WHAT'S NEXT FOR APPLE?

By David S. Jackson/San Francisco

It took Apple Computer chairman Gilbert Amelio 2 1/2 hours to say it, but Apple devotees last week finally got what they'd been waiting for: assurances that despite rumors to the contrary, the next generation of Macintosh computers will run most of the old software. The bad news is that it will be at least a year before the new system, code-named Rhapsody, is ready for public release.

"Backward compatibility," as they call it in the industry, had been an open question since last month, when Apple, after repeated setbacks in trying to keep its aging Mac OS ahead of rival Microsoft, announced that it would buy Apple co-founder Steven Jobs' NeXT Software company for $400 million and use his widely praised operating system instead. Apple officials now say the new system will not only work with most current Mac hardware and software but will probably look and feel like a Mac as well.

Will NeXT save Apple? A few days earlier, the company warned investors to expect a quarterly operating loss of as much as $150 million; its stock plummeted 18%. Amelio blamed the loss on disappointing sales of Apple's Performa computers but insisted that his comeback plan was "still solid." Said he: "We're making a dramatic shift that's going to change everything."

That remains to be seen. One good sign is that despite his windy speech at the annual Macworld Expo in San Francisco--which featured four movie stars, three CEOs, rock singer Peter Gabriel and former heavyweight champion Muhammad Ali--most software developers came away optimistic. The big question now is whether Apple's hitherto loyal consumers will keep the faith.

--By David S. Jackson/San Francisco