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Technology Stocks : Apple Inc.

AAPL 259.35

+0.1%

Jan 9 3:59 PM EST

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To: Bill Jackson who wrote (4409)	8/22/1997 7:59:00 AM
From: David Semoreson	of 213182

>>The downward spiral has not slowed yet. $800 million lost last >>year?? some costs cut, but enough?? This is exactly the kind of weak analysis that leads to poor conclusions. The loss in the last year is mostly restructuring (due to excessive bloat in the past), inventory reductions (as a result of poor sales estimations) and the purchase of NeXT (forward strategy). These are fixes to past problems, not continuing. And, the cost cuts are $400-500 million annually. Look at the last quarter to fairly estimate the "burn rate". They lost $60 million in what is seasonally the worst quarter. And they have $1.2 billion cash. There is ZERO chance that they fail due to insufficient financing - (they may still fail due to MSFT lead in mind/marketshare, but it will be easy to see that based on next years F/S and developer support for Rhapsody). For now, the odds are way better for a double than for a zero. I stand by my estimate of 4th Q PROFIT of $20-70 million. Show me your estimates of sales/margin/expenses that has AAPL losing anything like $800 million going forward.

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