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Mac Smart: File Apple's Claris move under 'illogical,' probably 'unprofitable'

Apple logo

By Charles Piller

Years ago, Apple insiders used to say that they ``bleed in six colors,'' an expression of their loyalty to the company with the rainbow logo. Apple's recent decision to downsize its Claris software subsidiary into a two-product company called FileMaker Inc. also inspires thoughts of an open vein, but without the hopeful rainbow.

Under the new structure, FileMaker keeps the flagship database product of the same name as well as the Claris Home Page Web tool. Apple has taken over the remaining Claris products -- notably ClarisWorks, Claris Draw, Claris Impact, Claris Organizer and Claris Emailer. One can only wonder what they will now be called.

So what's behind this change? After all the money Apple has hemorrhaged in the last two years, making $47 million in the last quarter was an amazing and welcome transfusion. Apple seems hellbent on staying profitable into the next quarter. A worthy goal, but at what strategic cost?

Consider this: For many years, Apple executives have wanted to increase the company's software business -- not to become a software company, but to complement a hardware business that became maddeningly difficult to make money from. Claris was always part of this plan, building a range of respectable applications, including FileMaker Pro and the popular ClarisWorks all-in-one productivity program.

Claris applications don't compete on power. They are just the most Mac-like in their class -- the easiest, most straightforward programs on the market. What takes weeks to learn in Lotus Notes or Microsoft Access can be mastered in FileMaker Pro in a day or two. And Claris products counter the ``Microsoft effect'' -- the tendency toward features overload that makes many of today's applications sluggish resource hogs.

Quality is hardly a guarantor of success. Yet Claris has been profitable, year after year, according to Apple. It managed this with good products, smart marketing and because Claris executives grasped a fundamental fact of life: Microsoft Windows. Claris built Windows versions of its key products without neglecting the Mac versions or jeopardizing profits.

So instead of building up this successful enterprise, Apple laid off 300 Claris employees, crippling the infrastructure for a credible and profitable family of products. What's the logic of this move?

Here's one possibility: Apple has intelligently decided to focus on its key strength: building great system software and great Macs to run it on. The Claris cross-platform strategy could never make or break Apple and could be viewed as a dangerous Windows distraction.

``The Mac software needed undivided attention,'' says Tim Bajarin, an analyst for Creative Strategies. He expects Mac versions of the Claris products to sell better with the power of Apple marketing and branding behind them.

It's a nice idea, but the truth is probably far more pragmatic: Apple's next quarter will be terrifying; sales in the spring normally run about 25 percent below winter. Sources close to the company say all signs point to extreme cost-cutting on the immediate horizon. ``Lean, lean, lean'' is the order of the day, says one insider. ``The people at the top are not thinking strategically.''

Sure, Apple should and will hang on to ClarisWorks for sales to schools -- a critical market for the Mac. But it's hard to envision a scenario in which ClarisWorks could remain competitive from within Apple. How aggressively can any of these products be managed after a net loss of 300 jobs?

ClarisWorks is strong enough to sell more or less as is for a while. Expect the other Claris products taken over by Apple to be milked without new development until they die, which will probably be soon. Apple has reportedly been shopping Claris unsuccessfully for months, so look for it to try to sell the more appealing, slimmed-down FileMaker Inc. for a tidy profit very soon.

These moves should help staunch Apple's bottom-line bleeding for one more quarter. I'm just worried about the quarters that follow.

(c) 1998, Los Angeles Times. Distributed by Los Angeles Times Syndicate

 
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