Nice to see a discussion going on here. I was wondering where everybody was the past few days, especially with earnings due.
I wonder why one would be shocked at Apple doing better than last quarter. OS 8 should generate $100+ million in high-margin revenue alone. This is Apple's biggest quarter for education sales and indications are that early education sales (ie, last quarter) were good. Apple is selling as many eMates as they can make. That's why they have only showed up this month for sale to the general public, and that only by mail order. I checked at my local university and they said they recommend to any student who already has a Mac to continue with the platform.
Costs are lower for Apple each quarter as the cuts Amelio and Anderson made come to pass. Their breakeven point becomes lower and lower.
Also, last quarter Apple had a miserable April and May. June saved them. Compare this to this quarter where we heard reports that OS 8 caused hardware sales in retail and mail order outlets to increase 30% in July. I asked around in August at the local Mac shops and they said the hardware sales increase was still going, a month later.
Now add the tertiary indicators like Adobe's Mac sales way up (they were way down last Q, which was when Apple had terrible sales on the high end, thus a converse is likely true this quarter), UMAX sales soaring, etc. and you have a compelling case for a good quarter.
I'll also mention that Apple sold as many 9600/350s as they got chips. I assume they didn't get many chips but the margins on those babies are huge and I assume there's little difference between making and marketing them and the 9600/300s.
Finally, why would -$0.40 do terrible things to this stock? That's only a $50 million loss, just like last quarter. But we've now made it to the Christmas quarter when sales are best. Rhapsody DR1 is out. And the new G3 chips are ready to start appearing. The G3 laptop comes out at the end of Oct. and the mid-range desktops come out in November. Toss in the predicted upgrade cycle (Dataquest) and I don't know why this co. would trade below $18 again and that would be for a brief, brief time.
You are a charming short though,
Marc |
