Slashdot Mirror
Apple Reports Q1 Loss
Amsterdam Vallon writes "Apple recently reported an $8 million loss, its second straight loss, compared with a $38 million profit a year ago. It seems that upbeat laptop sales weren't enough to get this company out of the Wall Street basement. Hopefully, with increasing Mac OS X and wireless-related sales, we'll see a nice increase come next quarter and after that, perhaps a jaunt toward profitability!" The back was apparently tipped into the red with one-time restructuring losses, else there would have been a modest profit; Apple expects stagnant revenues for the near future.
And now it's easier to run Linux software on Macs thanks to Apple's release of X11 for Mac OS X.
Karma: The shiznight, mostly because I am the Drizzle.
It costs $20m to restructure? Jeez -I can't even imagine that kind of money. Where does that kind of money go when you restructure? And try to keep replies as cynical-less as possible :)
They're a honest established American company. They're not doing so well because of cheap alternatives flooding the market. They still produce quality products, but because of the high appeal of lower-priced alternatives (though not of the same quality) their market share has dropped significantly. Does this sound like Harley Davidson or what? I think that the US of A could lend them a hand and help them get their production costs down and get Apple back in the running for decades to come.
but nobody wants to buy a PowerMac G4 when they feel a G5 is right around the corner. Unfortunately, anyone who watches the Mac scene knows that "G5s" have been around the corner now for two years.
I predict the largest problem for Apple is that even when the G5 finally ships, it'll be a lets-get-what-we-can-out-the-door-now type system based on the new IBM PowerPC/Altivec chip.
Personally, I hope Apple waits (...and waits...) until they have a box to really thump the x86 side of things again before they attempt to release anything under the title of a new generation.
The first G4 motherboards sucked.
Apple's Q1 results are pretty much what the stock geeks expected. The whole industry is bad shape from the dot-com bubble burst, with sales & prices *way* down from "the good old days".
Apple's got over four billion dollars cash in the bank, good (& stable) leadership, an established (& loyal) market base, and an impressive R&D program. They're getting through the "Gigahertz Gap" and moving away from the chip supplier that caused it (Motorola).
Apple is not a massive-financial-leverage house of cards (Enron, WorldCom, etc.) that needs a high stock price. Apple stockholders are not a fast-buck-happy mob who'll burn the company's future for great numbers for a quarter or few.
Bottom line: Apple is far too healthy a company and far too sober a stock to need to care much about routine quarterly financials.
It's easy to make up & spread cool- and credible-sounding stuff. Finding & checking hard facts is hard work.
Of course, reader #1 has a fundamentally conflicted position... he hates proprietary software, yet he buys a bleeding-edge machine and runs the latest Windoze games on it, thereby supporting proprietary software and the Microsoft monopoly.
If you're going to spend money on proprietary software, you might at least support UNIX, open source, and non-monopoly manufacturers by buying a Mac. There *are* adequate numbers of Mac games, after all.
(Don't try to convince me all those PC gamers are buying 2GHz machines so they can play Nethack really fast... or even GLQuake.)
GCHQ Quantum Insert installed. If only our tongues were made of glass, how much more careful we would be when we speak
To keep things in perspective. After a loss of $431 million last quarter. Revenue was not that much larger than the quarterly loss, at $2.8 billion. Apple loses $8 million after a restructuring charge, adds $125 million to its cash, keeps its r&d spending up and I'm supposed to feel bad?
Well then an easy solution is to buy old computers on ebay. I often see computers going for much less than the monitor is worth.
Well I've been buying Macs "regularly" since they came out. I bought one in 1984. I bought another one in 1991 or so. Bought one in 1998. Bought one in 2001. I *might* get one this year.
In the old days you could use a Mac for a LONG time before needing a new one. (These days Mac technology is moving faster it seems).
I buy new x86 Linux boxes at least once every two years. They are cheap, and lose their value so fast it makes more sense to ditch them regularly (I always try and sell my boxes before getting new ones, I'm not interested in "collecting" boxes).
*shrug*
These numbers don't tell you how many people are using Macs, just how many are being purchased in certain channels.
Not that it matters how much market share apple has..?
Put another way, they could take a $250M quarterly hit over four years & *still* be around!
Alison
"It is a miracle that curiosity survives formal education." - Albert Einstein
The declining profits are due to one thing. Apple is spending more money to sell the same number of computers.
You have the "switch" ads on TV and the not very successful Apple Stores.
