Something had to be done to combat these issues. That solution, as overseen by Jobs, was to buy Final Cut. The company used it to accelerate development on the QuickTime standard, releasing the first Apple-branded version, Final Cut Pro, at 1999's National Association of Broacasters show. Final Cut Pro 1.0 was designed to provide editors interested in the non-linear space a simpler, low-cost way to get into the business--and to ensure that QuickTime would not go the way of some of Apple's lost software technologies.
Jobs was refining Apple's message: The company made the computer you used to create, to explore, to "think different." And as a direct result of the company's investment into high-end non-linear editing software, Apple could explore a new area--consumer-level editing.
Similarly, one of the most significant consumer-level Apple products to emerge at this time wasn't hardware, but software: iLife. The company was ahead of the rest of the industry in realizing that digital media--music, videos, and photos--would soon become central to people's lives. In 1999, Apple released iMovie (and shipped it with a new iMac DV, for Digital Video), a program designed to let even the most-novice of computer users download video from their video camera and easily turn it into high-quality movies, complete with transitions, titles, and effects.
That was followed, in 2001, by iTunes (which debuted early in the year but became much more significant with the fall debut of the iPod) and iDVD, the latter of which let home-video takers create standard DVDs of their movies, including menus, themes, chapters, and slideshows. And 2002 brought the debut of iPhoto, which similarly made it easy to download and organize photos from digital cameras. By 2003, Apple had improved these programs' integration with each other and rolled them into a single package, iLife, that shipped with every Mac.
The impact of iLife is often overlooked: It meant that at a time when digital media was ascendant, and Apple was trying to differentiate its hardware from the competition, every Mac included a suite of great, easy-to-use software that let people create and manage that media--something that wasn't true of any other computer on the market at the time.
"We don't think the PC is dying at all," Jobs said during his 2001 Macworld Expo keynote where he discussed Apple's digital hub strategy. "It's evolving."
Apple's retail strategy evolved as well. In 2001, the company opened up its first retail stores, at a time when other PC makers--most notably Gateway--were stumbling with brick-and-mortar outlets. A decade later, Apple now operates more than 300 stores around the globe. The stores first turned a profit in 2004; last year, they recorded $9 billion in retail sales with $2.4 billion in retail profit. More significant, as Apple likes to point out in its quarterly earnings report, 50 percent of the people buying computers at the Apple Store are first-time Mac customers.
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