Notes from Apple CFO's Interview on CNBC Squawk Box 11/5/96
John Anderson, Apple's CFO appeared on CNBC's SquawkBox this morning. Here are my notes:
He was asked about the perception that all the best software/games are only coming out for Wintel platform. In response, Anderson said that Apple has launched an aggressive communications campaign for this XMAS season promoting third-party software titles that run on both Wintel machines and the Macintosh. The following details are from an earlier press release:
The campaign, "All Great Software Wears this Face," is designed to raise the visibility of third-party software for the Mac OS by making it easier for customers to identify, locate, and purchase Mac OS software products, primarily "hybrid" CDs, which contain a single stock keeping unit (SKU) number for products that contain multiple platform versions of the software in a single package. Hybrids account for a large percentage of overall Mac OS software titles but may not be sold in the Mac OS section of a software retailer, potentially creating the perception that there are fewer software titles for the Mac OS. Hybrid CDs are also the fastest growing type of CD distribution in the software industry. Trade associations and other organizations that monitor the software industry are just beginning to implement mechanisms for tracking these hybrids. The main issue surrounding hybrid CDs is that, although they contain a Mac OS version, they are often times stocked only in the Windows section," said Jonathan Fader, director of Apple's Developer Marketing group, "so when customers walk into their favorite software retailer, their perception may be that there are fewer products that run on the Mac OS. In fact, there are actually more, they're just not all in the Mac section. In partnering with retailers, our goal is to show customers that these titles exist throughout the store." In-store merchandising will include attention-getting banners, posters, and floor decals. Displays in the Mac OS section of selected retailers will identify the hottest new software to hit the market for Macintosh computers. Brightly colored pamphlets will offer customers peel-off notes containing descriptions of the hybrid issue and how to identify all software that runs on the Mac OS. More importantly, additional tote boards, shelf cards, and labels will help shoppers pinpoint Mac OS software titles outside of the Mac section.
Asked about the recent OS confusion, he said that Apple is still comitted to bringing a modern Mac OS out every 6 months or so. But he said they continually look at other options and wouldn't comment on BE specifically or any other software manufacturer out there.
Anderson said they have improved gross margins by increasing manufacturing efficiencies in combination with better design. Gross Margins have climbed to 22%. They also reduced operating expenses. These are the major reasons for their return to profitability.
They believe Apple can sustain gross margins above 20% going forward. He cited the coming CHRP designs, which will reduce component costs even further. He said Apple is not sacrificing margin with the recent price cuts. The newer designs for the products that have just come out allow lower prices.
In response to the charge that Apple is slipping behind in technological innovations, he said that Apple has increased their R&D head count by 400 from the beginning of last year to the beginning of this year.
Apple's Internet strategy is to offer superior usability and interface advantages to customers. Anderson said that there's a lot of "surfing" going on, and they're working in the labs to develop technology which enables people to assimilate Internet information into knowledge.
D. Kuspa |
