Apple To Consolidate Operations

Apple Computer Inc. said Tuesday it will consolidate its independent marketing and development units into fewer groups to cut costs and to concentrate on selling computers in key markets.

Apple also said Steve Wozniak, the electronics whiz who invented the companys first computer 20 years ago, will rejoin with Steven Jobs, the other Apple co-founder, as a part-time advisor to chairman Gilbert Amelio.

Apple, based in Cupertino, California, said it is still examining all aspects of its business and will determine by the end of the month how many jobs it will cut. The company also is considering dropping some product lines possibly including the Newton handheld computer, analysts have said to reduce its expenses by 20 per cent by the end of the year.

Simplicity is what makes this reorganisation appropriate for Apple compared with other reorganisations in the past, said Guerrino De Luca, the new head of Apples global marketing efforts.

Analysts had expected Apple to give specific details on Tuesday about job cuts and the financial impact of the move. They will have to wait until the end of the month, Apple executives said, while they analyse the companys situation.

Since Amelio took helm of the company last year, the company has focused on stanching quarterly losses, reducing inventories and increasing cash reserves, said George Scalise, head of Apples operations.

This organisation builds on that, Scalise said. It now allows us to focus on markets, to be focused on the hardware and software and to take advantage of the strengths weve built over the past six to eight months.

With the most recent restructuring, the second in a year, Apple for the first time consolidates all its marketing functions under one manager, De Luca.

The company also set up a worldwide sales and support organisation to be led by Marco Landi, currently Apples chief operating officer.

Wozniak, who co-founded the company with Steve Jobs at the home of Jobs parents, will also return to the company to advise Amelio on a part-time basis.

Jobs rejoined Apple two months ago when Apple bought his software company, Next Software Inc., for $400 million in a move to revamp the Macintosh computer.

Analysts have said Amelio has done a decent job of shaping up the companys balance sheet, but have questioned his strategy of attracting new customers by basing the companys next generation of computers on Nexts technology.

Next is 1989 technology, said Michael Murphy, editor of the California Technology Stock Letter. Apple will have a hard time convincing outside software companies to develop programmes for the new machines, when they come out late this year, Murphy said.

One of the biggest blows to Apples strategy came Tuesday when Bill Gates, chairman of Microsoft Corp., said he was confused about Apples software strategy.

Iam very interested in continuing to work with Apple as we have done through history, Gates said on Tuesday at a new product launch in Germany. But I am confused by the Apple operating system strategy ... and have decided not to worry about the future.

Microsofts support for any new Apple product is crucial because corporate customers increasingly are deploying Microsofts word processors and spreadsheets as their standard.