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Apple Plans to Grow to $10 Billion
mattmcal writes "Fred Anderson, CFO of Apple, this week outlined Apple's strategy for returning to its former self as a $10 billion company. He cited portability, digital lifestyle, and music as the three pimary drivers of this new strategy. Anderson announced last month that he plans to retire June 1 of this year."
$5 billion of that will be from iPod replacement batteries...
[obDisclaimer: I own a 1stG iPod and a 2ndG iPod - batteries still as good as new. But the headphones......
And of course, they would get to that $10 billion sooner if they would release a G5 laptop.
I can personally guarantee them to get $3k closer when they do...]
Fred Anderson is the CFO, NOT CTO...
Am I the only one thats a bit skeptical that hes saying this right before retirement?...
Seems to me like a:
1.) Talk up Apple, raise share price.
2.) retire, have all options vest.
3.) Profit!
situation to me.
According to quote.yahoo.com, the current market cap for AAPL is 8.87B, so they're approaching the 9B mark already. I think Apple is well on track with the high profit margins and popularity of the iPod, and all the great things they have been doing with both Mac hardware and MacOS X the last couple of years.
The excitement that has been surrounding Apple the last couple of years reminds me of the Macintosh during the System 7 or PowerPC transitions.
Also, it should be noted that Fred Anderson is the C*F*O of Apple, not the CTO
One of Apple's major strengths lies in its design and ease of use, which isn't so much different from Microsoft, but from the majority of the open source world. Apple couples these two design principles, ease of use and configurability, with their OS and also their other products, so their products are very appealing to many customers, especially designers, drawers, and graphic people.
In the near future, I believe there are going to be more and more of such jobs, and so Apple plays a large role in the IT field. I think the $10 billion limit can be reached.
"Until you do what you believe in, how do you know whether you believe in it or not?" -- Leo Tolstoy
Any idea of what Apple's current earnings are right now?
l ts .html
...
http://www.apple.com/pr/library/2004/jan/14resu
Apple Reports First Quarter Results
Revenue Increases 36 Percent Year-Over-Year
CUPERTINO, California--January 14, 2004--Apple(R) today announced financial results for its fiscal 2004 first quarter ended December 27, 2003. For the quarter, the Company posted a net profit of $63 million, or $.17 per diluted share. These results compare to a net loss of $8 million, or $.02 per diluted share, in the year-ago quarter. Revenue for the quarter reached a four-year high of $2.006 billion, up 36 percent from the year-ago quarter. Gross margin was 26.7 percent, down from 27.6 percent in the year-ago quarter. International sales accounted for 44 percent of the quarter's revenue.
It's been a very interesting turnaround in the geek/nerd market, to the extent that even CmdrTaco has a MacOS X system. It's too bad this market doesn't seem to be a significant percentage of the whole.
However, I was just managing a virus outbreak, and finally getting the Symantec Centralized Anti-Virus solution to more or less work in my company, and I can say the value of the time it took to do this would have easily paid the price difference between the PCs we have and the eMacs we could have bought instead. Add outside consultant time and Windows TCO compared to the Mac gets even more absurd.
Most of our employees use a web-based CRM system I developed for the company that's completely platform-independent, so theoretically there should be no problem at all switching.
Unfortunately, we have a phone system that forces a Windows lock-in for a variety of reasons, but if it didn't, I would think a switch to Mac for most people wouldn't be that difficult a sell. "Look, you can still get Office, and you'll have 1% of the trouble with viruses and worms. It's a no-brainer!"
If mid-sized companies like ours could be a bit more open-minded, and if they could avoid buying a phone system like we did (it was a mistake, for a lot of other good reasons), I think more companies would find major advantages in switching.
D
I think it's looking pretty optimistic for apple at this point....the ipod has helped people realize that paying a premium for an excellent piece of industrial design just might be worth it after all, the same mentality mac users have had for a while now.
Earnings are pretty small, there aren't too many companies that earn more than 10 billion/year. He was likely refering to revenues, (hit about $6.2 last fiscal year, $6.7 last calendar year).
Degaussing scares the bad magnetism out of the monitor and fills it with good karma.
Anderson also hints that there are more alliances in the works (beyond Pepsi, HP and AOL), but that there is nothing to announce yet.
