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

To: Andrew Danielson who wrote (16639)	8/13/1998 10:37:00 PM
From: Jeff Hayden	Read Replies (1) \| Respond to of 213177

>>HOWEVER, iMacs are lower margin, and lower unit priced than the rest of the G3 line.<< What makes you think that? From what little we've heard from Apple, the iMac enjoys a very good margin. I haven't a clue what it is, however.

To: Andrew Danielson who wrote (16639)	8/13/1998 11:17:00 PM
From: Pravin Kamdar	Read Replies (3) \| Respond to of 213177

Andrew, Apple is trying to seize the day with the iMac and expand market share at the expense of short term profit. The $100 million ad campaign proves this. Today's converts to the iMac are tomorrow's buyers of towers and laptops. Pravin.

To: Andrew Danielson who wrote (16639)	8/14/1998 1:20:00 AM
From: Sam Scrutchins	Respond to of 213177

HOWEVER, iMacs are lower margin, and lower unit priced than the rest of the G3 line. It's the Powerbooks, with their huge margins and unit prices that will make the ultimate effect on the Q4 revenue and bottom line numbers. Andrew, Just a thought FWIW. I suppose that Wall Street is much more interested right now in market share than in profits. To be reasonable, I think that Apple still must beat forecasts, but despite a margin reduction (and lower relative earnings), if Wall Street view Apple as a comeback story (and given the relative power of Macs vs. PC's), then it may not give a damn about slightly lower profits for Q4. Again, just a thought. Sam

To: Andrew Danielson who wrote (16639)	8/14/1998 9:05:00 AM
From: smartInvestor	Respond to of 213177

I was tossing around some numbers for Q4, and I came to one conclusion: it's the powerbooks that matter, not the iMacs. I'll take units over revenue at this point. If it means a short-term drop in the stock price, so be it. Units are critical for Apple longer term.

To: Andrew Danielson who wrote (16639)	8/14/1998 11:50:00 AM
From: Eric Yang	Respond to of 213177

"I was tossing around some numbers for Q4, and I came to one conclusion: it's the powerbooks that matter, not the iMacs. " Andrew, you're very sharp in picking up that point. I wouldn't go as far as saying that iMac won't matter this quarter but I think a lot of people don't realize how much Apple will benefit from PowerBooks this quarter. Even with the reported G3 PowerBooks supply issue (which I think won't be much of the issue by the time Q4 ends), I expect the revenue from laptops to jump this quarter. This is due to two factors: 1) higher unit shipment. 2) higher average unit price. AUP Significantly higher unit shipment than 103K last quarter is expected of course as production ramps up this quarter. Higher average unit price on laptops is also expected this quarter because 1) there were no price drops 2) lower priced pre-G3 laptops (which accounted for 31% of total laptops) are pretty much gone this quarter. I expect laptop AUP to jump from $2452 to $2800 or higher or an increase of $350. The combination of higher unit count and higher AUP means much higher laptop revenue. The fact laptop revenue is expected to make up a higher percentage of total revenue (from 18% of sales to 25%+ estimate in Q4) means that these high margin machines will have a greater impact on overall margin this quarter than the last. Of course one must factor in the margin for consumer line (iMac/AIO) and Pro line (G3 DT/MT) to get a good picture of the overall margin for Q4. As of now I think it looks very good. Margin for the iMacs is an interesting topic. But I think we can save that for a down market day... ;-) Eric