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

To: c-man who wrote (13977)	5/23/1998 2:37:00 AM
From: Richard Habib	Respond to of 213177

Sorry your vulnerable to these types of actions but your probably correct. Apple is moving toward a internet/800 number/direct mail type of distribution network. They are successfully positioning themselves as a small player with high single digit market share. Jobs said as much when he postured that they would go after Dell. A small, profitable company has no room for all the resellers that they have had. I've often worried about Apple's convoluted distribution network especially since they instituted the Internet store. It's a shame Apple will have to jettison resellers as they have always been strong advocates of Apple but Apple needs satisfied customers and a profitable enterprise. They can best accomplish that with a direct distribution network. Rich

To: c-man who wrote (13977)	5/23/1998 3:25:00 AM
From: HerbVic	Respond to of 213177

Thanks for the long post. I think it filled about a half hour of my time just to read it. You must have around two hours invested there. You really know how to make an entrance. And you raise some very interesting points. However, I don't think that Apple is trying to form a DELL model of inventory distribution. Can't! As you pointed out, those boxes don't sell themselves anymore. But Apple does need to protect its distribution channel as well as the advocates within it. A narrower channel of strong advocacy is much better for the company and the advocates than a 'commodity like' channel with Apples everywhere collecting dust without advocacy. And, let's face the real truth here: $11 million spread across 1,200 dealers is only $9,166 per dealer PER YEAR! If some of these dealers claim to have Apple business greater than $1 million, then clearly others must be Apple dealers in name only. "Oh yeah!" the salesman said, "We're an authorized Apple dealer. We can order any of their products for you. We don't keep them in the store because there's not that much demand for them. I'd say we could get one here in about a week if they have them in stock." We call them ORDER TAKERS. They take sales away from stores that have the product, that sell the product, that are trying to advocate the product and make a living doing it. The worst thing a company can do in distribution of a large ticket item is to dilute the channel to the point that no one in the channel has enough volume in the product to be profitable. That is what the old Apple did. The new Apple is fixing an old problem that should have never been there! So lighten up! Get your mind off of the dealer news. It ain't no bad thing. It's a good thing! This is the real picture you should be concerned about: <<snip from MacWeek zdnet.com; Apple hopes to achieve significant growth by year's end, according to a financial report submitted last week to the U.S. Securities and Exchange Commission. Apple's quarterly 10-Q report said the company foresees year-on-year revenue growth by the first fiscal quarter of 1999, which ends in December 1998. "The company does not currently anticipate significant sequential quarterly revenue growth before the fourth quarter of fiscal 1998, and year-over-year revenue growth is not expected before the first quarter of fiscal 1999," the report said. Despite two profitable quarters, sales during the first half of 1998 were $3 billion, down 20 percent from the same period in 1997, the report said. The filing said factors driving down sales included a 45 percent decline for imaging products, many of which were discontinued; a $223 million drop in PowerBook sales following a major roll-out in 1997; and the troubled Asian economy. On the plus side, Apple made $23.4 million in pretax profit when it sold 20 percent of its stake in ARM Holdings PLC, an English chip manufacturer. While revenues declined, unit shipments grew 2 percent between the first and second 1998 quarters, the 10-Q said. Sales of G3 machines climbed during the second quarter, jumping from about 21 percent of all systems shipped in the first quarter to about 50 percent in the second. The company's gross margins climbed from 22 percent in the first quarter to 25 percent in the second. The 10-Q said Apple's online store racked up $16 million in revenue during the second quarter. The filing said Apple had cash and short-term investments of $1.8 billion, up from $1.45 billion at the end of September 1997. Despite the company's optimism, Apple's debt ratings remain low, the report said. Standard and Poor's Rating Agency as well as Moody's Investor Services continued to rate the company at noninvestment grades, which predict a "negative outlook."

To: c-man who wrote (13977)	5/23/1998 5:48:00 AM
From: Zen Dollar Round	Read Replies (3) \| Respond to of 213177

...and now I'll have a few things to say about Apple corporate from time to time. Apparently more than a few. Don't we all enlightened now? Not so fast. Your post (a record for original non-pasted content in this thread, by my estimate) only shows that you're worried about your livelihood. It's quite obvious. Killing the clones was the only way Apple could become profitable. Spindler and Amelio managed to make such bad deals with the clone makers that Apple was not being adequately compensated for the engineering expenses incurred by the process. Jobs knew this and put a stop to it. One of the best things Apple ever did was get rid of the garbage -- large national chains that did nothing to help sell Macs. They knew nothing about them, and did little to maintain what they had. Good riddance. Apple eventually wants to go 100% direct sell? Wouldn't happen for many years, but it works for Dell, doesn't it? Specs of the iMac laughable? In what way? It'll have a 56k modem by launch, at least two models of add-on USB floppy drives to choose from (Newer Tech and Imation), and a some USB/ADB/serial/SCSI converter boxes for those who must have them until straight USB solutions become available. Oh, and in case you haven't heard, the laughable 233Mhz G3 chip in the iMac kicks 400Mhz Pentium II butt. The MacTV was a loser when it was announced, and I knew it to be so at the time. The iMac is the polar opposite of that. The iMac reportedly has 70,000 advance orders in the pipe at CompUSA. It's primed to be a great success. You make some valid points, like the eMate and Newton, but rumors hint to an eMate replacement in the works with some Newton capabilities. We'll have to see what happens. But most of your post is mired in a self-serving rant, IMHO.

