Byte of the Apple
columnist Charles Haddad said that there’s “reason to cheer” for Apple despite the company’s posted fourth quarter loss of US$45 million.
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Thanks to the iPod and other smart business decisions, Apple managed to stay ahead of the curve for quite some time as other computer makers were bleeding red, said Haddad. And if you subtract losses associated with one-time charges like a $49 million write-down of declining investments, Apple actually managed a profit of about $7 million, or about $0.02 per share. “That’s almost enough to buy every shareholder a jawbreaker to celebrate,” he added.
Apple’s retail strategy appears to be paying off, said Haddad, with quarterly revenue pegged at $102 million and 40 percent of new CPU sales in those stores going to new Mac users — a sign that Apple’s “Switch” ads are working.
Apple’s “vital signs are weak,” Haddad cautioned, noting that Mac shipments dropped 14 percent year over year. Key markets for Apple — publishing, graphic arts, advertising — remain depressed, and the educational market is grim, despite “huge publicity coups” like the state of Maine equipping all seventh graders with iBooks. “Few districts are making big orders of new computers. But, sadly, those that are ordering are choosing the likes of Dell over Apple,” he said.
Haddad said that ultimately, education has a smaller impact on Apple’s bottom line than publishing and graphics, since schools tend to buy low-margin systems. “A revival in advertising would give Apple a much bigger boost than selling every state on wireless iBooks,” he said.