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Technology Stocks : Apple Inc.

AAPL 268.18

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9:30 AM EST

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To: Eric Yang who wrote (17435)	8/31/1998 3:04:00 PM
From: Sam Scrutchins	Read Replies (1) of 213172

Eric, Great job on the Q4 estimates. Just one question: You apparently believe that the big iMac advertising campaign will have little effect on margins, based on your 25.4 vs 25.7% quarter to quarter reduction in margin. What is your basis for this assumption? Do you believe that Apple is enjoying other cost saving measures, offsetting the higher advertising costs (I assume that only a portion or the purported $100 million iMac advertising budget will be allocated to Q4), or do you think the amount of advertising costs allocated to Q4 are not substantially different than past quarter allocations? Thanks in advance for your response. Sam

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