5 Things Apple Is Doing Right - and 5 They Could Do Better

The Apple upswing that began with Steve Jobs' return to the company in 1997 and the introduction of the iMac less than a year later has reached a fevered pitch lately. Things are happening in Cupertino. Innovation is good. Apple is on the right track with much of what it is doing.

However, there a few areas that could stand a course correction.

1. Al Gore joins Apple Board of Directors

Arguably the third highest-profile Mac user in the country (behind former President Bill Clinton and Rush Limbaugh), former vice president Gore is sure to generate buzz. While he has always been a technogeek, Gore, in his first private board appointment, will also be a no-nonsense director not afraid to ask the tough question in meetings. The vice president replaces Oracle CEO Larry Ellison, who resigned in September. Apple has also added another director position, to be filled in the near future.

Gore is a longtime Mac user who briefly switched to the PC and has now returned to the Mac. Hopefully the additional director will also be a Mac user. Although it is unclear whether Mickey Drexler, Arthur Levinson, and Jerome York are Mac users, it's almost a given that Ellison wasn't (where are all the Mac versions of that great Oracle software?), and I'd bet the farm that Intuit's William V. Campbell isn't - otherwise QuickBooks for the Mac would not be three versions behind its Windows counterpart.

2. Slimmed-down Xserve for cluster

Someone figured out that if you hooked together enough Xserves, you can create a supercomputer, a poor man's Cray if you will (although at $3,000 a pop, a poor man couldn't afford many Xserves). The problem is that when Xserves are clustered, you wind up with a lot of Xserves with unnecessary (and costly) components, such as video cards and hard drive cages. In a cluster configuration, the servers combine their computing power to achieve much more horsepower than a single computer could. Most of the clustered computers don't need video cards or additional hard drives. Apple recognized this and now offers a slimmed-down version of Xserve specifically for use in a cluster environment at a $1,000 savings on each unit.

It is ironic that Xserve is being used in clusters, since Apple and Cray have something of a history together. Legend has it that Steve Jobs walked into Cray Research back in the 1980s and asked for founder Seymour Cray. Steve informed Seymour that he had come to buy a Cray to use in the design of the next generation Macs. At this point, everyone who has told me this story breaks into laughter. This event is apparently humorous because Cray supercomputers are custom-built for each purchaser and prices start in the millions. After the contract was signed and money changed hands, Seymour congratulated Steve, shook his hand, and told him that it was only fitting that Apple should be buying a Cray to design the Mac, since Macs were used to design the Cray.

3. Keynote/Jaguar

Less reliance on The Beast of Redmond can only be a good thing.

4. Fred Anderson Shoots Straight

Apple's Chief Financial Officer always tells it like it is, with no Enron-esque doublespeak. Investors know Fred will give it to them straight, which builds investor confidence, which leads to more people investing in Apple, which leads to higher stock prices, which leads to . . . well, you get the picture.

5. Not sacrificing the future for short-term profit

Both Steve Jobs and Fred Anderson have stated that Apple will not mortgage the future just to reap short-term profits. Each release of new and innovative Apple products solidifies the wisdom of this position.

There are a few things that Apple should be doing (if they are not) or could do better:

1. VirtualPC

Microsoft recently bought all of the important assets of Connectix, including VirtualPC, the software that emulates an Intel PC on your Mac and allows you to run Windows-only programs. Microsoft has promised great things for VirtualPC.

But just in case Microsoft's good intentions somehow get sidetracked, Apple should have its own PC emulator on the back burner.

2. Death of the G3 CRT iMac

Bad, bad, bad! Apple should resuscitate this venerable iMac and price it at $599 - $499 for education.

3. Tablet PC

The Next Big Thing hasn't gone unnoticed in Cupertino, has it?

4. The Education Market

Apple needs to redouble its efforts in the education market. Every time a school replaces Macs with Dells, another generation of children are taught that lockups, freezes, weekly reformatting and OS reinstall, and the Blue Screen of Death are a normal, accepted part of using a computer. If this behavior is okay, then why should little Timmy pay for a Mac?

5. Buy Palm and PalmSource

Just write a check and get it over with. Since Palm split itself into separate hardware (Palm, Inc.) and software (PalmSource, Inc.) companies, look at it this way: You get each one at half price.

Windows CE (or whatever they are calling it these days) was a dud six years ago when it was introduced, and it has gone nowhere since (excuse me while I reboot my PDA). With enough money in the bank to pay cash for Palm, Apple could own the handheld market.