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Technology Stocks : Apple Inc.

AAPL 273.25

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3:59 PM EST

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To: MeDroogies who wrote (24079)	4/17/1999 2:59:00 PM
From: Dragonfly	Read Replies (3) of 213177

Still,overall channel inventory did fall to 4.8 weeks from 5.3 weeks as of December while iMac inventories fell to below 3 weeks from 5 weeks. Since Apple must price-protect this inventory, Apple is still operating a modelthat's a far cry from Dell's, but it seems to be operating it quite efficiently. MeDroogies: This isnt channel stuffing. It just shows that the old business model hasn't been shedded yet. I believe this is the biggest negative for Apple right now. Its widely held that the Lombard Powerbooks would have been introduced already if there wasn't an oversupply of G3 PBs still in the channel. That's bad- delaying products means a delay in recouping development costs, and lost sales. But writing off all those G3s would be really expensive too. So the solution is that Apple needs to out-Dell Dell. It has to get channel inventories down to a couple weeks and production online and flexible enough to change mixes (colors or product lines )to meet demand. We need to eliminate the huge buildup in inventory that preceeds every product launch and the inevitable lack of supply as everyone who's been waiting for the new product goes out and buys it. The ideal situation is one where new products don't cannibalize existing ones-- lower the price of the G3s and bring the Lombards in at the high end. Don't have lots of 266 iMacs around when you introduce the 333s... just switch production. Nobody's going to complain if the 266 they ordered turns out to be a 333. Since Apple is a unique entity (its own OS, single sourced boxes, etc.) it has to compete with everybody- from Microsoft to Dell- and this means top notch execution. Its focus on channel issues has been spot on, and represents a real change from the first half of the 90s when Apple was not paying attention to the market. I hope this doesn't sound like a flame- its not. I'm an Apple fan and refuse to buy lower quality stuff. Apple's execution in the last year has been phenomenal. But, it needs to sustain this (and get some golden handcuffs around Jobs in such a way that he keeps his eyes on the ball) and get out of the woods (my definition of out of the woods is over 4 million CPU sales a year) before I'll buy in. Dragonfly

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