Apple posts $63 Million Profit

[ethernet76]

Originally posted by Sonofhaig
I assume they're not being used for "creative" purposes. I'm amazed that a creative dept. (in general) wouldn't want to take advantage of the "newer" creative apps. The differences between the Adobe apps that run on 9 and the ones that run on 10 are day and night in my opinion. Not to mention the stability of 10. I think waiting to convert will just get more costly as times goes on. Applications seem to get more and more costly. Running 9 now is like using an old car with too many miles on it. Eventually you'll break down and no parts will be available to fix it.

But when quark is 999 per machine, add in extensis suitcase which is probably another 200. Also count into fact, designers never use any program that ends in .0 for very good reason. This just eliminated quark 6, which blows for stability. It also eliminated any version of photoshop above 6.0.1 which isn't X friendly.

As a professional media person I've had more problems with OS X design software than I've had with OS 9 software. I still use Quark 4.11 even though I have 6.0.

Also designers don't really push the edge of their machines. When was the last time I needed dual 2.0 ghz for photoshop? Never. We run off servers so we are limited by the speed of the network, not the speed of the machines. You'll also note, that even though photoshop filters are great, they aren't used that often soley because they're kiddie play. Good design doesn't look complex, it looks simple and classy.

 

[billyboy]

Re: Re: Who are the 40%?

Originally posted by rdowns
We're just coming out of a down economic cycle; businesses were not spending-period unless absolutely necessary. One of the reasons why we were in that cycle. As we come out, business spending will begin to rise.

To me that just illustrates what a genius and brave bloke SJ is. When other far bigger companies tightened their belts and hung on in there, Apple stuck to their vision and carried on investing hundreds of millions in R and D behind the scenes - iApps, new PowerMacs, iTunesMusic Store didnt just happen, they were being developed in a recession and who knows what else SJ has committed Apple to, product ways.

When it would have been easy to stick to the Apple way of doing things and just be seen as an innovator for the PC world, SJ has also adopted a revised business plan that is sort of alien to Apple of old and does far more than keep the company ticking over very comfortably as a niche player. As the economy comes out of the doldrums, new product and new plan are gelling and Apple are finding themselves being catapaulted into a roll that can take them forward and keep them up to speed for at least the next two years. Even if other stuff bombs,, the iPod and music store are examples of what is possible for innovators with a hard business edge.

And who knows what projects SJ has been giving the green light to in the last couple of years to kick in in 2005/2006. With $4.8 billion in reserve, Apple could re invent the wheel.

 

[simX]

Re: Re: Re: PAtial explination of 40%

Originally posted by fatfish
One does not take note of how to return to the source of an article one has read, and the longer ago it was the less likely one is to remember, however it would have started as a redirect from either macrumours or maybe maccentral.

Your all probably right, it does sound a little exagerated, but like I said isn't this how this forum works, one hears (or sees) something and posts it so that the validity can be discussed.

... and I said that the validity of that article was nonexistent. You do realize that spreading something false that an article claims as fact is still spreading a lie, whether or not you were the one to originally state that "fact", right? I meant nothing against you personally, just against the infamous "fact" that Jobs is getting hundreds of millions of dollars per year in compensation for his job. That's just outright ridiculous and I wanted to set it right.

 

[splashman]

Why $4.8B in reserve?

Originally posted by billyboy
And who knows what projects SJ has been giving the green light to in the last couple of years to kick in in 2005/2006. With $4.8 billion in reserve, Apple could re invent the wheel.

A good post -- thanks.

Just curious: does anyone know why Apple (or any other company their size) would want to keep $4.8B in reserve? Obviously, they need some, but it seems like they've had those billions for quite a while now. Even with acquisitions over the years, the cash never dwindles. I expect they make some interest from it, but they must have better reasons than that. Anybody know what those reasons might be?

 

[avus]

Originally posted by ethernet76

Also designers don't really push the edge of their machines. When was the last time I needed dual 2.0 ghz for photoshop? Never....Good design doesn't look complex, it looks simple and classy.

Please avoid any generalization - I do need a dual G5, thanks.

 

[billyboy]

I dont suppose the mainstream analysts think it is good business to have that dead money hanging around, but then again they aren't working at Apple.

