iMac: Thinking Different in Asia

by Hisham M Nasir, Contributing Reader
September 22, 1998

Sometimes, Asian Macintosh owners feel like ignored spectators of Apple's progress. Many of us are keenly interested, but we feel our voices are not heard. The recent release of the iMac has made me sufficiently worried to need to shout. Apple needs to understand the current pattern of computer usage here.

I live in Malaysia, but many of the conditions here apply to the rest of Asia too. The trends of everyday use of computers in Asia lag behind those of the US by several years. Internet use is growing fast, but we pay for local calls, so it is not cheap.

Computers are relatively expensive (both Macs and PCs), costing some 10-20 percent more in real terms than US prices, with the Macintosh perceived as more expensive than PCs. Software is often 20-50 percent more in real terms than US prices. And Asian consumers, at whom the iMac is targeted, may not be as well-off as US consumers right now.

It is clear from what has already occurred in the US that there are concerns about the iMac's specifications: the lack of an integrated floppy disk drive, the software bundle, and the question over the need for built-in Ethernet. These worries are even more relevant to Asia. The iMac design may well match the reality of where technology is headed towards in the US - but Asia isn't going to get there for some years. The lack of standard features still necessary and relevant to Asian consumers, and the inclusion of some that aren't, are going to add to the price tag.

A successful iMac will provide a cost-effective upgrade route for owners of the venerable 68k Macs, attract the interest of first-time buyers, and convert some PC users, and thus increase Apple's presence in Asian homes, universities, and businesses. The threat to a successful iMac, and indeed to much of Apple's Asian sales, is equally clear.

We know what is going to happen here next month because trends lag behind those in the US. The sub-$1,000 PCs are here with 300MHz Celeron processors, 64MB RAM, and 8GB HD. The danger is that the standard features of the iMac will appear even less attractive in Asia compared to these even cheaper PCs. If the iMac can do well in the US against the consumer PCs, then it should also be able to do likewise in Asia. The question is how.

The key differences are the immediate extra cost of ownership of the iMac. Will the benefits of owning an iMac outweigh the additional purchases necessary to get the features needed in an Asian consumer PC? Due to the lower level of Internet penetration, a floppy disk drive remains a necessity to transfer files between home and office or school. What about bundling Microsoft Office 98? And games? This looks like being around an extra RM2000 (US$500) - to meet the perceived package that the cheaper PCs offer. This is too much. People will not understand the difference, because Apple's profile in Asia is so low that few people have seen a Macintosh in action.

Buying a computer is, for most people, the third largest single expenditure after their house and their car. So price is a key factor in Asia. Thus, you could see a drop in revenue from Asia particularly at a critical time such as now. Apple will need all the cash it can get to see it through the period when people wait for Mac OS X and for G4. And that would be bad for everyone.

So what can Apple do?

Apple Asia must make the iMac the most visible and attractive Macintosh ever. First, Apple Asia should immediately push for design adjustments to the iMac. Insert what is necessary, and leave out what isn't.

Add a floppy disk drive external connector. It will not cost much, and you can remove the existing Apple internal 1.4MB SuperDrive from any old Mac and use it as external drive for iMac. And it is plug-and-play, so no power cables are needed!

Cut cost by making the Ethernet connector optional for those who need it.

Cut cost by making the built-in modem optional for those who need to access the Internet.

Take advantage of the quality of Apple manufacturing by giving a 3-year free extended guarantee.

Get HP or Epson ready to ship a cheap USB inkjet printer, plastered with an "iMac-ready!" logo.

Include the best application software. Get Steve Jobs to ring Bill Gates to arrange a deal on Office 98 for Asian iMac buyers, either as a bundle or as a low-cost add-on at the same rate as that for PC vendors. It will increase Microsoft's income by guaranteeing marginal revenue and increase their penetration of the Asian Macintosh market. This shows the adult buyer that the iMac is not a toy. ClarisWorks won't do this.

Press some CD-ROMs of the best Mac shareware games. The entire catalogue from Ambrosia Software is great, plus demos of the top 10 commercial games from last year. There are three good reasons for this:

• You show what the iMac can do at little or no cost to Apple.
• Downloading large shareware files in Asia costs serious money, so CD-ROMs look like a good option.
• This is something PC vendors do not generally do because PC shareware is often of poor quality. This will look good to the customers, and show the main users (the buyer's kids) that the iMac is fun.

Apple Asia should ask Apple US to get the software developers to require hybrid Macintosh/PC CD-ROMs to be pressed in Asia, again with the "iMac-ready!" or MacOS logos on the boxes, to increase Macintosh games penetration on shelves in Asian stores. Then kids won't be laughed at when they tell their friends they are getting an iMac.

Apple Asia should actively transfer lessons learnt from the US. Advertise, aiming for the same level of impact and press coverage as in the US.

Apple Asia should create new channels: dealers, resellers, and VARs. Make it a condition for them that the hybrid CD-ROM packages are stocked and clearly labeled as both MacOS and PC products. Send new channels' staff on sponsored training courses, and give them options to buy iMacs at loss-leader prices. Turn them into enthusiastic local experts. These steps would give Apple Asia a more level playing field, and allow the iMac a higher launch profile to get iMac sales going and more people to understand the difference. Existing dealers will scream - but they will not generate the sales Apple Asia need.

Distribute subsidized iMac software titles.

Now, Apple Asia will probably disagree with most of these ideas, and have their own strategy. I hope it works, because I want them to succeed. But I suspect this is the last chance Apple Asia has to make an impression before the next generation of technology arrives. Apple Asia cannot think that using the same strategies as before is good enough. Now it's their turn to think different.

Asia needs Apple to maintain diversity as our computer infrastructure develops. Apple, on its part, needs to listen to its customers - including those in Asia.

Hisham M Nasir
hishamkb@tm.net.my
Malaysia

If you have any comments about this article, Hisham will be glad to receive your email.

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