<strong>I dont think Apple have ever sold more than 4 million macs/year under SJ,
* snip *
Apple is not growing revenue, Apple is not growing unit sales.
</strong><hr></blockquote>
Apple was growing revenue, Apple was growing unit sales. It is only this last year that they fell on their faces.
Apples unit sales and revenue for the past few fiscal years (since Jobs' return) are as follows:
1998: 2.763 million cpus, $5.941 billion
1999: 3.448 million cpus, $6.134 billion
2000: 4.558 million cpus, $7.983 billion
2001: 3.087 million cpus, $5.363 billion
Apple's last year was not good primarily, in my opinion, due to the abysmal desktop line. The iMac was obsolete, the Powermac is obsolete. This last year iBook sales were up a little, powerbook sales were down slightly, but iMac and PowerMac sales were off by about 40%, which is primarily where the 2001 drop is seen. I agree that we need the G5 by MWNY to invigorate PowerMac sales, but the new iMac will do wonders for the FY02 numbers.
Apple was profitable this first quarter dispite the economy, Sept. 11, and PC makers slicing each other's throats. I think apple is the first computer company that feels a recession or up turn, and you can bet with a G5 and the new iMac Apple's marketshare will increase buy a percent.
<strong>Belle, I think we are arguing different sides of the same coin, or perhaps we aren't even in disagreement at all.</strong><hr></blockquote>
I think we are in agreement for the most part.
[quote]<strong>if you mean that Apple needs to expand their share over this last quarter, then I agree. Last quarter was terrible, due in no small part to the stagnation of the desktop lines. But as long as Apple can maintain their average over the last few years of 4-5% I don't see them being in any real trouble.</strong><hr></blockquote>
No, I think Apple needs to increase its market share above the 4-5% it holds now, and as I said before, clearly Apple agrees.
The problem lies in Apple's recent history. When Jobs returned in 1997, he chopped away a hell of a lot of dead wood, and a whole chunk of living, leaf-bearing wood while he was at it, in an attempt to save the company.
Apple dropped unprofitable lines, disposed of warehouses full of Macs, lost a decent bit of its workforce, bought back stock, offered stock to employees, and took a variety of steps to keep a dying company afloat.
Whilst taking these steps to stabilize the company, it also took steps to advance its position, most notably by creating the iMac and iBook projects, and proceeding with Mac OS X. From the summer of 1998, the steps started bringing Apple back into financial stability, and then profit, and held Apple's market share.
But it's now 2002, and despite many further steps (The release of OS X, consumer apps like iTunes, technical introductions like FireWire and SuperDrive, the iPod, LCD displays) there is no sign of that market share increasing.
So what we've got is a company without prospect for growth, and this is the main reason market analysts have been so wary, and why Apple has taken the drastic step of opening stores.
While it doesn't necessarily mean Apple will go out of business tomorrow, or even this year or next, it's a nasty hole that Apple has to climb out of. What is very worrying is that the economy problems of last year saw some of Apple's competitors bite the dust, and even so early in 2002 it looks like some more are going to disappear, but there's no indication Apple is picking up the customers.
A company with no growth and no obvious potential for growth will eventually suffer horrendously as the value of its stock drops.
[quote]<strong>However, I don't think that this is what Dell is talking about. He seems to be saying that Apple needs to expand to > 6% to continue doing what they are currently doing, and I disagree with that sentiment.</strong><hr></blockquote>
This is the point we disagree on. He's right. Apple must increase its customer base. It's been almost five years since Jobs started picking up the pieces of a broken Apple, and he (and his team) have done a remarkable job of returning it to a sound financial position, but in that time the company has not grown.
[quote]<strong>There is a bit of concern over the next few quarters, but that concern is that Apple will lose sales, and lower its marketshare despite the R&D spending. This is a very real possibility, but it has nothing to do with Mike's statement. As long as Apple maintains both its marketshare and its margins, they will be able to continue creating new hardware designs. Every scenario to the contrary is based on lowering Apple's share or reducing margins.</strong><hr></blockquote>
To keep up, Apple is going to have to maintain its margins, and increase its R&D budget and bottom line costs. To do this and stay profitable, you have to increase your revenue, and the only way to do that without increasing margins (At 30%, this wouldn't be terribly popular) is to increase sales.
Apple can't sit back and just maintain current market share.
[quote]Originally posted by JLL:
<strong>It was a 37% increase compared to the same quarter last year.</strong><hr></blockquote>
Yikes, don't use the first quarter of 2001 as a comparison. That was one of the darkest times since 1997.
[quote]<strong>Rumors are just that - rumors.</strong><hr></blockquote>
Not rumors. Apple has been cutting jobs since the 50 that went last summer. There were stories in the local press before Christmas, and interviews with former employees. And Apple's CFO said there'd be further reductions during the conference call earlier this week.
