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    Technology & Health: Exponential Cuts Staff by 25% In Apple
    Setback ---- By Dean Takahashi Staff Reporter of The Wall Street
    Journal
    
    The Wall Street Journal via DowVision
    9 May 2:00
    
    Expo Technology Inc., a high-profile start-up whose turbocharged chips
    are supposed to be a key element of future Apple Computer Inc.
    machines, has laid off 25% of its work force due to product delays and
    a lack of funding.
    
    Exponential has run into problems because its Power PC clone
    microprocessors turned out to be slower than originally expected,
    resulting in lower-than-expected orders, said Richard Bergman, vice
    president of marketing.
    
    Closely held Exponential's problems only add to struggling Apple's
    well-chronicled woes. Apple partially funded Exponential and owns a
    sizable stake in the start-up, based in San Jose, Calif. Exponential
    promised in 1995 that its X704 chips, which would serve as the brain of
    a Power PC-compatible computer such as Apple's Macintosh, would be
    three times as fast as any Intel Corp. Pentium chip and run in excess
    of 500 megahertz.
    
    As such, Exponential's chips were a linchpin in Apple's strategy to
    distinguish itself from the personal-computer world. Initially, the
    chip would be built into machines targeted at performance-hungry users
    such as desktop publishers and professional video editors.
    
    But after two rounds of venture-capital funding totaling at least $27
    million, Exponential now is cutting about a quarter of its 90 employees
    and will have to raise more cash. The company's first prototype chips
    only ran at 410 megahertz, well below the target of 533 megahertz. At
    that level, Exponential's chips offered little advantage over Power PC
    chips from International Business Machines Corp. and Motorola Inc.
    
    "They thought they were going to have a big window where they had the
    performance lead," said Linley Gwennap, senior analyst at Micro Design
    Resources Inc., a market researcher in Sebastopol, Calif. "But the
    others are moving faster than they thought, and Exponential is behind
    schedule."
    
    Exponential officials had hoped to get 533-megahertz chips out in the
    fall, but by then IBM and Motorola are expected to have faster chips
    that could again close some of the performance gap, Mr. Gwennap said.
    
    Russell Brady, a spokesman for Apple, said the company has no current
    plans to use any of Exponential's chips. 
    
    News Source:The Wall Street
    Journal