International Business Machines Corp

Apple Computer Inc., inventor of the personal computer in the mid-1970s, now appears to be reinventing itself as it struggles to extend its successful machines into an extremely competitive market. In the past few weeks it has lopped staff, mulled an executive pay cut and slashed PC prices. Now it is taking the unprecedented step of discussing a link with its longstanding nemesis, International Business Machines Corp.

International Business Machines and Apple Computer on Wednesday signed their wide-ranging cooperation agreement, a landmark accord that includes the establishment of two joint venture companies and extensive sharing of technologies. The two computer firms, once bitter rivals, stunned the industry when they announced the outlines of the agreement in July.

In an ominous new twist to the Pentium chip controversy, computer users in corporations around the world are rushing to establish whether a flaw in the Intel microprocessor may have resulted in miscalculations that could make them vulnerable to lawsuits or trouble from government agencies.