Apple shutters Advanced Technology Group

Few of the numerous organizational changes ongoing at Apple Computer (AAPL) symbolize the "new" Apple quite like the decision to close down the Apple Research Labs (ARL).

Earlier this month, Apple largely disbanded the group of scientists (formerly known as the Advanced Technology Group), who engaged in long-term research. The group may be best known as the birthplace of QuickTime, the widely used cross-platform multimedia authoring and playback software. But to others, it is the birthplace of some of Apple's recent financial problems.

In the move, a portion of the remaining research team goes to other product groups (see related story) in a transfer that one former ARL member likened to removing the "heart and soul" of Apple.

"The group provided some important technology, but they also spawned the 'Not Invented Here' syndrome," says Tim Bajarin, president of Creative Strategies. "That had actually really hurt Apple over the last few years, with money put into proprietary research and development when they could have bought technology from outside," he says.

The syndrome is characterized by resistance to technologies not created by Apple employees. Industry observers say the attitude is traceable, ironically, to company cofounder Steve Jobs, who made the recent cuts and is moving the company ahead to more practical technologies such as a Unix-based operating system and network computers. Jobs is currently serving as the interim CEO of the company, having wrested control from former CEO Gilbert Amelio in July, after returning to the company as an advisor.

Some of the products resulting from ARL research that will continue on at Apple include AppleScript, speech recognition software, and V-Twin software for indexing, storing, and searching text documents, as well as QuickTime and QuickDraw 3D for accelerating 3D graphics.

Many of these projects are aimed at increasing user productivity. Apple Data Detectors, for instance, helps users pick relevant information such as email addresses and phone numbers out of documents and automatically open the appropriate program and use the information.

But some of the projects the group worked on were cut in the reorganizations of the past year, such as the OpenDoc component software technology. Projects like Cocoa (an authoring tool aimed at helping children design Web pages) and many others were never fully realized. A number of technologies developed actually went with the inventors to other companies, such as WebTV.

Apple, in its current financial state, can't afford to pour money into research that doesn't result in new revenue, says one industry analyst.

"Advancing the state of technology is what a lot of the industry engages in--that's what moves industry ahead--but ultimately Apple and the industry in general needs to be more focused about where it is expending its marketing resources in order to make sure that there really is a market requirement being addressed," said Richard Zwetchkenbaum, an independent industry analyst based in Marlboro, Massachusetts.

"Even the biggest companies have a limited budget. Research has to be initiated by a requirement that is based in market reality," Zwetchkenbaum says.

The computer industry as a whole has taken to buying whole companies or licensing technology rather than developing technology in-house in an effort to keep up with competitors and bring products out more quickly. But Apple researchers see this differently: This isn't necessarily a trend that Apple or other companies should follow, said a researcher who will soon no longer be with Apple.

"Apple research transferred more stuff into product than any other lab I can think of, including Hewlett-Packard and IBM," the source said, but Jobs wasn't aware enough of the role ARL played in developing current Apple technology before deciding to cut the group's funding, he noted.

In the future, in-house research and development efforts under the new structure will be focused on the pragmatic aspects of the Macintosh platform, including hardware, the Mac OS, and Rhapsody, Apple's next-generation operating system.

By next year, Apple is expected to introduce low-cost network computers running the Mac OS with up to a 300-MHz PowerPC 750 chip. The NCs would likely be connected to server computers running Apple's Rhapsody operating system. The final version of Rhapsody is expected to be released around mid-1998 for use on PowerPC machines. The new OS, which will initially be targeted at servers and high-end workstations, will offer features that improve application performance.

"As Apple takes on a more centrist role, industry standards and leveraging technology from others will become much more of the modus operandi of the organization," according to Zwetchkenbaum.

"Maybe Intel can afford to look five and ten years down the road" and by themselves come up a few key inventions, he says, "but Apple can't afford that. There really isn't any PC manufacturer that can afford much of that."