Apple Turnover Troubled Apple Computer Inc. Ousts Spindler, Installs New Leader

Apple Computer Inc. finally has what lots of people said it needs - new management.

Now what?

The troubled personal computer pioneer on Friday ousted chief executive officer Michael Spindler. He will be replaced by National Semiconductor Corp. CEO Gilbert Amelio, a respected manager with a knack for resurrecting shaky companies.

Shareholders and industry analysts welcomed the move. But they also warned that new leadership was only the first step in Apple’s recovery from red ink, shrinking profits and waning market share.

“The pump speed has picked up, so the ship isn’t sinking at the moment, but it still has holes under the waterline,” said Robert G. Herwick, president of Herwick Capital Management in San Francisco.

Apple, based in Cupertino, Calif., is the nation’s No. 3 maker of personal computers. But it has struggled in recent years against industry-dominating IBM-compatible PCs using Intel Corp. chips and Microsoft Corp.’s Windows operating software.

The company suffered anemic sales growth in the last three months of 1995, usually the best time of year for PC makers.

It lost $69 million in the quarter, forecast another loss for the first three months of 1996 and began laying off 1,300 of its 14,500 employees. The layoffs are the first stage of a reorganization that many shareholders and analysts criticized as inadequate.

Spindler, who became CEO after John Sculley was ousted in 1993, took most of the heat, with growing number of shareholders calling for his head.

Investors apparently liked the news, even though it was not confirmed until long after the market closed. Apple’s shares rose 87 cents to $29.25 on the Nasdaq Stock Market on Friday. National Semiconductor shares closed down 12-1/2 cents to $17.62-1/2 on the New York Stock Exchange.

Apple’s directors only 10 days earlier issued a statement saying they fully supported Spindler and his ability to reorganize the company.

But the board now agreed “it was in the best interest of Apple Computer to have a transition in leadership,” the company said in a brief statement. Amelio immediately replaces Spindler as CEO. The company did not say whether Spindler had resigned or been dismissed.

Amelio also replaces A.C. “Mike” Markkula as chairman. Markkula will become vice-chairman, a post he held previously.

Amelio lifted National Semiconductor from near bankruptcy five years ago. Before that he turned Rockwell International’s unfocused computer chip business into a leader for modem components.

Apple’s problems are rooted in its competition against IBM-compatible PCs using Intel Corp. chips and Microsoft Corp. operating software.

Apple has cut prices to compete, but its development costs remained high and its profit margin plunged. The company’s market share has fallen below 8 percent, raising fears that software developers would stop writing programs for Apple’s Macintosh computer.

In addition, it misjudged demand, ending up with huge back orders for high-end, profitable computers and a glut of low-end machines.

Spindler won praise for Apple’s smooth transformation of its entire product line to the speedy PowerPC microprocessor.

But he also was blamed for Apple’s more recent woes, including the company’s sluggish progress in getting other companies to “clone” the Macintosh.

“Change was absolutely necessary,” said Mark Hall, editor-in-chief of MacWeek. “Spindler was under tremendous pressure to either perform a miracle or step down, and because he was not a supernatural being he did the latter.”

Amelio, an Apple director for the past year, drew special praise for his philosophy of fostering a company’s long-term growth.

“Apple could do a lot worse, and I think the worst thing Apple could do is to do nothing,” said Pieter Hartsook, publisher of the Hartsook Letter in Alameda, Calif.