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Apple: not dead yet
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Greg Ross Telephone: 408-991-7345 Motorola SPS FAX : 408-991-7420 Sunnyvale, California USA EMAIL : rtbd70@email.sps.mot.com Subject: Apple-Some Good News
Recently quite a bit has been made of the "implosion" of Apple. Financial analysts who allegedly know how to read a profit/loss statement are ignoring their training and making pronouncements on Apple that are quite out of hand with the facts. Likewise, the media has taken to reporting bits and pieces of a story without looking further.
How does Apple's loss of $68 million in one quarter compare to other companies? Well, in 1993, IBM lost $399 million in one quarter and had massive layoffs. ATT recently lost a staggering amount of money on its PC manufacturing unit (formerly NCR) and decided to split itself in three to protect itself in case of overwhelming loss in any particular area, and just announced the layoff of 40,000 employess. Microsoft just announced layoffs, and on top of that, several tracking groups have announced that vendors are shipping back orders of Windows95 that didn't get bought. Similarly, Reuters reports that Intel's woes have only just begun.
Apple had 3 of its best quarters in the 1990's in 1995; only one quarter was not profitable, due to price cuts due to fierce competition with Japanese companies allegedly dumping machines on the Japanese market, of which Apple has a nearly 20% share.
According to SEC filings for FY 1995, Apple made $11 billion in net sales, with a net income of $424 million, $952 million in "cash, cash equivalents, and short-term investments", total assets of $6 Billion, and a long-term debt load of $303 million. Bankrupcy isn't a option - Apple has too much money on hand. One bad quarter in a otherwise profitable year does not a failure make.
If we follow the logic of the Apple naysayers then IBM, ATT, Intel, and Microsoft are headed for doom.
Demand is high for machines running the Mac/OS. There is currently between a $600 million to $1 billion backorder on PowerMacs (source: Apple Computer).
Apple also has its foot in the door of innumerable other innovative technologies that will insure longevity (their licensing of Pippin to Bandei, for example - read the current US News on that one) along with the development of Quicktime, OpenDoc (with Novell & IBM), QuicktimeVR, Quickdraw3D and on and on.
Lets review a few things:
Apple maintains a 10-13 percent US market share as a computer manufacturer in a glutted market and consistently rankes as vendor 1 through 3 (sources below).
The Macintosh operating system (MacOS), is gaining market share globally, with US figures of approximately 15% according to combined statistics from Apple and the Mac compatible manufacturers (Power Computing, etc.)
According to the US Microcomputing Statistics Committee, Apple's US market share grew to 10.8% in Q2 '95 up from 10.2% in Q2 '94. They shipped 20 percent more computers in Q2 '95 than in Q2 '94 - compare that to 15 percent for Compaq, 18 percent for IBM and a 5 percent growth for industry overall.
Both Dataquest and International Data Corporation (IDC) put Apple in first place in their quarterly surveys of computer sales in the U.S. for Q3 '95. Apple topped all competitors, with over 13 percent of all computers sold in the U.S. being Macintosh computers, in Q3. Dataquest pegged market share at 13.1 percent, while IDC estimated share of 13.9 percent. Apple shipped 25 percent more computers in Q3 '95 and had previously shipped over 20 percent more units worldwide each quarter for the previous three quarters, with units increasing over 50 percent in the U.S. in Q2.
Apple is the #1 vendor in US markets in K-12 education, higher education, publishing, and multimedia authoring and playback.
Apple has a 63% share of the installed base in US K-12 institutions according to QED. Apple's market share in K-12 has risen over four points in the last year.
58% of all K-12 purchased in the 95-96 school year will be Macs, per QED.
IDC estimates that Apple is the #1 installed base vendor in US homes in 1995.
Apple has a 63% share of the US commercial publishing market. Apple has a 26% share of the US corporate publishing market. Apple has a 50% share of the US chemical, pharmaceutical, biotechnology, scentific, and engineeering markets.
