quote:

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One Smith Barney analyst said, regarding Apple, "I think they'll continue to gain share in consumer because I'm a firm believer that the products they have for managing digital content are so much better than anything else that's in the marketplace."

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Macs are (or used to be) so much better at handling ALL content and we all know how that story turned out.

It looks like Apple has stemmed the bleeding and posted a profit on actual operations this quarter (as opposed to hiding behind their profit on investments). That’s good news if you’re a shareholder. The G5 with a less-is-more Mac-like OS would be a real sign that Apple had turned the corner and would be good news for Mac users. Making REAL change is quite different than finding a wishful quote from the fawning Mac press (or analysts).

I'll wait for HH's analysis before saying what I think about it...

Here's the link for the results of the quarter.

PowerMacs are still in free fall and sales are down in comparison with the same quarter last year...

Too premature to say anything. I would feel comfortable expounding this as a reversal after I see a few quarters of steady upward growth. As it stands now, this could be a harbinger of good things to come, or it could be a blip in the continuing slide. Certainly not something with which to begin gloating. Maybe room for some wee bit optimism, but little else.

<< Apple reports $19 million profit
By Jim Dalrymple
jdalrymple@maccentral.com
July 16, 2003 4:24 pm ET

<< Apple on Wednesday posted a $19 million profit or 5 cents a share, for its fiscal third quarter, down from $32 million, or 9 cents, a year ago. >>

_______________________

<< While overall market share numbers are down to 2.9% from 3.2%.... >>



Please explain why you post that as a triumph to be celebrated.

Because it wasn't down even more?? Because it's a "moral victory"??



Markle

[This message was edited by Markle on Thu July 17 2003 at 02:48 AM.]

The figures below show Apple's raw net sales for the past thirteen plus years:

1990---$5.60 billion
1991---$6.30
1992---$7.10
1993---$8.00
1994---$9.20 ---Introduces PowerPC
1995---$11.10 ---Microsoft introduces Window 95 late in the year.
1996---$9.80 ---Apple purchases NeXT
1997---$7.10 ---Jobs takes over. Sales continue dropping
1998---$5.90 ---Introduces IMacs
1999---$6.10 ---Sales about the same as last year.
2000---$8.00 ---First significant sales increase since Jobs takeover.
2001---$5.40 ---OS X released.
2002---$5.74
2003---$5.99 ---(extrapolated) Net nine month sales of $4.49 x 1.333



Here are the same figures adjusted to constant FY2002 dollars to give a more accurate representation of Apple's sales for the past plus thirteen years

1990---$7.80 billion
1991---$8.33
1992---$9.01
1993---$9.85
1994---$11.00 ---Introduces PowerPC
1995---$12.94 ---Microsoft introduces Window 95 late in the year.
1996---$11.14 ---Apple purchases NeXT
1997---$7.84 ---Jobs takes over. Sales continue dropping
1998---$6.40 ---Introduces IMacs.
1999---$6.52 ---Sales about the same as last year.
2000---$8.32 ---First large sales increase since Jobs takeover.
2001---$5.49 ---OS X released
2002---$5.74
2003---$5.99 ---(extrapolated) Net nine month sales of $4.49 x 1.333



In the past I've always singled out net revenues as a measure of how well Apple is doing in the computer business. This was based on the recognition that Apple is a computer manufacturing company and, in the past, generated nearly all of its revenues by selling computers. This isn't as true as it once was. Each year the revenue figures tell us less about how Apple is doing in the computer business because each year its other businesses are making an increasing contribution to the total.

For example, look at the 2003 Q3 report just out. Anything striking about it? Well, as miths says one quarter doesn't mean all that much, but look at the dollar figures for PowerMacs. Thalo has always pointed out how important Pros are to Apple. Well, not this quarter. The sale of "PowerMacs" generated $234 million. The sale of "Peripheral and Other HW" generated $285 million--- a $51 million difference. So, who is the more important customer in terms of dollars, those customers that buy PowerMac or those who buy iPods and other gizmos? This quarter it's the gizmo guys by $51 million dollars. I do expect the PowerMac sales to pick up due to release of the G5, however it has fallen so very low for so long that it will probable never recover. As things stand now Apple is barely, and just barely, in the desktop computer business. Portable devices are becoming more its game. And that doesn't just mean computers.


This quarter Apple is reporting that 30% of its revenues ($451 million) came from activities other than making and selling computers. In the past these activities were insignificant compared to its computer business, just a few percent at most, but no longer. So, no longer is merely reporting total revenue figures going to tell us what we want to know--- which is how Apple is doing in the computer business. That's because Apple is moving away from it to include other business. Notice that this quarter revenues are up a little, but the actual number of computers sold has fallen from the same time last year.

What I've done below is list the actual number of computers Apple has sold for the years for which I have data. "Computers" means all computers, PowerMac, PowerBook, iMac, and iBook (worldwide.) This way we will be able to track if Apple is selling more or fewer computers. As Apple changes the focus of its business the total revenue figure becomes less informative and tells us less about Apple's computer business. Keeping track of the number of units sold will help us stay focused on its computer business rather than, say. how it is doing as a Circuit City type retail store selling other companies' products.

