November 12, 1996 6:00 PM PST

Apple cybercafes due in 1997

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Apple Computer (AAPL) is announcing plans to open state-of-the-art cybercafes across the country, starting with one in Los Angeles in late 1997.

Future sites include London, Paris, New York, Tokyo, and Sydney, Australia, among others.

As reported Monday by CNET, the Apple Cafes are expected to let users surf the Net at high speeds, play games, and design Web pages along with the offerings of a full-service cafe. The stores also may sell consumer products with Apple logos.

"The time is right," said Satjiv Chahil, senior vice president of marketing for Apple, in a telephone interview. "Cybercafes are in. The technology finally is reaching out to 'the rest of us.' This will be a place to showcase our products in the real world."

The cafes could also help solve the "shelf-space problem" that Apple has in raising the profile of its products against Microsoft and others. Details such as how much people will pay for Net access still have to be worked out, he said.

Chahil added that Apple will receive royalty fees in the deal, and that the company's identity will be interwoven into every part of the cafe.

The deal is part of Apple's effort to license its brand name more widely and, at the same time, promote its computer products. In the company's eyes, cybercafes offer the perfect venue. They are thriving through the United States and Europe as many users find that they can surf the Net and socialize at the same time. Some cybercafes charge a membership fee, such as $10 per year, and offer Net access for 18 cents per minute.

The 15,000-square-foot Los Angeles cybercafe is planned to accommodate up to 250 people. The company is currently scouting sites in Westwood, West Los Angeles, Santa Monica, and in the Beverly Hills areas of the city.

From every table, customers will be able to surf the Net, order food and beverages, and have videoconferences with other patrons. Private members-only VIP rooms also are planned. The move for private areas and invited guests mirrors that of other cybercafes, who have found a growing revenue stream in hosting corporate functions and special events.

Apple is teaming up with Landmark Entertainment Group, Mega Bytes International, and the Artists Rights Foundation to make the announcement.

Landmark Entertainment, which has said it aims to be a "small Disney," specializes in theme park projects. They have included a "magical empire" at Caesars Palace in Las Vegas, a Star Trek attraction at the Las Vegas Hilton, a Jurassic Park attraction at Universal Studios, and themed resorts in the Middle East and Asia.

Mega Bytes is a U.K.-based real estate company, and the artists foundation is a nonprofit group devoted to protection and presentation of film art. Apple said that it will support the foundation through its proceeds from cybercafes.

Competition will be stiff, however. A similar cybercafe called Cybersmith, as well as independent cybercafes, are opening throughout the country with many similar features.

The cafes could resemble a "wired" Hard Rock Cafe or Planet Hollywood. The moneymaking potential is great. At Cybersmith, the core clientele is 25- to 34-year-olds; 80 percent of them have home PCs and 40 percent are online. They are a primary target for CD-ROM publishers, software, video game makers, and ISPs.

 

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