Apple is the #1 brand among college students: Among full-time, undergraduate students who own personal computers and attend U.S. four-year public and private colleges, 29% own Apple-- a full 11% more than the nearest competitor. (Source: Roper College Track 1994)
Apple is the brand of choice in higher education institutions: 19.4% of PCs purchased by higher education institutions in 1994 were Apple computers, 11.5% were IBMs, 8.4% were Gateway 2000s, 4.1% were DECs, and 2.9% were Compaqs. (Source: Computer Intelligence InfoCorp, 1994)
Schools looking to own the most powerful technology available are indicating a strong preference for Apple technology: In the coming year, PowerPC/Power Macintosh sales are projected to out-pace Pentium sales 3-to-1. (Source: Quality Education Data's 1995-96 Technology Purchasing Forecast)
Macintosh is the number one Web authoring platform.
Apple achieved status as the number two Internet server vendor in two months time.
63% of all multimedia applications development is done on Macintosh, per Dataquest.
33% of existing multimedia personal compters are Macintosh, per SIMBA Information, INC.
Apple is the #3 vendor in the US business market. Over one-third of Apple's revenues come from the business market.
Apple is the number one US computer vendor and the number two vender overall in Japan with 16-20 percent of the market, per IDC and Dataquest.
Macintosh software sales accounted for 18% of the Japanese market in Q2 95, up from 13 in Q2 '94, per Software Publishers Association.
Apple is the most used personal computer brand overall in Australia, per IDC and is the number one brand in Australian business, education, and consumer markets.
Apple was the number one vendor in the Canadian education market in 1994, with 32.5% share, per IDC. Apple was the number one vendor in the Canadian consumer market in 1994 and through the first half of 1995, per AC Nielsen Marketing Research. Apple's growth in Canada through the first half of 1995 was double the overall Canadian market growth.
There are over 8000 applications that run on Macintoshes.
For the first half of '95 Mac aps sales were up 16% (through May) according to SPA.
IDC says that on average, the cost to develop and support Wintel applications is 50% higher per dollar of revenue than the cost to develop for Mac. The same study indcates that software marketing costs are 13.5% of revenues for Mac apps and 26.3% for Wintel apps. Macs generate almost 75% more software revenue per machine than Windows machines.
US News and World Report: "From a software publisher's point of view, releasing a Macintosh version makes good business sense. Production costs for Mac software are lower than those for Windows titles; less testing is required because there is a single standard for Mac hardware and software. And Macintosh owners buy 30 percent more software than their Windows counterparts."
A Federal Government Computer News survey published January 18, 1996 found that Apple's System 7.5 was tops in the overall scores and led the other operating systems in 9 of the 11 attribute scores. Other operating systems which were included in the survey included Windows 95, MS-DOS 6.22, Windows for Workgroups 3.11, Windows 3.1, MS-DOS 6.2, and MS-DOS 6.0.
Quotes from the report:
"...with eye-popping scores of 100 and 96 in the ease of use and ease of installation categories respectively, it's safe to say the average Mac user would never trade a Mac for a Windows machine.
"Federal users universally praised System 7.5's interface, software compatibility and most of all, its stability.
"'System 7.5 is easy to use and not prone to constant system crashes associated with all the Microsoft systems I use,' said Kurt Garnjost of the Air Force Legal Services Agency in Washington. 'Not only do I have fewer problems, but when I do, I'm never at a loss to figure out what the problem is and how to solve it.'"
CI Inforcorp study demonstrates that Mac brand loyalty is the highest in the industry, 90% of Mac customers buy Macs again when making a second purchase.
A PC World suvery of 23 customers ranked Apple #1 in depentability, and service.
JD Power and Associates recently ranked Apple Macs #1 in reliability, dependability, and customer satisfaction.
Several labs have confirmed that the PowerPC chip is superior to any Intel product, including P6 (pentium pro).
I have left a ton of other informative stuff supporting Apple and the MacOS for due to space concerns.
Best Regards
Greg Ross ```
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