Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Apple Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Eric Yang who wrote (11833)	4/19/1998 3:28:00 PM
From: Scott Crumley	Respond to of 213177

Eric, I agree that the idea of Apple developing Quicken in tandem with Intuit would have it's problems. I was thinking more along the lines of Apple buying the Mac side and using it as a core to develop a new product for the Mac and Rhapsody in the same way that Microsoft develops Money. But it's true that financial software wouldn't be a fit with regards to Apple's expertise. But the fact still remains that Campbell is on the Board and the Mac platform needs a financial package. Is there any chance that Intuit could be going to Yellowbox development. That is, replacing specific Mac support with a one button port to numerous platforms, including the Mac, under Allegro or such? I agree that piracy is a problem, but it is a ubiquitous problem, effecting Wintel and Mac and nearly every application found on both. Quicken (I currently use 7) is an excellent piece of software. I would think it's integration with MacinTax is important to a lot of folks in the Mac community. Most of the people in my immediate Mac community use Quicken and love it. Something must be done to fill this (psychological) hole that Intuit has created with their press release. Scott

To: Eric Yang who wrote (11833)	4/20/1998 1:41:00 AM
From: Marc Newman	Respond to of 213177

Most Vicious Poster, I was in a combative mood that day too. Not sure why. But I was able to really enjoy going down to the corner and picking up the local papers to read about Apple. A funny thing--Apple is no longer big, big news. Last year, especially with layoffs, the Apple coverage was huge in the Chronicle, Examiner, Mercury News, etc. Now? The article covering earnings looks just like any other big Silicon Valley firm. Business as usual at Apple. Another profitable quarter. Ho-hum. It's great. Just when I'm getting ready to ignore Bill Jackson he posts: << I have been reading for 3 hours now, and I sent some e-mails in support of Apple to some people. Maybe it will have an effect.>> Guess I have to give him a break now. He's been good for keeping us abreast of what a power supply and mouse cost and for reminding us about seasonal trends in the PC marketplace, but his thoughts on Apple have been all over the place. Your bringing to light his December post was highly appropriate. Not sure how he suddenly decided that Apple would do .30 based on "high-margin OS sales." What OS sales? A few stray copies of 8.1? Cripes. And he still doesn't get it that Apple is different seasonally from the other pc companies. Sure, his Apple stores might have had a summer slowdown, but Apple sells more pct.-wise to schools than any other company. Sales can be down at retail in the summer yet still be higher overall than in previous months. Anyway, I think it encouraging that K-12 sales rose 9% last quarter. I think that's just an early sign that the G3 will really help in this marketspace. In the same way that the G3 gave a boost to December in the US and probably gave a boost to Japan this quarter, it will give a boost to education sales as it moves into that space. The AIO and the online store for education will only help matters. I'll give you a post on Q3 earnings, next post. But to round off this one, I have to say that I'd always read that Mac-users pirate less software than pc-users. Or maybe it was just that Mac-users are more likely to pay shareware fees. Marc

To: Eric Yang who wrote (11833)	4/20/1998 2:01:00 AM
From: Marc Newman	Read Replies (1) \| Respond to of 213177

Eric, My thoughts about this current quarter are that we'll come in between $1.4 and $1.5 B in revenue. I do think the margin will drop. The PowerBooks will help a lot, but the educational discounts and the yet lower prices on the non-G3 items should keep a cap on any gain from moving well past a 50% G3 mix. Look at the Macintouch note about CompUSA--the low-end 6500 has only just been lowered to $999 there. As soup reported, non-G3 prices held up well last quarter. Probably not the same can be said this time. Apple did reduce inventory by $100 million this past quarter, but a healthy amount still remains and will be hard to make money on. Hopefully the 6500s will disappear more quickly than the Performas. I was still seeing those last fall. So if revenue is at worst $1.4 B (Anderson said revenue would be flat), then we've got a gross profit of $322 million. I bet expenses go down to $290 million, unless for some reason the educational season relies on extra sales force. But anyway, it looks to me like a profit of about $40 million minimum, after adding in interest income. Add in millions for the stake in ARM. Now, I do think revenue will be higher than $1.4 B. Schools are being well-served with the AIO, plus they have extra cash from federal technology grants. In fact, with all the grants, perhaps education buying season will start earlier this year. And we all know that the PowerBook refresh is really going to drive sales. Apple sold a ton of 3400s last February when they were launched. I bet we get nearly the same pop, considering the wide variety of models, plus the "fact" that Apple is going to actually launch a tv ad touting them. What else will hold us down this quarter? Further price reductions on the G3s, partially brought on by a big glut on the pc side. We do have to realize that Apple won't be benefiting from Compaq, IBM, etc. having inventory trouble. So I think a conservative figure is $1.45 B in revenue. But one could easily see $1.5 if the PowerBooks take off, education sales are strong, Apple somehow comes out with a 6-slot G3, etc. So maybe a $70 million profit, at the most, excluding stock gains. If Apple is able to surprise again with the margins, say 24%, then tack on another $15 million. I'll take it. Two good notes. I heard some nice radio ads from my local Mac chain (ComputerWare, you remember them) offering an Office '98/OS 8.1 deal. And CompUSA had a big promotion over the weekend offering a free tv for any Pentium II or G3 cpu purchase. The Mac wasn't just a throw in--they placed the Apple bundle in the most eye-catching part of the newspaper ad. Should sell a good quantity this weekend, chain-wide. For $2149 you could get a G3 233 desktop, 15" monitor, printer, and free tv. Marc

To: Eric Yang who wrote (11833)	4/20/1998 11:30:00 AM
From: Randy Tidd	Read Replies (3) \| Respond to of 213177

> Scott, I don't think that rumor of Intuit selling Quicken to Apple > holds much water. Supporting one product on two different platforms > while maintaining portability, and consistency can takes a lot of > engineering effort... Actually, if you look at that rumor literally, not a lot of additional effort would be required. It said that Intuit might write Quicken for MacOS 8.1 and the Rhapsody Blue Box. The Blue Box is basically a MacOS emulation layer within Rhapsody, so not a lot of additional engineering work would be required to get the software to run both native MacOS and Blue Box. So this would really be a marketing move to provide a "killer app" in the Rhapsody arena. Having a major player support Rhapsody in this fashion would validate it to the market and make it a much more viable product. Now if they had said they were coming out with a Yellow Box version... then I'd have to agree with you that a lot of engineering work would be needed. Randy