Rick Aristotle Munarriz (TMF Edible)
Paul's wife, Erika, hated her Power Mac G4. My mother-in-law Evangelina loves her iMac. So, where does that leave us? Nowhere really. I've yet to see an infallible product hit the market -- or one that is universally loathed for that matter. Don't go stuffing Paul's email with G4 love letters. Spare me the iMac sob stories. In the words of the profound Wallace & Gromit, "There's no sense prevaricating around the bush." Opinions are like noses -- they smell. We can turn to the critics for a more seasoned perspective.
The Larson lemon is a CNET Editors' Choice machine. That rank piece of citrus, in its new Cube format, won Home Office Computing's "Product of the Year" award, and the media accolades continue.
Paul points out that sales are down. That is true, but the quality of the revenues is what matters here. Apple earned nearly twice as much last year on $8 billion in sales than it did when revenues peaked at $11.1 billion in 1995. Yes, the current quarter is a bad start to fiscal 2001, but the company is looking at stronger sales, wider margins, and higher profits sequentially in the quarters ahead.
Paul also notes that Apple is flunking out of the classroom. He doesn't think the situation is entirely related to the summer in-house shuffle, and I agree. Apple passed the baton months earlier. But the software argument will be less and less convincing as time goes by.
Apple simply needs to knock harder and play on its strengths. Educators strive for logic, value, and simplicity. Apple offers them one-stop convenience; easy installation and painless upgrades; one company -- not a Rolodex of options -- to address hardware, software, and operating system matters. What school wouldn't want to stock up on cable-clutter-free, self-contained iMac solutions? Besides, they look so cool.
It's easy to see how the rollout of OS X will spur Apple's huge fan base to upgrade to dual-processor G4 systems. It's easy to see how the Cube at a more attractive price point will win over more than just journalists gushing over its quiet fan-free operation, raw power, and stylistic beauty. It's easy to see, period. So why is it not as easy to believe?
I feel like Eve. I'm here holding up Apple to your lips, asking you to take a bite, and you think it'll be the end of Eden. But Apple's balance sheet does not hiss. The fact that the company is trading at just six times this year's watered-down estimates on an enterprise value basis does not slither. There's no venom in Apple's rich product line, which goes beyond envy-inspiring hardware to include award-winning software such as QuickTime, WebObjects, and iMovie.
It's portfolio paradise. Sorry, Paul, you can't compare apples to lemons.
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