#6685 - Part 6 - Peter Wijnans
Apple's future...
Motorola gets rights to Apple's software (Apple's future)
by Jim Carlton & Quentin Hardy
At a technology conference in Arizona last week, a panel of industry experts was asked if it believed Apple Computer Inc. would still be standing on its own in 1998. Most of the experts said it wouldn't.
"Apple needs to find a strategy and it may be very
difficult to find one," explained one of the panellist,
Ellen Hancock, co-chief operating officer at National
Semiconductor Corp.
Don't tell that to Ms. Hancock old boss, Gilbert F.
Amelio, Dr. Amelio, who quit his job as National Semiconductor's
chief executive two weeks ago to become chairman and
CEO of Apple, insists the Cupertino, California computer
maker can survive as an independent company. "The
troubles are very fixable," dr. Amelio said in
his first press briefing, Friday. "I've been down
this road before."
Dr. Amelio said that Apple had agreed to license its Macintosh operating system to Motorola Inc.
Motorola's decision to license the operating system is an effort by both companies to boost Apple's image at home and abroad, while also giving a lift to Motorola's PowerPC chip and computer business.
Under the terms of the deal, announced Friday, Apple is giving Motorola rights to use Apple's current and future operating systems. Motorola also gets the right to sublicence the operating system to other computer makers, who would presumably offer Apple clones in the retail market.
Motorola also plans to incorporate the operating system into cheap personal computers it will make in Nanjing, China, for use in the potentially lucrative China market and elsewhere abroad, said Motorola Vice President Joe Guglieme. Production of those computers, which Mr. Guglieme indicated would retail for about $ 1.200, is slated for later this year.
The value of Apple's licensing transaction wasn't disclosed, but Dr. Amelio said the real value to Apple wasn't money. "Our primary motivation is to expand the platform," he said. More Apple-type machines in the market gives consumers more choice, and assures software developers that there's a market for Apple software.
Amid mr. Amelio's optimism, he sais he doesn't expect Apple to return to profitability for nine months. That goes farther than what Apple had been saying, which was that it expected a big loss in the current quarter endeing march 29 and might have losses in other future quarters. And though Dr. Amelio's impressive turnround of National Semiconductor, a chip maker in Santa Clara, California, is one reason Apple's board turned to him, the Apple job will be much tougher, most industry observers agree.
Under former Chief executive Michael Spindler, who was ousted by the board, Apple lost money, market share and credibility. Apple had a loss of $ 69 million in the first quarter ended dec. 29, and faces even bigger losses this quarter. More fundamentally, it has been unable to get to market enough innovative and snazy new machines to justify higher prices than rivals and maintain a significant chunk of the personal computer market, the business model Apple was built on. Last year, its global PC market share dropped to 7.8% from 8.3%, according to Dataquest Inc.
One way for Dr. Amelio to possibly fix this, of course, is to turn to a strong partner. Apple was recently in merger talks witg Sun Microsystems Inc., but rejected the bid. On Friday, Dr. Amelio said again that Apple is not currently in merger talks ans "we have none foreseeable in the future."
Dr. Amelio didn't spell out many specifics about his rescue plan. But he did predict that Apple could return to profitability in about nine months, and that he'll take about 100 days to formulate his plan. Generally, he said, the plan would include such "housecleaning" steps as streamlining Apple's Macintosh product line, focusing on markets where Apple is strongest. He said he would "almost certainly keep Newton," the handheld computer technology that some industry experts think Apple should dump. But eWorld, Apple's underperforming on-line service, may get the ax.
"Does the world really need another (on-line) service?"
Dr. Amelio said. But he said no final decisions have
been made. He said he didn't envision "massive
across-the-board layoffs," and that the company's
success would hinge more on its performance in specific
market segments than on its rise or fall in share of
the overall PC market.
"You've got to make money before you can gain market
share ," Dr. Amelio said. He added, however, that
he is committed to increasing the Macintosh's market
share through licensing, which Apple tried half-heartedly
and far too late under Mr. Spindler. "We will
be enthusiastic licensees."
Nonetheless, the early line from many industry experts is that Dr. Amelio chances of keeping Apple independent at anything approaching ts current size aren't good. His challenge, a monumental one, is to both expand and to innovate, while under constant pressure to cut costs. Without innovation and growth, Apple risk being deserted by increasing numbers of software developers, a potentially crippling problem since customers won't buy Apple products if they don't run favorite applications. Apple is already an afterthought among many developers.
A top Silicon Valley executive , also pessimistic about Apple's chances, believes Dr. Amelio needs to dramatically step up his pace, swiftly clear out bloated inventories and generally speed up Apple's rate of design, production and distribution. He thinks Apple must rapidly try to exploit the Internet, and that it should slap its brand name, still one of the best-known around, on an expanded line of products for the home and other markets - even if it doesn't make the products itself. But he also thinks Apple should drop certain software developments projects in areas where formidable companies like Silicon Graphics Inc., Sun Microsystems and Hewlett-Packard Co. are already strong.
A smaller camp argues, however that Apple's base of
more than 10 million active and loyal Macintosh users
is so strong that the company can still execute a turnround
on its own.
"There's a lot of historical goodwill towards the
company among the Mac loyalists, and those people want
Apple to succeed," said Kenneth Krich, president
of ComputerWare, a retail chain based in Sunnyvale,
California.
Moreover, Apple has been counted out before and has managed to bounce back. One thing the amiable Dr. Amelio has already achieved: Cracking the bunker mentality and insularity that pervaded Apple as its fortunes sank under Mr. Spindler. Dr. Amelio did say the company's "biggest problem is the perception that Apple is in trouble," but rather than hunker down, blame the media and keep mum, often Apple's stance in the recent past, Dr. Amelio's plan clearly is to try to get out his message that Apple is far from dead.
The Wall Street Journal Europe, dinsdag 20 februari 1996
Interessante ontwikkelingen! Eens kijken waar dat op uit zal lopen en in hoeverre wij als eindgebruiker ervan kunnen profiteren.
Met vriendelijk groet,
Peter Wijnans, Heerlen.
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