Little for anyone’s comfort (‘cept diehard Windows forever fans) in Apple Computer Inc’s second quarter figures (CI No 3,142), which not only showed a thumping loss of $708m, $186m at the operating level, on revenue that plunged again, plummeting 27% to a mere $1.6bn – revisting the kind of quarterly sales recorded in the late […]
Little for anyone’s comfort (‘cept diehard Windows forever fans) in Apple Computer Inc’s second quarter figures (CI No 3,142), which not only showed a thumping loss of $708m, $186m at the operating level, on revenue that plunged again, plummeting 27% to a mere $1.6bn – revisting the kind of quarterly sales recorded in the late 1980s, and making it look as if competitors need do nothing to take Apple out of the market – the company is doing a very good job of it all on its own. Trying to put a positive gloss on the figures, Apple said that strong sales of new, faster Power Macs and laptops and lower expenses would help it meet its goal of reporting a profit by its fiscal fourth quarter, to September – but slash and burn still seem to be the watchword and it is not much good what was only a couple of years ago an $11bn company getting back into the black on $1bn quarterly sales. Apple’s loss from operations of $186 million, or $1.48 a share, was worse than the consensus industry analyst forecast of $1.22 a share, according to tracker First Call. Of the charges, $155m was for lay-offs, but can Apple thrive without those people? We feel the worst is behind us and our strategy is on track, Apple chairman Gil Amelio said in a telephone conference call with analysts. He said sales will probably increase in the third quarter over the second and that the company probably will meet its goal of being profitable again by the fourth quarter. The number of Apple computers shipped worldwide in the second quarter plunged 33% to 602,000 units, compared with 892,000 units in the same quarter a year ago – and that again was a drop larger than most analysts had bargained for. Sales in Japan and Europe also were weak, Apple executives said. Apologists say Apple has been hurt by higher costs than its rivals because it needs to support both the hardware and software sides of its business – but Amdahl Corp was able to make a modest living for 20 years on less than one fifth of Apple’s best annual sales, and a company with $11bn annual sales really should have been able to do it all and prosper. And for heaven’s sake, if it found it too difficult, why not sell the volume manufacturing business to the best computer builder around, and confine itself to software, hardware design and relatively short-run gismos – or get others to manufacture those too? Meantime, Larry Ellison has been telling the Nippon Keizai Shimbun in Tokyo that if he were to take control of Apple Computer Inc, he would turn it into a manufacturer of Network Computers – which would seem to throw much of the Apple franchise away. But then did he say that or did he simply say that Network Computers would be a strong new string to Apple’s bow? Such nuances get lost in translation. It appears he did say he is likely to likely to launch a bid for control, and will make the decision within the next few weeks.