A previous rumour doing the rounds was a 100 million free song deal with McDonalds, Which you can find here.
McDonalds later said there 'Was no deal to announce', but did not actually deny the rumour.
The revenue and publicity from such a deal would certainly put iTunes further in the lead in the online music store biz.
But perhaps Coke might not be so happy with that.
...The technical trainers.
During the "good ole days" (1998-2001) when dot-com money was fluid, training centers were handing out MCSE cert training and testing and getting better than $2000 or even $3000 for it. Now, I doubt many people care as they saw what it bought them.
Enter Apple growing market share. Companies will still need someone to show the secretary how to use the Dock. It isn't that it's difficult to use, it's that she just doesn't have the self confidence that she's doing it right.
The winner (besides our favorite produce supplier) is the training company that now has a service someone will buy.
I only came here to do two things; kick some ass, and drink some beer...looks like we're almost out of beer.
This guy has consistently beat the crap out of Apple management over waste. Order fulfillment has never sunk to (pre-Jobs) bad levels. Their products are competitively priced, and they sure are cool. Innovation abounds. None of this would be possible if Apple were still hemorrhaging money.
Good job, Fred! Good luck with retirement.
There exists no way of exchanging information without making judgments. --Bene Gesserit Axiom
"Apple's only hope for such great growth, really ,is iMusic."
Thats a reaching statement considering the fact that they dont yet make such a product.
"That is the only thing they have that is truly competitive."
Apple makes iMusic? Never heard of it.
"The iPod bubble will burst as soon as someone comes out with something similar"
There are already plenty of knock-offs.... with similar features yet non have knocked apple off its high point.
"but with a battery hatch"
This would be an important feature if the iPod's battery was non replaceable (it is) and if the iPod battery was unreliable. (It's not)
and missing controls (like on/off switch)."
It doesn't need an on off switch. It turns off by itself.
"Likely it will cost half as much."
So, you're suggesting that this hypotheticvall competitor will ADD more and yet cost half that which Apple charges. HAH!
"Apple's desktop machine bubble already burst:"
Could have foold me. Their desktop business is doing very well.
"the Mac's appeal only to a tiny niche market"
Apple computer users make up between 10-12% of the computing market. That's hardly a tiny market by any stretch of the imagination.
You must be thinking in terms of "market share" rather than "install base". Apple's "market share" is small not because people aren't buying their computers or even because people are bying them less frequently than before. (Quite the contrary). Rather, PC users are replacing their existing machines twice as freequently. (Less longevity). Because "market share" is solely determined by quarterly or annual sales figures the "market share" number will be low while the user base continues to grow.
"which will not grow unless Apple does such things as drop the price"
I don't see how Apple could drop the price much more. They're already priced the same if not lower then PCs of comperable specs.
"and mass-market the thing."
They do this already.
A better strategy might be to simply educate the masses about business in general. If your post is an indicator or the average PC user... i'd say its an absolute necessity.
In practice, users never need to treat it as "on" or "off", which - if it wasn't for the poor design of most units that are "always on" in some way - really ought to be the way most electronic devices work. It's more intuitive to have the thing just doing what you ask it than to have to examine what mode it's on and react accordingly.
You are not alone. This is not normal. None of this is normal.
Technically, all the current iBooks can drive an external display at a resolution above 1024 x 768. Apple just turns it off in software (the open firmware). For information on how to easily (without risk of losing warranty) turning this back on, look here:
Rute Moeller's spanning hack for the iBook
And yes, I fully agree that we shouldn't have to resort to this kind of solution, but it is a solution nonetheless, and one that has worked very well for me for the past two years on my 600 Mhz iBook. In fact, I wouldn't have bought my iBook had I not known about this.
Cheers.
(Sorry posted in html rather than plain text) here it is again... properly formatted
,is iMusic."
"Apple's only hope for such great growth, really
Thats a reaching statement considering the fact that they dont yet make such a product.
"That is the only thing they have that is truly competitive."
Apple makes iMusic? Never heard of it.
"The iPod bubble will burst as soon as someone comes out with something similar"
There are already plenty of knock-offs.... with similar features yet non have knocked apple off its high point.
