Apple May Hike Clone Fees According to Exclusive Report on Computer Reseller News Online at http://www.crn.comCRN Online Also Has Full Text of Amelio's Memo to Staff Regarding March 14 D-DayPRNewswire Apple Computer Inc. (Nasdaq-NNM: AAPL) is considering raising the licensing fees for Macintosh clone makers, a development that some sources claim could make it prohibitively expensive for some clone makers. "We are looking at it and rethinking it with our licensees," acknowledged Guerrino DeLuca, executive vice president of marketing at Apple Computer Inc. "We are considering the entire licensing relationship. We may raise the price (under certain contractual provisions) and lower it in others." Sources at Apple said that clone licensing fees could climb significantly. Under one proposal being floated at Apple, clone makers would pay Apple $100 to $1,100 per system sold, according to a source inside the company. The fee would vary with the price/performance of the computer. It is unclear how much clone makers are currently shelling out. But the re-negotiations could constitute a huge fee increase overall, effectively pricing some clone makers out of the market, sources said. One Apple employee familiar with the licensing proposals said some changes being considered would effectively "get us out of the licensing business in a few months ... This will create an environment that makes it impossible to clone." DeLuca said that a decision on new licensing fees has not been made yet. Further, he said, any decision will have to take a variety of factors into account, including incremental sales and market share being driven by the clone manufacturers. "The licensees have gained market share for Apple. They are growing share, and that is a good thing," he said. "The relationship we have with our licensees has less to do with our contract and more to do with our business relationship." "The people you are talking to have only seen part of the movie," he added. DeLuca would not comment on or discuss specific licensing fees proposals. At the center of the licensing re-negotiations is Tempo, the version of the Macintosh operating system to be released this summer, said company sources. Clone manufacturers hold licenses for Apple's Macintosh System 7. They do not have licenses for System 8. Until now, Tempo has not had a number designation. Today, however, Vito Salvaggio, director of OS releases, told CRN Online that Tempo is a significant enough upgrade to be called a System 8 release. "Tempo will be called OS 8," he said. "It's a pretty significant release." Salvaggio would not comment on how the designation would affect licensees. Ironically, the news comes at a time when clone manufacturers recently raised Apple's market share. San Diego-based Computer Intelligence Inc. said that Apple and the clone makers constituted 11.2 percent of the business market for computers in January, up from 9.5 percent in December and 7.8 percent in November. Those sales, though, have cannibalized some of Apple's. Apple insiders said that DeLuca once said that clone manufacturers cost Apple $1 million a day. DeLuca said the statement was taken out of context. The figure arose from a hypothetical centered on gross margin considerations, said Deluca. Some insiders fear that Apple's licensing division will be gutted in the upcoming restructuring, which is to be unveiled March 14. Apple Chairman Gilbert Amelio will unveil Apple's restructuring plan on March 14, according to an E-mail sent to Apple's 13,000-plus employees. Amelio is expected to close down certain divisions and projects, including Pippin and possibly Newton, according to various analysts. Four thousand or more Apple employees are expected to get laid off during the restructuring, said various sources. Layoffs will be announced a week or so after the March 14 restructuring, said one Apple source. In other CRN Online Breaking News stories, Computer Reseller News Online is also posting Amelio's memo announcing the layoffs to Apple employees. Following is the full text of that document CRN has obtained: From: Gil Amelio To: Apple people--everywhere I know all of you are wondering how the work of analyzing and restructuring the company is going, and, more importantly, when we will have definitive information about the future of your job. Last month, I outlined a schedule that said we would complete our comprehensive analysis of the company by the end of February, and that by early March we would be in a better position to know what areas of the business we will pursue in the future and the personnel resources required to support these projects. A great deal of work has gone on since then to define a new Apple Computer. We have implemented a new functional organization structure that consolidates the company's product development, marketing, sales, support and operations efforts into groups sharply focused on Apple's strategy. We have also completed the appointment of managers to run these groups. They are now making firm decisions concerning both the projects and activities that are key to our core business as well as the personnel reductions that we will begin implementing this month. With the completion of this business plan, we will know what personnel resources are required to support the new structure. So, on March 14 we are planning to give more details on what we'll do and what we won't do in the future, the number of layoffs and the charge we will make to our second- quarter earnings to fund the reduction. I also promised last month that we will almost completely refresh Apple's product line in 1997, and we've begun to deliver on that promise. On February 17th we introduced the world's fastest laptop--the PowerBook 3400--a complete new line of Power Macintosh computers, the eMate 300 mobile computer for K-12 education customers, the MessagePad 2000 mobile Internet computer, and the QuickTake 200 digital camera. The reviews of these products have been very positive. Congratulations to all who helped bring them to market. We are supporting the announcement with an aggressive advertising campaign that began last week. In the next thirty days we will announce more products that again demonstrate that we are focused on specific customer sets. Let's remember in the coming days that our mission is to develop, manufacture and sell great products. Please keep up the good work in this area. Without great products, there is no Apple. I know these are very difficult times for everyone. I continue to be amazed and appreciative of your tireless efforts as we work to achieve a shared goal: the return of Apple as a healthy leader of a rapidly changing industry. Thanks. Respectfully, Gil -0- 3/5/97 SOURCE: CMP Media, Inc. CONTACT: Robert Faletra, 516-733-8612, or 516-265-0641; or |