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11 Nov 97

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Post "Apple Event" Report: 11 Nov 97

Introduction:

In the Introduction to the "Recon On Apple" Report, RFI stated the following:

".....This has not only built anticipation and buzz about this 'Apple Event' but also lead to all manner of speculation about what would be announced on 10 Nov 97; as well as initiate speculation about what Mr. Jobs will do to top it at Macworld Expo San Francisco in January. Truth be told, Mr. Jobs, et al, need to build momentum between now and the shareholders meeting as those proxy statements are being prepared to be mailed out and most of the votes will have been completed and sent in by the time Mr. Jobs takes the dais at the Macworld Expo keynote. And no sooner than the proxy questions are filed and sent out, those questions will be known; if not sooner. Especially if a rumored Apple and Oracle merger is going to be one of the questions; which is remote.

So, Mr. Jobs has the desire of his heart; which is to rivet the world's and the markets attention on Cupertino between 7 - 10 Nov 97, as well as renewing a lot of interest in Apple and what it is doing going forward. His plan has been a success as RFI has been hit with numerous queries about what we know, when we knew it, and when we're going to tell it.

Yes, Mr. Jobs' plan has been a huge success but he has to provide steak for all that sizzle; and he's been working on "aging" that steak since Macworld Expo Boston and even before. Not everything that he is working on will be ready in time for 10 Nov 97 but at least one Bill Gates type of 'Jaw Dropper' announcement will surely be made during that 2 1/2 hour Apple Media Event on Monday 10 Nov 97.

And yes, invitations are still going out and they are being followed up by e-mails to certain select parties, trying to ensure that the place is packed to the rafters as well as having others making sure that they are watching the globalcast at one or more of the locations around the globe.

Ever since RFI started giving markup warnings about this event between 7 - 10 Nov 97 (we were first, thank you very much) we've been holding our cards close to our vest as we didn't want the news to leak prematurely and then have its eventual impact on the markets lessened or even negated. We even consulted with a Trader (Capital "T") as to when we should time its release to RFI's subscribers. And, we've all but placed an embargo upon Apple Recon content in the intervening days and weeks.

Which brings us to the 'Steak' for all our sizzle. What you have all been patiently waiting for; which we apologize for but some of RFI's Special Report content has been leaking out of our 'ecosystem' into places where it should not be. Which is why we've been so cautious.

The Recon on Apple that follows is being presented as : 'Recon, Rumors, Reports, etc.' that RFI has received and we are not definitively stating that any or all of these might be part of the 'Jaw Droppers' that Mr. Jobs is going to give (emphasis ours). Take a look at what happened when RFI scooped the Jobs keynote content, etc. Mr. Jobs lopped off 15 minutes from his keynote at the last minute after having an emergency Board meeting the night before.

With that said. RFI will offer up those 'Recon, Rumors and Reports' that we have either known for some months now, or has come into our possession over the past several weeks. Some of which is confirmation of things that RFI has known or suspected and things we even mentioned in RFI and on Apple Recon contemporaneous to the time when we learned of, heard or detected them.

So, RFI is going to give you a rundown of the Recon, Rumors and Reports we've received that appear to reveal some of the things Mr. Jobs is working on as 'Jaw Droppers'...." (emphasis ours)

Obviously, Mr. Jobs did not have any of the anticipated "Jaw Droppers" ready for the 10 Nov 97 "Apple Event" as the only ones forthcoming were the Apple Direct Sales / Build - to - Order announcements as well as the G3 systems. Something that was widely anticipated for a long time. That Mr. Jobs did not deliver the "Steak" for all of the "Sizzle" generated prior to the Apple Event is obvious. However, these are the first steps in order to build momentum prior to not only Macworld Expo San Francisco but the Apple Shareholders Meeting as well. Between now and then: Apple, the New Board and Mr. Jobs has to start delivering on that "Steak" lest the diners get totally restless and decide to leave the restaurant.

And, because Mr. Jobs did not deliver on the potential "Jaw Droppers" that RFI reported were possible, some are opining that RFI was "Way Off Mark" while others have been left scratching their heads as to "Why" Mr. Jobs allegedly and / or apparently held back. To which RFI replies: "Either they weren't ready for prime time by Monday or there was some other reason behind it. However, RFI is also expecting that those potential Jaw Droppers are still possible and we're content to wait on events.

Furthermore, when RFI first reported the "Rumor" that Apple was going to move towards Direct Sales on the Internet, at the time the Apple Club Marketing Questionnaire was being conducted on Apple's web site, there was also heavy skepticism over RFI's Report.

And, those who are so readily jumping on the bandwagon of "You REALLY Blew It" also ignore the fact that RFI was also adamant in its skepticism over the potential announcement of an Apple / Oracle merger on Monday, as well as the reasons why. But, that's convenient "cut and paste" commentary from them. C'est la guerre.

