AAPL.O Recon: First Report
As we stated yesterday in the Special Update, you'd know as soon as we
knew. And we'll be sending out subsequent reports as we obtain more
information. A lot of it might be "Raw Recon" as we disseminate "Intel
Reports" directly from the field if need be. And all of our sources who
are on this distro list need to start digging and reporting in post haste.
It's time to get to work.
"Fireworks" at Macworld Expo
Several months back RFI forecast that there was going to be "Fireworks" at
Macworld Expo in Boston, but we weren't referring to them in the literal
sense at the time. However, besides the "Fireworks" we forecast the
attendees at Macworld Expo in Boston will also be able to enjoy a
"Fireworks" display over Boston Harbor on 6 August; almost as if to
punctuate the "Fireworks" RFI previously mentioned. It looks like Macworld
Expo Boston is going to be "Memorable" to say the least. And here's some
of the "Fireworks" RFI expects....
"Chairman Jobs" & Seizing The Opportunity:
Right after Dr. Amelio resigned as Chairman and CEO of Apple Computer
(AAPL.O) there were only two credible candidates on the current Board to
ascend to the Chairman's seat: Mr. Jobs and Mr. Woolard.
But, Dr. Amelio's resignation brought to the forefront RFI's assertion
after the NeXT deal was announced: that contrary to Mr. Jobs' assertions
that he didn't "want to" run Apple, there was a Big Difference between
"want to" and "needs to". Dr. Amelio's resignation brought "Needs To" into
play.
Mr. Woolard, former Chairman of DuPont, was the only other credible
candidate for the Chairman's seat and was "Wall Street's Favorite" as
witnessed by the Pro-Woolard item in the 21 Jul 97 issue of The Wall
Street Journal (WSJ).
However, when it came down to deciding whether to give primacy to "Valley"
considerations or "Street" considerations, the "Valley" considerations won
the day. Therefore, Mr. Jobs "is it" as far as the most recent reports go.
And as long as Mr. Woolard remains on the Board to continue offering his
"pragmatism" and experience at turning a huge conglomerate (Bullets to
Percocet & Beyond) around a lot of The Street's considerations and
concerns will be addressed and possibly ameliorated.
Furthermore, it looks as if the Board is going to "seize the opportunity"
that RFI editorialized upon by announcing that "Industry Names" (Possibly
Barksdale?) to the open slots on Apple's Board. Something else that will
address and ameliorate the concerns that both "The Street" and the nascent
proxy warriors have about the Board. And while RFI has been one of those
"Rabble Rousing" about the Board, we're not taking any credit for this
development; we'll let others crow about their success. We're just glad
that it will be occurring.
And as long as this "Forward Recon" is fulfilled (Woolard staying and
Industry Names) RFI will endorse and support Steve Jobs' ascension to
Chairman and the Board additions. However, we're withholding officially
announcing our support until it's a "done deal".
In an unrelated matter, RFI received a "Recon Report" which we have to
treat as "rampant speculation and rumor mongering" absent any hard
evidence. And just as we gave Mr. Jobs the "benefit of the doubt"
regarding that 1.5 million share block sale, we'll also give him the same
benefit of the doubt regarding this most recent rumor and speculation.
It has been reported that contrary to "Consensus Suspicion" (including
ours) Mr. Jobs might not have sold those 1.5 million shares but may have
been adding to his holdings in anticipation of ascending to the Chairman's
seat. However, Mr. Jobs might have sold those shares only to repurchase
them, if at all, which might have caused this rumor to generate. As we
said, we're giving him the benefit of the doubt on this one, just as we
did with that 1.5 million share block. Remember, this report is an
unconfirmed and unsubstantiated rumor and needs to be treated as such.
However, if true, it takes away one of the most important legs of RFI's
Trading Sell position.
Apple's Next Power CEO & Direct Sales
Last year when Apple was conducting its Apple Club marketing survey, RFI
broke the story that Apple was intending to embrace the "Direct Sales
Model" and we stuck by our guns even while under fire for that assertion.
When Dr. Amelio resigned and the board announced its intention to seek a
"Consumer Oriented & Marketing CEO" Apple's Direct Sales intentions were a
necessary consideration.
The rumors that Mr. Joel Kocher, of the Mac Cloner PowerComputing,
becoming Apple's Next CEO are gaining credence and traction both inside
and outside of Apple.
Taking into consideration PowerComputing's success at Direct Sales, as
well as its success in building market share in the Mac Clone market, Mr.
