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Apple poised for more layoffs

Now that the deal with Sun is dead, Apple is starting to lay off the 1,300 employees targeted two weeks ago. More layoffs are in the works, said one analyst.

Apple officials are busy putting into place their restructuring plans while talk of a merger with another company fades. Selling the company doesn't make sense until the stock price is higher, said one analyst.

"The layoffs have already started," said Pieter Hartsook, an Apple watcher and editor of The Hartsook Letter. "They knew who the people were before they made the announcement. They will probably identify another 1,500 within a very short period of time."

A future merger is still possible if Apple officials get the stock price up to an acceptable level, said Hartsook. "I think that the current board's view is that the current stock price undervalues the company, so it doesn't make sense to sell. They need to get the stock price up to $40 or $50. Then if they want to sell, it makes sense," Hartsook added.

Apple had some good news on the technology front, however. Company officials showed off at Demo 96 the first fruits of the CHRP project in the form of a PowerPC system running desktop applications including Photoshop and Excel under the Mac OS.

The demonstration shows that Macintosh application developers shouldn't be deterred from creating new programs because the Mac OS will enjoy renewed vigor on the PowerPC platform.