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. Last Updated: 07/27/2016

Apple Set to Drop Low-End Macs

SAN FRANCISCO -- Apple Computer Inc. is considering exiting the low-cost Macintosh business as part of a widely expected restructuring of the struggling company, sources said.

The speculation Sunday came as sharply lower gross profit margins led Apple to announce last week that it will post a first-quarter loss and take a restructuring charge, which analysts said is for layoffs of anywhere from 1,300 to 3,000 employees.

Apple's first-quarter results are due Wednesday, after the stock market closes, analysts said.

They expect Apple to announce layoffs and the size of the restructuring charge, but were not sure whether the Cupertino, California-based company would unveil any new business directions at the same time, or wait until its annual meeting Jan. 23.

An Apple spokeswoman could not be reached for comment. But industry sources confirmed parts of a report in Saturday's San Jose Mercury News that said Apple is expected to announce Wednesday its plan to stop producing low-cost Macintoshes.