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

To: Mike Connolly who wrote (23507)	3/14/1999 10:35:00 PM
From: soup	Read Replies (1) \| Respond to of 213177

> Soup, any ideas on what Apple's future strategy might be to deal with color-specific imac shortages/imbalances< Make more of the colors in demand, etc. I don't think the five-palette dictum is still in force. Dealers can order what they want. I've also heard reports that all the iMacs LG is making are the blue/purple. >Also, the continued availability of Rev. B's seems to be taken by analysts as a sign of slow imac sales -- could you comment on whether or not this can be considered a valid indicator of sales?< Don't know. Depends a lot on the vendor and how they're being marketed. From my (Tekserve's) perspective, the average iMac shopper is less cost sensitive than color sensitive. CostCo purchasers are likely the opposite. Did quotes on four serious systems yesterday. (Pretty exhausting, btw.) While most of the weekday business is service related, Saturdays are becoming "CompUSA" days.

To: Mike Connolly who wrote (23507)	3/15/1999 3:18:00 AM
From: HerbVic	Read Replies (1) \| Respond to of 213177

>>...the continued availability of Rev. B's seems to be taken by analysts as a sign of slow imac sales... << The abundance of iMacs left in the channel would seem to be an indicator of slower than expected sales. Let's examine the logic behind the assumptions that would have to be correct in order to believe it so. The following assumptions would have to be true: A. That production of the 'B' iMacs ceased with the introduction of the 'C' iMacs. B. That the sales channel held a supply of 'B' iMacs that was consistent with normal inventory flow. C. That demand for the 'B' iMacs has some parity with the demand for 'C' iMacs. Defining the obvious: Assumption A is an unknown. To my knowledge, we do not know at which point Apple ceased production of the 'B' iMacs, because they did not tell us. If anyone does know, please share. Assumption B is false. We know that in channel sales of 'B' iMacs accelerated when Apple introduced the 'C' iMacs and reduced the MSRP along with the MWP on the 'B' iMacs. So much did the sales accelerate that there were some noises expressed about channel stuffing. Assumption C may be true, but there will be no measure to verify the assumption until the end of the quarter. Examination based on ethos: My optimist's best guess would be that, faced with an unexpected increased demand for 'B' iMacs at the lower tier price, Apple continued to produce 'B' iMacs on some production lines until the orders were filled. Let's face it. We're talking about production of a monitor stuffed with a motherboard, a hard drive and a CD ROM, all out sourced shelf parts except for the motherboard. The mail order houses correctly anticipated a huge demand for under $1000 bondai blues and as a group, incorrectly over booked. My pessimist's best guess would be that Apple intentionally over produced the 'B' iMacs for the first quarter to insure there would be no shortages, then leveraged the inventory reduction act in late December and early January with volume incentives. That may also explain why the bulk of them ended up in the mail order channel. The real answer to what happened may be somewhere in between. The answer to the "slow iMac sales?" question may lie in the details of a totally different analysis method. Since there are 5 'C' iMac products and one bondai blue left in the channel, one might expect it to take a little longer to clear the channel of the lesser machine. And since they all seem to be selling well except the orange and green, we could say that there are perhaps 4 successful iMacs this quarter where there used to be only one. Let's look at what we do know. The pricing pressure being experienced in the Wintel world is due to saturation, not fall off in demand. With industry growth estimated at 13% a year, and Apple marching to its own drummer, do we really need to worry that there's a slow down when the analysts are the only ones waving that flag? HerbVic