Apple Will Phase Out Its National Direct Sale Unit

Continuing a sweeping reorganization, Apple Computer intends to eliminate its 60-member national direct sales force that has marketed Macintosh computers to major corporate customers, President John Sculley told an industry forum Wednesday.

Sculley said that the direct sales force will be phased out by July 1 and that the company will rely on retail dealers in its efforts to compete with IBM for large business customers.

The beleaguered company recently announced the elimination of 1,200 jobs and the consolidation of its top management--including a reduced role for Steven Jobs, chairman and co-founder.

“We have put our individual egos aside, and we are putting teamwork in its place,” Sculley told computer industry executives and analysts in San Francisco at the start of a two-day MacForum 1985 conference.

He said Apple will continue to streamline its work force and reduce expenses. In addition to transferring sales operations to independent dealers, Apple will build more alliances with other software and peripheral equipment companies and change its advertising campaign for the Macintosh computer, Sculley said.

Norm DeWitt, director of personal computer industry services for Dataquest, a San Jose marketing research firm, called the new strategy “a very effective step” toward improving Apple’s competitiveness.

“I think it was probably futile for (Apple) to continue trying to compete with IBM’s direct sales force,” DeWitt said. “IBM’s got a much broader product line; it can offer virtually everything a major customer needs.”

Sculley acknowledged Wednesday that “Apple’s future is being challenged more than ever.”

Since its introduction last year, Apple’s Macintosh--a computer aimed primarily at the business market--has made slow headway in that market. According to statistics released by Future Computing of Dallas, sponsors of MacForum, the Macintosh has accounted for only 8% of 1985 personal computer sales to business, compared to 47% sold by IBM.

Apple’s reorganization and layoffs, Sculley said, were an effort “to streamline our organization, not only to reduce our operating expenses but also to sharpen our management focus and increase the appreciation for accountability throughout our company.”

Starts July 1

For the past six months, Sculley said he has been “consolidating operations” and trying to create “a more disciplined” organization. He said he is convinced that “a more disciplined environment will actually help us get innovative things done quickly and effectively.”

Except for a small number of contracts already in place, almost all Apple sales to large companies will be made by dealers after July 1. Compaq, maker of an IBM-compatible portable computer, has successfully followed a similar strategy, analyst DeWitt said.

Sculley noted that about 30% of all personal computers bought by large businesses are purchased through dealers.

Apple will also continue to emphasize sales to schools, he said, but will alter its approach.

“We will be making a transition in our university and college sales from a direct-only to a selling approach which includes the dealer in the process,” he said.

Also beginning July 1, Apple will begin stressing a new slogan for the Macintosh to emphasize its power rather than its ease of use.