Mac fanatics, waxing Rhapsodic

Right now you've got 26 million Mac users, often classified as fanatics. What are the pros and cons of having such a fanatical customer base?
First of all, having a large customer base is an asset, particularly if you pay attention to that customer base and respond to their needs--you understand that customer base. Another reason that I came to Apple was I was impressed with the goodwill that Apple enjoys with its customers. And the customers don't just say "I enjoy this system," they say "I love my Mac." And it's a different statement.

On the negative side, you must pay attention to that base. They understand your systems very well and you have to perform.

You've also said that it's not necessarily healthy to be one big happy family with all of your customers. That's what I mean in terms of having this fanatical base.
I think that response [was taken] a bit out of context. It was in reference to the amount of press--personal press--that we get in this company. The press doesn't just deal with the company, its customers, its market, or its technology, but pays much more attention to the people and executives in the company. And it's not clear to me that that's healthy. So it was in that context, where everyone feels they're a part of the group, sort of an extended family.

It seems that part of Apple's future success depends upon playing to that culture, at least in marketing. It sounds like you're saying, "We also have to pull in the other direction."
I think too many people place an emphasis on culture. I do think that it's extremely important to understand your customer set. If that's what you mean by "culture," then I'm OK with that notion, that we for example focus very much on K-12, we focus on the publishing market, we focus on the enterprise, we focus on the consumer, and we are spending more and more time focusing on who bought our products, why, and being able to respond to that.

But again, to go back to the statement, I think that we have tremendous goodwill with our customers. We need to respond to that, to what they like about their system, they've said the new system must be Mac-like. And again, we're spending time to really make sure we understand what we even mean when we say "Mac-like."

A Mac user wrote us in email recently, "What Apple needs to do is fire all the dealers and hire people to answer the phones. Apple needs to act more like Dell and less like the old IBM." Do you see any truth in that statement?
Ignoring the companies they referenced, I do believe that we need to understand the different channels. With the Next acquisition we in fact now have a sales force that is very much an enterprise-based sales force, as well as a consulting group that assists primarily enterprise customers. We go to the K-12 market a different way and we go to the customer a different way. We are doing a better job now for example of keeping track of who our customers are by name, by location, by geography. And we intend to become more proactive ourselves relative to those customers.

I've heard that among the divisions within the QuickTime media layer group there's a lot of confusion as to who is doing what. Will this reorg help in multimedia and publishing, two of your core markets?
Well I think the reorg is going to get us more focused on the two areas. One, the customer segments that we're addressing, and certainly the publishing or what we call "pen market" is one that we intend to address.

What does the focus entail exactly?
We're still in the process of going through the restructuring, so we haven't resolved all of that. But I do think it's clear that we will address publishing, we will address learning. For example, K-12 and higher education. And we do intend to have a very focused effort on all of our current customer base so that we can respond to their needs in the future.

So far you're presenting the new operating system Rhapsody as something for everyone, from corporations down to the end user. When and how will you start to articulate some of those different positions?
I think we'll be articulating that over time, but I think right now the early deliveries of Rhapsody, which is the operating system we're addressing here, will be aimed at the high end, will be aimed at publishing, and will be aimed at the enterprise market. It is only later on that we'd be getting to other segments of the market, including support of the Performa and support of the PowerBook. Those would come later, but if we could roll out this operating-system strategy correctly, over time, you are right--it will be our answer in all of our markets. But we'll start at the high end and then later on get to the other markets.

How would licensing Windows NT fit in when you have Rhapsody as your enterprise solution?
Rhapsody is the support of PowerPC, it is support of the OpenStep APIs and it is support of compatibility. With the Next acquisition, we also have OpenStep available on NT on Intel today. It is our intent over time to keep the programming interfaces consistent between the OpenStep on NT and the OpenStep we will have on the PowerPC. So developers who develop to those OpenStep APIs have access not only to the PowerPC products, but also have access to providing the same support on top of NT.

So if this happened you would license NT to developers?
No, the developers can get NT from Microsoft. We would provide them with OpenStep on top of NT and then we will make the APIs consistent so that an app that runs on Rhapsody on the OpenStep APIs can also run on Intel on the NT system. We also have an OpenStep implementation that in fact runs on Pentium without NT. So we have support of Intel, both native through the next offering, as well as on NT.

Underlying Rhapsody is Unix. Is this going to pose a problem when you start to market Rhapsody to the common user?
We'll be very successful if they don't know it's Unix; if they think it's a Mac and it has the ease of use of a Mac. It's very much our intent to expose the Mac features, make it easy to use, which is what the Macintosh is known for. We have received requests from some people to not block some of the Unix nature if people wanted to have access to it. And I think we can do that. But even today, when Next ships the OpenStep system, in many cases it's not obvious that it's running on a Unix base.

Can Apple afford to resist the economy of scale that Intel represents?
To some extent, the software strategy we have--where [our strategy] spans across or will span across the PowerPC platform as well as the Intel platform--gives us some advantages as it relates to those volumes. Prior to the [Next] acquisition, developers told us it would be very important if our strategy allowed our software and programming interfaces to span not only the Apple volumes with the PowerPC, but also to have access into the Intel volumes. And the OpenStep APIs in fact give us that capability today.

What are the defining traits that you feel have brought you where you are now, today?
One, I care a fair amount about people. I really believe in some type of consensus management, a consensus management where one person always has one more vote than anybody else so you can make decisions and go on. I think this is an aspect that females can bring to the business. Some of the female skills in fact are extremely important as we go through some of these changes.

I also don't like failure at almost anything, personal or public. So I do try very hard to make sure that what I'm working at can be successful. And then on top of that I really do enjoy having fun. We probably need a little bit more of that at Apple.