Make-or-break Apple cuts model range

Apple Computer is cutting its model range in half to about 20 and reducing the number of operating systems it sells from six to one in another drastic attempt to cut costs and revive its fortunes.

The new strategy, regarded by many analysts as a make-or-break moment for the once- mighty-but-now hobbled computer company, was announced yesterday by its recently installed chief executive, Gilbert Amelio, at a conference of software developers in California.

In one glimmer of good news, Mr Amelio told the developers that sales of Apple products rose by 40 per cent in April over March. Shares in Apple were unchanged at midday yesterday at $27.25 after Mr Amelio's comments.

Mr Amelio took over at Apple in February after the ousting of his predecessor, Michael Spindler. At the time, the company was in deep crisis, having just announced a quarterly loss of $69m and plans to lay off 1,300 staff. Squeezed by the increasing market domination of the Wintel standard, combining Microsoft's Windows operating system with Intel's chip technology, it had seen its world PC market share drop to 7 per cent.

Since his arrival, Mr Amelio has weathered the announcement of a subsequent quarterly loss of $740m - the worst in the company's history - which included a large inventory write-down, while he has moved to sell a manufacturing plant in Colorado and to eliminate another 1,000 jobs.

So intently anticipated was Mr Amelio's speech that some observers were comparing it to the introduction in 1984 of the first easy-to-use personal computer with the Macintosh operating system. That transformed Apple into America's number one PC manufacturer.

Under Mr Amelio, the company has also signalled its intention to focus intently on developing products to make it easier for consumers to explore and use the Internet.

"I have a vision for this company, I have a dream, if you will - to bring computing to rest of us," Mr Amelio told yesterday's conference, noting that global sales of computers are expected to double by the end of the millennium.

Mr Amelio said he intended to cut the number of models made by Apple by 50 per cent over the next 12 months. Meanwhile, by paring the number of Apple operating systems from six to just one, he said he hopes to focus all of the company's energies on the Mac system.

Through his cost-cutting strategy, Mr Amelio signalled that he expected to be able to make Apple profitable again on a total revenue of $9bn, compared with the $11bn in revenue generated by sales in 1995.

Mr Amelio is also accelerating Apple's slow change of heart in agreeing to allow other manufacturers to clone Apple systems under licensing agreements.