1996---3.960 (million units)
1997---2.875
1998---2.763
1999---3.448
2000---4.558
2001---3.087
2002---3.101
2003---2.997---(extrapolated) nine month units of 2.225 x 1.333

When we list Apple's sales this way we can be somewhat humbled by how few computers Apple actually sells, just a few million a year, compared to the many millions of units being sold worldwide.

Of course the total unit sales for FY2003 are not in yet so it is extrapolated from the available nine months of data. This will give you a fairly accurate idea of how Apple is doing this year. The final figure is usually very close to the nine month extrapolated one.

Perhaps we should also keep an eye on the percentage of revenues generated by non-computer sales. As little as three years ago it was barely a few percent. Mostly Apple was in the computer business. The big new from this quarterly report (as I see it) is that Apple generated 30% of its revenues for the quarter from activities other than making and selling computers. It is not as focused on this business as it once was.

To me, it's good news and worth crowing about because when you look at all the data and facts in the report, Apple's doing really well. Sales are up, half the people buying new Macs have never owned one, before, and the company, itself, is in good financial shape.

My favorite platform is in excellent shape, and has a bright future.

Er...9Killer, sales are NOT up. Have you read HH's post?

For instance, PowerMac sales are down 18% from last year and 20% from last quarter.

That's A LOT of pro users not wasting a single dollar in Apple's HW/SW solution, many of whom have probably switched to Windows already while the rest are still waiting for the nonsense to stop.

I'm not talking about PowerMac sales (though those are about to go up, too), I'm talking about all macs. They're shipping tons of PowerBooks, iBooks, etc. iMacs and PowerMacs are just part of the picture. Laptop sales are where the industry is heading, and, once again, Apple's ahead of the curve.

Anyway - to address the original issue, yes, sales are up.

And to answer the implication of your post (that Pro users are Apple's main customers) - the thing you guys don't understand is there aren't a lot of pro users, period. I can do my "Pro" work on a Mac (so can you, but we know how you feel about that) so I'm happy Apple's selling to so many "consumers" just so the platform can continue to thrive.

Success hardly equals nonsense.

[This message was edited by 9KILLER on Thu July 17 2003 at 12:24 PM.]

[This message was edited by 9KILLER on Thu July 17 2003 at 12:29 PM.]

Er...9Killer, sales are NOT up. ...


Technically, Apple revenues are up slightly. So that part is true. Computer sales are down as are profits, which means, of course, that Apple is less of a computer company than it was.

How is this good news? Why should any of us cheer because Apple is selling more mp3 players and increasing sales of computer supplies in its retail stores? Why cheer this line of mp3 players over any other line of mp3 players? Why cheer this string of retail stores over any other string of stores selling similar merchandise? Do we really have an interest in one consumer electronics outfit over another consumer outfit? I, for one, have no interest in glorified Walkmans or the art of retailing. I didn't a couple of years ago and I don't now. What changed? Did I miss the memo that requires me to take an interest in retail consumer merchandise?

"C'mon down to the CRAZY APPLE store where prices are INSANELY GREAT!!! Open 10AM to midnight. C'MON DOWN!!!"

Now I'm supposed to admire retailing tactics instead of technological innovation? Says who? I suggest we go back to cheering for our home sports teams. Makes more sense. Otherwise we may find ourselves in the foolish position where we no longer mention that great evil beast, Microsoft, and instead, we heap scorn upon that great evil beast, Walmart. Does the word "insane" mean anything in this context? Have we lost our ever-loving minds?

It's a bit surreal. As Apple abandons its former customers, just the way it abandoned the Pro segment, those same customers are cheering the shafting. Admittedly, one quarter, or even the past three years, doesn't tell the whole story of how it will turn out, but the direction is obvious.

Tell ya what--- I'll dust off the pompoms when I read a report that indicates that Apple has decided to rededicate itself to being the best computer maker in the world selling the world's finest computers. How's that for a business plan? Make a superior product! I'll cheer Apple on then. How can I cheer on retailing? Wouldn't I look like an idiot?

quote:

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Tell ya what--- I'll dust off the pompoms when I read a report that indicates that Apple has decided to rededicate itself to being the best computer maker in the world selling the world's finest computers. How's that for a business plan? Make a superior product!

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I'm right with you, brother double-H. I'm happy to cheer for iPods. They're minimal and they work. Trouble is -I- need a computer. If they could take the same care and "Less is More" thinking, and crap-cutting of the iPod, and channel it into their PCs, we'd be golden.

My problem is, I don't see how robust iPod sales are going to translate into better CPUs for you and me. Alls it's gonna do is vindicate the digital hub strategy. Convince the marketing team that they were right about casual and passive use being the wave of the future. And so I see the danger of the dreaded crap-spiral.

If Apple isn't willing to PROVIDE quality pro tools, a quality operating system, they can always point to their core user base as having gone soft on them. Well, there's a reason for that: OS X.

quote:

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Computer sales are down as are profits, which means, of course, that Apple is less of a computer company than it was.

