The iMac went on sale in the US on August 15th, and in Japan and Ireland two weeks later. So far, results have exceed almost everyone's expectations, even Apple's. Buoyed by a $100 million advertising campaign, the kind of marketing blitz that is vintage Steve Jobs, the iMac hit with a splash. From billboards to television ads to 10-page fold-out ads in glitzy publications such as Vanity Fair, the iMac is everywhere.
"They're selling as fast as they go into stores," Mr Phil Schiller, Apple's vice-president of worldwide product marketing told the Wall Street Journal. In fact, Apple plans to manufacture more than 650,000 iMacs in the next four months to try and keep up with consumer demand. That is about 100,000 more computers than many analysts expected.
Apple's other products, which have been winnowed from about 15 to just four since Mr Jobs returned to lead the company, are also doing well. The Apple Powerbook G3 has been in short supply since its introduction several months ago. But Mr Jobs told a meeting of some 3,000 software developers in San Francisco two weeks ago that Apple's improved manufacturing system will allow supply to meet demand within weeks.
"Demand totally outstripped our forecasts," Mr Jobs said. He also announced a 20 per cent price cut to $2,799 for a popular model of the G3 Powerbook.
Mr Jobs new strategy of specific products and timely delivery is also reflected in the new 8.5 operating system, which is due to be shipped next month. That system will allow users to search the Internet through multiple search engines using the power of Excite and Infoseek for example, at the same time.
Currently, Internet users trying to find certain information have to go from one search engine to another if the information is not readily available. Apple's new feature, called "Sherlock", will allow users to search the entire Internet using a number of search vehicles at the same time.
Apple has struggled over the last few years, suffering job losses and weakened sales. Certainly the volatility of the global economy and the thrashing of the US stock market, especially in the technology sector, makes future predictions difficult.
But what is evident in this quarter at least is that Apple has returned to the consumer market with a bright and sexy yet substantive product that is bringing people into the stores. Net income for the company was $101 million, and profitability soared to its highest level in three years.
The iMac has created excitement. Now all Mr Jobs must do is maintain the momentum, the manufacturing and the profit margins.
