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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Merritt who wrote (29995)	7/19/1998 6:45:00 PM
From: Janice Shell	Read Replies (1) \| Respond to of 132070

How do you feel about COB?

To: Merritt who wrote (29995)	7/19/1998 6:50:00 PM
From: Janice Shell	Read Replies (2) \| Respond to of 132070

HAHAHAHAHA I'll have it YET....

To: Merritt who wrote (29995)	7/20/1998 11:20:00 AM
From: Knighty Tin	Read Replies (1) \| Respond to of 132070

Merritt, My look at Apple has also shown that part of the profits may be real. I still think the big writeoffs put them on steroids, but they have chopped revenues and costs to the bone. Now the question is, can they grow? MB

To: Merritt who wrote (29995)	7/26/1998 4:09:00 PM
From: Thomas M.	Read Replies (3) \| Respond to of 132070

upside.com Worms in Apple's Comeback? June 10, 1998 By Aaron Goldberg Give a spin master an inch, and he'll take 3. Give Steve Jobs an inch, and he'll be racing around the block. Case in point: Jobs' talk of an Apple Computer Inc. comeback. But what exactly does comeback mean? Rational, thoughtful people--and Apple's recent stock price run suggests that some investors are neither--understand there's a huge difference between turning a company around and making a company turn the corner. Turning around means you stop doing stupid things that work against you. Turning the corner means you can outperform key players in your business. While Apple may show signs of the former, it is by no means accomplishing the latter. Whether or not Apple is growing is the key issue. The Cupertino, Calif., company contends that it is again growing faster than the market as well as gaining share. However, at Ziff-Davis Market Intelligence (formerly Computer Intelligence) in La Jolla, Calif., we measure what customers actually buy. And if you look at Apple's "sell out"--which refers to products customers buy rather than wares shipped to the channel--you'll see that the company's first-quarter growth was in the 10 percent range; however, the overall market grew about 25 percent, according to our figures. So where's this "outperformance" to which Jobs refers? In addition, based on the actual buying activity of business customers, Apple's share has been decreasing in commercial accounts. It may not be dropping as fast as it was, but it's not growing, either. And the consumer business is even softer: Apple missed the first year of the sub-$1,000 retail PC market, and its new iMac systems are still priced about $300 too high. Add to that the fact that the company has also dramatically reduced its number of retail distribution outlets. And let's not forget that Apple killed the clone business, which means it immediately got back 15 percent to 20 percent share of its Mac business. So now Apple has no leverage points from additional brands. "But, Aaron," you say, "Apple's sales numbers are improving." Ah, but let me explain how a one-time event is helping Apple. And let's talk about that dirty little industry secret: channel inventory. In the third quarter of 1997, Apple averaged 25 sales days of channel inventory. In the fourth quarter, it swelled to 38 days. And in the first quarter of 1998, it jumped to 41 days! To be fair, it was trending down in March, but you've got to wonder if Jobs and company have been taking channel-stuffing lessons from Compaq Computer Corp. CEO Eckhard Pfeiffer. Now let's talk about the "rebound" effect. We all know that Apple under Gil Amelio was not delivering great product, nor was it stirring up the Apple faithful. The result was that Apple customers, in dire need of upgrades, weren't buying. Huge latent demand was building for decent new products. In comes Jobs, spirits rise, PR improves and products get better. So the pent-up demand is unleashed in a torrent of G3 buying. And the iMac, the first affordable Apple product in a dog's age, should also do well initially. But what then? What happens in the last two quarters of this year? This time frame scares me. Not only must Apple go from not screwing up to performing and executing well; it also must do so during a period when the competition will be raising the bar again. The Wintel world will be announcing a new range of even lower-cost ($600 to $800) products this fall. And Windows 98 will have become a market force. To save the company, Jobs talks about being a leading innovator, but Apple can't be a broad innovator. It doesn't have the money to pull it off. If you look at the relative R&D investment of Wintel, Java and Mac OS, Apple's Mac OS has maybe 1 percent of the dollars in R&D investment that Wintel has. Apple has been forced to focus on niches--which further reduces its chances of gaining share. So, much as I'd love to be on the bandwagon emotionally, rationally I can't climb on board. Underlying facts won't let me; I'm a rational, fact-driven, East Coast person. And while I don't doubt that Jobs has turned things around, that corner is still a long way up the block.