"but with a battery hatch"
This would be an important feature if the iPod's battery was non replaceable (it is) and if the iPod battery was unreliable. (It's not)
and missing controls (like on/off switch)."
It doesn't need an on off switch. It turns off by itself.
"Likely it will cost half as much."
So, you're suggesting that this hypotheticvall competitor will ADD more and yet cost half that which Apple charges. HAH!
"Apple's desktop machine bubble already burst:"
Could have foold me. Their desktop business is doing very well.
"the Mac's appeal only to a tiny niche market"
Apple computer users make up between 10-12% of the computing market. That's hardly a tiny market by any stretch of the imagination.
You must be thinking in terms of "market share" rather than "install base". Apple's "market share" is small not because people aren't buying their computers or even because people are bying them less frequently than before. (Quite the contrary). Rather, PC users are replacing their existing machines twice as freequently. (Less longevity). Because "market share" is solely determined by quarterly or annual sales figures the "market share" number will be low while the user base continues to grow.
"which will not grow unless Apple does such things as drop the price"
I don't see how Apple could drop the price much more. They're already priced the same if not lower then PCs of comperable specs.
"and mass-market the thing."
They do this already.
A better strategy might be to simply educate the masses about business in general. If your post is an indicator or the average PC user... i'd say its an absolute necessity.
The margins are not as much as the average outraged x86 geek makes them out to be. From what I've heard, they make as much on an iPod as on an iMac. Don't forget they have to plow a lot into R&D, whereas Dell just has to order the latest chipset and case from Taiwan and load whatever MS is offering at the time and sell them together.
My hope is the next revision or two of the G5 desktop takes off like crazy, as their power and speeds will more closely match the x86 market. Motorola's inability to ramp up the G4 series fast enough was a serious blow to sales, I'm sure.
It doesn't mean much now, it's built for the future.
Yay! It's the "PCs are better cause they have floppy drives" argument. After lunch I bet you'll hit us with the "PCs have multiple mouse buttons" whammy and we'll all put our Macs up on eBay and head to DELL.com for a *real* machine, with a full-on serial port too I bet! Rippin!
"Apple has yet to solve the battery problem."
Again, there is no battery "problem".
The iPod battery lasts as long as any bettery of that type is supposed to last. I forget what the exact specs are... but they are very liberal (although it does vary depending on the number of times you charge the device).
As is to be expected, not all things work as planned... hence the reason for Apple's warenty, Apple's extended warrenty as well as its more recent battery replacement programs. Additionally, iPod batters can be purchased from theird part manufacturers for less than even Apple sells.
If it fails outside of the warranty period, you can have Apple replace it for $99, or buy a replacement from a third party vendor, including tools to safely open your iPod case, for about $50.
The battery was never intended to be a servicable part. Instead it was intended to last the entire lifetime of the machine. Some batteries - a tiny fraction of iPod users overall - have turned out to last only 18 months - that's unfortunate, but as both Apple and third party vendors offer replacement services, it isn't a problem.
Apple's position is not "Throw the iPod away."
You might just as well complain about the "iPod screen problem". After all, the screen will fail on a number of iPods earlier than expected. People are used to batteries that fail after six months and need replacing because they're only designed to last that long; if other batteries typically were built to last five to ten years, they wouldn't be seen as a user servicable part.
You are not alone. This is not normal. None of this is normal.
My screen failed when I used it to hammer stakes for my tent on a camping trip.
Imagine how dissapointed I was when I couldn't use the iPod for the rest of the trip!
Now I hear you can't easily replace the battery when it runs out of charge?
Amazing people put up with this product!
(Please note the sarcasm.)
Yeah, and you guys panned the ipod too: http://apple.slashdot.org/article.pl?sid=01/10/23
"where the staff told him there was nothing Apple could do: his iPod's one-year warranty had expired. But they would be happy to sell him a new model to replace it."
That article refers to the "Apple's Dirty Little Secret" Web site not Apple's official position. If you listened to the phone call recording that got MASSIVE attention... the support rep suggested that because his iPod fell out of warenty the caller buy a new Apple warenty (costing $250) "but at that cost you might as well buy a new iPod anyways".
