With all the hoopla surrounding the sacking of Apple's CEO Gil Amelio last week, and the extremely poor timing of its Board of Directors in doing so, I think we should take a look at what's really needed at Apple.

Dr. Amelio made the hard decisions, took his best shot, and Apple is a much better business today than it was when he took over. It has cash in the bank, a credible project underway to upgrade the MacOS, and much improved hardware quality. What it needs now is new sales, and a spokesman/leader who can take to the road and create the excitement for Apple's products that has been missing throughout the 90's.

But all is certainly not yet turned around at Apple. There's a two-headed Hydra prowling the halls of this embattled company, and unless it's dealt with, many dark days will still lie ahead. Let's explore this.

It's become a little tiring to say that Apple's primary problem has been poor forecasting. While it's true that Apple manufactured a billion dollars of hardware during the past two years that no one wanted, it's also true that Apple amassed a backlog of a billion dollars of lost sales on models it wasn't making enough of.

So, people clearly still want Apple's products. Apple itself may be stumbling, but the Macintosh industry is thriving, or at least trying to.

Since the Mac clone companies started up over the past year, Macintosh/clone sales have actually risen. Sales to schools are actually up. But you'd never know it by listening to the "Die Apple" press. Apple's problem is that its share of the Macintosh pie has declined. Guess why...

If I offered you a high quality, faster Macintosh with four times the memory, twice the hard disk storage space, and more peripheral accessories (Zip drive, keyboard, monitor, modem, software) than Apple's comparable product for 20 percent LESS, would you be interested? Power Computing thought so, and is making out like bandits. They were willing to make a little less on each unit to grow their business and build up new customers, while slowly building a reputation for innovative and quality hardware. Their approach seems to be working, and Apple has noticed. As have Umax, Motorola, Daystar, APS, and the other wannabe clones.

Guess how Apple reacted? They pulled out their licensing agreement, noted that they had the right to CERTIFY the clones for compliance before the companies could sell them with the new capabilities, and, mystery of mysteries, a delay in the certification process occurred (Power Computing noted one model that took months.). Anticompetitive? Nah! Coincidence!

This summer, with the renaming of the pending MacOS 7.7 to MacOS 8.0, the cloners found they had to renegotiate their software license, since their current license only applied to MacOS 7.x. Apple wanted to significantly raise the cost for MacOS 8.x running on the most profitable models (the higher end CPUs), pressuring the cloners to sell the lower profit margin lower end CPUs. This issue still isn't settled, and probably contributed to Power Computing deciding to expand into the Wintel platform market to assure its continued growth by selling both Mac and Windows PCs.

Now if all this sounds a bit strange, it is. How is Apple to survive if it doesn't grow the Macintosh platform's share in the industry? Yet, if Apple allows the cloners to sell the most profitable Mac configurations, how is Apple's hardware business to survive?

The point is, Apple is two companies, a creative software company, and an innovative technology hardware company. Whenever the issue of licensing the MacOS to cloners comes up, which sounds great to the software guys, the hardware geeks withdraw in horror. Steve Jobs is asserted to have actually called the cloners "leeches."

How to resolve this? Break the company up into two profit centers. Let the Software Division make whatever deals it can to license the MacOS to whomever it can. This will pressure the Hardware Division to innovate, add value to its models, to COMPETE with the cloners. Why do you think you can order an Intel Pentium 200Mhz CPU with 32MB RAM, 2.5GB storage, monitor, keyboard, and Windows 95 for around $1,000? COMPETITION...

The cloners are clearly demonstrating that the Macintosh isn't dead. People are waiting in line to get their hands on newer, faster models. This week, one company actually released the first Rhapsody application (a drawing program), for an operating system that isn't even finished, just to demonstrate how fast it will run on today's Mac PowerPC platform! So, the excitement for the platform remains, but...

Apple may not be able to remain as big a company as it has been in a newer competitive hardware environment, at least for awhile, as it lets the platform expand. So, why do we need the Hardware Division? Why not just sell off the hardware end? This is why: It's the MacOS, and what I call the Mac Experience, that makes a Macintosh.

If a specified suite of software behaves properly on a cloner's new box, you'll know immediately. I still remember the measure of PC cloner's compatibility in the 80s was whether it ran Microsoft's Flight Simulator program. There's no need to create a bureaucracy for certification. If Mac programs don't run, if Mac's traditional plug and play become quirky, the cloner's doomed. Just running a ported Windows application on a Mac cloner's box isn't good enough if the Mac Experience isn't there.

Apple's Hardware Division must maintain the tight integration of the MacOS to the hardware. That's the key. Apple's Mac HAS TO BE BETTER, to SET THE STANDARD. It all must work perfectly, or there's no point, there's no value added. It's up to Apple's new marketing arm to sell this image for Apple to maintain its edge in competing with both the Mac and Wintel clones.

The Macintosh Experience is rooted in its elegant integration of the OS and the hardware. It's up to Apple's Hardware Division to demonstrate this standard of excellence. Anything less, and you might just as well buy a clone.

- Dave Marsh