<strong>So what we've got is a company without prospect for growth, and this is the main reason market analysts have been so wary, and why Apple has taken the drastic step of opening stores.
While it doesn't necessarily mean Apple will go out of business tomorrow, or even this year or next, it's a nasty hole that Apple has to climb out of. What is very worrying is that the economy problems of last year saw some of Apple's competitors bite the dust, and even so early in 2002 it looks like some more are going to disappear, but there's no indication Apple is picking up the customers.
A company with no growth and no obvious potential for growth will eventually suffer horrendously as the value of its stock drops.</strong><hr></blockquote>
Apple is growing, just not as fast as the Wintel segment.
You can't look at market share alone - the number of Mac users is just as important.
[quote]Originally posted by Belle:
<strong>Yikes, don't use the first quarter of 2001 as a comparison. That was one of the darkest times since 1997.</strong><hr></blockquote>
I compare Q1 to Q1 - that's how it's done. But comparing to other quarters it was still an increase.
[quote]Originally posted by Belle:
<strong>Not rumors. Apple has been cutting jobs since the 50 that went last summer. There were stories in the local press before Christmas, and interviews with former employees. And Apple's CFO said there'd be further reductions during the conference call earlier this week.
</strong><hr></blockquote>
You're comparing a company that lays off 5-10% of their work force to Apple that lays off <.1% ?
[quote]Not rumors. Apple has been cutting jobs since the 50 that went last summer. There were stories in the local press before Christmas, and interviews with former employees. And Apple's CFO said there'd be further reductions during the conference call earlier this week.<hr></blockquote>
True, Apple has been firing some employees, but for a company as large as Apple is having 50 people go in a summer is not unushual. Companies are always trying to trim their workforces of people who are underperforming. Whether these firing's are just the standard adjustment of the workforce, or serious cuts aimed at keeping profits high is unknown, at least to me. But I would suspect it's mearly the standard workforce adjustment. I doubt that firing 50+ people would have any sizeable effect on Apples finnacials. Purhaps Apple has become a little more thorough in their trimming becuase of the global economy, but its certainly not full on layoffs.
[quote]Porsche has a very small market share and spends a ton on money on R&D, they are in an even smaller niche of the auto market than Apple is in the computer market. But they are an exceptionally successful company right now. They succeed because there is a large enough absolute number of people who want their machines. Over time their market share has fallen (because the total market size has grown substantially--mostly at the lower end), but the current total customer base is slightly larger than historical highs. Sound roughly familiar? Boxster/iMac? Etc???<hr></blockquote>
Problem with the car analogy is that none of the car mfg's, no matter the market share really has to worry about infrastructure--all the stuff that makes owning a car work. Its all there subsidized by govt's or in place because there are no "platform" issues [okay, I'm not talking about car tweakers and those specialties]. For Apple to move beyond its "holding" pattern they have to get more marketshare--so that infrastructure like apps, drivers, peripherals and the like start appearing with greater speed and regularity.
They are in a position to so that with OSX, the rumored G5, and other iPod-like products. Though it always seems like a tough and long slog waiting for Apple to deliver.
First (and ultimately only) rule of microeconomics: a buck is a buck.
Most people look at a dollar relative to the total price of the item. So they see saving a buck on their computer as insignificant, but see a dollar off of a supermarket chicken and it's a deal. It's the same amount of money, period. In other words, percentages don't tell the whole truth. If Apple is increasing its customer base, but the marketshare is down because the overall customer base is growing faster, then Apple is still growing its customer base. That's why Porsche can do what it does. Customers are customers. They equate to money. More customers, more money no matter what the rest of the world is doing.
Obviously, market share is relavant. It measures the first derivative of income: growth. Apple's sales aren't growing as fast as the total sales of computers. You can argue how the total number of computer sales is computed, but that much is true I'm sure. It' does NOT necessarily mean that Apple's sales are shrinking. There's missed opportunities to be sure. and it will affect the bottom line, mostly in terms of perception than in real money terms: a buck is a buck.
How the hell does this topic belong in Future Hardware? Other than the lame excuse that Apple's demise as a company means no new hardware. <img src="graemlins/bugeye.gif" border="0" alt="[Skeptical]" />
<strong>Have you seen the Buisness Week article yet?
"Apple cant make killer new hardware for much longer, and sucking away R&D funds if they dont expand maeket share"
Somebody put a bullet in Mike's head. Please.</strong><hr></blockquote>Why shoot the messenger? He's right! Hey Mike Dell built and runs the largest PC company in the world! Unlike you i think you could say that he knows what he's talking about!!!