Obviously the support rep didn't say the thing that offerd the most level of comfor to the caller, but that hardly implies that Apple's position was to throw the iPod away.
Regardless, Apple has since updated the iPod support program to include an iPod battery. Additionally other suppliers have offered replacement batteries for even less than that which Apple sells them for.
This is all a moot point for the most part because we're talking about the fringe edge of iPod owners anways... only this extremely small number individuals are reporting problems. Thankfully, Apple and theird party companies provide support for this small group.
"A $50 DIY kit, also documented at popsci.com. Pretty steep."
Not at all. Batteryies for the Dell's Mp3 player, the archos brand gateway etc all utilize similar pricing structures as Apple and 3rd party companies do for the iPod.
Replacement batteries for the iPod are very much in sync with battery prices from other major MP3 manufacturers.
>>>"As is to be expected, not all things work as planned"
That's a nice spin on "busted the thing just trying to get to the battery". Better-designed devices for a fraction of the cost have a hatch, or from 2 to 4 screws.
That's a nice spin on a device that is designed so well that the battery is intended to last the entire life of the product... as the iPod does in the vast majority of the time.
"Does this warranty cover opening the thing?"
Not sure... though that is not even necessary. If anything should go wrong with your iPod during its warrenty period an individual need only call Apple, they'll ship you a padded box the following day to mail them the iPod, they will send someone to pick it up, next-day deliever it to Apple where they will fix it that day, then next day it back to you.
Apple's warrenty service is EXCELLENT.
> According to quote.yahoo.com, the current market cap for AAPL is 8.87B, so they're approaching the 9B mark already.
Some random market caps for your amusement, all in 10^9 US$
- General Electric 329
- Microsoft: 284
- Exxon-Mobile: 277
- Wal-Mart: 261
- Intel: 189
- IBM: 166
- Cisco: 156
- Coca-Cola: 120
- Dell: 84
- HP: 70
- Time-Warner: 77
- Disney: 55
- Ebay: 44
- Yahoo: 29
- GM: 27
- Ford: 26
- Amazon: 17
- Sun: 17
- Apple: 8.9
- RedHat: 3.2
- McDonalds: 2.2
- Gateway: 1.9
- SCO: 0.17
Just be glad Apple is offering a reduced-price repair price for those iPods where one of the non-servicable parts can be replaced out of warranty. Because that's what the battery is.
Given the choice, I'd rather have a well designed machine with a battery designed to last years, than a poorly designed machine with a replacable battery that lasts months. Obviously, YMMV.
You are not alone. This is not normal. None of this is normal.
"The company lacks a grasp of certain basics of friendly user-interfaces for gadgets."
I would say the exact opposite. You turn the iPod on by touching any of the four buttons on the front (or the scroll wheen button), and turn it off in the same way by holding play.
The iPod has six buttons on its front surface (the trackwheel and select are two buttons.
None of these buttons has any moving parts - it's all touch sensitive. No mechanical parts to break down during use. The only mechanical switch on the whole unit is the hold switch on the top by the headphone socket.
Apple's buttons are big and easy to press. I don't have big hands by any stretch of the imagination, but I hate hate hate the current trend of manufactuers to put smaller smaller fiddly buttons on their products. You need a matchstick to press the keys on some cellphones nowadays.
I fear for the day when I dial a number on my phone and I press all the keys together and the Simpsons quote will come to mind:
"I'm sorry, your fingers are too fat to dial this number. If you would like to order a complimentary dialing wand please mash the keypad angrily now"
Or something like that.
Apple's large buttons are a joy to use, and the interface (from the way the buttons work, to the way the menus on screen work) is second to none.
Lacking a grasp of friendly user interfaces? Bollocks! It's beautifully designed from a UI perspective.
Only a small subset of users are finding that their batteries die in 18mo. I purchased my original iPod in November 2001, a week or so after Apple introduced them, and the battery runs perfectly fine over 2 yrs later. Apple's support documents that the battery should be able to with stand 500 charge cycles. Since the average user doesn't totally drain their battery daily, that can work out to a fairly long time. For example, I only have to fully recharge my battery about once a week. Which means I go through 52 recharge cycles per year. If I get a full 500 charges, that's almost 10yrs of battery life.
