January 25, 1996

Apple's Woes May Benefit Consumers

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    This may be a difficult time to be an Apple Computer shareholder, but that does not make it a bad time to buy an Apple Macintosh computer, according to computer-industry analysts.

    Despite the confusion surrounding Apple's weak financial performance and corporate revamping, including reports that the company may soon be acquired by Sun Microsystems Inc., analysts insist that there is little risk in buying a Macintosh.

    In fact, it may be a better time than any, as Apple embarks on an ambitious campaign to sell its $1.9 billion inventory of mostly lower-priced Macintoshes.

    Apple is set to announce price cuts on Saturday on many models in its Performa consumer line of Macintoshes, and analysts say that will be only the start. Apple usually cuts prices early in the year to make room for new Macintosh models that it announces each spring, and given the company's problems, the discounts could be even deeper this year.

    "There are some real bargain opportunities as Apple reduces the backlog," Pieter Hartsook, editor of the Hartsook Letter, a computer industry publication, said Wednesday.

    But the bigger question for many consumers is whether they will be able to get service and parts two or three years from now for a computer they buy today.

    With more than 14 million users of its computers worldwide and thousands of Macintosh retailers and consultants, there is little chance that Apple would leave customers without technical support or service, or a path to upgrade to future technologies, analysts say.

    Tim Bajarin, an analyst with Creative Strategies Research International, pointed out that Apple continued to provide parts and technical support for the Apple II computer for seven years after it discontinued that product.

    "There's not much risk to the consumer buying Apple products today, regardless of how the restructuring goes," Hartsook said. "Even if Sun or someone else were to buy Apple, the Macintosh brand name will stay. That's what they'd be buying."

    After all, he added, "Who's going to buy a 'Sun Macintosh'?"

    While Apple would be unlikely to abandon the Macintosh, it probably will continue to replace existing models with technically superior ones. This has nothing to do with Apple's woes but is a result of the computer industry's constantly rising performance bar, which often makes today's technology obsolete virtually overnight.

    Apple has often canceled one Macintosh model to make way for another, without any warning to customers or retailers. Still, that is a far cry from abandoning its customers entirely.

    "The risk of Apple going out of business and leaving no one to support the machine is almost zero," Hartsook said.

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