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APPLE'S PYRRHIC VICTORY

YOU'VE JUST ELIMINATED your biggest competitor. Good news, right? Not necessarily. On Sept. 6, Apple Computer agreed to a deal that, over time, will remove Hewlett-Packard from the market for Mac-only inkjet printers. HP will sell its inkjet-printer engines to Apple rather than under its own brand name, piggybacking on Apple's bigger share of the Mac segment. That gives HP a graceful exit from a shrinking business. Apple will be left with up to 70% of the $800 million business, and it probably will pay less for the engines than it did under a previous deal with Canon. The price: HP's departure, say analysts, will send a profoundly negative signal to already-jittery Apple loyalists.

EDITED BY KEITH H. HAMMONDS


Updated June 14, 1997 by bwwebmaster
Copyright 1996, Bloomberg L.P.
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