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Technology Stocks : Apple Inc.

AAPL 272.16

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3:59 PM EST

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To: Richard Habib who wrote (23662)	3/25/1999 2:19:00 PM
From: Eric Yang	Read Replies (3) of 213176

"Eric had info he expressed on AApl Chat that Apple indeed did have about a 5 week channel and wants to reduce that to 3.5 weeks or so by the end of the qtr. " Actually what I've heard is that they are trying to reduce channel inventory to 4.5 weeks or so. Given the fact that we are still product constrains reducing channel inventory to 3.5 would probably be too aggressive. Anyone can lower channel inventory by dramatically lowering unit shipment and starving the channel. But then consumers wouldn't be able to find what they want. The proper way to reduce channel inventory is to work closely with resellers so that products reach where they are needed and only as much as needed. That way channel inventory can be reduced while still allowing consumers to find what they want on store shelves. I think this is the goal that Apple is striving for and will take some time for this to happen.. It'll require accurate sales projection on Apple's part as well as cooperation from resellers. The benefit of a direct sales model is that you bypass resellers and the centralized distribution centers essentially eliminates channel inventory. Eric

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