Apple Tuesday announced the cancellation of its G4 Cube, a beautiful machine that couldn't compete with more standard Apple offerings and thus "niched" itself into a corner. While the market for Apple products is already limited because of the dominance of Microsoft's Windows operating system, its willingness to take chances is what gives the company the "edge" it needs to keep fighting.

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By Dave Marino-Nachison (TMF Braden)
July 5, 2001

Depending on your perspective, Apple Computer's (Nasdaq: AAPL) flippantly titled press release -- "Apple Puts Power Mac G4 Cube on Ice," read the headline -- represents either salt in your wounds or much-needed relief.

Apple Tuesday pulled the plug on the G4 cube, a remarkable bit of PC design that jammed a powerful workstation into an eight-inch box. It was remarkable in many ways, chiefly its unique and even stunning enclosure that would not have looked out of place in an artist's conception of a 22nd-century office or den.

Unfortunately, while publicity surrounding the glitzy box -- which has been broadly eulogized in the press -- may have helped Apple's image, the machine was not as kind to corporate profits. For sure, a slowdown has hurt PC makers across the board, including Dell (Nasdaq: DELL), Gateway (NYSE: GTW), and others that have reported slowing sales, leading to fierce price wars. But the G4 Cube compounded that by being underpowered and overpriced. In essence, it was a triumph of form over function.

Apple left the window open for a reintroduction of the Cube down the road, though there are no plans to do so at present. That the company's shares ticked only slightly downward today is probably more telling than such tease-talk, as investors are seemingly accepting this news for what it is. What it means is another matter, as the company hasn't said if, or how, this news might affect near-term financial results.

So what is it? A routine product flop, or an earth-shaking disaster? Call it business as usual at Apple. The company has long prided itself on its ability to turn brilliant conception into practical creation, and many of the same minds that worked on the G4 Cube also contributed to its successful iBook and iMac lines that, while not as startling in presentation as the Cube, were similarly distinctive and represent the company's ability to combine futuristic fantasy with the realities of user needs. (The company hopes its new retail stores will help it connect more effectively with consumers.)

And this is not to mention the G4 workstation series, which with its expandability, power, and comparatively conventional design cannibalized Cube sales. (For more on the PC business, visit our Computer Hardware InDepth area.)

In the end, Apple stockholders and long-time followers of the company will likely chalk this up as one more example of corporate creativity gone just a tiny bit too far for the masses to support the concept. Remember the Newton handheld? The Lisa workstation that predated and, in many ways presaged, the Macintosh?

And yet the company is still around and doing pretty well. With the market for Apple products already limited by nature given the dominance of Microsoft's (Nasdaq: MSFT) Windows operating system, Apple puts itself at a further disadvantage by directing high-end, niche products at a consumer market.

But by doing so it also maintains the "edge" it needs to keep fighting what die-hards will call "the good fight." It's a tradeoff stockholders have long been willing to make.

Dave Marino-Nachison thanks Tedd for the photograph he uses as the wallpaper on his old Powerbook's desktop. His stock holdings can be viewed online, as can The Motley Fool's disclosure policy.

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