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Now THAT'S Different (10/14/99)
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By George, we think he's got it! Leave it to Steve Jobs to figure out a way to break the long-standing Apple Profit Stock Curse. See, for the seven quarters prior to Q4/1999, Apple's final earnings have been not just profits, but profits higher than the Wall Street analysts were expecting. And yet the Street's reaction to this "we're doing even better than you thought we were" news has generally been a few points knocked off of Apple's stock price. While we never understood this behavior, we were happy to document it as an honest-to-goodness repeatable syndrome and then leave it at that.
But Steve was thinking differently for Q4. Tired of seeing AAPL dip every time Apple did better than expected, yet facing an eighth consecutive Street-beating earnings report (following reduced estimates after his own earnings warning), there was only one way to break the pattern: simultaneously announce a move so absurd-- so absolutely unheard of in the computing industry-- that Wall Street would be confused into breaking its pattern. (Shades of Confuse-A-Cat, Limited.) Hence, Apple's $111 million quarterly profit was announced just as the company introduced a new line of Power Mac G4 systems which ushers in a whole new paradigm: slower computers for the same cost.
Oh, sure, you may scoff-- but you can't argue with a 14% increase in Apple's stock price. AAPL rose over nine points throughout the day in very heavy trading, finally closing at over $73 despite the company's better-than-expected profit. When you think about it, it almost makes sense, given the terrific stock performance of some of those Internet ventures whose business plans seem to be to post as large a loss as possible. (And for those of you who think Apple's stock performance is due to the analyst upgrades mentioned in a Reuters article, how's the weather over there in Fairy-Tale Land?) So congratulations to Steve both for breaking the curse, and for bringing the computing world another Apple innovation: less speed for the same price.
Unsurprisingly, we're hearing whispers that Dell soon plans to steal Apple's thunder by revamping their own line of power-user systems. After seeing Apple's stock jump 14% after unveiling slower machines that cost the same price as their predecessors, Dell hopes to take things a step further. Therefore, Dell's new Precision workstations will use much slower 486 processors running at no more than 66 MHz, with prices ranging from $2500 to $4000. Uh-oh. If Apple's going to compete with that, we hope they've got a hidden cache of 68030s kicking around in a warehouse somewhere...
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SceneLink (1845)
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And Now For A Word From Our Sponsors |
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 | | The above scene was taken from the 10/14/99 episode: October 14, 1999: Steve Jobs breaks Apple's stock curse by confusing Wall Street into sending AAPL soaring. Meanwhile, irate customers get their wish, as Apple reinstates the G4 pre-orders that were cancelled just the day before, and Windows 2000 slips again, now due in February of next year...
Other scenes from that episode: 1846: World's Not Ready (10/14/99) Unfortunately, it appears that the Macintosh community sometimes needs to be dragged kicking and screaming into the future of computing. Remember the uproar over the iMac's lack of a floppy drive? Well, here we are a year and a half later, and not only is the iMac wildly successful, but Apple has also omitted the floppy drive from every computer it now produces, and there's nary a complaint still out there... 1847: Shoulda Called It Win99 (10/14/99) Finally, a quickie about our pals in Redmond, who are still struggling to get Windows NT 5 out the door. Renaming the product "Windows 2000" a year ago may have been just a little too prescient; the next version of Microsoft's heavy-duty professional/server operating system was most recently due on store shelves before the end of this year, but according to a PC Week article, now the company is saying that the product won't be available until February of next year...
Or view the entire episode as originally broadcast... | |  |
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