“Apple produced another triumphal earnings report on Apr. 14, with CEO Steve Jobs beaming as he announced soaring numbers. For the second fiscal quarter of 2004, ended Mar. 27, Apple earned 12 cents per diluted share — triple the number from the same time last year. Net profit hit $46 million, and gross revenues grew 29% from the previous quarter, to $1.91 billion,” Alex Salkever writes for BusinessWeek. “The results showed that iPods had strong sales momentum. Apple sold 807,000 of the pint-size but superpopular digital-music players, a 9.5% increase over the previous quarter’s sales. At that rate of increase, Apple could see iPod sales climb past 1 million units per quarter by early 2005.”
But, Salkever writes, “Jobs & Co. still has some problems it needs to attack pronto if it wants to keep all those investors happy. First of all, the country’s most powerful public pension fund, the California Public Employee Retirement System (CalPERS), plans to lodge a no-confidence vote against Apple’s board of directors. Second, the outfit continues to ignore shareholder pleas that it dip into its huge cash hoard and cough up a dividend.”
Salkever writes, “Finally, while iPod sales looked huge, computer sales failed to grow as quickly as the overall industry expanded. All of this should be food for thought for Apple’s directors as they sit down to discuss the future of this week… So while it’s great that Apple seems to be winning the digital-music race, a little perspective is in order. Mac sales really need a lift, and there’s a simple way to do this: cut prices. Consumers still see Macs as the most expensive PCs around. And so far, the G5 has been a sales disappointment.”
“Apple needs to learn that price is determined by market demand and not its own perception of what products are worth. Its prospects look brighter now than at any point in recent memory, and it still boasts some of the fattest margins — if not the fattest — in the business for its PCs. Jobs & Co. has the tools to really turn Apple into a mainstream player if they can boost computers sales by dropping prices,” Salkever writes.
Full article here.
MacDailyNews Take: Power Mac G5 sales have not yet taken off because Steve Jobs promised 3GHz G5s within a year at their introduction and the majority of individual buyers are waiting for that second-generation Power Mac G5 before they make a relatively large purchase that will last them years. Did Steve purposely mention 3GHz G5s at the G5’s introduction in order to tamp down demand for a bit during the G5’s ramp up, since he had an inkling that portables, Mac OS X Panther, iLife, and iPods would more than fill in the difference? We think he mentioned 3GHz G5s for a reason – to smooth demand while IBM and Apple ramped up – since it is rare that Apple talks about any future product iterations so far in advance.
And, Alex, have you seen Apple’s eMac line? Quite a bargain for what you get, but Apple will never out-sticker the likes of eMachines, etc. Consumers need to understand the differences and the advantages of owning a Mac OS X machine vs. some cheap eMachines’ Windows box. We believe that understanding is finally dawning on the Average Joe Windows Sufferer
I agree with MDN’s take. Sure, some people will just say “eye candy” and blow it off, but a larger proportion of people will take notice and at least subconsiously, take it in and the seeds will be planted. Then, Apple should just continue on continuing on and let the giants fall where they may. Show what you got and it will eventually happen.
But that’s what Apple has done for 20 years and look where it has got them.
They need to get aggressive – with their advertising and their pricing.
Apple can improve their Mac exposure beyond their own website. They can probably learn a lot from iPod advertising and the Music business in general. The old stupid granola ads got to go forever. People want to feel that the product their buying makes them “cool”. In addition, cramming all the OS X features in one Ad would be a mistake. When a singer releases an album, they release one song from that album and a few weeks or so later they release another song. Each hit results in more Album sales. Apple should be advertising one feature at a time. Focus on iPoto digital camera integration, then iMovie, then iDVD, then Garageband. In all these ads, show off the GUI features. How about bluetooth phone integration (Apple currently has the best bluetooth implementation)? Each of these is a hit song on their own merits and deserves their own exposure.
I was really disappointed to see HP with a TV ad extolling their own photo App digital camera integration with their HP PC’s. One wise person once said, “no one puts a lamp under a table” So Apple put your lamp on top of the table and let the light of your best of breed apps shine. You got all that cash, use it.
