Legendary Computer Maker Says It's Not For Sale
Jan. 24, 1996
CUPERTINO, Calif. (AP) _ Apple Computer Inc. denied Tuesday that it's for sale, seeking to contain a frenzy of speculation and shareholder anger about the growing crisis at the legendary computer maker.
Apple's chairman, Mike Markkula, made the statement after an annual shareholder meeting marked by widespread criticism of his management team, which has led the company that popularized the desktop computer into a morass of losses, layoffs, misjudgments and a clouded future.
Markkula spoke after The Wall Street Journal reported Tuesday that a $4 billion buyout of Apple by Sun Microsystems Inc., a maker of powerful desktop computers, was imminent.
Like Apple, Sun Microsystems is rooted in California's Silicon Valley technology powerhouse and has helped shape the evolution of the computer industry.
Asked by a reporter whether he cared to repeat earlier statements that the company is not for sale, Markkula said, ``Apple is not for sale.'' Neither Apple or Sun executives would comment beyond that.
Nonetheless, speculation about Apple and Sun drove a frenzy of trading that pushed their stocks to the top of the Nasdaq most-active list. Apple shares rose $1.12 1/2 to $31.62 1/2, up 4 percent, while Sun's fell $4.44 to $44.12 1/2, or 9 percent, as analysts tried to make sense of the combination.
With Apple bruised by a financial loss and declining market share, some shareholders called for the resignation of directors and top executives, including chief executive Michael Spindler.
Both Spindler and Markkula said they were aware of how serious problems are at the second-largest personal computer maker.
``I take responsibility. How can I not?'' Spindler said after the meeting. ``What do you want to hear? Mea culpa?''
An Apple-Sun combination would be better able to take on common foes in software makers like Microsoft Corp. and hardware companies like Silicon Graphics and Compaq.
One source told the Journal that Sun might pay $4 billion, or $33 per share, for Apple. That would be about half what Apple reportedly sought from IBM when those companies discussed a merger in 1994.
While Apple's sales have grown healthily, they have not kept pace with the overall personal computer industry. Apple has trouble matching the prices of rivals since it bears all its development and marketing costs.
Other PC makers use a different design, based on Intel Corp. chips and Microsoft Corp. software, and can spread out costs. They represent 90 percent of the overall market.
The situation has been clear for years, of course, and shareholders drilled executives for not doing more to improve Apple. Spindler, who took over in 1993 after John Sculley was forced out, felt the sharpest barbs.
``You have mismanaged assets and damaged a franchise and brought a great company to its knees and Mr. Spindler it is time to go,'' Orin McCluskey, an investment manager from New York who owns 10,000 Apple shares, said during the annual meeting.
Spindler said nothing in response, but told reporters afterward, ``I think the criticism is fair. I take it as it is meant _ to have the company better perform.''
Some other shareholders were less hostile.
``Obviously I am concerned,'' said Brian Mountford of San Francisco, who owns 100 shares. ``I understand they're going through some difficulties, but they do have the technological edge in computing.''
Sun, the leading maker of computer workstations for engineering and research, would likely be most interested in Apple's ability to help improve its growing business in Internet-related machines and software.
Apple's Macintosh PCs are widely used, for instance, to create World Wide Web sites. In addition, the company has developed a $500 machine that connects to a TV and phone, providing Internet access at a lower cost and possibly opening the global data network to new customers.
But Sun's Internet direction hasn't favored Apple. Its Java programming language, which can create flexible software for data networks, can't yet be used for to write programs on the Macintosh.