
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SUNDAY, December 12, 1993                   TAG: 9312100040
SECTION: BUSINESS                    PAGE: F3   EDITION: METRO 
SOURCE: RORY J. O'CONNOR< KNIGHT-RIDDER/TRIBUNE
DATELINE: SAN JOSE, CALIF.                                 LENGTH: Medium

APPLE BANKING ON NEW CHIP DEVELOPED WITH IBM

Apple Computer Inc., counting on a heavy boost from personal computers using the PowerPC microprocessor, hopes to as much as double its market share by attracting customers beyond the base of current Macintosh owners, a top company official said.

"We are now establishing what sort of goals we have for gaining market share," Apple executive vice president Ian Diery said. "I believe we have to get to 20 points of market share as quickly as possible over the next several years."

Diery said the company shift from current microprocessors to the new chip - co-developed by Apple, IBM and Motorola - offers Apple its best chance at significantly improving its standing in the personal computer market.

"This is a viable opportunity for Apple to gain market share," said Diery, who heads Apple's personal-computer division. "I don't need 15 or 20 points [increase], but just five points. That would make a tremendously successful business for us."

To do that, Apple will have to steal sales from Intel Corp., the Santa Clara, Calif., chip maker that dominates the market for microprocessors. Most analysts expect its new Pentium chip to capture most of the market against PowerPC and a handful of other new competitors.

Apple also would have to boost its market share much further than it has been able to do in the past. The Cupertino, Calif., company commanded just 9 percent of the worldwide personal-computer market in 1992, according to figures from market researcher International Data Corp. Apple's U.S. market share is larger, running at around 12 percent this year.

While Apple could "survive very comfortably" if its market share doesn't grow appreciably, Diery said the PowerPC is "fundamental" to Apple's success.

Some analysts said Apple is likely to increase its market share when it begins shipping PowerPC-based computers next year but questioned whether the company could manage even a five-point improvement. International Data figures project Apple boosting its stake of personal computers sold annually to about 11 percent by 1997.

By 1997, each point of market share will represent roughly 500,000 computers, meaning that Apple would have to ship 1.5 million more computers than International Data projects to gain five points of market share worldwide. To get to a 20 percent market share, it would have to sell about 10 million computers, a feat International Data analyst Eric Lewis said would be almost impossible.

"I think it's unlikely Apple can get there alone," Lewis said. "The only scenario that gets Macintosh-type products to a 20 percent share would be if Apple had a successful licensing program [for its technology] with a number of vendors."

Apple chief executive Michael Spindler indicated last month that the company is evaluating its licensing options for PowerPC-based Macintosh technology. Diery said his division has set up a task force to consider such licensing issues.

by CNB