The cube the cube! This is the computer that sent Apple into a tailspin! Take away the cube dabacle and Apple isn't in the percipitus position it is in today! Talk about a waste of R&D! When you have a company that's always on the brink, a disaster like the cube is enough to kill it! <img src="graemlins/smokin.gif" border="0" alt="[Chilling]" /> <img src="graemlins/smokin.gif" border="0" alt="[Chilling]" />
Comments
<strong>I dont think Apple have ever sold more than 4 million macs/year under SJ,
* snip *
Apple is not growing revenue, Apple is not growing unit sales.
</strong><hr></blockquote>
Apple was growing revenue, Apple was growing unit sales. It is only this last year that they fell on their faces.
Apples unit sales and revenue for the past few fiscal years (since Jobs' return) are as follows:
1998: 2.763 million cpus, $5.941 billion
1999: 3.448 million cpus, $6.134 billion
2000: 4.558 million cpus, $7.983 billion
2001: 3.087 million cpus, $5.363 billion
Apple's last year was not good primarily, in my opinion, due to the abysmal desktop line. The iMac was obsolete, the Powermac is obsolete. This last year iBook sales were up a little, powerbook sales were down slightly, but iMac and PowerMac sales were off by about 40%, which is primarily where the 2001 drop is seen. I agree that we need the G5 by MWNY to invigorate PowerMac sales, but the new iMac will do wonders for the FY02 numbers.
<strong>Belle, I think we are arguing different sides of the same coin, or perhaps we aren't even in disagreement at all.</strong><hr></blockquote>
I think we are in agreement for the most part.
[quote]<strong>if you mean that Apple needs to expand their share over this last quarter, then I agree. Last quarter was terrible, due in no small part to the stagnation of the desktop lines. But as long as Apple can maintain their average over the last few years of 4-5% I don't see them being in any real trouble.</strong><hr></blockquote>
No, I think Apple needs to increase its market share above the 4-5% it holds now, and as I said before, clearly Apple agrees.
The problem lies in Apple's recent history. When Jobs returned in 1997, he chopped away a hell of a lot of dead wood, and a whole chunk of living, leaf-bearing wood while he was at it, in an attempt to save the company.
Apple dropped unprofitable lines, disposed of warehouses full of Macs, lost a decent bit of its workforce, bought back stock, offered stock to employees, and took a variety of steps to keep a dying company afloat.
Whilst taking these steps to stabilize the company, it also took steps to advance its position, most notably by creating the iMac and iBook projects, and proceeding with Mac OS X. From the summer of 1998, the steps started bringing Apple back into financial stability, and then profit, and held Apple's market share.
But it's now 2002, and despite many further steps (The release of OS X, consumer apps like iTunes, technical introductions like FireWire and SuperDrive, the iPod, LCD displays) there is no sign of that market share increasing.
So what we've got is a company without prospect for growth, and this is the main reason market analysts have been so wary, and why Apple has taken the drastic step of opening stores.
While it doesn't necessarily mean Apple will go out of business tomorrow, or even this year or next, it's a nasty hole that Apple has to climb out of. What is very worrying is that the economy problems of last year saw some of Apple's competitors bite the dust, and even so early in 2002 it looks like some more are going to disappear, but there's no indication Apple is picking up the customers.
A company with no growth and no obvious potential for growth will eventually suffer horrendously as the value of its stock drops.
[quote]<strong>However, I don't think that this is what Dell is talking about. He seems to be saying that Apple needs to expand to > 6% to continue doing what they are currently doing, and I disagree with that sentiment.</strong><hr></blockquote>
This is the point we disagree on.
[quote]<strong>There is a bit of concern over the next few quarters, but that concern is that Apple will lose sales, and lower its marketshare despite the R&D spending. This is a very real possibility, but it has nothing to do with Mike's statement. As long as Apple maintains both its marketshare and its margins, they will be able to continue creating new hardware designs. Every scenario to the contrary is based on lowering Apple's share or reducing margins.</strong><hr></blockquote>
To keep up, Apple is going to have to maintain its margins, and increase its R&D budget and bottom line costs. To do this and stay profitable, you have to increase your revenue, and the only way to do that without increasing margins (At 30%, this wouldn't be terribly popular) is to increase sales.
Apple can't sit back and just maintain current market share.
[quote]Originally posted by JLL:
<strong>It was a 37% increase compared to the same quarter last year.</strong><hr></blockquote>
Yikes, don't use the first quarter of 2001 as a comparison. That was one of the darkest times since 1997.
[quote]<strong>Rumors are just that - rumors.</strong><hr></blockquote>
Not rumors. Apple has been cutting jobs since the 50 that went last summer. There were stories in the local press before Christmas, and interviews with former employees. And Apple's CFO said there'd be further reductions during the conference call earlier this week.
