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Amelio focuses on business practices to revive Apple

Amelio focuses on business practices to revive Apple

After taking full advantage of his 100-day grace period, Apple Computer's new CEO, Gil Amelio, has outlined a plan for turning the company's fortunes around that focuses heavily on the Internet and a back-to-basics philosophy.

Conceding that Apple "failed to win the battle because we made basic business errors", Amelio promised that his strategy for Apple will be based on a solid business proposition that will place less emphasis on leading-edge technology and more focus on execution.

Apple's main thrust over the rest of the decade will be to solidify its role in developing the Internet, which the company has so far only focused on by default.

Although Apple may well be able to call itself the primary platform for Internet development, the No. 2 provider of Internet servers today (after Sun Microsystems), and the largest single reseller of Internet clients, detractors have indicated that the company's success has come about in spite of, rather than due to, Apple's past Internet efforts.

Apple's focus will change, Amelio promised, because Apple will now look to form partnerships with industry leaders, such as Sun and Netscape Communications. The partnerships are designed to integrate Apple's core technologies, such as OpenDoc, with Internet standards, such as HTML and Java.

In addition to declaring his intention to transform Apple into an Internet company, Amelio announced a restructuring plan that focuses on the basics, which include: reducing Apple's break-even point from the current $US12 billion to approximately $US9 billion in 12 months, in part by laying off at least 2,400 employees; reorganising Apple into four units, including AppleSoft, AppleNet, AppleAssist, and Information Appliances, that would focus on software, connectivity, on-line service and support, and hardware, respectively; breaking the hardware group into four units that focus on the Macintosh platform; Internet Appliances, such as Newton and Pippin; Imaging Peripherals; Alternative Platforms, such as Apple's AIX-based Unix servers; and PowerPC Reference Platform designs running non-Mac operating systems; reducing the number of systems Apple offers from 80 to 40 and cutting back on the number of motherboards Apple uses; bringing out system software enhancements as soon as possible, rather than waiting for a major event, such as the 1997 Copland release, before adding significant new features; and increasing the focus on developing server products, which could include a version running NT.

Although none of the proposals made by Amelio were startling - in fact most had been identified by Michael Spindler, Amelio's predecessor, as changes he was considering before being replaced - together, they should add up to a more manageable and ultimately profitable business, Amelio said.

"Apple's staffed by brilliant, committed, inspired people," Amelio said, "but we lost the sense of having a shared vision." That loss resulted in Apple offering users a bewildering array of models that were minimally different from each other. "We have to get away from adding new technology, no matter how good it may be, just because it's good," Amelio said.

Although Amelio offered only a few details, such as shipping all Power Macintosh systems with 12Mb of RAM for better Internet support, adding Copland's VTwin search engine to Cyberdog, and creating a $US20 million market development fund for third-party applications, his remarks were well received.

"I think he did what he had to do," said Pieter Hartsook, editor of the Web-based "Hartsook Report". "There wasn't anything revolutionary, and there weren't many specifics; but it outlined an approach that's doable, and that's what Apple needed."

"I was pretty pleased," said one developer. "I don't think I was surprised by anything, but I think it showed he knows where he wants to take Apple and that he has a good idea of how to get there."


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