Apple's future does not look so rosy

"Captain wanted for sinking ship." At this stage in the decline of Apple Computer, it needs more than a touch on the tiller, or the pitching overboard of another few thousand unwanted members of the crew. The problem is that most of the sensible options have already been tried, and even fixing the things that are wrong with Apple may not save it, so what is there left to do? Apple has now parted company with three chief executives - John Sculley, Mike Spindler and, last week, Gil Amelio - in four years.

It would be comforting to think that they simply were not up to the job. But whoever takes over will need to recognise that Apple's problems are more fundamental than that. The company has laid off staff in 1985, 1990, 1991, 1993, 1995, 1996 and 1997, and been restructured half a dozen times. Its quarterly revenues have almost halved and, not counting Wednesday's financial results, it has lost $1.6 billion in the past 18 months.

The most urgent problem is the decline of Apple's personal computer, the Macintosh. Shipments fell by 44 per cent in April and 38 per cent in May, compared with the same months in 1996.

In the 1980s, IBM also lost huge amounts of market share when PC-compatibles entered the field.

Of course, genuine Apple Macs - the real thing - ought to be able to withstand competition. Alas, Apple has had problems about quality control and marketing. Amelio established programmes to deal with the quality control, such as recalling some models of the PowerBook notebook computer from US dealers. Things have certainly improved since then, but perhaps not enough.

At least the hardware problems are fixable: Apple's software dilemma is another matter. Independent software houses tend to write programs for the most popular machines, so Apple's falling market share could result in less new software becoming available.

All sorts of people have ideas about what Apple could do to turn itself around. It could, for example, exploit its still-powerful brand name in allied areas such as handheld computers. It could ramp up Mac manufacturing and slash prices to increase market share, but that is what Spindler tried.

Hired as a turnaround artist 17 months ago, Mr Amelio began well: slashing the bloated research department, trimming the product line, and tightening operations. "But once he'd done the slashing and burning he had no ideas on how to grow things again,' says an Apple source. "It was pretty much accepted he wouldn't last the summer.'

Two rumours now circulate through Apple's corridors: that Mr Steve Jobs, Apple's co-founder who returned as an adviser to Mr Amelio in January, forced him out; or that Mr Amelio was told to resign in advance of the poor financial results. Most likely, it is a bit of both. Even Jobs's most ardent fans at Cupertino headquarters see him as "Machiavellian', according to the same Apple employee. "No one knows Steve's agenda. He definitely wants to be kingmaker. But he doesn't want to be king."

Jobs has apparently rejected the chief executive officer position, which realistically would have meant stepping down as head of his animation company Pixar.