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Apple running out of time
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March 13, 1997: 7:33 p.m. ET
Analyst says company has lost much of its credibility with Wall Street
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NEW YORK (CNNfn) - The eyes of most technology investors will shift to Cupertino, Calif. Friday afternoon when Apple Computer Corp. is expected to unveil details of its latest restructuring.
The struggling computer company has already said job cuts are on the way, although speculation on just how many get the ax has ranged from 2,000 to 6,000.
Speaking Thursday on CNNfn's Digital Jam, Gene Glazer, technology analyst at Dean Witter, said although the nail's not yet in Apple's coffin, the coffin door is closing.
Glazer said he believes estimates predicting 6,000 jobs will be sliced are a bit drastic since it would be hard for Apple to continue after such a drastic cut.
"I'd say something closer to 4,000 is about the number. Full-time employees number about 11,000, so 4,000 is a pretty dramatic cut.
"I don't see how they can go much lower than that and do what they have to do which is get back on track and turn the company around," he said.
The one thing Apple must do, Glazer said, is stop its market share erosion. (190K WAV) or (190K AIFF)
Some on Wall Street have tossed about the idea that Apple may eliminate entire divisions, although Glazer finds this unlikely.
"I don't see them getting out of a whole business. There is talk about outsourcing some of their functions. The consumer, low-end performers may go, but the question is can you not have a full product line (and succeed)? The last I heard this was still being debated," he said.
Besides eroding market share, one of the biggest problems for Apple may be the fact that its credibility on Wall Street has been hurt.
"The people investing in Apple are contrarians and are the same people who bought IBM two years ago when no one believed they could be turned around. The analysts are generally very pessimistic about the outlook," he said.
Glazer said Apple Chief Executive Officer Gil Amelio and the rest of the top management team will need to show results relatively quickly.
"(Amelio) has only been there a year. Some are starting to say Steve Jobs is actually CEO in the background. But this is really it. They don't have a lot of time. I would say even two years is too long," he said.
One of the few new products to be released recently was a new version of the Newton's operating system. Glazer said development for the Newton will likely continue since Apple has committed to seeing it through the introductory stage.
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Apple Computer Inc.
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