<strong>So what we've got is a company without prospect for growth, and this is the main reason market analysts have been so wary, and why Apple has taken the drastic step of opening stores.
While it doesn't necessarily mean Apple will go out of business tomorrow, or even this year or next, it's a nasty hole that Apple has to climb out of. What is very worrying is that the economy problems of last year saw some of Apple's competitors bite the dust, and even so early in 2002 it looks like some more are going to disappear, but there's no indication Apple is picking up the customers.
A company with no growth and no obvious potential for growth will eventually suffer horrendously as the value of its stock drops.</strong><hr></blockquote>
Apple is growing, just not as fast as the Wintel segment.
You can't look at market share alone - the number of Mac users is just as important.
[quote]Originally posted by Belle:
<strong>Yikes, don't use the first quarter of 2001 as a comparison. That was one of the darkest times since 1997.</strong><hr></blockquote>
I compare Q1 to Q1 - that's how it's done. But comparing to other quarters it was still an increase.
[quote]Originally posted by Belle:
<strong>Not rumors. Apple has been cutting jobs since the 50 that went last summer. There were stories in the local press before Christmas, and interviews with former employees. And Apple's CFO said there'd be further reductions during the conference call earlier this week.
</strong><hr></blockquote>
You're comparing a company that lays off 5-10% of their work force to Apple that lays off <.1% ?
[ 01-19-2002: Message edited by: JLL ]</p>
True, Apple has been firing some employees, but for a company as large as Apple is having 50 people go in a summer is not unushual. Companies are always trying to trim their workforces of people who are underperforming. Whether these firing's are just the standard adjustment of the workforce, or serious cuts aimed at keeping profits high is unknown, at least to me. But I would suspect it's mearly the standard workforce adjustment. I doubt that firing 50+ people would have any sizeable effect on Apples finnacials. Purhaps Apple has become a little more thorough in their trimming becuase of the global economy, but its certainly not full on layoffs.
[ 01-19-2002: Message edited by: Falcon ]</p>
Problem with the car analogy is that none of the car mfg's, no matter the market share really has to worry about infrastructure--all the stuff that makes owning a car work. Its all there subsidized by govt's or in place because there are no "platform" issues [okay, I'm not talking about car tweakers and those specialties]. For Apple to move beyond its "holding" pattern they have to get more marketshare--so that infrastructure like apps, drivers, peripherals and the like start appearing with greater speed and regularity.
They are in a position to so that with OSX, the rumored G5, and other iPod-like products. Though it always seems like a tough and long slog waiting for Apple to deliver.
Most people look at a dollar relative to the total price of the item. So they see saving a buck on their computer as insignificant, but see a dollar off of a supermarket chicken and it's a deal. It's the same amount of money, period. In other words, percentages don't tell the whole truth. If Apple is increasing its customer base, but the marketshare is down because the overall customer base is growing faster, then Apple is still growing its customer base. That's why Porsche can do what it does. Customers are customers. They equate to money. More customers, more money no matter what the rest of the world is doing.
Obviously, market share is relavant. It measures the first derivative of income: growth. Apple's sales aren't growing as fast as the total sales of computers. You can argue how the total number of computer sales is computed, but that much is true I'm sure. It' does NOT necessarily mean that Apple's sales are shrinking. There's missed opportunities to be sure. and it will affect the bottom line, mostly in terms of perception than in real money terms: a buck is a buck.
" DUDE! YER GETTIN A DELL!"
<strong>hope nobody said it yet...
" DUDE! YER GETTIN A DELL!"
SHUT UP!
<strong>steve said it best...apple competes through innovation. dell competes by being wal-mart.
dell may have marketshare, but they'll never have style. as long as mike is CEO, they'll never have class either.</strong><hr></blockquote>
2.9% market share! Some innovation!!!
<img src="graemlins/smokin.gif" border="0" alt="[Chilling]" />
<strong>Have you seen the Buisness Week article yet?
"Apple cant make killer new hardware for much longer, and sucking away R&D funds if they dont expand maeket share"
Somebody put a bullet in Mike's head. Please.</strong><hr></blockquote>Why shoot the messenger? He's right! Hey Mike Dell built and runs the largest PC company in the world! Unlike you i think you could say that he knows what he's talking about!!!
<img src="graemlins/smokin.gif" border="0" alt="[Chilling]" /> <img src="graemlins/smokin.gif" border="0" alt="[Chilling]" />
[ 01-20-2002: Message edited by: rbald ]</p>
<strong>The cube the cube! This is the computer that sent Apple into a tailspin</strong><hr></blockquote>
No, the economy did, and Apple has done far better than most of the other computer manufacturers.
[ 01-20-2002: Message edited by: JW Pepper ]</p>