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News Alert from Dow Jones Online News via Quote.com
Topic: Apple Computer Inc
Quote.com News Item #4051893
Headline: Apple Said To Plan To Start Selling Network Computer In Spring
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NEW YORK -(Dow Jones)- As one report surfaced that Apple Computer
Inc. plans to jump soon into a business that some analysts think will
greatly help the struggling computer maker, another report surfaced to
suggest a separate move made by Apple last month might worsen its
problems.
The San Francisco Chronicle Tuesday reported Apple has decided to
make so-called network computers that will be based on the firm's
flagship Macintosh operating system software. Apple will introduce the
machines, which will cost about $750, at the Macworld Expo trade show in
January and will roll out the machines in the spring, the Chronicle
reported.
Network computers are simplified, low-cost machines that advocates
say will displace many personal computers in the home and business.
While not as powerful or feature-laden as traditional PCs, network
computers let users surf the Internet, exchange electronic mail and do
basic computing tasks.
The Apple NC will use a PowerPC microprocesor code-named Arthur, the
Chronicle reported. The machines likely will run the current Mac
software and be connected to server computers running Rhapsody, Apple's
next-generation operating system.
The machines will be aimed at the education and publishing markets.
Apple already has a popular product similar to a network computer; its
Newton division produces the eMate, a portable machine similar to a
small laptop computer that is popular in schools.
Separately, respected market-research firm Dataquest Inc. released a
study that concludes Apple's move last month to scrap its Mac licensing
efforts will seriously hurt Apple and contribute to the eventual demise
of the firm.
The Los Angeles Times Tuesday quoted the report from Dataquest, a
unit of the Gartner Group, as saying "Apple has started down a path that
will lead to its demise as a serious player in the PC market." Dataquest
is said to have sent the report to its clients in the past few days.
In the short term, Dataquest thinks Apple could enjoy a few solid
quarters because of its current offerings and upgrade opportunities. But
beyond that, Dataquest sees a host of issues eating into Apple's market
share.
Apple, based in Cupertino, Calif., has been struggling against
stubborn financial losses, disappointing sales and eroding market share.
Apple (AAPL) last week named company co-founder Steve Jobs interim chief
executive officer as it continues to search for a new permanent CEO.
Among other major moves, Jobs effectively ended the company's
licensing program after he demanded much higher fees from Mac clone
makers, who refused to pay them, and by refusing to give the cloners
future versions of the Mac operating system. Apple agreed to reacquire
the Mac license it issued to Power Computing Corp., the biggest cloner
of Macs, in a $100 million deal.
Dataquest sees a fire sale of existing Mac clones lowering Apple's
already sagging market share in the third and fourth quarters."
Dataquest also thinks the PowerPC chip will begin to cost more and
compete less effectively with Intel Corp.'s chips. Dataquest also said
Mac software developers will move more swiftly away from the Mac
platform.
But not everyone is down on Apple and some market watchers feel that
Apple might be the best suited company to make money in network
computers. At Apple Expo 97, the largest trade exhibition outside the
U.S. for the Macintosh, Apple software chief Avie Tevanian last week
acknowledged that developing a network computer is very much on Apple's
mind. But he stopped short of making a firm prediction about when such a
product might come out.
"The whole notion of network computers is very exciting for Apple.
Clearly that's of high interest to Apple. But we don't have plans we can
talk about right now," he said at the time. Tevanian is a protege of
Jobs and Apple's is senior vice president of software engineering.
Network computers would use the Internet to let users access programs
and content. Indeed, one of Apple's new board members, Oracle Corp. CEO
Larry Ellison, has been one of the most vocal champions of the NC
concept. Analysts are split over whether NCs will be a big trend. NCs,
in theory, could reduce demand for Microsoft Corp.'s Windows operating
system.
Breaking step with Apple's prediliction for exuberant promotion of
new products long before launch, Apple has been tight lipped about its
NC plans. Sensitive to customer disappointment with earlier failures to
deliver products as promised, the company now will only announce new
products - such as an NC - when delivery schedules are certain. "Our
customers are living with a lot of history," Tevanian said last week.
"Just because we have a new management team doesn't mean they forget
that."
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