More baseless speculation...
By last Thursday, Apple knew that they would have to announce disappointing earnings. Keep in mind that 2000 earnings will still be up 31% over 99. Q4 2000 revenue will be up 40% over Q4 99. Q4 2000 quarterly earnings will be up 19% over Q4 99. But the point is that analysts' expectations were for Q4 2000 to be up 73% (!), so they will be disappointed. So Apple was going to have to preannounce. But they didn't yet say why.
Why indeed? Why, if revenue will be up 40%, will earnings be up only 19% this quarter? Is it simply because margins were lower, because Apple spent most of the quarter with starved channels waiting for delayed, announced products, blowing out the old stock at near-zero margins (considering that the best selling Mac lately has been the discontinued and discounted PMac G4 400, not the new models)? Maybe. Or has Apple been spending lots of cash on unannounced products? Well, they certainly have been, but could that account for hundreds of millions of dollars in expenses?
My guess is that Apple couldn't explain this discrepancy without giving away the punchline for some skunkwork projects. And we all know how precious a product announcement punchline is to Steve Jobs.
What could Apple have been doing that would cost hundreds of millions of dollars? We know that they bought the DVD Authoring unit from Astarte and have not yet announced where that is going. We know that they hired Allen Moyer, the Sony retail executive who headed the Metreon project, and that the September issue of Wallpaper magazine (among other sources) confirms that "a major commercial architecture firm is competing for Apple's store design contract," but we haven't yet heard Apple's retail plans.
I think that since Apple knew that they had to preannounce, and since they couldn't give away Steve's glory by stating the reason for their low margins and high expenses, they issued a terse, carefully worded preannouncement that basically says "We're a little short this quarter. We'll tell you why on 10/18." Some time between now and 10/18, I expect we will find out what's going on. They're certainly not going to announce a new product or retail initiative in their quarterly statement, so I expect that we'll hear an announcement before that.
Or I could be wrong and they just might be really screwing up. Either way, I'll bet they were at least as shocked as you and I at the market's reception to their preannouncement! |