I think they make more than a "bit of interest" on that. I am useless at maths but even 1% x 4.8 billion sounds loads. That sum is a good addition to figures every quarter

Also, I know from my own experience, if your company has a healthy reserve, it gives you a lot of confidence to try new things. It is amazing how clearly you can think without the nagging worry that if something new goes wrong it could ruin your business.

 

[rdowns]

Re: Why $4.8B in reserve?

Originally posted by splashman
A good post -- thanks.

Just curious: does anyone know why Apple (or any other company their size) would want to keep $4.8B in reserve? Obviously, they need some, but it seems like they've had those billions for quite a while now. Even with acquisitions over the years, the cash never dwindles. I expect they make some interest from it, but they must have better reasons than that. Anybody know what those reasons might be?

For some time now, Apple has had enormous amounts of cash and earns considerable amounts of its revenue from their reserves. Even when Apple was down, they had lots of cash. I remember the Microsoft deal where MS invested $150 million. Everyone said how much it helped Apple (continued Office development was the key there) but Apple hardly needed that money despite losses. THey still had boat loads of cash.

Back on topic, I don't know why they keep so much in cash reserves.

 

[eazyway]

Re: Re: Why $4.8B in reserve?

Originally posted by rdowns
For some time now, Apple has had enormous amounts of cash and earns considerable amounts of its revenue from their reserves. Even when Apple was down, they had lots of cash. I remember the Microsoft deal where MS invested $150 million. Everyone said how much it helped Apple (continued Office development was the key there) but Apple hardly needed that money despite losses. THey still had boat loads of cash.

Back on topic, I don't know why they keep so much in cash reserves.

At the end of 1997 fiscal year Apple had $1.4 B in cash. This cash build up has come in the last 6 years even with the downturn and the acquisitions.

 

[VIREBEL661]

Originally posted by Dont Hurt Me
ones still on os9 are missing out and enjoying those crashes.

My older systems with 9 are very stable - just a little more work in troubleshooting extensions, etc... Much better than ANY windoze, IMO, but then again - I've used Macs for far longer than X, which I do love so!

 

[jkeithh]

Originally posted by Steamboatwillie
40% OS X users? I find that shocking but I started using Macs on OS X. After the fact I used a few Macs on OS 9 and scratched my head thinking "What is this?" I realize that there are alot of OS 9 users and I am sure that the OS is great/stable/fast etc but, on the surface anyways, OS X seems light years ahead! Maybe coming in late in the game my perspective is skewed...

I think I am in the same boat as you. My first Apple was a PowerMac 7200 I purchased on eBay in June of 2001 running OS 9. I decided I loved the Mac (even with OS 9) and bought an iMac 2 months later and OS X totally blew me away. Maybe it is us coming into the game late because I can not understand why more people don't use OS X.

 

[Zech Marquis]

Damnnnnnn

That was one awesome Holiday quarter for Apple! Very encouraging news indeed, as I will be buying a 14 iBook G4 shortly. Keep it up guys!

 

[true777]

I love it how articles on Apple now are much more omnipresent in "serious" publications such as Forbes and the Wall Street Journal. I've listened to those conference calls for years now and the analysts' questions, too, appear much more informed these days. I believe this points to the fact that Apple's excellent performance in difficult times has put them again in the ranks of tech companies to be taken seriously - similar to Yahoo and the few other major players who're still delivering fairly consistent operating profits. Analysts and business publications alike used to take companies such as Sun and Silicon Graphics seriously while treating Apple as a toy company. Now that Sun is reporting quarterly losses in the hundreds of millions of dollars, Apple is suddenly looking pretty awesome again, and rightfully so.

SJ has surely shown the industry a thing or two - I just hope he won't turn megalomaniac and assume that anything he thinks is cool and puts his finger on will automatically turn to gold. But without SJ, Apple would be where SGI is today - a formerly great company marginalized, almost broke and barely in existence anymore.

I'm sure the weak Dollar helped quite a bit with the phenomenal European sales, too. Go Apple!

 

[centauratlas]

Re: Re: No plans vs no announced plans

Originally posted by fatfish
of course it could mean that any plans they have are just not being announced.

I can't see the advantage of giving them the whole darn thing so they can run it on a 99cent box (PC)

I just like to watch closely when people say "we have no plans" or "have announced no plans." They are generally said for a reason.

