Apple Computer's Snazzy iMac Draws Early Orders, MacWorld Hype|
Cupertino, California, July 1 (Bloomberg) -- Apple Computer Inc.'s iMac home computer is drawing big advance orders at retailers more than a month before its introduction, which is expected to boost sales and earnings in the second half.
At ComputerWare's 10 stores in Northern California, more than 186 buyers have placed orders to get one of the first translucent blue space-age computers, which cost $1,299. No. 9 PC maker Apple is expected to hype the iMac at its MacWorld trade show in New York next week, with more demo models, new compatible software and add-ons like scanners and networking cards.
You could call it 'iMacWorld,''' said analyst Louis Mazzucchelli of Gerard Klauer Mattison, who rates Apple ''buy.'' ''Apple always tries to make an event out of this show, and whatever it is this time it will have to do with iMac.''
All the iMac interest means that Apple probably will escape the slow summer sales that are expected to hamper results for some other personal-computer makers. That will help boost Apple's sales and earnings in its fiscal fourth and first quarters. Analysts expect the company to ship as many as 400,000 of the machines in the quarter ending in September.
It's going really well -- way beyond what we expected,'' said Paul Ramirez, vice president of ComputerWare, which sells only Macintosh machines and products. ''If this is an indication of future sales, life is going to be great.''
Life has been anything but great for Cupertino, California- based Apple in recent years. The company made serious missteps in forecasting demand, which resulted in short supplies and angry customers. Management turmoil put the company in a tailspin that resulted in losses totaling $1.8 billion in 1996 and 1997.
Interim Chief Executive Steve Jobs was brought back almost a year ago after being forced out of the company in 1985. Jobs introduced the iMac in May, invoking the first Macintosh introduction by using the same ''hello'' message on the screen with ''again'' underneath. The original Apple Macintosh was the pioneer of point-and-click and icon-based computing.
Analysts now expect the company to report its first annual profit since the company started its slide in market share and earnings in 1996. Market share is starting to tick back up and sales are expected to start growing from year-ago levels by December.
I expect them to report more than $1.00 in earnings in the fourth and first quarters (combined),'' said analyst Stephen Dube of Wasserstein Perella Securities. ''I don't remember the last time Apple put two quarters together like that.''
Indeed, the average estimate for Apple's first quarter, which ends in December, has risen to 52 cents a share from 47 cents at the beginning of May, according to First Call Corp.
Still, Dube and other analysts are cautious about getting too optimistic. Apple still must navigate a big transition to the new consumer machines, new portables and new versions of its operating system software. Most important, analysts said, the company needs to attract new users, not just Mac fanatics.
They should see good demand for the products that are out there. The question is the sustainability of the demand,'' Dube said.
Jobs is famous for using these gatherings of the Mac faithful to whip up enthusiasm and make grand announcements. At last year's MacWorld in Boston, Jobs unveiled a $150 million investment by Microsoft Corp. and a board shakeup that pushed out founding investor Mike Markkula.
This year's show is expected to be much tamer. Jobs will make an appearance via satellite during a keynote speech by vice president of marketing Phil Schiller.
Apple will use the trade show to show off new storage products for the iMac, which has no floppy drive, as well as network products and printers for the machine. The company also rushed out about 50 demo models to show to the expected 40,000 attendees.
And that's good news for retailers like Computer Town, which has five stores that sell Apple products as well as other PCs, and expects to get a display model of the iMac to coincide with MacWorld.
Once people can touch and feel and see it, they'll go nuts for it,'' said analyst Mazzucchelli.
Tony Violanti of Computer Town is counting on that. He said his stores have received hundreds of advance orders, which was much higher than he expected, and the rate of new orders has accelerated in the past few weeks.
As far as Apple goes, I don't think we're having a slow summer at all,'' Violanti said.