How the mighty have fallen:
The fast-growing company surprised Wall Street on Tuesday with an
admission it had clung too tightly to prices in the quarter ended Jan. 29, sacrificing sales to maintain margins and profits. While profits rose 49% in the latest period, its sales climbed 38%, well below the 56% average gain in the last two years. Shares in the Round Rock, Texas, computer maker fell $7.1875, or 8.1%, to $81.5625 in Nasdaq Stock Market trading Wednesday.
Chief Executive Michael S. Dell said the company has been edging closer to the low-priced machines, a market segment it has avoided because of its skinny margins; he insisted "we actually are" addressing demand for low-cost machines. "We're increasingly participating in that segment. We've got $1,199 machines now," said Mr. Dell.
Will AAPL be next? |
