Apple Computer here We Go Again
Case 12
Apple Computer, Inc.(2000): Here We Go Again
I. CASE ABSTRACT
July 9,2000: It was ten days before the July 19, 2000 Macworld trade show in New York, when Apple Computer, Inc. Chief Executive Steven P. Jobs once again wowed the masses with his P. T. Barnum–style product introductions. First came the small stuff: a see-through plastic keyboard and a sleek mouse. Then, off came the covers from new versions of Apple’s popular iMac computer, now in four rich new colors, including ruby and indigo. Finally the climax: an 8-inch cube-shaped Mac that packed Apple’s most powerful technology into a clear plastic case about the size of a toaster.
The reporter from Business Week sent to the trade show gushed, “Since returning three years ago to the company he founded, Jobs, 44, has worked the most unlikely comeback since the 1969 Amazin’ Mets.” Close to death in 1997 with mounting losses and shriveling market share, Apple was back to making the most stylish products. Revenues were up 17 percent to $1.8 billion, in the quarter reported on July 18. The stock was up eight-fold since Jobs returned. Stock analysts expected 25 percent plus revenue growth in the year that ends September 30, 2001.
Thanks to the coolness factor of Apple’s products, the company was charging up to 25 percent more than its competitors for a machine with similar capabilities. That helped Apple gain a gross profit margin of 29.8 percent in the quarter ending June 30. More amazing is that in a company known for its free-spirited, free-spending ways, Apple had become a master of operating efficiencies. Jobs slashed expenses from $8.1 billion in 1997 to $5.7 billion in 1999. This was accomplished by outsourcing manufacturing and trimming inventories, shifting 25 percent of sales to an online store, and slicing the number of distributors from double digits to two.
October 20,2000: Under the headline “Apple Computer Plunges 52 percent, Drags Down Rest of Market” the Wall
Apple Computer, Inc.(2000): Here We Go Again
I. CASE ABSTRACT
July 9,2000: It was ten days before the July 19, 2000 Macworld trade show in New York, when Apple Computer, Inc. Chief Executive Steven P. Jobs once again wowed the masses with his P. T. Barnum–style product introductions. First came the small stuff: a see-through plastic keyboard and a sleek mouse. Then, off came the covers from new versions of Apple’s popular iMac computer, now in four rich new colors, including ruby and indigo. Finally the climax: an 8-inch cube-shaped Mac that packed Apple’s most powerful technology into a clear plastic case about the size of a toaster.
The reporter from Business Week sent to the trade show gushed, “Since returning three years ago to the company he founded, Jobs, 44, has worked the most unlikely comeback since the 1969 Amazin’ Mets.” Close to death in 1997 with mounting losses and shriveling market share, Apple was back to making the most stylish products. Revenues were up 17 percent to $1.8 billion, in the quarter reported on July 18. The stock was up eight-fold since Jobs returned. Stock analysts expected 25 percent plus revenue growth in the year that ends September 30, 2001.
Thanks to the coolness factor of Apple’s products, the company was charging up to 25 percent more than its competitors for a machine with similar capabilities. That helped Apple gain a gross profit margin of 29.8 percent in the quarter ending June 30. More amazing is that in a company known for its free-spirited, free-spending ways, Apple had become a master of operating efficiencies. Jobs slashed expenses from $8.1 billion in 1997 to $5.7 billion in 1999. This was accomplished by outsourcing manufacturing and trimming inventories, shifting 25 percent of sales to an online store, and slicing the number of distributors from double digits to two.
October 20,2000: Under the headline “Apple Computer Plunges 52 percent, Drags Down Rest of Market” the Wall