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NEWS ANALYSIS : Exec's Departure Indicates Continuing Chaos at Apple


Only seven months after its last overhaul, Apple Computer has again realigned its marketing organization, forcing the departure of popular executive Daniel L. Eilers and indicating that the company continues to be wracked by dissension at the highest levels.

Eilers, whose departure was first disclosed Wednesday, said in an interview that the reorganization--which dissolves a centralized marketing organization and moves all marketing functions into the regional sales organizations--made his job unnecessary.

"We're taking my group and putting them out in the field to be closer to customers," he explained. "If you no longer have a central worldwide marketing organization, then you don't need someone to head it."

He indicated that cost-cutting was the main reason for the overhaul, and that layoffs are likely. Apple did not say how many jobs would be eliminated.

The departure of Eilers, a 13-year Apple veteran, comes just weeks after the resignation of Chief Financial Officer Joseph Graziano and makes him the fourth senior executive to leave the company this year. Eilers, who had previously been the head of Apple's software subsidiary Claris, was appointed senior vice president of worldwide marketing in April, and as recently as Monday during an interview with The Times appeared to be brimming with enthusiasm for his new job.

Industry watchers greeted the reorganization favorably. "They had to streamline marketing so that products get into the hands of customers more quickly," said Tim Bajarin, president of Creative Strategies, a marketing consulting firm. "You can't do that if all the decisions are being made by headquarters."


But they mourned the loss of another highly regarded executive. Eilers's resignation, coming so soon after Graziano's, slightly soured what should be a time for celebration: A nearly 1 1/2 point increase in Apple's market share for the third calendar quarter, reported by Dataquest Inc., a San Jose market research firm.

Apple's gain was all the more remarkable in that it came right after the launch of Microsoft Corp.'s Windows 95, a software package that gives IBM personal computers and clones many of the same user-friendly qualities of Apple's Macintosh computers. The company saw its share grow in markets where it has traditionally enjoyed a strong following: schools, homes, desktop publishing and video editing.

"Apple's lost the big PC war," said Dataquest analyst Kimball Brown. "But the markets where they are strong makes for a very sustainable long-term business."

The changes were one more sign of the continued chaos within Apple. "There's no teamwork going on at the highest levels at Apple," said Mark Hall, editor of MacWeek, a trade newspaper.

Graziano stepped down after losing a battle with Spindler over the future direction of the company. Many expected that Eilers, a close ally of Graziano's, would be the next to go.

But Eilers adamantly denied that his leaving has anything to do with the earlier dispute. "I don't know if there was a disagreement between Michael and Joe," Eilers said.

"I realize that there was a lot of speculation, but there is zero truth to it," he said. "Michael and I have been in 100% alignment." Eilers will stay on until December. Spindler was unavailable for comment, but in a prepared statement said: "We appreciate the contribution Dan has made in helping us crystallize our market segmentation strategy, in his former role as president of Claris, and his achievements in other Apple positions during the past 13 years. We wish him well in his new pursuits."

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