Dataquest Sounds Death Knell for Apple
Apple Computer Inc.’s recent moves to halt its licensing strategy will have serious detrimental effects that will lead to the demise of the troubled computer maker, market research firm Dataquest Inc. said in a report released Monday.
“Dataquest believes this action raises the risk factors for participating in the Mac market to new highs and will have serious detrimental effects on Apple,” two Dataquest analysts said. “Our conclusion is that Apple has started down a path that will lead to its demise as a serious player in the PC market.”
Dataquest released an executive summary of the report that it had sent to clients in the last few days.
In the last month, Apple purchased the license and assets of Power Computing Corp., the biggest Macintosh clone maker, for $100 million. Last week, both Motorola Inc. and International Business Machines Corp. said they would no longer license the Macintosh operating system from Apple.
“Apple’s actions will now initiate a fire sale of existing clone Macintosh inventories from Motorola, Power Computing and others,” Dataquest said. “This fire sale will inevitably cost Apple a few points of market share in the third and fourth quarters.”
Analysts Martin Reynolds and James Staten also said that PowerPC processor parts, the “brain” chip in the Macintosh and its clones, will begin to cost more and compete less effectively with Intel Corp.’s Pentium chips.
Dataquest predicted that Macintosh software developers will move faster toward other market opportunities and that the Windows-based PC market will continue to widen its lead.
Dataquest said, however, that at this stage it still expects the company to post a few good quarters because of its current great product lineup and user-base upgrade opportunities.
“However, we have increased the probability that the upgrade opportunity will pass Apple by, resulting in a continued decrease in unit shipments year-over-year,” the analysts said. “Further, we do not believe Apple will survive its next downturn, which will presage the company spiraling into insignificance as it loses any advantage of scale.”