RFI is still standing behind those potential "Jaw Droppers" as becoming eventual fact even though RFI initially reported them as "Rumors, Reports, Recon, etc." and did not definitively state that they were going to come to pass. Something else some are conveniently forgetting.

However, RFI received an unsolicited opinion from someone (who is not affiliated with Echo 4 Communications, RFI or Apple Recon in any manner) as to "Why" Apple might not have made any announcements regarding the potential deals and other things in the works. We're including it here, sans the correspondents name to protect their identity, so you can see what their take on it was. And while RFI is not embracing this opinion as an explanation, it is something to consider:

"Subject: Did you play too many cards?? Date: Mon, 10 Nov 97 23:53:08 +0000 From: xxxxxxxxxxxxxxxxxxxxxxxxx To: rkm-echo4@worldnet.att.net

I wonder if after showing all your cards on Friday, if that changed any of the presentation on Monday? I tuned in the transmission too late, and found that after 45 minutes, the rest of the satellite time was devoted to downloading the media clips. Was that THE planned event?? Hhmmmmmmmm makes me wonder. What Steve did get was a chance to see what was in the rumor mill from all sources. He even had the chance to evaluate the Good sources (Like Apple Recon), as well as the far fetched sites. Not that this makes any of the information posted less valuable, but now "HE" knows (if he didn't already) what cards everybody else was holding.

BTW, Is Steve that consuming when someone puts down Apple? The Bulls eye over the image of "Mr. Dell" was an interesting shot back."

While RFI is not in the habit of suspecting "Conspiracy Theories", such a maneuver would fit into the Machiavellian moves that Mr. Jobs has been making ever since his return to Apple. And, it did in fact give Apple and everyone else the opportunity to see what "Cards" people were holding vis-a-vis Apple's future potential moves. But, RFI does not suspect (nor have we heard reports) that there were last minute changes (as were reportedly made with the Macworld Expo Boston keynote; 15 minutes "missing" as it were) in the 10 Nov 97 "Apple Event", but it did smoke out a lot of people trying to explain the "what might..." aspects of the event.

Thankfully, RFI has been extremely careful as to sanitizing the "Recon" we've been receiving (even more so since the Ferreting Efforts started at Cupertino) as to protect our sources and contributors even more; as others have been.

However, all was not lost from the 10 Nov 97 "Apple Event"; even sans any "Jaw Droppers". Especially if they are announced at a later date. RFI is content to wait on events.

Which brings us to the main focus of the Apple Event yesterday: "Michael Dell: Stand In Poster Boy"....

Michael Dell: Steve Jobs' Stand In Poster Boy?

Well, RFI should have factored in a "Plan B" if Apple wasn't going to have a "Jaw Dropper" inked and ready for prime time for the 10 Nov 97 "Apple Event", and it was ironic that Mr. Jobs selected Michael Dell as the "Stand In Poster Boy" for the Event.

In the Recon On Apple Report introduction, we reported on the potential possible announcements and "showed our cards", with the caveat that Mr. Jobs might not have them ready and RFI explained "why" Mr. Jobs and the New Board had to build momentum going forward from 10 Nov 97.

However, even Mr. Jobs using Mr. Dell as the "Stand In Poster Boy" for any potential "Jaw Droppers" that RFI reported, isn't insignificant in and of itself.

Pray tell, why (other than Mr. Dell's flippant remarks of a few weeks back) would Mr. Jobs use Mr. Dell as a "Poster Boy" for their Direct Sales and Build - to - Order efforts? Apple's Direct Sales and Build - to - Order Strategy and Initiative isn't going to steal Dell customers away. Most people and businesses that order direct from Dell are ordering boxes after they've already made their platform and OS choices. And most first time buyers go to a retailer to have their hand held for them, unless someone is holding their hand for them in direct ordering, as they navigate the waters of "Buying a Box".

In other words, Apple's Direct Sales and Build - to - Order Mac models will not threaten Dell ("We're Coming After You", you're in our sights) unless Apple also intends (going forward) to "go after" Dell's current and potential customers with systems that directly compete with Dell's offerings: namely, X86/WinTel boxes (AKA: MacTel / RhapTel / Rhapsody on Intel) in the future.

And yes, you know where we're going with this: "Today G3. Tomorrow the Spectrum..." Unfortunately, if this is to be the case, Apple "needs an OEM" to produce and ship those boxes, which leaves three potential front runners as likely suspects: UMAX, IBM and Gateway. Unless they decide to do it themselves, which Apple has repeatedly denied intending to do.

With developers getting the Rhapsody for Intel Developers Release, RFI is left in the position wondering what Apple intends to do vis-a-vis OEM WinTel boxes with Rhapsody for Intel. As well as its plans in light of the targeting of Dell.

To be honest, RFI suspects that yesterday's "targeting" of Mr. Dell and Dell (DELL.O) was another telegraphed punch that will later become obvious to all once things are finally shaken out. And while RFI suspects that Mr. Jobs' targeting of both Dells was in fact a telegraphed punch, we're content to await on events.

