Apple Not Connecting Well With Small Business

I’ve always taken it as an article of faith that small businesses love the Mac more than anyone except publishers and schoolkids.

Small-time entrepreneurs, artists and anybody whose work steers them to the visual and improvisational have historically gravitated in the Mac’s direction, for many reasons.

More than anything, small businesses need a hassle-free computer. Plug-and-play peripherals have always struck me as a case in point.

For example, I use both Macs and PCs, and I recently had to install a terminal-emulation program on my PC. (Don’t ask.)

It wouldn’t work until I yanked my Windows 95 plug-and-play modem out of my computer and moved jumpers (small clips that connect pins sticking up from the modem’s circuit board) to trick the device into believing that it was really an old “Com 2” modem. Two hours and a few gray hairs later, I experienced the joys of terminal emulation. Ouch.

And I had phone support to turn to, unlike most small-businesspeople. But I digress. . . .

These kinds of Windows PC experiences are common enough that one would think that SOHO--small office/home office--should be a Mac stronghold. So how has the Mac been faring lately in the SOHO market?

The answer depends on whether you’re talking about the SO or the HO. According to ZD Market Intelligence, the Mac’s installed base--the percentage of all computers in use--among businesses of one to 19 employees was only 5.1% as of Jan. 1. But if you look at the self-employed--home offices and sole proprietorships--the Mac claims a healthier 9.1% share.

This may reflect the more diverse needs of home-office people; if you’re doing all the marketing, design, sales, Web surfing and business development yourself, you need a computer that can handle many tasks easily. Once you have a few employees, specialization lets people make do with less capable but less expensive computers.

The observation seems to hold true when you look at last year’s sales of machines into those markets. New and used Macs accounted for only 2.7% of small-office purchases but 6.2% of home-office/sole-proprietorship purchases, slightly higher than the Mac’s sales performance overall.

Such numbers suggest why Apple seems to be ignoring the small-office buyer these days. But does it have a credible shot at climbing back into mainstream status via home offices?

Apple’s key graphic-design-oriented SOHO buyers “don’t tend to get the sub-$1,000 PC,” said James Staten, an analyst with Dataquest in San Jose. “They buy in the $1,500 to $2,000 space,” favoring machines that can manage all of their needs without undue frustration. These days, you can get a good G3 unit for about $1,600.

And with some luck, Apple’s recently announced software strategy will boost the range of office productivity software offerings for the Mac.

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But for the broader small-business market and the multitudes who run part-time or hobby businesses out of their homes, Apple needs to charge less. The new all-in-one iMac, scheduled to ship in August for $1,299, is Apple’s low-priced offering. I think it will be a hit in the schools and for some home users, but falls short as a business machine, SO or HO.

The iMac--with fast ethernet but no floppy drive--is designed for networks. Yet according to Dataquest, only about 20% of small businesses and far fewer homes are networked.

This wouldn’t be a big deal except that the iMac renders previous Mac peripherals obsolete, not a small problem for the small fry.

The iMac gets rid of SCSI--a reliable, genuinely plug-and-play technology that supports many hundreds, if not thousands, of peripherals, from scanners to printers to storage drives. Instead the iMac goes to universal serial bus--the new PC standard, which does have advantages over SCSI.

Unfortunately, USB works only sporadically due to rampant software-driver problems, and, pathetically enough, it’s slower than SCSI.

Windows 95 doesn’t support USB effectively, so there are so far relatively few USB products for Windows PCs, let alone for Macs. That may change when Windows 98 hits--itself far from a sure thing in this day of antitrust fervor.

All this reminds me of my painful little modem experience. What small-business Mac user needs the potential hassle of setting up a USB floppy drive?

Let’s hope Apple comes out with a more SOHO-friendly offering soon.

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Times staff writer Charles Piller can be reached via e-mail at [email protected].