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| Talk,
Graham Bower,
08 January 1999 | |
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Most Apple Computer fans seem pretty smug these days, and you could be forgiven for thinking that we're in for a bumper crop from the Apple orchard this year. Strange then, if Apple is doing so well, that their share price to earnings ratio is so much weaker than that of competitors like Dell. If seems that Wall Street's investors are not quite as optimistic about Apple's long term future as the gushing journalists who seem to think that a lick of orange and blue paint can turn a regular laptop into an exciting new 'dotcom' product catagory.
On closer examination, that orchard contains several rotten apples.
A year ago, when everyone was celebrating Apple's return to profitability and its compelling new product strategy, many comentators remarked on Apple's new-found ability to exceed expectations. When Apple CEO Steve Jobs announced the blue and white G3 computer at the beginning of the year, the machines went on sale the same day. Gone were the days of Apple vaguely discussing possible future products which only to scrap them a few years down the line without ever bringing them to market (Copland anyone?). No, with Steve Jobs back at the helm, we had an altogether new Apple, a company that didn't leak forthcoming product details to the press, and suprised and delighted their sales channel and end users alike with new products announcements swiftly followed by a ready supply of product.
The announcement of the new G4 computer at last month's Seybold conference in San Francisco seems to herald a return to the bad old ways at Apple. The problem for manufacturers like Apple is that by announcing forthcoming products before bringing them to market, they undermind sales of their existing product lines. Who's going to buy a G3 computer when then know they can get an even wizzier G4 computer for the same price if they wait a month.
Well a month later, and Apple's keeping us waiting. Not only for the new 'Sawtooth' G4, but also for the much heralded iBook. The problem, however, is not just that everyone is waiting for prematurely announced new products. The truth is you'd be hard pushed to buy any kind of Mac right now. Apple resellers on both sides of the Atlantic are grumbling about the lack of Macs to sell. Even supplies of the highly popular iMac computer seem to be drying up, and Apple is yet to make any announcement of an upgrade for the now aging iMac product line in time for the all important Christmas period.
For a company that claims to be back in the business of selling personal computers, they seem to have a strange lack of computers for sale. Apple put this down to delays in the delivery of the new G4 chip from their supplier, Motorola. But Apple cannot blame Motorola of the late arrival of the iBook, and the lack of any new direction in the iMac line. (Presumably Apple's special announcement this week will be regarding a new iMac or some sort).
Noone can argue with Apple's excellent marketing, but it's claims of 'operational excellence' somewhat stretch credibility. Job's has set much store in Apple's improved inventory management, gleefully highlighting that Apple consistantly has a lower inventory than that of it's competitor Dell. Low inventory is all very well, but perhaps Jobs should take a closer look at Dell's example - after all, when have you ever seen Dell short of a PC to sell.
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