To: c-man who wrote (13977)	5/23/1998 9:12:00 AM
From: X-Ray Man	Read Replies (1) \| Respond to of 213177

You make a couple good points, but mostly mired in sour grapes. Yes, the distribution channel has to change, to the disadvantage of many former advocates, if they were not in a position to move product. But that is the only model now that will allow Apple to survive. Apparently, you would rather Apple dwindle away but maintain your good will short term. Long term, you would lose out anyway, just give you more time to transition to other product. If this action is enough to make you an anti-Apple advocate, or the others, then in fact they were never truly Apple advocates. The platform is a bad or good choice for the customer independent of whether you will have the opportunity to make money on it.

To: c-man who wrote (13977)	5/23/1998 3:56:00 PM
From: Alomex	Read Replies (1) \| Respond to of 213177

Great posting. The bulls here tend to gloss over the negatives of Apple, and your posting raises a few good ones: (MacWeek dropping the name and changing direction by end of June was the big jolt last week but clearly predictable given how thin that magazine had become). I was not aware of this one. This one should raise all manner of warning flags on an AAPL investor. What will be their new focus? You can preach the "BMW" model all you want to...but ultimately a Mac will have to have MAJOR TITLE software to survive, and software developers REQUIRE platform marketshare to develop their products, and decent platform marketshare requires Apple ADVOCATES Jobs has stated that he will focus on market niches (education, advertising, publishing). You don't need major titles for those. I personally know Apple's education resellers were strongly trying to sell eMates to our local schools...mere weeks before this announcement. That Apple allowed this to occur was morally unsupportable. Why the surprise? Have you forgotten the Apple ][ ? I was this > < close to buying one when the Mac came out. At the time I did not realise (1) the magnitude of the user screw up and (2) that it is Apple pattern to screw the user, be it with extremely expensive boxes, outdated OSes, broken promises, flaming boxes. The amount of good will this company gets for having a multicoloured logo never ceases to amaze me. People howl when M$ does things that are one tenth as bad... in my view, Apple is headed for one single goal - a true [exposed] hidden agenda - to DIRECT SELL 100% of their product. PERIOD. I'd say with one exception: CompUSA's SWAS . Otherwise I agree. And IMHO this is not all that bad. Apple's dealer network is in disarray and dying. They are mostly places where mac users walk in looking for an upgrade and walk out with a WinTel instead. Eliminating most of them makes a lot of sense. I laughed at the iMac specs...I think the article referenced today in this thread correctly nails this machine as a loser It seems clear to me now that iMacs are mostly oriented towards people who already own another Mac (which explains Jobs' reference to the six watches for every American triva factoid). Apple claims to have 20 and change million users out there (personally I think the actual figure is much smaller), but, say, even if it was one fifth of that number, you still have a potential market of 4-5 million users. Add a few educational sales and some internet home users and I think iMac will be a hit, but one very different from the VW bug. Lots of people who have never owned a VW beetle are buying one. iMacs wil be mostly confined to previous mac users and their relatives.

To: c-man who wrote (13977)	5/23/1998 10:21:00 PM
From: Bill Jackson	Read Replies (1) \| Respond to of 213177

C-man. One hopes that this is not some kind of Jobs Death dive and he has a strategy behind it. In factthere will be an entire tier squeezed out of the VAR channel soon as virtually all computers go to some variant of a direct model. Some like Dell never had any retail and are doing fine. Good reliable boxes are what Apple makes, and they connect well and quickly and so I see Apple as better at the direct model than Dell(who have a huge support structure for Wintel calls and deads on arrival). Apple will go direct and people like you will go to be site VARS and you should pursue this with Apple as they will want the customers who buy 500 for a nwetwork to deal with local support. This business will be the olive branch proffered to the APple vars/retailers cut off later on. This will be made clear later as they want to let the vars they killed just now to go away and stay away as the remaining dealers will become the service-vars of the future. The VA they will add will be the netrok service and other stuff that needs hands on people. I do not think Apple will try to do that work in house. The beaurocracy will be horrible, so they will farm that out. It is a survival modus. It will allow prices to fall and margins to remain and give Apple the ablity to be nearly competitive with the WIntels(at least the premium ones) Bill BTW, I think the owner of Quark is intensely pro Apple and will be among the last to decamp, even if he does make a WIntel product I think he will keep the Apple product going.

To: c-man who wrote (13977)	5/24/1998 11:26:00 PM
From: Stephen Leung	Respond to of 213177

Great Post Congrats on a very introspective post. I really agree with you on most points. However, times are changing, I think Apple is just trying to cut costs with less resellers. As you can tell the short term will see Apple share price spiking down along with the rest of the hi-tech co's. All the news on Apple is already out. They failed on their OS strategy terribly which is what's it all about (why didn't they come up with Mac OS X before? - all these changes in OS development is setting software development behind for the Mac0. I think many consumers are becoming skeptical about the software development for the Mac. With the software lying in a few dominant players, both consumers and corporations alike will mainly choose the Wintel camp. With the MS Windows legal stupidity arising, Apple has missed a critical timing spot to release competitive OS. By the time Apple releases Mac OS X, Win NT will be firmly entrenched.