I agree about giving them the whole thing - that would make *no* sense. The only things that might make sense are (1) iTunes (it is there), and (2) iChatAV.

Other than that, I can't see a reason for Apple to do it. Perhaps when/if the iPod goes video they'd do an app similar to iTunes for video.

To me that all that makes sense.

 

[centauratlas]

Re: Why $4.8B in reserve?

Originally posted by splashman
Just curious: does anyone know why Apple (or any other company their size) would want to keep $4.8B in reserve?

The main one is security. Suppose they have a new product launch (such as the G5 last summer), and during the launch IBM found a problem with the chip (e.g. like Intel did with the floating point error or something worse.) If they've stopped producing G4s and can't ship the G5s, they need $ to carrying them along. They don't have to worry as much *if* something goes wrong. Likewise, say they wanted to switch to Intel processors (not likely with IBM doing a good job now), but it gives them the cash to manage the switch if needed. It gives them security and flexibility.

They can also use it for aquisitions if they wish. That was why the rumors of Apple buying a music studio last year were possible - they had the cash for much of the price.

The problem with this is that Apple has $4.8B in cash. There market capitalization (# of shares multiplied by share price) is about $8.90B (see http://finance.yahoo.com/q?s=aapl). What this means is that their enterprise value is about 4.1 billion. Assuming those figures are accurate that is $12-13/share of cash.

Why is this a problem? It makes them potential take-over target. Sure, you have to pay $8.9B to buy the company but you get $4.8B in cash if you want it, meaning you could buy it for 4.1 billion (potentially, it would obviously cost more once people heard you were making an offer).

An interesting possibility is to do a leveraged buyout and potentially go private. One never knows what will happen!

 

[DGFan]

While I am optimistic there is bad news here....

1. margins fell
2. sales in the US were weak
3. iMac/eMac sales were down considerably

The first item is just a bump and hopefully will not be repeated. But the other two items are serious concerns. Apple needs to get its act together on the low end to keep marketshare from slip-sliding-away.

 

[DGFan]

Re: OS9 vs. OSX

Originally posted by splashman

For the AVERAGE user (i.e., not the design/print/video/audio folks), there hasn't been a compelling reason to upgrade. Stability?

I would say the opposite. Businesses that use a product to earn money have two things to consider when upgrading:

1. Typically many computers would have to be upgraded so the expense is much bigger overall - and there are profits to consider

2. Businesses have a workflow using specific software on their existing systems and it is critical not to interrupt this

Businesses tend to be much more risk-averse and require a much bigger and provable boost to upgrade than a typical home user.

 

[DGFan]

Originally posted by Prom1
Analysts are missing the BIG picture.

I can't believe how many people HERE are missing the big picture and would rather argue about whether it's good to upgrade from OS9 to OS X.

Look carefully at the numbers. The music business is obviously very good. But it accounts for a small part of the top line (10% revenue compared to CPU sales).

Macs are selling well over seas. This may be boosted by the weak dollar so it can be written off to *some* degree. But Macs are getting killed here at home.

Here in the USA year over year change was 0% number of units and 25% revenue increase (obviously the higher end units were selling well). But sequentially sales were down 17% in units and 0% in revenue.

Pure and simple: that is not good. It's not cause to be running around yelling "the end is near" but it's still a bad sign. Apple needs momentum. But even with all this great new product in '03 Apple *still* lost market share in the USA.

Apple needs to come out with some products to capture the low end. It will help them regain marketshare which will give them *real* momentum.

That's the big picture.

 

[DGFan]

Originally posted by MrMacman

Not true, Steve Jobs gets $1 Dollar a Year (because if you make 0 you aren't working ... there is this tax process)... but he makes the real money on bonuses... so

I believe Jobs also rents back to Apple the private jet that Apple gave him when he rejoined the company. That doesn't show up as "salary" but it's cash in his hands.

 

[applebum]

Originally posted by manu chao
According to ThinkSecret and others there are 25 million active Macintoshs, 20 million (or 80%) can run OS X (10.3 or at least 10.2) and 50% of that or 10 million are running OS X.

So only 50% of those who could run OS X, do so.

