Amelio clears way for new Apple

Change continued to sweep Apple in April as new boss Gil Amelio took more steps to return the firm to a sturdy financial footing. There were more dramatic signs of the spring cleaning operation Amelio began when he took over in February.

The most significant development was that Apple made an operating loss of $740 million (£490 million) in the first three months of 1996. This is by far Apple's biggest-ever quarterly loss, but there are sound business reasons behind it. Inheriting a confused situation where there was a shortage of the more powerful machines and a large overstock of other Macs (like the Performa range), Amelio has essentially given up on selling these surplus Macs at a profit. Writing them down alone is costing $388 million (£257 million).

Apple also now intends to cut another 1,500 jobs on top of the 1,300 posts Amelio's predecessor Michael Spindler said in January would disappear. This doesn't necessarily mean 2,800 people are to lose their jobs. Apple is selling one of its manufacturing plants to SCI Systems, which already makes computers for other firms - including Mac-compatible computers for Power Computing. SCI will inherit the 1,100 employees working for Apple at the plant and the Macs coming out of there should actually end up costing less.

The way ahead

Amelio is planning to announce more plans to make Apple stronger at the firm's WorldWide Developer Conference in May, after three months of analysing company strengths and weaknesses and taking feedback from employees. But he gave some indications of what he's got in mind when he spoke to reporters after the loss was announced in April.

Despite the size of Apple's deficit this quarter, Amelio has set the target of breaking even within the year. He also wants to make the company more accountable to its customers. Doing this and getting Apple to sell particular products well will solve `90% of Apple's problems', said Amelio.

He pointed out five areas that will form the backbone of Apple's efforts in the future: the PowerMac (1) and home machines (2) like the Performa and the Pippin console are the most vital products, contrary to specualtion that Apple would abandon the home market. PowerBooks (3), server computers (4) for hosting Internet sites and the Newton portable assistant (5) will also receive renewed support.

He also confirmed what nearly everyone except Apple had believed for some time: the release of Copland, the next version of the Mac operating system, will be delayed until 1997 rather the promised late '96. But the delay will give Apple a chance to make the OS work more closely with the Internet, giving it a technological advantage over rival systems like Windows 95.

Research chief leaves

David Nagel, Apple's respected head of research and development, has left Apple to lead the Labs department of global phone company AT&T. Overseeing the continuing work on Copland, the new version of the Mac OS, Nagel was a popular figure, but had also been criticised for delays in Copland and PowerMac designs. Apple's only official comment indicates Nagel has left because of the extent of the opportunities at AT&T, rather than any disagreement with Amelio.

Five-star PowerMacs hit stores - Help for games authors