Apple To Develop Low Cost Network Computers

Apple Computer Inc is developing low-cost network computers that will run Macintosh software, to be introduced in early 1998, analysts said on Tuesday. Network computers are usually less costly than regular PCs, come without a floppy disk or CD-ROM drive, and are developed for accessing corporate networks and the Internet.

"What I've heard is that as soon as Jobs arrived, that (product) went on the fast burner," said James Staten, a Dataquest Inc analyst, referring to co-founder and interim chief executive Steve Jobs. "It was fast-tracked to become a product as soon as possible." Staten said he did not yet have any specific product details.

MacWeek, an industry trade publication, reported late last week that Apple initially plans to run the Macintosh OS Version 8 on a network computer device, which will run the 266 megahertz versions of the PowerPC 750 processor.

Apple plans to unveil the network computer at the next MacWorld Expo in January in San Francisco, said MacWeek. An Apple spokeswoman said that Apple has not announced any product plans for a network computer device.

"All we said is that Apple is evaluating it as one of the emerging trends of the computer industry that could benefit its key customer segments." She declined to comment any further. "There probably is a market for it in education," Staten said, adding that the one question is how would these products fit in with the Newton division, which Apple recently decided not to spin off as a separate subsidiary. The Newton unit develops hand-held portable devices such as the MessagePad.

Separately, Apple filed a lawsuit in US District Court in San Jose, California, on Monday, accusing a former employee of accepting more than $1 mn in bribes over an eight-year period. In return, he allegedly steered $168 million in business to a supplier of printer components called James E. Grimes Co of Upland, California.

The suit alleges that Gary Edwards, formerly the head of Apple's imaging products division, was paid at least $15,000 a month by the supplier.

The lawsuit also names James E. Grimes Co. as a defendant.

An Apple spokeswoman said it would be inappropriate for the company to discuss any details of the lawsuit. "It's a very unfortunate situation," she said. "But Apple needs to protect its rights as a company and Apple has suffered substantial damages by these actions and we intend to pursue this to the fullest extent of the law." According to a clerk at the US District Court, no response from James E. Grimes Co had yet been filed. Officials at the company could not be reached for comment.