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Technology Stocks : Apple Inc.
AAPL 271.01-0.3%Jan 2 9:30 AM EST
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To: Andrew Danielson who wrote (16639)8/14/1998 11:50:00 AM
From: Eric Yang   of 213177
 
"I was tossing around some numbers for Q4, and I came to one conclusion: it's the powerbooks that matter, not the iMacs. "

Andrew, you're very sharp in picking up that point. I wouldn't go as far as saying that iMac won't matter this quarter but I think a lot of people don't realize how much Apple will benefit from PowerBooks this quarter.

Even with the reported G3 PowerBooks supply issue (which I think won't be much of the issue by the time Q4 ends), I expect the revenue from laptops to jump this quarter. This is due to two factors:
1) higher unit shipment.
2) higher average unit price. AUP

Significantly higher unit shipment than 103K last quarter is expected of course as production ramps up this quarter. Higher average unit price on laptops is also expected this quarter because 1) there were no price drops 2) lower priced pre-G3 laptops (which accounted for 31% of total laptops) are pretty much gone this quarter. I expect laptop AUP to jump from $2452 to $2800 or higher or an increase of $350.

The combination of higher unit count and higher AUP means much higher laptop revenue. The fact laptop revenue is expected to make up a higher percentage of total revenue (from 18% of sales to 25%+ estimate in Q4) means that these high margin machines will have a greater impact on overall margin this quarter than the last.

Of course one must factor in the margin for consumer line (iMac/AIO) and Pro line (G3 DT/MT) to get a good picture of the overall margin for Q4. As of now I think it looks very good.

Margin for the iMacs is an interesting topic. But I think we can save that for a down market day... ;-)

Eric
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