“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