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 LAS VEGAS, Nev. Jan. 9 /PRNewswire/ -- Apple's Chairman and CEO John Sculley today will reveal the company's plans to enter the consumer electronics business -- the latest phase in Apple's ongoing strategy to increase its market presence. Sculley, in the keynote speech at the Winter Consumer Electronics Show (CES), will say that Apple will extend its present business into the consumer arena and will enter the high- growth field of digital consumer information products.
 Consumer-specific machines by year-end
 According to Sculley, Apple plans to begin this effort by introducing a new selection of consumer-configured versions of its popular low-end Macintosh products into consumer channels in the United States and selected markets during the second half of calendar 1992.
 Among the new products the company plans to introduce are two differentiated lines of CD-ROM-based desktop Macintosh systems -- one for consumer channels and one for Apple's traditional personal computer channels. Both product lines are intended to be based on Apple's new QuickTime multimedia technology, working with Apple's System 7 Macintosh operating system. QuickTime -- which runs on most Macintosh systems -- brings high quality video, sound, and animation to the computer screen. These new, internal CD-ROM Macintosh product lines are planned to be available for the 1992 Christmas selling season.
 "Introducing high-volume products into consumer channels will be important in creating critical mass presence for Apple as a consumer channel vendor," says Sculley in the keynote. "We will be adjusting our service and support offerings to be appropriate for the consumer channel.
 "We are confident in our ability to continue to create highly differentiated personal computer systems which will make these strategic moves into consumer channels also be in the long-term interest of our traditional resellers. There is a long history of entry-level Macintosh owners trading up over time to more sophisticated Macintosh systems, so reaching out to more new users should have a strong, positive effect."
 New digital consumer information products, starting at year-end Apple plans to offer entirely new products based on digital technologies. While today's consumer electronics products are based largely on analog technology, which often limits the user to the role of passive recipient, digital technology is interactive and customizable, allowing the user to control what, when, and how they receive and manipulate information.
 "The transformation from analog to digital technologies opens the possibility for a wide range of potentially very innovative and useful devices that we are calling generically Personal Digital Assistants (PDAs)," he says. "Unlike personal computers, which are general purpose products requiring a certain level of user skill, PDAs will focus on specific functional capabilities and will be designed to be much easier to use than computers. PDAs will include such devices as electronic books, electronic organizers, multimedia players, electronic note takers, display telephones and personal communicators.
 "We believe that pervasive networking based on digital technologies will be as important to creating a new industry of Personal Digital Assistants in the 1990's as the the integrated circuit was in launching the personal computer industry in the late 1970's. As a result, we have been actively working in the area of digital telecommunications, both wired and wireless, for several years.
 "We are interested in playing an important role in creating easy-to- use devices for digital-based services. We expect that the advent of digital television and digital telephony will create logical follow-on opportunities to the first wave of stand alone PDA's. We believe that many vendors from several industries will be offering digital services over digital networks in the future and we hope to become a provider of technologies and products for some of these markets."
 Apple's ongoing strategy to increase its market presence Sculley says the company's entry into the consumer business is additive and complementary to Apple's core Macintosh business and follows the company's phased approach for increasing market presence. The first phase of this strategy was to gain momentum in its core Macintosh business. Last fiscal year, Apple's Macintosh unit growth was over 60percent. The next phase was to begin to develop momentum in large organizations. Apple's alliance with IBM was, in part, aimed at addressing enterprise needs. The third phase is to develop the infrastructure and product plans to enter new businesses, such as the consumer business, building on Apple's unique technology strengths.
 "The consumer products division's business model will be separate and different from our personal computer business model. We will continue to define and refine that model during fiscal 1992," Sculley says.
 "In addition, we are building relationships this year with well- established consumer electronic partners. New products based on Apple- created software technologies will be introduced in 1993, both under the Apple brand and also by several other companies under their own labels. We believe this approach has the best chance of giving consumers a wider variety of choice, thus stimulating category demand for new kinds of devices and allowing Apple to enter this competitive industry from a position of strength and shared investment."
 An immediate example of shared investment is Apple's agreement with IBM to form a new joint venture software company. Called Kaleida, the company will establish a common multimedia data format for the industry. Apple and IBM will both license software from Kaleida to use in future products from each company. Other computer and consumer electronics vendors are expected to announce agreements with Kaleida in the near future.
 Sculley says Apple's expertise in creating easy-to-use products, its experience in complete system design, and its popular appeal to individual users put Apple in a strong position to compete successfully in the consumer electronics market. "We are choosing a path which builds on our strengths and at the same time shares some of our best technologies with some of the world's best consumer electronics companies. We hope to become one of the great innovators and agents of growth in consumer information products in the 1990's."
 Apple, the Apple logo, and Macintosh are registered trademarks and QuickTime, and System 7 are trademarks of Apple Computer, Inc.
 -0- 1/9/92
 /CONTACT: Brooke Cohan, 408-974-3019, or Patty Tulloch, 408-974-5449, both of Apple Computer/
 (AAPL) CO: Apple Computer, Inc. ST: Nevada IN: CPR SU: PDT

PS -- NY007 -- 8057 01/09/92 08:31 EST
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Date:Jan 9, 1992

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