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Tech Industry

Apple sees a future in software

According to CTO Ellen Hancock, Apple is "too much dominated by hardware" and plans to shift its focus to software.

PALM SPRINGS, California--Apple Computer (AAPL) is remaking itself as a software and services company, the chief technology officer of the beleaguered manufacturer of personal computers told a technology conference yesterday.

"We are a systems company with hardware, software, and services," CTO Ellen Hancock said at a conference sponsored by the Nasdaq stock exchange and Upside magazine. "We are currently too much dominated by hardware."

"Yes, this is a change in direction. It is one of the reasons I went to Apple, which had been a software provider, but not in a business sense," said Hancock, noting that software and services are more profitable businesses.

"We want to have an operating system that extends beyond its hardware base." She revealed internal discussions on whether to adapt Apple's new operating system, purchased last month with Next Software, to PCs based on Intel chips, but indicated no pro-Intel decision had been reached.

Internal Apple development efforts to update the Macintosh operating system were in disarray when she arrived last summer, she said.

"We didn't have a plan in place to ship a new operating system," Hancock said.

Apple has isolated itself in the computer industry, she admitted. "We must demonstrate that we will be a better industry player. Apple has been insular in the past."

She also refuted comments from Be CEO Jean-Louis Gassée that Apple picked Next over Be because it places more importance on the business market than the multimedia market. Hancock said that Apple went for Next because it was the "clear technology leader."

She also indicated that she is leaning toward using the new Mach microkernel, the basic building block beneath the NextStep operating system, for future Macintosh operating systems.

"I fully expect to close on that decision toward the end of this month, [or] early next month," she said, adding that Apple is looking at its own Copland kernel as well as an updated version of Mach recommended by Next developers.

Hancock also that Apple sees the server market as a major opportunity. "We will have hardware offerings that that work on storage in servers."

Reuters contributed to this report.