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To: Sam Scrutchins who wrote (23936)	4/14/1999 9:59:00 AM
From: Sam Scrutchins	Read Replies (1) \| Respond to of 213177

Does anyone have a telephone number for today's conference call? Added after original post: Apple just mentioned on CNBC. Talked about earnings release, the good sales of iMacs, and the fact that Apple intends to broaden out into the small business sector with its computers. Sam

To: Sam Scrutchins who wrote (23936)	4/14/1999 12:02:00 PM
From: Richard Habib	Read Replies (2) \| Respond to of 213177

Sam, what your missing on MOT is that the portion of their business that sells PPC to Apple probably doesn't exceed 3% of their sales. I listened to MOTs cc and as expected not one comment was made regarding the PPC business, not even as regards embedded. MOT had qtr sales of 7.23B. Apple sells somewhat less than 1M units. How much do you think they pay MOT for the PPC? Do the math. Remarks regarding their semi segment indicated a growth forecast of 9-11% for 99. Sales were flat sequentially which is a better result than normal since seasonal issues usually indicated a decline in Q1. Orders were up 7% sequentially. MOT consumes about 22% of their semi output in their own products. It appears to me that given comments the profitability in the semi group resulted from price stability across the range of products coupled with the completion of cost cutting program (Part of their major restructuring) As regards R&D the focus on the semi sector is in software products which I assume is their range of networking software. Overall R&D increases are being targeted primarily in their wireless and networking sectors. As you may know MOT is completing a major restructuring. In the semi group this includes exiting some of their component businesses with a focus on micro-controllers, micro-processors including the PPC and DSPs. They specified in the cc that the focus in the semi sector would be toward products targeted toward networking and wireless. Those of you who aren't familiar with MOT should take a look at the wide range of businesses this company is involved. The semi group is only one of 4 major sectors in a company that makes everything from lightbulb ballasts, to automotive chassis electronics to wireless. Long term I am pessimistic that a company with such a varied focus, one for whom their Apple business is such a small portion of the business will compete successfully with a targeted company like Intel. While Intel offers a range of chip products, even in MOT semi business, the products are widely distributed. Even in the MPU business in which the PPC falls, it is one of several products. You have got to believe that focused managers like those at Apple have to be uncomfortable with the MOT relationship. It wouldn't be a surprise to me if Apple has had discussions with Intel. Rich