Company Status of Apple Computers
Company Status of Apple Computers
During the time of this case Apple Computer’s status was not looking too good. It was the close of fiscal fourth quarter of 1997 and Apple’s revenues were $1.6 billion, a 30% decrease from the year before. The company’s net loss for the quarter was $161 million compared to a net profit of $25 million the previous year.
To get a better understanding of the company’s 1997 financial position with respect to the previous year see Exhibit 1 Apple’s Financial Ratio Analysis.
Steven Jobs was once again in charge but only as acting CEO while Apple as in search of a new CEO. Prince Aliweed owned 5% of Apple and they were looking for suitors to by Apple and fix it.
The decline in demand, resulting in losses and the combination of intense price competition led the company in it’s decision to continue restructuring it’s business in 1997. Apple Computer focused on reducing it’s core structure, improving its competitiveness, and restoring it’s sustainable profitability.
In February 1997, Apple acquired NeXT. The purchase brought Steve Jobs back into the company.
To better understand Apples position we need to analyze where they are currently at.
The Positives-
1. Brand Recognition- It is no secret Apple has a world renowned brand name and catchy hardware design. Apple’s success was due to marketing and technological innovation in the high growth.
2. User Friendly Architecture- Apple kept the architecture of the Macintosh proprietary, and it could not be cloned like the open system IBM PC. This allowed them to charge a premium for their distinctive user friendly features. This user friendly feature not only helped them to take a large portion of the general market share it helped them to be the dominant player in schools.
3. Purchase of NeXT Software-
The Acquisition of NeXT brought a host of talented quality programmers along with Steve Jobs and other executives. They knew Apple, the industry, and were full of vision which is what Apple desperately needed at this time.
4. Good Core Products-
Apple had strong core products, the Macintosh still had a strong foot hold in the market. In the early 1990’s Apple sold more personal computers than any other computer company. Net Sales grew to over 7 Billion, net income to over $530 Million, and earnings per share to $4.33. The basis for these products allowed Apple...