APPLE LEADER DETAILS CORE OF COMEBACK : COMPANY TO TRIM FORCE, REORGANIZE.

Byline: Catalina Ortiz Associated Press 

Facing frustrated shareholders, Apple Computer Inc.'s chairman promised a smaller, more focused company that will once again lead the industry with exciting and innovative products.

Gil Amelio, who took charge of Apple exactly a year ago, outlined both the stubborn problems that threaten the company's survival and his latest plans to overcome them at the company's annual meeting Wednesday.

But while stopping Apple's losses is his most urgent task, Amelio said he's intent on more than just staying afloat. He was determined to restore Apple to its ``destiny.''

``I want to re-create the Apple that can once again turn this industry on its head,'' he said. ``I want to re-create an Apple that shocks, amazes and delights people all around the world with the power of high technology made easy and accessible.''

Some shareholders were skeptical that Amelio would be able to erase Apple's red ink, reverse the slide in sales and renew confidence in the company.

``I think the last 12 months have been very sobering,'' said John Wharton, an investor from Palo Alto. ``I think maybe shareholders are . . . feeling a sense of mortality - that Apple could be in real trouble here.''

Many, however, were cheered by the chairman's presentation.

``I was very impressed,'' said Tim May, an investor from Santa Cruz. ``The talk was focused and clear.''

May said he is optimistic about Amelio's recovery plan and the planned introduction of new products this year. He also was enthusiastic about Apple's use of Next Software technology as the basis for a new operating system for the Macintosh computer.

Amelio's talk came a day after Apple announced its second restructuring in the past year. So far, it consists of a corporate reorganization intended to promote efficiency and to let Apple focus on markets where it remains strong. But layoffs are pending, with Apple deciding how many in the next month.

Apple co-founder Steve Wozniak, who hasn't been involved in the company since 1985, is returning as an adviser to Amelio and liaison to the key education market. The other co-founder, Steve Jobs, recently joined Amelio's team as an adviser after Apple bought Jobs' Next Software Inc.

The latest makeover was prompted by Apple's $120 million loss in the October-December quarter. Apple, which has lost money four of the past five quarters, hopes to make money again this summer - but on lower revenues.

``That means we're going to have to get smaller before we get bigger,'' Amelio said. ``It's time for Apple to face up to the fact that we cannot do everything. We can't be in every market. We can't support every technology.''

Shareholders didn't hesitate to voice their frustration about Apple's troubles in the formal part of the meeting before Amelio's presentation.

Several persistently objected to stock-option plans for Amelio and other top executives, perks that would pay off handsomely if the company's stock jumps far above its current value.

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Photo: Apple Inc. Chairman Gil Amelio told shareholders at their annual meeting Wednesday, ``I want to re-create the Apple that can once again turn this industry on its head. I want to re-create an Apple that shocks, amazes and delights people . . . with the power of high technology made easy and accessible.''

Associated Press