Apple recommends recharging the battery every 14-18days, which would extend 500 full recharges even longer. Really for what the Neistat brothers went through, they either had faulty batteries, or were draining their batteries daily, for over a year.
I consider myself a mid-range user of the iPod, but that's only because their are so many who use their iPods only for trips, etc. I use mine daily, for 4-8hrs a day. When i purchased, I thought the battery might last 3-5years, and so far it's on target.
Really, I've dealt with Apple, Compaq, HP, and IBM products in the past two years and Apple's 'problem' rate is as low or lower than the next guy's, the problem is that when an Apple laptop has a minor issue (like 'white spots') the whole community bitches about it.
When an IBM laptop exhibits a problem there's no 'community' to coagulate into a problem in the first place.
The G5 is a stunningly quiet machine compared to the Dell P4 machine's we've got at my current site, but Mac users still bitch about it being so much louder than their fanless iMac when they hover around the water cooler. The PC users here just shut up and take what they get and don't complain.
"Sometimes, I think Trent just needs a cup of hot chocolate and a blankie." -Tori Amos on Nine Inch Nails
That doesn't make sense; people buy Macs for their cool industrial design and software. Windows on an IBM-made G5 processor machine isn't going to be very helpful in either department.
D
That is a logical fallacy. An "appeal to authority" to be precise, IIRC. The press saying something is true does not make it true. MS bought 150,000 shares of non-voting preferred stock at $1000 a share. The deal was a show of good faith as part of a larger deal where they agreed to continue development of Mac MS Office for five years an Apple agreed to drop outstanding legal claims and bundle MS Explorer. MS did not agree to develop Office for OS X (Rhapsody, and Cocoa only at the time). The stock payed a dividend and was convertible to common stock at $16.50 after three years. MS ended up converting and selling at a market price of ~$82,IIRC. I can't remember what the dividend was. At the time, Apple had already issued their convertible debenture, sold most of their plant and some ARM holdings. They had over $6 billion in cash and cash equivalents. That is even more than they hold now. Microsoft's investment was merely window dressing. In fact, I don't see that Apple got much out of it at all. MS clearly had no plans to drop Office. They far exceeded the terms of their agreement by developing an OS X version.
It is cowardly, and a betrayal of whatever it means to be a Jew, to act as a white man
-James Baldwin
Do you think he would find this description depressing? I can't think of anything more disappointing than uberness wasted on blogging.
First, both are minor parts of the vehicle's functionality. Second, they're features that most people don't want or need. Third, they're features that the people who do want them really shouldn't be using in the first place, as they are harmful to your health (or at least the reliability of your data and/or your ability to concentrate on the road).
And we didn't abandon SCSI. Your firewire hard drive uses SBP2. That's SCSI commands sent over a serial tunnel. Want to know what your CD/DVD drive uses? ATAPI. That's SCSI packets encapsulated into ATA requests.
SCSI is like the force. "If you kill me, you will only make me stronger." And so, in effect, by abandoning the actual parallel SCSI physical transport (which really sucked, IMHO), the SCSI protocol (which doesn't) lives on in nearly every computer built in the past several years, PC or Mac.
But I digress.
120 character sigs suck. Make it 250.
I was at an Apple press conference today, where they showed off iLife to the press.
Arne Odden, a rather nice fella and the CEO of Apple Norway, started the whole thing by saying that he's getting a bit tired of the questions about iTunes Music Store for Europe, since no one knows when the myriad of contracts, recordings (yes, even European artists record and these are going into the store), and the kitchen sink will be ready.
So he said it with these words:
It'll ready, when it's ready.
And that is what we know about the Apple Music store for Europe today. He even mentioned that there's some recorings being prepared from tapes. Studio tapes that is. Interesting...
On a side note, the presentation falled into the clammy hands of the DemoDevil when the iPod everything was stored on reached its limit (4 kB left!) and crashed the whole shebang right into the stone age. That was the first time I ever saw the Mac equalent of a BSOD, the grey please-reboot-window. Even that was designed beautifully. The Wintel fanatics started to laugh, but made utter fools of them selves afterwards by asking the dumbes, most inane questions I have ever heard from persons supposed to work for the computer press (Think PC Magazine journalists).