Apple Stock Tumbles On Reported Production Problems With New iMac
Those of you who are waiting already know that but here's the article:
<a href="http://news.com.com/2100-1040-846748.html" target="_blank">http://news.com.com/2100-1040-846748.html</a>
<a href="http://news.com.com/2100-1040-846748.html" target="_blank">http://news.com.com/2100-1040-846748.html</a>
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<strong>Those of you who are waiting already know that but here's the article:
<a href="http://news.com.com/2100-1040-846748.html" target="_blank">http://news.com.com/2100-1040-846748.html</a></strong><hr></blockquote>
thanks for the info.
i wonder what they mean by "radiation problems."
The only way inventory would alarm investors is if Apple had a huge inventory. Actually, this probably why Apple does not have a huge inventory. Companies have to pay for inventory. Low inventory is a GREAT thing, don't get it twisted.
On the flipside, there is a potential issue with backorders being cancelled. However, the fact that the iMac is a hot seller should mitigate that factor.
The drop has to be for another reason. It's not because Apple can't make them fast enough. That doesn't even sound right.
[ 02-27-2002: Message edited by: gordy ]</p>
[ 02-27-2002: Message edited by: Tarbash ]</p>
<strong>Perfect example of some analyst spewing unconfirmed facts and investors freaking out. I guess those wallstreet guys haven't taken into account the fact Apple has probably sold WAY more than 200,000 iMacs so far. The fact they can't build them fast enough shouldn't be a problem (This is GOOD), and the production problem isn't confirmed by any solid sources. (No Quanta or Apple execs had any comments)
[ 02-27-2002: Message edited by: Tarbash ]</strong><hr></blockquote>
It's NOT good. it's very BAD. Those production numbers are pitiful. And are coming NO WHERE NEAR meeting demand. Apple has a product but not the capacity to deliver it. that's not a good business model. They also can't charge the customers until it has been built or shipped I believe.
Apple is sitting on HUGE revenue and they are screwing up. Way to go. You would think they would have learned by now.
<img src="graemlins/oyvey.gif" border="0" alt="[No]" />
<strong>Apple is sitting on HUGE revenue and they are screwing up. Way to go. You would think they would have learned by now.
<img src="graemlins/oyvey.gif" border="0" alt="[No]" /> </strong><hr></blockquote>
By now, we should understand that there is absolutely no way in hell that anyone can anticipate all the snags that come in a first mass production run. It is definitely bad for this quarter's numbers, but if you can be on the good side of bad, being unable to fill so many orders is better than not having demand and having a huge inventory. Honestly, it's bad news short term (unless you think they'll never be able to ship those iMacs), and will probably have a big hit in their numbers come March so their stock is reflecting this now plus the typical a knee-jerk reaction.
It does represent possibly (and likely) really big numbers after the quarter closes during March, so if you're in for the long term (and you should be with equities), then buy some more now while it's on sale.
i wonder when ill get my imac...
Is this a real problem?
Is there another facility of the mid and low-range iMacs?
Urgent issues for AAPL.
??
Dr. L
<strong>Things will eventually work out. They're not making toasters here. Many analysts complained that it was the wrong time for Apple to introduce a new iMac. Apple was right however. Getting the production kinks out in a normally slow quarter means that when the big sales come this Fall, they'll be flying out of the plant into customers hands. Any production short-fall will be made up in ensuing quarters. Also, Apple has not made any statements so this should be taken with a grain of salt, possibly a large grain of Kosher salt!</strong><hr></blockquote>
yea, like apple is going to come out and say they are having problems
<img src="graemlins/oyvey.gif" border="0" alt="[No]" />
even at max production apple expects only 100,000 units a month. obviously that is not enough.
<strong>Low inventory is never a reason for investors to be alarmed. </strong><hr></blockquote>
Err...you should probably steer clear of the stock market with thoughts like that.
If a company's production levels are below what they should be they are making less revenue than they could. If it is just a short term boom in sales then market price will head up. If there is so much as a rumour of production problems though the price will drop and often significantly for the short-term.
Production issues are an indication of some very poor management so don't expect either Quanta or Apple to come out saying "Yes we can't produce computers".
You might see Apple make a statement if this isn't resolved quickly to the effect, "Due to overwhelming demand Apple has signed a contract with Patron X to increase production capacity for the new iMac". No reasons why demand couldn't be met and in fact it looks like sales are just better than expected. Common move although you have to be careful since it can come out in quarterly earnings.
All that said it is hard without inside knowledge to know how true or bleak it is for Apple. Also their sales figures are likely largely based on pre-orders and expected shipments.
Inability to meet production is never good for a company trying to lift marketshare though.
If you are wondering that comes from experience on these matters. I worked as a consultant in that area for quite a substantial time. Ensuring adequate production and logistical solutions and solving issues in that area for companies took up a good part of my life
1). Is there a production problem or not?
2). If it was LCD related, I would consider it an Apple mistake--has the Samsung connection failed or was that just a bad investment and poor planning by Apple? <img src="graemlins/hmmm.gif" border="0" alt="[Hmmm]" />
3).Is there a radiation problem---get this answered quickly or it will poison sales, remember the cracks in the cube controversy? :eek:
4). If Towers and iBooks are still selling well profit margins ironically will stay high, resulting in higher earnings. <img src="graemlins/smokin.gif" border="0" alt="[Chilling]" />
Get the truth out quickly and honestly, thereby cutting the controversy!
(BTW, if anyone REALLY needs an iMac and lives in Chapel Hill, NC, our student store on campus has 5 iMacs in stock)
I have my doubts about any serious show-stoppers with the design. There is likely the usual litany of full production snafus, but nothing terribly serious. They can open more lines and outsource the production once they get the kinks out of the system, but not before . Doing so just to get product in the channels will cost more because they would be re-inventing the wheel each time they opened up a new line without getting it right the first time.
Remember the original iMac took months to get to the market. Perhaps Apple should have run a similar approach so the tme to make production corrections could be marketed as a "countdown."
PS: keep an ear to the ground for any earnings warning from the fruit company.
[ 02-27-2002: Message edited by: BuonRotto ]</p>