In the world of finances — especially in the tech field right now — it’s hard to know whether the glass is half empty or half full. Apple’s latest quarterly reports show a net profit of US$66 million, though sales are off 22 percent year over year. Is that half empty or half full?
Columnist Arik Hesseldahl in an online Forbes opinion piece definitely thinks it’s at least half full.
“At $16.99 a share as its closing price yesterday, Apple is only 37 percent off its 52-week high,” he says. “Compare that with the performance of PC companies like Compaq, which is off 69 percent from its high and Gateway, off 90 percent. Dell has done better, off less than 30 percent from its most recent high.”
Even with sales down by 22 percent and profits down by more than $100 million over the year-ago quarter, gross margins are up by more than 5 percent, Hesseldahl says. Despite this, the columnist said that errors such as “the ill-conceived PowerMac G4 Cube” have cost the company.
Hesseldahl also notes that the company, like all tech firms, has its work cut out for it in the months ahead. Seasonal sales, usually a high point of the year, are a question mark in the weak global economy. The current low prices on computer memory chips and flat-panel screen display may not last, Hesseldahl adds. And Apple’s also going to have to contend with the “media onslaught” when Microsoft launches Windows XP.
However, Hesseldahl thinks that Apple may have an ace up its sleeve with the mysterious digital device the company will unveil next Tuesday. It will certainly be “beautiful,” the columnist says.
“You can expect it will have its own little section in the Apple store,” Hesseldahl adds. “And you can expect it to be the subject of numerous clever TV commercials between now and December, all of which will be nominated for Clio awards. And if nothing else, if it’s truly cool, you can bet the thing will boost traffic to the retail stores and Apple’s online store. And maybe, just maybe, some of those who buy one will take home an iMac or iBook to match.”