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Technology Stocks : Apple Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Phillip C. Lee who wrote (8144)	2/2/1998 11:42:00 PM
From: James Yu	Read Replies (1) \| Respond to of 213176

To All, Here are some opinions and rumors from Newsbytes - use your own judgement. CUPERTINO, CALIFORNIA, U.S.A., 1998 FEB 2 (Newsbytes) -- By Patrick McKenna, Newsbytes. Apple Computer Inc. [NASDAQ:AAPL] has received mixed reviews and raised eyebrows with its termination of retail agreements with Best Buy, Circuit City, Computer City, Office Max and Sears. One analyst said the strategy was one more act of Apple's "corporate destruction committee," while another said the announcement was only partially surprising. The agreement does not affect regional and local retailers of Macintosh computers. Apple spokesperson Rhona Hamilton said companies such as Frye's and "Apple-only supplier" CompuWare are not affected by the announcement. "There are still some 3,500 retail outlets where you can buy a Mac," said Hamilton. On a national level, Apple plans to focus attention on CompUSA's 148 retail stores. Late last year, the computer hardware and retail superstore chain debuted a new Apple merchandising concept called a "store within a store." Within a certain area of each store, CompUSA created a small Macintosh store which is serviced by individuals with specific Macintosh training. At Macworld Expo in San Francisco last month, Apple's interim chief executive officer, Steven Jobs, said sales of Macintosh computers at CompUSA stores where the transition was completed was up 11 percent. Today, Apple said every CompUSA store has an Apple store within a store. Computer industry analyst and publisher of the California Technology Stock Letter, Michael Murphy, responded to Apple's reduced national sales presence, saying, "This is just another move by the corporate destruction committee. They killed the clone business. They went around their loyal resellers by selling direct. Now they want to have less presence in the national retail space. Have you seen the store within a store idea? At most stores it is maybe 3 or 4 percent of a CompUSA store." Murphy speculated, "Maybe this announcement came out before the retailers could tell them, 'Maybe it's just not worth it anymore (to sell Macintosh computers and Apple software).' Look you have a company whose investment in R&D (research and development) is below 5 percent. You have to have at least 15 percent. Microsoft has 16 percent. Intel has 9 percent, but that is $2.9 billion." Dataquest analyst James Statten was not as harsh with Apple. "Part of this announcement makes sense," began Statten. "Sears already said they were getting out of the computer business. I am not too surprised about Best Buy, Circuit City and Office Max. They probably did not want to participate in Apple's store within a store concept. The Computer City announcement I find surprising." Apple's Hamilton confirmed Statten's suspicions. "That is pretty much the case. We wanted them to create the store within a store concept." Over the weekend, Don Crabb, longtime Apple watcher and critic, concluded Steven Jobs' strategy is to reshape Apple into an attractive position to be sold. Under the heading:"Apple as Consolidated Company So We Can Sell the Bloody Thing Strategy," he wrote, "Rebuild Brand Recognition. Eliminate Employee Perks. Kill Quality Assurance. Slash Developer Support. Squash Servers. Eliminate Printers. Ditto Digital Cameras. Develop Rhapsody as Server only. Keep Newton But Kill Development. Dump Claris. Don't Advertise. Cut Marketing and Sales Expenses. Fire Your Sales Force and Hire Contractors. Layoff Staff. Show a Profit. Sell the Company. Maybe New Owners Can Create a Viable Strategy." His comments can be found under Don Direct at abbottsys.com. Accustomed to years of rumors about a possible sale, Apple spokesperson Katie Cotton said, "We never comment of rumors or personal speculation." Murphy would not dismiss the idea of Jobs' wanting to sell Apple, but wondered, "I am not sure who would buy it right now." He said Oracle, Sony, Sun Microsystems, companies frequently rumored as interested, were out of the picture. "Maybe it would make sense for Philips (symbol - PHG), but I have no idea if they have an interest." Another rumor going around is a partnership with a Korean conglomerate. Once source close to Apple told Newsbytes, "What was really bothering Jobs at Macworld (in January) was a deal with a Korean company that fell through." Jobs walked out of a CNBC report when he was asked about Apple's search for a new chief executive officer (CEO) and was considered to be in a less than good mood during the trade show. "The most likely player in Korea would be Hyundai," added Murphy, "but the Asian financial situation would have made a deal impossible." Newsbytes' unnamed source said Jobs had all his hopes on announcing the Korean deal before it fell through. The company still searches for a CEO while facing a reduced worldwide desktop computer marketshare of 3.1 percent. Employee layoffs continue to take place as announced earlier by the company. Reported by Newsbytes News Network: newsbytes.com. (19980202/Press Contact: tel Rhona Hamilton, Apple Computer, tel 408- 974-6439 /APPLEFADE/PHOTO) End of Report Best wishes James