Network: What's in Steve's box of tricks?

Apple Computer's secret project - to develop a new multimedia player to sit on top of your TV set - has the computer industry's rumour mill buzzing. Cliff Joseph reports.

Apple Computer is never far from the headlines, but the latest bout of speculation about the company is even more fevered than usual.

The rumours focus on a project code-named Columbus. Initially, it was thought that Columbus was a set-top box that could be used to connect a television to the Internet. It now seems that Columbus refers to a whole range of consumer products being developed by Apple. That range does include a set-top box that goes by the name of AMP: the Apple Media Player.

Apple isn't the only company working on Internet set-top boxes. WebTV, a company backed by Microsoft, has gained a lot of attention and is preparing a trial service in the UK.

The Apple Media Player would be different, as it would act as a kind of general purpose entertainment device that could also play music CDs and films using the new DVD format.

It is the versatility of such a device that is creating so much interest. Film companies that release films on DVD disks could put Internet links on to the disks, and AMP would allow people to watch the film and then connect to Internet sites that sell film merchandise. Music companies could do similar things with audio CDs, linking CDs to Web sites that sell concert tickets or music videos.

Those sorts of marketing opportunities have attracted attention from Hollywood. There are rumours that Disney and Sony are about to launch takeover bids for Apple. A more likely outcome is an arrangement whereby Apple licenses its technology to companies that want to use it. But whether these rumours are true or not, Apple's share price has doubled since the beginning of the year. The Wall Street Journal has even made a "Buy" recommendation on the strength of the AMP rumours.

Apple has tried to keep these projects secret but it has stopped denying the existence of the Columbus and AMP projects. When questioned at a recent conference, Apple's CEO and co-founder, Steve Jobs, simply replied: "I can't talk about that stuff."

What Jobs has said, though, is that Apple will make a concerted effort to regain its position in the consumer market later this year. "Apple has not built a great consumer machine in the last several years, but you'll see that change this fall."

In addition to AMP, it is thought that Apple will be developing other consumer products, including a home computer priced at less than $1,000, and hand-held devices to replace the recently abandoned Newton. Speculation continues that Apple is developing a network computer (NC), but such a product would rely on Rhapsody, the server operating system that Apple is developing. Rhapsody is several months from completion, so an announcement on NCs does not seem imminent.

There is also renewed speculation about Steve Jobs himself. Jobs was ousted in a boardroom coup in the mid-1980s but returned to Apple last year, after mounting a coup of his own, but said that he would only accept the CEO position on an interim basis, in order to see Apple through its management crisis. Apple said that it would announce a permanent CEO, but Jobs appears reluctant to relinquish control. This has discouraged potential candidates, such as the former IBM man Jim Cannavino, who is said to be unhappy with the idea of remaining answerable to Jobs.

Apple's board has been negotiating with Jobs for several months in an attempt to get him to stay on full-time. Their latest offer is said to be worth $250m. Jobs has yet to respond and the board is getting impatient.

To top it all, Gil Amelio, who was toppled by Jobs last year, is about to publish a book about his time at Apple. It is expected to make savage criticisms of Jobs, but the recent turnaround in Apple's fortunes means that Jobs' position is stronger than ever.

Many of these rumours should be clarified next month. Product announcements are expected, and a shareholders' meeting will put pressure on Jobs to make his mind up about the CEO position. One thing' seems certain. Its recovery may not be complete, but after two years of crisis Apple is back in the game.

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