Amelio resigns from Apple

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The Independent Online
Fifteen months after he assumed the helm at Apple Computer, pledging to halt the once-sizzling company's numbing decline in revenue and market share, Gilbert Amelio stunned the industry last night by announcing his resignation.

Mr Amelio is throwing in the towel days before Apple is due to reveal its third-quarter earnings figures early next week. Speculation was instantly ignited that his departure points to results that will be even more dismal than the worst Wall Street expectations.

Leaving the personal computer maker with Mr Amelio is Ellen Hancock, an executive vice-president for technology. While the search will be mounted immediately for a new chairman, Apple's current chief financial officer, Fred Anderson, will take over the running of the company in the interim.

Perhaps more significantly, however, Steve Jobs, one of Apple's founders who returned to the company last December, would "assume an expanded role as a key adviser to Apple's board and executive team", the company said in a statement released soon after the close of New York's markets.

While Mr Amelio's departure will deepen doubts about Apple's future viability, many Wall Street insiders have in recent weeks increasingly been voicing doubts about his leadership.

Mr Anderson insisted during a conference call with analysts last night that Mr Amelio's resignation was not linked in any way to next week's earnings announcement. He confirmed, however, that the Apple board was dissatisfied with Apple's general earnings performance.

During Mr Amelio's tenure, Apple has gone through two wrenching restructurings involving the laying off of thousands of jobs, the shelving of several lagging products and the introduction of several new faces at the executive level.

In the past 18 months, however, Apple's losses have accumulated to almost $1.5bn (pounds 920m). And Mr Amelio has been able to do nothing about the company's leaking market share. In 1996, Apple's share of the PC market shrivelled to 5.2 per cent from 7.9 per cent in 1995. It fell still further to a meagre 3.5 per cent in the first quarter of 1997.

By fleeing the company, Mr Amelio is conceding that his efforts to rescue it have failed. Hired in February 1996 from National Semiconducter Corp, Mr Amelio at first won the support of Wall Street and investors.

Compounding the misery now has been a slump in value of Apple stock. Last week it sank to just $13.125 per share, its lowest level since 1986. The latest bruising to the share price was prompted by news that Power Computing Corp, which makes clones of Apple's Macintosh PCs, was defecting and developing alternative PCs based on Microsoft Windows and Intel chip technology.

"Apple's platform is a dying species," said Henry Voskoboynik, an analyst at ABN Amro Chicago Corp. "Even the clone makers are turning their back on Apple."

Apple investors were also spooked by rumours that Mr Jobs was preparing to sell the 1.5 million shares he acquired when Apple bought his Next Computer Software Inc for $400m in February. The search for a new chief executive will be led by Mike Markulla, chairman of the board for 10 years.