Apple fights the big crunch

The company's survival plan looks viable, says Stephen Pritchard

Following months of speculation about its future, executives at Apple Computer must be hoping that the company is turning the corner at last.

Apple has already warned that it will again post a loss for its second quarter in April. But the appointment of Gilbert Amelio, of the National Semiconductor Corporation, as chief executive officer and chairman - along with categorical denials of takeover rumours - is a sign that the computer manufacturer is planning to tough it out.

The announcement last week of a new tie-up with Acorn, manufacturer of the Risc PC (as well as builder of the BBC Micro) gives a clue to Apple's future direction. Acorn, since its BBC Micro days, has enjoyed a strong presence in British schools. Apple regards education as one of its core markets. Although it has sold well in Scotland, Northern Ireland and in universities, Apple's Mac has not been as successful here as it has been in the United States.

In April, a new Apple-Acorn joint company will take over both manufacturers' sales to schools in Britain. Apple and Acorn have worked together before; Acorn's subsidiary, ARM, makes the chips for Apple's Newton pocket computer.

Initially, the new venture will sell both Apple and Acorn systems. But Acorn is already committed to producing machines that comply with the PowerPC Platform - a technology backed by Apple, IBM and Motorola that will run Unix, the Mac operating system and Windows NT.

By the year end, Acorn hopes to demonstrate its Risc operating system on an Apple machine, "with Acorn software and other bits", says Peter Bondar, director at Acorn Risc Technologies. Its own hardware will combine Acorn StrongARM processor with a PowerPC chip and, possibly, an Intel chip in a PowerPC Platform box.

Apple hopes that Acorn compatibility will strengthen its offering to schools, where Windows machines are gaining ground. Acorn, meanwhile, will gain access to Apple multimedia technologies and Mac OS software titles.

At the same time, Apple has recruited Olivetti, which owns 58 per cent of Acorn Group, into the Mac clone camp. Olivetti will use the Mac operating system to push educational computing in Europe, where ratios of computers to pupils can be as high as one to 60 (in the UK, one to 15 is more usual; in the US, one to seven).

None the less, Apple must be hoping that Olivetti goes beyond the education sector if it is to kick-start the Mac cloning programme. Apple's licence to the Italian company is not restricted to any one market segment.

The talk at Apple is once more of targeting core markets and adding value. "We want to make sure we are delivering complete solutions, not just the box to the consumer," says Nigel Turner, director of new business development at Apple Europe. "We will spend much more time on that than the box-pushing approach."

Concentrating on its strengths and market-leading technologies may well be the best way forward for Apple, which has gained little from trying to fight the Windows-Intel world head-on. In the UK market, Acorn's educational experience should be a real boost to the PowerPC partnership, and to Apple in particular.

Acorn maintains that it will continue to build its own Risc systems. But with the bulk of the company's market - education - covered by the joint venture, the future of the Acorn Risc operating system as a separate platform is less than clear.