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Apple's not rotten
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January 7, 1997: 9:24 p.m. ET
Amelio assures customers company is headed in right direction
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NEW YORK (CNNfn) - It's a difficult task to say your company is on track to success when you are about to post a $150 million loss.
But that's what Apple Chairman Gil Amelio said Tuesday as he tried to allay the fears of the faithful Mac users about the company's future at the MacWorld trade show in San Francisco.
After the troubled computer maker said last week that it expects to report an operating loss of as much as $150 million for the company's fiscal first quarter and announced further restructuring moves aimed at slashing another $1 billion in costs from its operations, Wall Street was ready to play taps for Apple.
But Amelio sought to soothe investors and customers by saying the company's overhaul of its software will be smooth.
"I'm not really concerned about it," he said on CNN's MoneyLine with Lou Dobbs. "It's a very clearly definable problem. We know how to deal with it."
When Amelio took over Apple last year, he designed a three-year plan to turn around the company. Since then, he has slashed costs and cut jobs.
But his biggest move to date has been the purchase last December of NeXT Software Inc. for $400 million. The move reunites Apple with its co-founder Steve Jobs, president of NeXT. (131K WAV) or (131K AIF)
Amelio hopes the return of Jobs will smoothly carry developers from Apple's current software to its new operating system, Rhapsody, which will combine technology from Apple and NeXT.
"People have said that NeXT is 5 to 7 years ahead of the competition," Amelio said. "Candidly, we made the same assessment. That's why I made the acquisition."
Amelio tried to put a positive spin on the company's first quarter loss. He said that only the consumer line fell short of expectations, while all other Apple products sold well.
"The Santa Claus forgot to come. We had one major miss to our performance, and that was the consumer line. It's not going to change the fundamentals to what we're trying to do."
Amelio conceded that additional cost-cutting won't be easy, although he shied away from committing to any layoffs.
"Whatever it is we're going to have to do, we'll do it quickly and surgically. The key is we're not going to ignore the implications to our cost structure."
Although Apple stock fell 37.5 cents to $17.50 a share on Tuesday, Amelio refused to be swept up in all the gloom surrounding the company. (193K WAV) or (193K AIF)
"What's going to determine the success of Apple is doing the right strategic things that move us in the direction where we are more competitive and, therefore, more attractive to the consumer. And that's what we're trying to say is going to happen," he said.  -- Scott Benjamin
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Apple Computer
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