Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, November 5, 1994                   TAG: 9411070027
SECTION: BUSINESS                    PAGE: A6   EDITION: METRO 
SOURCE: KNIGHT-RIDDER/TRIBUNE
DATELINE: SAN JOSE, CALIF.                                 LENGTH: Medium

IBM AND APPLE TO ANNOUNCE NOT-SO-SECRET OFFSPRING

Apple Computer Inc. and IBM have chosen the giant Comdex trade show to make public a deal that has hardly been a secret for weeks: The two companies will collaborate on designing a single computer that can run software from either firm.

The companies scheduled a press conference Monday morning in New York to brief analysts but won't make the plan public until Nov. 14 in Las Vegas, where 200,000 people are expected to gather at the largest annual computer industry event.

Missing from the agreement, however, is a license for IBM to equip its versions of the computer with the Macintosh operating system. That is key to permitting Macintosh ``clones'' on the market, a step most industry observers think Apple should have taken years ago to increase its market share and attract programmers to write new software for its system.

But analysts said such a license isn't crucial to the deal right now. They said it will probably take Apple engineers at least two years to finish the computer.

Neither company would confirm details of the arrangement, except to say they are talking to each other about creating the design.

People familiar with the negotiations, however, have said IBM probably will agree to pay most of the costs of developing the computer, which would use as its ``brain'' the PowerPC chip designed by IBM, Apple and Motorola Inc. It would be able to run, without any modification, programs written for Apple's Macintosh computers or IBM's OS/2 operating system.

The computer could give the two companies a weapon to turn against the dominant personal computer design in the marketplace, built around Intel-style microprocessors and Microsoft Corp.'s Windows operating system. Those computers, popularized by IBM more than a decade ago, account for more than 80 percent of the personal computer market.

Apple's Macintosh accounts for most of the rest, but analysts say the company has not garnered a larger share of the market because it is the sole source of the Macintosh. The IBM-style machine, on the other hand, was widely ``cloned,'' resulting in price and supplier competition that wooed far more buyers.

IBM reportedly was reluctant to sign a Macintosh software license because it is trying to persuade customers to adopt its OS/2 system and doesn't want to appear to undercut its support for it.