The Rhapsody Premiere Release is still slated for January 98, with Unified due to be shipped in July 98; still reportedly on track for their debut concurrent with the timetables for the Macworld Expos.

That, in the intervening time, Apple decides to make public what its intentions for Rhapsody for Intel are, and what part it will play in the Apple Direct Sales and Build - to - Order initiatives is open to question. Currently, all we can do is speculate as to what we think are likely scenarios, which are also scenarios that RFI and Apple Recon have delineated long ago. Therefore, we'll have to wait on events, but yesterday's targeting of Dell smelled like a telegraphed punch. All we have to wait upon is whether it's: a feint, lands or misses its mark.

As one long standing bona fide and certified "Macologist" opined several months back, they are scrutinizing every utterance and move by Mr. Jobs and Apple for the potential meanings behind perceived "telegraphed punches". Something that RFI has been doing as well.

FWIW, if all Mr. Jobs' was doing with the "Michael Dell As Stand In Poster Boy" (AKA: "The Keynote Guest Formerly Known As Gates, et al") was a bit of showmanship to reinforce the Direct Sales / Build - to - Order Initiative, he would have been better off using Mr. Waite of Gateway 2000, as he qualifies for "Think Different" status. So does Mr. Dell, as he "revolutionized" the PC market with the Direct Sales / Build - to - Order strategy, but RFI gathers that Mr. Dell was targeted because of his flippant and importune remarks.

Bottom Line On Dell as "Stand In Poster Child"?:

RFI fully suspects that there was more than symbolism and "Oh Yeah? Your Mother Wears Army Boots" to the selection of Mr. Dell as "Stand In Poster Boy" but we'll have to wait upon subsequent events and / or Recon.

And, we're thinking that the next 6 - 9 months is going to be an interesting time for Apple watchers are Apple builds and extends upon the announcements that were the focus of the 10 Nov 97 "Apple Event". As Yogi Berra has been credited with saying: "It Isn't Over Until It's Over..."

Enough said.

Apple and Oracle:

One other thing that was "missed" on 10 Nov 97 was that RFI was about the only one who consistently cast doubt upon the fact that an Apple / Oracle merger would be proposed on Monday 10 Nov 97; and RFI also explained (categorically) why.

While RFI still does not dismiss either a Strategic Partnership between Apple and Oracle, or even an eventual convergence, there was something evidenced by all the reporting vis-a-vis the Apple / Oracle merger story: A lot of sources probably got burned by over eager reportage on the alleged details of the Apple / Oracle merger. Fortunately, for RFI's sources, we didn't bite.

Yet, even still, RFI knows that this drama with Apple and Oracle, et al, is not over until the final credits roll. Hopefully, when they do, all those who have sat through the entire full-length feature of the "Never Ending Story" will be pleased with the outcome.

And, as far as RFI is concerned, we're sticking with the potential "screenplay" that we outlined in the Serendipity Strikes and Fantasy Special Report as there's no evidence to the contrary available at this point in time.

AAPL.O: Where To From Here?

On Monday 10 Nov 97, Apple's volume and price activity early in the day suggested a 10 million share day but they key was the 24 resistance level, as well as the 21 resistance level, which RFI mentioned in its updates. And, the uncertainty around the price activity prior to its move from the 16 1/2 area caused us to state that the time premium for the farther out strike months (December, January and February) on the options was worth the price.

Even still, there's 9 trading days until November expiry and RFI did state that 10 Nov 97 was only the opening salvo. There's also a lot of trading days between 10 Nov 97 and Macworld Expo San Francisco; as well as January expiry.

If AAPL.O does retrace its move to the area of the 16 heavy support level, or even lower, then RFI will consider it a time to start looking for that Opportunity Signal in the volume which will signal a reversal in the trend. However, there is a lot of support and the buying volume over the past several weeks has far outweighed the selling volume and pressure.

Some are currently of the opinion that AAPL.O might be heading into the single digits but RFI has a hard time seeing their logic unless the general markets and the Tech Sector tank with a vengeance and Apple gets dragged down with the rest of the markets. You see, Apple has already suffered the worst of its woes and during the activity on "Gray Monday" Apple was the only stock in the S&P 500 to actually close up on that day.

Furthermore, with all of the potential "Jaw Droppers" still hanging over the markets there is a clear and present danger to the shorts in Apple as any given day could trigger a "surprise announcement" from Apple.

As RFI has consistently said: "Apple, Mr. Jobs and the New Board has to start building momentum between 10 Nov 97 and Macworld Expo San Francisco." And we also told you why.

While Apple might see interim weakness in its share price, there is a considerable floor under the share price at 16 and it will take some large event for it to fall below that level. And with expectations that Apple might show some black ink in its FY98 Q1 earnings report, the potential for disaster in the share price is somewhat lessened.

We'll keep you posted...

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