Apple Recon: From RFI Update Week of 17 Feb 97


Apple "Play" & Other Rumors...

Up until Monday morning, RFI had its Apple Report all neatly arranged, edited and ready to go. Until Monday morning that is. Fresh information and "recon" came flooding over the gunwales to necessitate the total scrapping of what we had written, except for the main point of RFI even addressing the most recent, but not last, Apple reorganization. However, the "Next Reorganization" won't to conducted to handle current or continuing "problems" but future prospects.

As RFI stated, Apple's most recent reorganization won't be its last. The "Next Reorganization" is more than likely due in the period between Q3 98 - Q3 99 due to growth associated with Intel Rhapsody port/MacTel boxes that will run Windows applications. Never mind the "reorganization" that would occur if recent rumors are true.

Rumors and reports are circulating that Steve Jobs wants to "Buy Apple" and become both the majority shareholder as well as Chairman. This has led to the revival of the Ellison interest because of these rumors and reports. Remember that in Feb/Mar 96 RFI reported that the Michael Milken/Larry Ellison Investment Fund was pondering making an unsolicited bid for Apple and to bring Steve Jobs back with that turnaround plan in his hip pocket.

If, and we stress if, Jobs does make a play for Apple, he'll need someone with a "Big Bank", which automatically makes the Milken/Ellison Investment Fund "prime suspects" (refer to RFI's item / Apple Recon Item "Stepping Up to the Plate").

If the Jobs Apple Play rumors are true, with or without Milken/Ellison, then we can expect Dr. Amelio to either turn over the Chairman position over to Mr. Jobs, while retaining the CEO slot, or having him "punch out" (depart) as soon as his tenure would have been deemed a success. FWIW, if the Jobs play does occur, then he can claim success and call it a day while having laurels of triumph being placed upon his brow. And if the Jobs rumors are true, then expect Pixar to become a de facto adjunct of Apple; especially if RenderMan becomes part and parcel of Rhapsody.

Another rumor that Applesauce reported is that Mr. Jobs was behind Ms. Hancock's recent "demotion" in the last reorganization, and that Ms. Hancock's days at Apple are numbered. FWIW, Ms. Hancock was behind the decision to shut down Apple's Cambridge lab which was working on porting the ill-fated Copland NuKernal to Mach, which is the kernal upon which Rhapsody/NeXT MacOS will be based.

As RFI reported, it seems that the markets will soon have a plethora of "Macologists", like the Kremlinologists of The Cold War, if the Hancock rumors are true. These newly minted "Macologists" will try to discern who's who in Apple's power structure depending on their positioning/proximity to Dr. Amelio and Steve Jobs. Not to mention Mr. Wozniak.

Which brings us to another "rumor" that has been circulating. MacWeek's Mac-The-Knife has been reporting rumors that Exponential is allegedly considering abandoning the PowerPC chip in favor of the Pentium and PentiumPro platform. While it makes for nice copy, RFI wouldn't "bet the ranch" on this coming to pass.

First and foremost, one has to consider the PPC licensing agreement Exponential entered into with IBM to gain permission to produce Exponential 500 MHz+ PPC chips. It wasn't a "One Way Street". IBM, being no fool, executed a cross-licensing agreement that gives IBM access and rights to Exponential's technology. In other words, if Exponential "abandons" the PPC chip, IBM won't and will exercise its rights under the cross-licensing agreement. Which also makes it less appealing to Intel.

Secondly. Exponential would have to go "hat in hand" to Santa Clara because of the statements Exponential's management team made about the X86 technology, and its "unsuitability" for Exponential's technology, at the time they signed the PPC cross-licensing deal. To liken it to current events, it would be like OJ Simpson going to Bruno Magli for an endorsement deal after calling their shoes "ugly assed" for the past 2 years.

Third. Intel was only able to get its speed bump to 400 MHz by using a cooling system more compatible with NASA or Rube Goldberg than the consumer market; even IBD, et al, admitted the "Sham". Exponential's technology causes even more "heat/thermal issues", so using Exponential's technology on Pentium/PentiumPro chips would be like pouring gasoline on a fire. FWIW, RFI doesn't think for one moment that the average consumer wants the choice between "PC Flambe" or a PC cooling system reminiscent of "Three Mile Island" sitting on their desktop or laptop. Think of the liability. Some lady received $3 million for spilling hot coffee on her lap. What do you think the media will do with cases of "WinTel Weenie Welt"?

Bottom Line? Now that Apple has "The Fastest Mass Produced Desktop and Laptop/Portable Boxes on the Market", we can expect even more "news and developments" to come pouring out. And while Apple is prone to further weakness, it appears to have stabilized but it still hasn't given the "opportunity signal" which means that the selling might not be quite done just yet.

Apple Recon  Recon Lite  e-mail