Ok - hope no one else has asked this (I went through the first few pages and didn't see it). I have 2 older Macs that shipped originally with OS9. I have since upgraded both to Jaguar, but have not registered the software. In that case, are my 2 machines still considered OS9. If so, how many others have done that, thus skewing these numbers. Anyone know how they actually come up with these numbers?

 

[rog]

Originally posted by manu chao

According to ThinkSecret and others there are 25 million active Macintoshs, 20 million (or 80%) can run OS X (10.3 or at least 10.2) and 50% of that or 10 million are running OS X.

So only 50% of those who could run OS X, do so.

Well about 50% of macs that can run OSX can't run it well. I'd say any G4 without an L3 or 512k L2 doesn't run it well. Nor does any G4 under 800 MHz. The 900 MHz G3 is barely adequate. All 1st gen iMac, iBooks, beige G3s and BW G3s that haven't been upgraded all run OSX horribly slowly.

As for my earlier post about PM sales, they increased 30% year over year. But then a year ago sales were abysmal! So the G5 only accounted for a measly 30% jump. also, MacNN states that unit sales are actually down over 2002! PC sales grew a lot last year and for Mac sales to go down and be under2% worldwide market share is scary.

iPod sales are good news, but it's just not enough to grow the platform and obviously the B&M stores haven't helped either, although maybe help keep sales from sliding futher.

Overall a real mixed bag. Apple needs some serious price cuts and speed bumps across the G4 line to spur sales.

 

[wookitus]

Originally posted by g5man
Don't give up on aapl. Many got burned with the Nasdaq bubble crash. Apple is going to kick some reall ass in the next 3 to 5 years. The economy is picking up and there are millions of users that will have money to upgrade.

In the last year I have bought over 1200 shares. I have owned Apple stock for over 6 years. I have never lost money on it. I see it going up to $60 a share within 3 years.

Apple stock always takes a dive after earnings.

I used to be optimistic. But after 13 years, I haven't been impressed. Yeah, Apple did well along with the other tech companies in the late 90's, but that was simply an inflated value.

Go figure after yesterday's announcement their stock is down $1.20 this morning. Apple makes amazing products, but they run a terrible business.

 

[mrsebastian]

how is it, apple puts out good numbers and my stock drops $1.20????

 

[applebum]

Originally posted by rog
Well about 50% of macs that can run OSX can't run it well. I'd say any G4 without an L3 or 512k L2 doesn't run it well. Nor does any G4 under 800 MHz. The 900 MHz G3 is barely adequate. All 1st gen iMac, iBooks, beige G3s and BW G3s that haven't been upgraded all run OSX horribly slowly.

Perhaps this is in the eye of the user...I have a 400 g3 iMac and a 450 g4 PM. The only thing I have upgraded is the memory on the iMac. Both are running Jaguar and they both run fine. I prefer using either of these to using my 1.7 AMD Windows Laptop. The speed seems to be better on my Macs, and I certainly prefer OSX to Windows. Maybe it depends on what applications you are using as well. Or, maybe as soon as I get my new Mac I will truly see a difference and will then wonder how I ever used my old Macs??

 

[LethalWolfe]

Originally posted by DGFan
Pure and simple: that is not good. It's not cause to be running around yelling "the end is near" but it's still a bad sign. Apple needs momentum. But even with all this great new product in '03 Apple *still* lost market share in the USA.

Apple needs to come out with some products to capture the low end. It will help them regain marketshare which will give them *real* momentum.

Are you sure? I thought I saw numbers from a few months that had Apples marketshare up slightly.

I'm wondering what kind of numbers people will be happy with? I don't think anyone should expect Apple's marketshare to jump from around 3 or 4 percent up to 10 or 12 percent overnight but that feels like what some people expect. The iPod wasn't an instant success, FCP wasn't an instant success, now that the G5's are out why do people expect Apple's PowerMac sales to suddenly skyrocket and launch them into a marketshare % that they haven't seen for years?


Lethal

 

[Dont Hurt Me]

Apple is loosing marketshare, the article stated it went from 3.5% last year to 3.2% this year. Apple continues to screw up. They need to fire whoever is the CFO and start running the corporation like a business instead of a niche market player catering to those few professionals and forgetting its about the consumer. its like they are clueless on how to expand the computer business. its so obvious to me. perhaps Steve should call me.