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.