By February of [[1997]], the X704 was ready - hitachi delivered Exponential over 7,000 410-MHz chip. Apple was in a fairly bad shape at the time, with massive layoffs on the horizon; just a month later they acquired NEXT software for $430 million, bringing back Steve Jobs as an advisers and replacing key Apple upper management. Around the same time, Exponential displayed an X704-based machine to journalists at the LA [[wikipedia:Dreamworks|Dreamworks Studios]], running complex 3D animations and wowing the audiences. Following Exponential progress [[IBM]] announced a new chip: the {{ibm|Mach 5}}; the chip didn't actually arrive until 5 months later. While clocked at only 250 MHz, its considerably larger cache and wider datapath promised to match X704's performance. IBM chip was also to be manufactured on their new [[0.25 µm process]] (compared to X704's [[0.5 µm]]). Apple eventually went with IBM's chip but only for a short time as by 1998 they went over to PPC 750 series. In a meeting that took place on March 3 1997 Apple told Exponential that with the lay off of thousands employees they will no longer be able to design a system around the X704 chip. This decision had devastating consequences for Exponential which relied on Apple's deal which would've meant hundreds of millions of dollars in revenue.

By February of [[1997]], the X704 was ready - hitachi delivered Exponential over 7,000 410-MHz chip. Apple was in a fairly bad shape at the time, with massive layoffs on the horizon; just a month later they acquired NEXT software for $430 million, bringing back Steve Jobs as an advisers and replacing key Apple upper management. Around the same time, Exponential displayed an X704-based machine to journalists at the LA [[wikipedia:Dreamworks|Dreamworks Studios]], running complex 3D animations and wowing the audiences. Following Exponential progress [[IBM]] announced a new chip: the {{ibm|Mach 5}}; the chip didn't actually arrive until 5 months later. While clocked at only 250 MHz, its considerably larger cache and wider datapath promised to match X704's performance. IBM chip was also to be manufactured on their new [[0.25 µm process]] (compared to X704's [[0.5 µm]]). Apple eventually went with IBM's chip but only for a short time as by 1998 they went over to PPC 750 series. In a meeting that took place on March 3 1997 Apple told Exponential that with the lay off of thousands employees they will no longer be able to design a system around the X704 chip. This decision had devastating consequences for Exponential which relied on Apple's deal which would've meant hundreds of millions of dollars in revenue.

On April 17, 1997 Apple cancelled their existing contract with Exponential, invoking the 'design flaw' clause citing the slower clock speed as the reason. Under the contract Apple was required to pay $1.4 million cancellation fee. The $1.4 was never paid; money that would have more than likely kept Exponential going for a fair mount of time. As a last straw; Apple never delivered the promised modified ROM.

On April 17, 1997 Apple cancelled their existing contract with Exponential, invoking the 'design flaw' clause citing the slower clock speed as the reason. Under the contract Apple was required to pay $1.4 million cancellation fee. The $1.4 was never paid; money that would have more than likely kept Exponential going for a fair mount of time. As a last straw; Apple never delivered the promised modified ROM.