Apple vows to restore computer supremacy

The promised rescue involves job cuts and the suspension of executive bonuses. David Usborne reports

There may not be much polish left on it - indeed the peel itself is pretty much gone and the core is musty - but Apple Computer has vowed once again to reclaim the future as its own. Macintosh fans around the world can only pray that it can be so; analysts and investors are restraining their scepticism.

Action to rescue the once-mighty computer pioneer was promised by Gil Amelio, its beleaguered chief executive, at the annual shareholders' meeting last week. His plan includes a further restructuring and a new and aggressive advertising campaign. He also announced the suspension of executive bonuses.

The details of the slimming plan are only partially known. Apple will be reforged into three main divisions, focusing on education, publishing and the Internet. A new round of job cuts is expected soon, with as many as 3,000 employees likely to go from a workforce of 13,000.

Speculation also abounds about some Apple products, including the Newton hand-held computer which seems destined for the axe.

"It's time for Apple to face that we can't do everything," Mr Amelio told the meeting. "We can't be in every market and we can't support every technology."

In a nod to Apple's glorious past, meanwhile, Mr Amelio has hired founder Steve Wozniak, who has had no contact with the company since 1985, to rejoin it as an adviser.

The other founder, Steve Jobs, was also brought back on board with Apple's $400m (pounds 245m) purchase of his Next Software just before Christmas. With Next, the company hopes to develop a new operating system.

Hopes are also high for a new, in-your-face, advertising campaign soon to be unleashed on Americans. With the slogan, "Warning. Don't try any of these things on a Windows PC", it will attempt to poke fun at the Microsoft- Intel juggernaut and promote the video and sound advantages of Macintosh.

Among those to welcome the new tack was John Lister of image consultants Lister Butler. "The perception of an organisation is almost as important as the product," he said last week. "The perception of Apple is that they have lost energy and are slipping behind."

On bonuses, the story is more that they were being paid at all. Apple made an overall loss of $800m last year and recently announced a thumping $120m loss in its last fiscal quarter and a decline in revenue of 32 per cent. However, on the back of a $25m profit registered in the quarter ending 27 September last year, some executives received large bonus cheques. Mr Amelio himself received a $648,000 bonus on top of his salary of $990,000.

With its world market share fast shrinking, the road for Apple remains steep. But many shareholders welcomed a presentation from Mr Amelio that was unexpectedly candid and gutsy.

"I want to recreate the Apple that can once again turn this industry on its head," he declared.

"I want to recreate the Apple that shocks, amazes and delights poeple all around the world with the promise of high technology made easy and accessible."