Paul, Apple issued a clarification to counter the misunderstanding that they were going to develop a brand new OS or port their current OS over to other microprocessors. You can read it at:
biz.yahoo.com
In short, they are firmly committed to the PowerPC chip. I for one, don't think these recent price cuts bode well at all; sounds too much like the margin shaving/desperate market share grab that got them in trouble in the first place. I also have lowered my expectations for Apple's ability to possibly breakeven in this current quarter.
In my past analyses on this board of Apple exec's comments, retractions, clarifications, I correctly read between the lines and deduced that Apple was going to surprise everyone with a profit this past earnings release. Unfortunately, I was wrong about it staying in a $25-$30 range! Well, here's my new pitch:
The real reason why Amelio and his CFO have been emphasizing that Apple won't be able to "sustain" profitability until the second quarter of '97 isn't so much because the company is still struggling with their current market share/margin/expenses situation. It's because even though they managed to squeak out a short-term PR coup with the last quarter's small profit, they knew they were going to slash margins in this quarter and sacrifice the chance of breaking even or generating another small profit. With the last quarter's pleasant surprise under their belts, they probably felt they could get away with one more losing quarter. Please, someone tell me I'm wrong and that the price cuts are mostly due to lower component costs. But these price cuts are steep!
Why are they doing this? Well, I think they might have wanted to take advantage of their slightly improved public image and try to get back some market share with agressive price cuts. Stemming the market share decline would be a worthy short-term goal, and even a tiny increase would be a major coup, and go a long way towards countering the bias against the company's survival. Also, they've got a slew of new CPUs, higher-speed PowerPC chips and the new Powerbook coming out next quarter, so why not try to maximize sales of existing platforms before they're discontinued if it might mean a tiny increase in market share, or at the very least, a smaller decrease in market share? Just my two cents.
D. Kuspa |
