Apple Computer Proceeding with Initial Phase of Business Restructuring

Operating Results for First Fiscal Quarter Consistent with Previous
Indications

CUPERTINO, California--January 17, 1996--Apple Computer, Inc. today
announced financial results for its first fiscal quarter of 1996, ended
December 29, 1995. For the quarter, Apple's net revenues were $3.1
billion, an 11% increase over the first quarter a year ago. Unit shipments
for the quarter grew by 12% to 1.3 million. Both net revenues and unit
shipments represented Apple's highest quarterly totals ever.

As Apple previously indicated on January 10, the Company's gross margins as
a percentage of net sales declined significantly during the quarter,
resulting in a net after-tax loss for the quarter of $69 million, or a
loss of $0.56 per share. This compares with a net profit of $188 million,
or $1.55 per share in the same quarter a year ago.

Consistent with its previous disclosure, Apple also announced a company-
wide restructuring of its operations. The initial phase of this
restructuring, which has begun, will result in the layoff of approximately
1300 full-time, temporary and contract employees worldwide over the next
12 months, representing a reduction of at least 8% of Apple's total work
force. As a result of these specific planned actions, the Company expects
to record an associated charge of at least $125 million before taxes in
its results for the second fiscal quarter, which ends March 29, 1996. The
Company said that additional restructuring actions and additional charges
against earnings are possible in the second fiscal quarter and in future
quarters, reflecting a continuing implementation of its restructuring
process.

"Our results for the first quarter do not reflect the tremendous intrinsic
strengths of the Apple franchise, including our brand equity, loyal
customer base, undeniable technology leadership, outstanding products, and
solid competitive advantages in key markets and growth sectors such as
education, consumer, multimedia, publishing and the Internet," said
Michael Spindler, Apple's president and chief executive officer. "The task
in which Apple management and its Board of Directors is currently engaged
is to utilize Apple's strengths in order to position the Company for
long-term strength and success.

"The most immediate and obvious work we must undertake is to quickly
streamline operations. The workforce reduction is a necessary first step,
and will begin primarily in sales, marketing and administration.

"In addition, we have started a systematic evaluation of our strategic
investments and business portfolio. To date, this has resulted in a
divesting of our investments in Kaleida and Taligent, while retaining
access to the technology these firms produce. We have also refocused our
online services strategy away from a stand-alone proprietary business to
one which uses and integrates with the Internet, which means we don't have
to develop a costly infrastructure ourselves.

"Next, we have begun to develop strategies to fundamentally change our
business model. In products, we intend to simplify our product portfolio
so our offerings focus primarily on innovative, differentiated and
best-of-class products in our key market segments in education, business
and the home. Our strategy will be to build brand preference around these
offerings. In order to assure a full selection of Mac OS-based products in
all parts of the market, we will pursue a much broader licensing of the
Macintosh operating system.

"In addition, we are pursuing expanded business alliances to further
promote and extend our platforms, evolve new businesses that utilize our
strengths in multimedia and the Internet, and better manage our assets by
leveraging the expertise and capabilities of our business partners.

"Addressing the strategic issues before us and restoring the company to
profitability will take time. Based on our current internal forecasts, we
expect to report an operating loss for our second fiscal quarter,
independent of further restructuring charges.

"Our goal is to ultimately redesign Apple's business so that we can carry
out our most important strategic missions. These include ensuring the
continued superiority of the Macintosh platform, especially in the areas
of multimedia and the Internet; vibrant support from developers; the
highest customer satisfaction and brand loyalty; leading positions in
markets where Apple competes; and increased shareholder value," said
Spindler.

Financial Results

Revenues and unit shipments increased during the quarter as the Company
shipped more than one million PowerPC processor-based Macintosh units
during the quarter--the highest number of RISC processor-based systems
ever in a single quarter.

For the period, international revenue accounted for 51 percent of net
sales, compared to 47 percent of net sales in the year-ago period.
International revenues grew 19% compared with the first quarter of last
year. These results included 26% growth in revenues and almost 50% in
units in Japan, and approximately 18% growth in European revenues. The
growth in European revenues and profits represented the fastest revenue
growth rate in that region in the last few quarters.

Gross margins as a percentage of net revenues dropped to 15.1% of net sales
for Q1 1996, a sequential drop of 5.6 percentage points from 20.7% of net
sales for Q4 1995 and a 13.6 percentage point decline from 28.7% in the
year-ago quarter.

The Company attributed the decline in gross margins to more aggressive
pricing across its markets during the competitive holiday selling season,
particularly in Japan-the Company's largest market outside of the U.S.
Apple's gross margins were also impacted during the quarter by inventory
adjustments of approximately $80 million before taxes to reflect current
pricing pressures.

Total research and development and sales, general and administrative
expenses for the first quarter were $594 million, or 18.9% of net sales,
compared with $547 million or 19.3% of net sales in the same period a year
ago.

Except for the historical information contained herein, the matters
discussed in this news release are forward looking statements that involve
risks and uncertainties. Potential risks and uncertainties include,
without limitation, continued competitive pressures in the marketplace;
the effect competitive factors and the Company's reaction to them may have
on consumer and business buying decisions with respect to the Company's
products; the consequences competitive factors and buying decisions may
have on current inventory valuations; the effect of any continued losses
on the Company's needs for liquidity; the effect of the announced business
restructuring on the future performance of the Company, especially the
performance of the Company's employees; and the need for any future
restructuring, and the effect that they might have on the performance of
the Company. More information on potential factors which could affect the
Company's financial results are included in the Company's Form 10-K for
the 1995 fiscal year, filed with the SEC.

Apple Computer, Inc., a recognized innovator in the information industry
and leader in multimedia technologies, creates powerful solutions based on
easy-to-use personal computers, servers, peripherals, software, online
services, and personal digital assistants. Headquartered in Cupertino,
California, Apple (NASDAQ: AAPL) develops, manufactures, licenses and
markets solutions, products, technologies and services for business,
education, consumer, entertainment, scientific & engineering and
government customers in over 140 countries.

Apple's home page on the World Wide Web: http://www.apple.com/
 
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