Trying to bite chunks out of Apple's share

As Apple Computer Inc enters its fourth decade, it faces a set of headaches that are relatively new to the company: The ones that come from being a top dog.

After spending most of its life as a respected but cultish small player, Apple has entered the mainstream, courtesy of the iPod. For years, tech industry watchers wondered if the company would even survive, as Apple's share of the computer market dwindled to a sliver.

With the success of its digital music player and online music store, Apple is now finding itself accused of being a monopolist.

French lawmakers are trying to make Apple stop linking its online iTunes Music Store exclusively to its iPod player, and music publishers are chafing at Apple's refusal to charge more than 99 cents a track at iTunes. Both argue that popularity gives Apple unfair control over the market.

Even malicious software-writing hackers are showing an unwelcome interest in Apple's Mac computer. This year has seen two "malware'' programs designed to muck up the Mac operating system. Though the programs weren't particularly damaging, antivirus software companies were quick to pile on with talk of how Mac is about to become the new "it'' platform for hackers to attack. These are the sort of problems that Microsoft Corp usually has had to deal with as the tech industry's biggest player.

Credit

"Once you get to be a certain size, you get to be a target,'' tech pundit Rob Enderle said. "You can do pretty much whatever you want when you're small, but when you're the dominant player, the rules change.''

Apple's numbers are still small on the home computer side it controls less than five per cent of the market but it has arrived at a tremendously influential place in pop culture.

"Apple's importance in high technology is grossly disproportionate to its market share,'' said Owen Linzmayer, author of "Apple Confidential 2.0: The Definitive History of the World's Most Colorful Company.'' "Apple is considered by many the research and development company for the rest of Silicon Valley.''

Silicon Valley historians credit Apple with changing the course of the personal computer revolution about five or six times, though Mac fans can argue for a higher number.

Apple didn't make the first computer, perhaps, but this was the company that brought personal computers to the masses and made the personal computer revolution possible with its early understanding of the importance of an easy-to-use graphic interface for computer users.

Transformation

Decades later, the iPod is the latest and most profitable example of the company's skill at turning technology into something that changes people's lives. The world already had several MP3 players to choose from before Apple made its entry, but Apple's product took it from a niche gadget class and transformed it into a cultural force.

As if its innovations weren't enough of a contribution, Apple gave Silicon Valley its best and longest-running storyline, one that even non-techies could appreciate. There was the rivalry between Apple founder Steve Jobs and Microsoft's Bill Gates. Apple was the better computer, the legend goes, but it lost the computer wars because Jobs didn't licence its operating system software to computer makers, as Microsoft did.

Even without a nemesis to contend with, Apple's internal history is its own odd drama. In 1985, Jobs was edged out of his own company. In his absence, the company lost its way and languished.

When Apple bought Jobs' second company a decade later, he shortly became Apple's chief executive again. Jobs sold his animation company, Pixar, a project started during his time away from Apple, to Disney earlier this year.

Today, the tech industry is in a race for the living room. Some credit Jobs with starting the movement in this direction. In 2001, Jobs started talking about the "digital hub" in which the computer's role is that of a centre of the digital lifestyle, a connecting point for gadgets such as the digital camera and the MP3 player.

Sure enough, the concept is the dominant one in the consumer tech industry, with every company from Microsoft to Intel to Apple toiling away at products that will play music and video files, display pictures and network with the home office computer.

As for Apple's market share in the computer world, it's still low. Research firm IDC figures that Apple had 4 per cent of the computer market in 2005, up from 2.7 per cent in 2000. By comparison, the company held 15 per cent of the computer market in 1985.