Apple: Behind the hype, there’s desperation.

Behind the hype of Apple’s Worldwide Developers Conference last week — the new iPhone OS, the price drops for Macbooks and the Snow Leopard release — I got the sense that something is not altogether right in the Apple universe these days. It’s almost as if there’s a bit of desperation lurking behind the hype.

To its credit, Apple has almost always been good at hiding its fear. The question now is whether the company is really primed to compete, or whether we’ll see it plummet back to its pre-return-of-Jobs days.

Let’s start with notebooks:

Apple announced last week that it will drop notebook prices 5% to 15% — a welcome respite for those with Mac envy who couldn’t afford even an entry-level Apple notebook. The media hype (of course generated by the Apple reality distortion field) has been primarily praise for Apple recongizing difficult economic times and giving potential customers a break. Truth is, though, that these price cuts are not entirely altruistic. It was actually done to conteract a 10 percent drop, year-over-year, in revenue for Apple’s Mac business. Industry analysts say Mac doesn’t appear to be gaining market share at all — this after several years of posting 20% to 50% gains per year.

The economy may have something to do with that — after all, if most of us have less disposable income, our dollars are more likely spent on necessities. And if we absolutely need a new computer, we’re going to save whatever we can. And that scenario plays to one of Apple’s most glaring weaknesses: the lack of affordable, entry-level computers.

The netbook market has exploded in the past year. I can’t imagine a better time for netbooks to have come on the scene. These days, you can easily pick up a sub-$300 machine loaded with XP just about anywhere. Heck,  I own one, and I love it. Apple refuses to enter the netbook space, and has instead relied on its old standby ideology: Anything cheaper that what they charge is crap. In the meantime, plenty of folks are using the netbook as either the entry-level computer or, like me, the go-to gadget for the livingroom or on the go, and Apple’s missing that boat.

At the same time, Microsoft is making hay over Apple’s high prices with its “I’m a PC” ad campaign, pointing out just how affordable a suped-up PC can be when compared to Apple products.

Ever so quietly, these factors are convincing fence-sitters to go the PC or netbook route.

On to Snow Leopard:

There appear to be a lot of neat new bells and whistles in Snow Leopard, and the tech media, as usual, is doing a nice job of drooling over the improvements. What was striking to me, however, was how Apple couldn’t introduce Snow Leopard without bashing what will become its primary competitor, Windows 7. During the Snow Leopard announcement, there were claims that Windows 7 was really a service pack for Windows Vista, and that it’s “still going to have problems.” This for an OS that won’t hit shelves for another four months.

Why attack Windows 7? Why mention Vista at all?

Unfortunately, Apple has built so much of its advertising around the “not PC” ideal that — especially in the OS space — it can’t compete without tearing down its competitor (using vague jabs) first. Particularly galling in this instance is Apple’s claim that Windows 7 is a Vista service pack — especially because Apple itself admits that Snow Leopard is an incremental upgrade over Leopard — not a full rewrite of the OS. It is not, after all, OS XI, right? And if you’re selling value, you’re telling us a brand new OS is worth $29?

Apple makes beautiful products. There is no question that Apple has cornered the market on chic. And I like the OSX operating system. Day-to-day, though, I use three different computers and they all run Windows XP. I don’t get the Blue Screen of Death (I think I’ve gotten it twice. Ever.). I don’t suffer system crashes. As an IT manager I find far more cases of user error than hardware or software failure. Why am I telling you this? Because if you’re going to sell me an Apple product, tell me what it does — don’t tell me what Windows doesn’t do.

If Apple is to turn around its stagnation (Wall Street predicts an 8% year-over-year drop in Mac unit sales in the June quarter), it must concentrate its message on what it does well — not the competition’s weakness. It also has to provide more and better gateway products to take away the competition’s strengths. I don’t agree that a tablet PC is the way to go here, but a sub-notebook is a very solid start. Apple execs need to stop dictating what consumers want and start listening.

So what is Apple afraid of? Failure? Not likely. Failure is a necessary part of innovation, and certainly Apple has had its share of miserable OS and products. Heck, without Microsoft, Apple probably wouldn’t be in business today.

Perhaps Apple is realizing that it has reached the pinnacle of the boutique computer business, and it has done so by consistently billing itself as anti-PC. Perhaps there’s a realization that there are only so many fanboys in the world who are willing to pay whatever you’ll charge…and the rest of us are actually price sensitive. Perhaps they’re just seeing the numbers and realizing they’re not recession-proof. Perhaps they realize that — as most reviewers have said — Windows 7 looks like a damned good operating system.

No matter what the answer, there’s a lot more to Apple’s words and actions than hype alone. You can mark my words on that.

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