Dumb. We have rarely, if ever, seen OS commercials on TV for a good reason — the complexities of a computer screen don’t translate to a 30-second spot. Showing off Expose and fast-user switching is tantamount to the spinning-flaming logo joke from old IBM commercials. OS X is the best OS out there, but you’d never be able to tell in a TV commercial.
In the hands of a professional, Mac OS X could be shown on TV in 30-second spots. I have hooked people into a real Mac OS X presentation with a 3 second display of Expose in action. On the plane, in the airport, at work, wherever. Expose works like a charm. People want to see more about Mac OS X after Expose is shown to them. Apple should be doing the same on TV where they can do it to millions all at once..
Also, MDN’s take about “adding” as opposed to “switching” is dead on. Eliminate the fear for potential “switchers” and you’ll have switchers in droves.
This article is about stock practices! have you guys even read the article, or MDN’s ‘take’ on things? Sure the emac is a great deal to those who know about them, but who knows about them? Only the faithful and converted. I want to see more ads as well.
Salkever, Thurrot… Is there only 4 guys who comment Apple?
MDN could change these four to another four. Maybe they are little better and knows how Apple does things.
They also need to maybe consider more frequent price adjustments for foreign markets to take into account exchange rates. Dell et al do that to remain competetive. Apple just see an opportunity to rip off some customers for some more cash – or possibly are simply unaware that it’s something they need to think about.
The G5 dual is currently the equivalent of about $650 more expensive in the UK. This is after taking into account exchange rates and taxes. It means a machine that could retail comfortably at �1999, including a reasonable currency fluctuation buffer, is being sold for �2299.
They’ve made good with the eMac pricing, but the iBook is the equivalent of about $170 more expensive here. They could sell it for �749 instead of �799, still have a 6% buffer (instead of 13%) and maybe sell a few more machines as they hit lower and more competetive price points. (Still above eMachines, obviously)
If someone sells junk it does not mean that you have to beat that price.
Hywel. It is not that bad anymore what it was before �. Now we have the same price at least in Europe. Before � Apple had separate prices for every single country and price differences where +-30%
What Fred Mertz says is absolutely true. I am a realtor,(unfortunately have to use Virtual PC most of the time) but when PC users see over my shoulder what I do with my Mac, they are amazed!
But the most common question usually is: How can I do that on my PC?
And they want to be able to do it with the bundled software on their PC, to which I have to say, sorry, you probably can’t do it.
I think this can be done with the right tv ads, from the right agency, which by definition apparently can’t be done by Apple’s current agency, which seems to be able to only handle fuzzy, vague, “image’ ads?
Or, for whatever reason, is this something that Steve just doesn not want to do? I don’t know, still mystified about that after 15 years.
Great products, but STILL an inaccurate image of Apple in the eyes of the public.
Well, apple managed to get to this “fattest margins boasts” without the investors approval and without analysis like Salkever’s.
Apple’s product are finished product and they worth the price tag they display. If you’re expecting Apple to sell its line of laptop as the same price Dell, IBM or Sony sell theirs then you should wait till hell freezes over.
Many critics have tried to discourage people from buying iPods because they are overpriced, yet it is still the best selling mp3 player in the world.
Please, allow Steve to do his work the way he always done it. Investors can be disappointed but Apple is not a “junk” maker.
It’s the little things they need to show. I create PDFs on the fly from any app. You can’t do that on Windows without spending extra on software.
“Did Steve purposely mention 3GHz G5s at the G5’s introduction in order to tamp down demand for a bit during the G5’s ramp up, since he had an inkling that portables, Mac OS X Panther, iLife, and iPods would more than fill in the difference?”
Uh, no. Unless he knew that IBM was going to have a problem producing the G5 in which case he was, with Machiavelliist precision, covering up a bad decision. He is either smart AND dumb OR………..G5’s are too expensive. MDN’s attempt to make Steve God is only the latest silliness.