Kocher is a logical choice for a candidate for the CEO slot; especially if
the rumors of an Apple / Power "tie-in" are correct. Some are using the
term "merger" but they don't mean that in the literal sense.
If RFI had to pick a front runner for the CEO slot it would be Mr. Kocher.
Mr. Jobs would set the strategic vision for Apple and Mr. Kocher would
handle the tactical and operational execution of the strategy. Also, Mr.
Kocher would bring his successful management style to Apple.
Furthermore, even though PowerComputing has filed for an IPO and
WinTel/Mac mix strategy, this does not preclude Mr. Kocher from taking the
helm at Apple; as Apple's strategy, after Mr. Jobs' return, is probably
what moved PowerComputing to its current strategy. And yes, RFI does
acknowledge that Apple's strategic shift towards this mix was initiated
prior to Mr. Jobs' return but was accelerated once he arrived.
And Mr. Kocher coming to Apple would mend a lot of fences with the cloners
and the Mac Community in general as it definitively sends a positive
message and solidifies Apple's commitment to the clone market and
strategy.
And that it also jibes with what RFI has been reporting all along (MacTel,
Sleeping With The Enemy, etc.) pleases us to no end. There are a lot more
benefits to this rumored movement of Mr. Kocher to Apple's CEO slot, but
those already mentioned are good enough for starters.
Microsoft's (MSFT.O) "Big News" at Macworld Expo Boston
If Apple's "Fireworks" (figurative and literal) weren't enough already, we
can also expect "Big News" from Microsoft at Macworld Expo in Boston; as
well as "stronger than usual presence" of Microsoft at the Expo. And, RFI
suspects that it is not just to steal some of Apple's thunder and
attention at the Expo.
Current speculation as to the nature of the news / announcements /
developments that Microsoft is expected to make are:
(a) 1) Microsoft's announcement to support Rhapsody
(b) 2) Microsoft Office related announcements.
(c) 3) Microsoft "Rethinking" its support of PPCP for WinNT 5.0/6.0 now
that Apple intends to "Embrace and Extend" (couldn't help that one) the
X86 platform.
(d) 4) Enter into a "Strategic Alliance" with Apple in light of its new
strategy and prospects.
RFI knows that these speculations contradict some of Mr. Gates' and
Microsoft's recent statements and announcements but even Mr. Gates has
probably seen "the writing on the wall" that RFI has delineated in both
RFI and on Apple Recon.
But, RFI cautions that as of this writing the "Rumored Microsoft News" at
Macworld Expo in Boston are unsubstantiated rumors and speculation. When
and if we learn more, we'll let you know. You'll know as soon as we do.
Apple Advertising "Big Time" in Boston:
As you are well aware, RFI has long been a critic of Apple's advertising
and marketing campaigns (or lack thereof) but Macworld Expo in Boston
might be the signal of a change.
Besides the "Fireworks" show over Boston Harbor on 6 August, Apple is
reportedly spending heavily on radio and other advertising in the Boston
market during the Expo. "Radio Buys" are reportedly in the range of
$125-200,000 and are being bandied about. And, we're certain that the
Fireworks show will be a central part of it.
Whether this trend continues after the Expo remains to be seen, but RFI is
pleased that Apple is no longer "just preaching to the choir" but are
going after the general public in a significant way. And no, RFI hasn't
yet seen or heard any of the ads that are going to be run during the Expo.
Granted the campaign for Macworld Expo will be "Bread and Circuses" but
it's also the type of campaign that attracts both the media's and the
public's attention. Anyone care to guess whether the Boston TV Stations
will pick up Apple's Fireworks? Heck, it might even make CNBC, CNN, FNC
via a feed or taped report.
Apple / AMD Deal
In our Independence Day content, RFI reported on the talks between Apple
and AMD for Apple to use AMD's K6 chips in its MacTel boxes, servers, etc.
We will probably see a formal announcement of the deal and the unveiling
of Apple MacTel Hardware using K6 chips at Macworld Expo.
The impact and significance of this cannot be discounted. Take into
consideration everything we've written on this topic, going as far back as
the March 96 Special Report.
Bottom Line?
We've only scratched the surface and haven't even analyzed the
significance and impact of this "Recon" as it floods in.
We'll keep you posted and we apologize in advance for any fax / e-mail
overload this developing story might cause.
As an addendum, there are about 5 pages of Bids for Apple Call Options to
each page of Asks for Apple Call Options since the open. It will only get
worse once this report hits you, and after we post this on Apple Recon.
Enough said. For now. We'll keep you posted.
from http://www.geocities.com/WallStreet/7744/fireworks_970729.html