Sadly, Apple tried to do what Gateway did with their stores, and so far has failed.
Whenever I go to an Apple Store, there is always a lifelong Mac user in there as well as a few younger PC types checking out the hardware. Not very often I have I seen anyone buy anything.
Gateway stores... lots of PC people, a few looking to buy a new system.
Being a salesperson, I really see the difference between the people that are "just looking" versus the people that have an intent to purchase something.
The stores aren't cheap to run, and if they don't have the effect of increased company sales...
And we all know how cheap TV ads have become...
Apple computers are luxury goods compared to you barebones PC. This is not to say apple products are expensive for what you get, actually they are a screaming deal for what you get. It's even arguable that apple's have lower long term costs. But faced with budgetary limits, people will seek short term economies and cheap PC's or NO pc at all is it.
On the otherhand this is leading to a lot of defered purchases. When the economic confidence resumes or companies reach a point where they have to upgrade they will make those purchases. So I think it's important to look not just at apple's sales relative to PC sales, but rather to apple's installed base. Those people are the ones that are defering purchases and will likely be purchasing apples in the future.
I've read apple has a fair amount of cash in the bank and they have a relatively adaptive production line. Thus they are in a good position to do research and develop strategic products (keynote, iPhoto, OSX, G5 architectures, Xraid) during the economic downturn. If they restructure a bit to minimize cash burn and keep innovating they will win when the market inproves. Some evidence can be seen at the consumer elctronics show where the most innovative ideas were a nerd watch and an ovrsized ipod that cant play DVDs. The collective PC idustry is not spending money on research there are no venture capital to launch new things. Mean while apple chugs out all sort of new stuff single handedly.
it's anyone's guess when this economic downturn will end. By the end of it there's going to be a lot of consolidationa and carnage inthe PC industry. what will emegre will be fewer companies with either the leanest production or the most innovative products. Apple will benefit on both ends. their production costs will go down due to the lower costs of production of electronics and they will have the most uniquely differentiated products. So it's really a question of staying solvent not making money at this point in the game.
Some drink at the fountain of knowledge. Others just gargle.
You're absolutely right, and I can back that statement up with a case in point.
My mother's been using "hand-me-up" Macs for years now; that is, every time I bought a new Mac, I gave her the one it was replacing. This had been working quite well, because as a fairly modest user, she never needed the latest and greatest. She does a bit of word processing, web surfing, and email... A Mac from three or four years ago is more than sufficient.
In recent months, the monitor on her Mac started borking. After about 10 minutes the picture would begin to fade, getting gradually worse until it was impossible to read anything. I suggested a new monitor, but she decided that if she was going to spend the money on a new monitor, she might as well spring for a new computer as well. After several months of putting it off for financial reasons, she did.
This week she went down to the Apple store and bought a brand new iMac with a flat-screen monitor (and a 40 gig HD that she'll never come close to using, sigh!). Point being, she was doing just fine with what she had until extenuating circumstances - the monitor going out - made her upgrade. If it hadn't been for the fact that money's a bit tight, she would have bought the new Mac months ago. On the other hand, if it hadn't been for the bad monitor, she'd have waited until there was a bit more juice in the bank before upgrading.
When the economy gets rolling again, there will be a lot of people in similar situations who buy again when they see their bank balances level out. I'll be one of them. Having to setup and configure OS X to my mom's liking on the new Mac has got me hooked... As soon as I can afford it (yes, I'm literally too broke to spend $129) I'll be buying myself a copy of OS X for my G4. And yes, one day I'll buy another Mac or three.
Apple's far from dead. They're just suffering along with the rest of us until 2004.
"BSD: Free as in speech. Linux: Free as in beer. Windows 10: Free as in herpes." --Man On Pink Corner in #52607549.
But they have always catered to that same population, and they have not always lost money.
It was bound to happen because the economy is in the crapper and EVERYONE (mostly) is losing money.
Finkployd
An $8-million loss? That's Awesome. Let me get this right...
A couple days after rolling out upgrades of iCal, iSynch, introducing the totally new products Safari, Keynote, a 17" PowerBook without peer and a 12" PowerBook without peer -- during a deep and protracted recession -- and Apple announced that they lost only $8-million?
Considering their business volume, that's basically a wash. Plus, that's got to be the best $8-million dollars spent last quarter and there are dozens of high-tech CEO's that would give their right nut to have done as well.
Look at the big picture, everyone.
--Richard
Austin, Texas