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This is what I was talking about. Apple is selling LESS computers. Computer sales are down.

I was drinking Pepsi when I read this. It went through my nose:

quote:

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"C'mon down to the CRAZY APPLE store where prices are INSANELY GREAT!!! Open 10AM to midnight. C'MON DOWN!!!"

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I'm still laughing as I paste it.

HH

How do these statements make any sense?

"The big new from this quarterly report (as I see it) is that Apple generated 30% of its revenues for the quarter from activities other than making and selling computers.It is not as focused on this business as it once was." and "Computer sales are down as are profits, which means, of course, that Apple is less of a computer company than it was."

I believe only desktop sales are down. Profits were down because cost's were up. How is Apple generating more revenue from things other than computer hardware sales a bad thing? Did Apple five years ago offer as much software to buy as they do today? Or is this a bad thing also? Please explain how all this makes Apple less of a computer company than it once was? Am I missing something? Have they droped the iMac or laptop line of computers and I missed it. Apple is no longer offering a wide variety of computers at all levels from low end to high end? The one line that has been off on sales the Pro line Desktops has just been revamped with a machine that is what the Pro market has been crying for. This makes Apple less of a computer company?

How is a company diversifying itself in an integral way with products that absolutely compliment the products they already have a bad thing? iPod iSight iLife Music Store Final Cut Pro/Express keynote and so on.

Maybe if Apple started selling iFurniture or an iClothing line and started dropping the above mentioned products what you are suggesting might have some validity but I just don't see the doom and gloom you are speaking of.

<< How is Apple generating more revenue from things other than computer hardware sales a bad thing? >>

It's not, of course. I think HH's point was that the quarter's results include sales from other businesses, such a iTunes and iPods. So Apple's results don't just tell us what's happening with its computer business anymore. We have to separate out the different businesses to see the situation now. As I've said before, one of the few smart things Apple has done for its survival is to diversify its business. When they start selling more to Windows users later on, it will probably get even better...while its core computer business continues to stagnate.

The market share figures seem different at every source that I read. So I'm going to back off talking about that until there's more consistency in the information.

Markle

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So I'm going to back off talking about that until there's more consistency in the information.

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Oh, no!

You are THE source for dispassionate statistical analysis of Apple. Now I'm gonna be stuck with nothing but the spin artists at the two ends of the spectrum!

Am I missing something?

Yes.

Oh I get it now.

A week after the iTunes music store opened CNNMoney ran this article.

I love this statement.

quote:

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Most Apple users had to sit out the digital music revolution until the release of iTunes, causing an initial "oil well gusher of interest," says Phil Leigh of Raymond James & Associates.

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And these guys are actually getting paid for what they have to say.

<< "C'mon down to the CRAZY APPLE store where prices are INSANELY GREAT!!! Open 10AM to midnight. C'MON DOWN!!!" >>

"Yes, I'm CRAZY STEVIE!! I'm so crazy I gave away 3/4 of my customers!! I'm so crazy I'm selling a product that most of them DON'T WANT!! They begged me not to stop selling my best product, and I'm so crazy I shoved a coffin in their faces and said, "HEY, I GOT YOUR BEST PRODUCT RIGHT HERE!!" I'm so crazy I won't even let my new boxes run the product they want!! I'm so crazy I'm selling an OS from the 60's like it's THE LATEST THING! I'm so crazy I got some of my customers believing they're disloyal if they don't use my new product! I got a few of them saying they need to buy it to help me out!! I got a few of them buying a new box every time I up the hardware requirements! (I upped MY hardware requirements, so UP YOURS!!) I got a few of them thanking me for blinding colors, blurry screenfonts, and eyestrain! ...Come to think of it, maybe I'm not the only crazy one."


Markle

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(I upped MY hardware requirements, so UP YOURS!!)

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Oh. my. friggin'... HOWWWLLLL!!! Yee ha, testify brother Markle! You tell 'em, man.

Product diversity = good.
Crappy product = bad.
Demanding excellence = not disloyalty

You know, maybe economic theory ain't my jive, but seems to me Apple is showing strength in an area where they, gasp, did a good job. They're showing weakness in an area where they did a bad job.

Seems to me they're trying to force the Mac Faithful into adopting, before the product has even come CLOSE to hitting its stride. That's the typical selling hopes and dreams bullshit. But the stakes are too high for pros. You can't do stuff like this, and then center it all around passive use and entertainment, digital hub crap. Yeah, that stuff can be a part of it... but right now it's a big bloated water balloon, and pros are there with a pin poised on it.

The bottom line, is pros see right through all this marketing nonsense, and when push comes to shove, adoption has to be based on something other than happy horseshit. Aqua and unix were not enough to sell me.

I need the Finder. I need speed. I need font rendering. And most of all I need the Mac interface. Minus idiotic nonsense. I need a pro system that will surpass the legacy.

You know what? I have no problem helping Apple out. If they help me out first.