Bruised Apple faces harsh facts

DAVID USBORNE

New York

Increasingly lonely in its battle against the monolithic Microsoft Corporation and hurt by a spate of supply and manufacturing problems, Apple Computer is being forced to consider whether it can survive as an independent company.

The issue was suddenly thrust into public debate last week, when Apple's respected chief financial officer, Joseph Graziano, announced his resignation after he failed to persuade the company's board that the time had come for Apple to sell itself.

The most obvious potential suitor for the company would be IBM, which made a first approach last autumn. Earlier this year, however, Big Blue spent $3.5bn (pounds 2.3bn) on its acquisition of the Lotus Development Corporation and may no longer be interested in the increasingly beleaguered Apple.

Rarely have prospects seemed more bleak for Apple, America's third largest maker of personal computers. Last month, it revealed that because of difficulties keeping up with demand, it was sharply reducing its estimates for revenue and profits in its fourth fiscal quarter.

Also last month, the company was forced to recall some of its Powerbook laptop models after discovering that under some circumstances its battery units could burst into flame. This was on top of the relative flop of its Newton Thinkpad digital organiser.

All the while, Apple has seen its share of the US personal computer market slide to just under 8 per cent. Although some of the slippage has been attributed to management mistakes, the company is continually finding itself up against the brick wall of Microsoft and its Windows operating system.

In an interview with the New York Times, Apple's chief executive, Michael Spindler, attempted to douse the speculation of a merger, but at the same time indicated that, to survive, the company would have to consider alliances with other companies as well as some rationalisation of its operations.

Suggesting that Apple's existing alliances - with IBM, for example, in the development of the Power PC chip - could be deepened, Mr Spindler remarked: "The big question is, how will we stand together?" As to restructuring, he went on: "There are crucial decisions that are going to have to be made about letting go of some parts of a business that are quite unnerving to some people, including ourselves."

Mr Spindler was not coy about Apple's problems, which in recent days have helped push its stock price down to around $36, nearly half the $65.5 it reached three years ago. "This has been the most difficult quarter in our history," he conceded. "Give us one strong quarter and all this will go away."

With the Christmas season approaching, Apple might indeed overcome the worst in the next few months. Any short-term pick-up in sales, however, will do nothing to answer the more fundamental question of how the company is going to endure when large corporations, in particular, are shunning its products in favour of systems designed for Microsoft Windows.

Start your day with The Independent, sign up for daily news emails
News
One Direction's Zayn Malik gazes at a bouquet of flowers in the 'Night Changes' music video
people
News
people
News
'Free the Nipple' film screening after party with We Are The XX, New York, America - 04 Feb 2014
news
Arts and Entertainment
Russell Tovey, Myanna Buring and Julian Rhind Tutt star in Banished
tvReview: The latest episode was a smidgen less depressing... but it’s hardly a bonza beach party
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Claims Administrator

£16000 - £18000 per annum: Recruitment Genius: A position has arisen within th...

Ashdown Group: Development Manager - Rickmansworth - £55k +15% bonus

£50000 - £63000 per annum + excellent benefits : Ashdown Group: IT Manager / D...

Recruitment Genius: Security Officer

£16500 per annum: Recruitment Genius: Applicants must hold a valid SIA Door Su...

Ashdown Group: Business Analyst - City, London

£50000 per annum: Ashdown Group: Business Analyst - Financial Services - The C...

Day In a Page

The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

The saffron censorship that governs India

Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
Prince Charles' 'black spider' letters to be published 'within weeks'

Prince Charles' 'black spider' letters to be published 'within weeks'

Supreme Court rules Dominic Grieve's ministerial veto was invalid
Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

How did fandom get so dark?

Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
The galaxy collisions that shed light on unseen parallel Universe

The cosmic collisions that have shed light on unseen parallel Universe

Dark matter study gives scientists insight into mystery of space
The Swedes are adding a gender-neutral pronoun to their dictionary

Swedes introduce gender-neutral pronoun

Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

Disney's mega money-making formula

'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
Easter 2015: 14 best decorations

14 best Easter decorations

Get into the Easter spirit with our pick of accessories, ornaments and tableware
Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower
Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

Did a botched blackmail attempt help Cyril Smith escape justice?

A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss
Tony Blair joins a strange and exclusive club of political leaders whose careers have been blighted by the Middle East

Blair has joined a strange and exclusive club

A new tomb has just gone up in the Middle East's graveyard of US and British political reputations, says Patrick Cockburn
Election 2015: Meet the top 12 wacky candidates seeking your vote in May

Election 2015

Meet the top 12 wacky candidates seeking your vote in May