IF apple wanted to promote the best feature of its line, it would show windows BSOD and problems resulting from virii and worms, and compare them to osX. The reason apple does not do this simple thing is because sometime, long ago, Bill called Steve and said “If I EVER see a commercial or ad comparing your slick deal to my pos, I will stop producing Office X”.
Is his name Jobs or Osborne?
They could have a 30 second ad where the tv screen is fully taken up by on os x screen. Then they just show a video being played, moved to background, music being played, syncing iPod, move to background, etc… then expose showing them all at onece…melt to apple logo.
It could be done unfortunately Apple is lifestyle seems to be the policy and an os x demo is perceived to be geeky ( when, in this case I don’t think it need be )
Microsoft have done this in a somewhat lame way and they seem to shift quite a few units.
A dividend is ludicrous but expensing options is inevitable, so wy not lead? As for the cash horde… takeover protection? Safety cache? Opportunity reserve? Why not!
As for commercials… I don’t believe in them. Apple is doing it the only way, by leading in product. It’s clearly the best product. It’s garnering its share of favorable publicity. It has the ability to keep innovating while avoiding BIG screw-ups. It can develop pro-apps and consumer apps and pull the rug from under the competition. It’s stretching — to wit, the QC issues and other teething problems. This engine is running smoothly and firing on all cylinders. If only the US market could have stayed focused on product rather than the wrapper they would be in much better shape.
Security holes and viruses are on our side. Ridiculous licensing terms are on our side. The best Linux platform is a Mac for chrissakes! The OS is based on Unix. IT Departments are starting to look seriously… the good ones, at least. If IBM can’t make chips for the future then who can? What more do you want — customers?
They’ll come in time. When they’re ready. Stay the course, Steve.
“We believe that understanding is finally dawning on the Average Joe Windows Sufferer�” — Rubbish! — Junk! — Not true!!
Look, regular Joes in the Windows world think that viruses, spyware and crappy perfomance is just how it is. They complain about it for sure, but to regular folks that’s just how “computers” are. They have no idea that there is any other choice, (Windows=Computer) and if they have ever heard of Apple, or “the Mac” they have no idea it is any different and that is all Apples own, dumb fault!
Use some of that huge mountain of cash and come out of hiding! Show the world how much better it can be damn it all!! Don’t you just want to slap them? Computer users are ripe for something that works.
I’m so sick of dying Gateway, Dell-Mart and such, saturating my TV with their ad’s about quality and reliability – Cheap batards – and not a squeek from Apple. Obscurity kills. Apple really needs to get on the stick and come out of hiding. If they are the BMW of computing, then advertise like BMW…
less is more is wrong because shaven is right.
Staying the course will only reduce market share further while making the ipod absolutely necessary for corporate survival, and reduce R and d on computers.
The average person who is not part of the apple love-in thinks macs are stylish, cute, expensive, and won’t satisfy their needs.
Despite the hope evident on this site, I think that that opinion is becoming MORE prevalent, and sales figures back that up.
In Australia at the moment, Microsoft is running a series of adverts that hint at their software assisting people’s creativity – I almost choked when I saw them, because this is clearly Apple’s niche – where is Apple? – the silence is truly deafening … Apple has no idea how to market a product – heck even one television advert (are you listening Apple, you know tv – it has pictures and sound …) would be a start.
Eric, the same stuff is running in the states, and not.
Speaking about expensive computers, I recently read this article about the new BMW 7 series, which I was horrified to find out is powered by a version of Microsoft Windows CE. (not to change the subject) I was actually thinking about getting a 5 series which has the same iDrive controll system (until I read this article). No, OSX should not be a secret for Mac users. BMW needs it. Wintell boxes are all about price. $50k is a lot to spend when you can get a Dell for $500 bucks.
http://www.baselinemag.com/article2/0,3959,833424,00.asp?kc=BAZD103019T1K0100547
yet again, I will say, if apple won’t do it, why doesn’t the more creative mac community make commericials and raise $$ to show them on local TV networks??
By the way, according to this article, it doesn’t appear that Windows runs any better in a BMW than it does in a Dell.
They call it iDrive? That’s going to frost some folks I bet!
Steve, why? What advantage is it to individuals to promote Apple?