Apple Computer is set to post its first losses for three years. Apple's news confirms it is now a buyers' market for desktop PCs. It follows revenue warnings from Dell and HP, profit warnings from Gateway, and Compaq ceo Michael Capellas' warning of an imminent price war.
While Apple is mainly a consumer PC vendor, it is still the industry standard desktop in the field of design and publishing, with a strong following in UK education institutions. Because its like-for-like prices are generally above those of Wintel PCs, Apple will find it hard to match the coming discounts offered by the Wintel vendors.
The swift industry-wide decline in PC sales will result in Apple's first non-profitable quarter in three years,'' said ceo Steve Jobs, who added that the company would return to profitability in 2001. Apple's shares fell 20% on last night's news.
Jobs said Apple faced problems of its own making, which it was "aggressively addressing", combined with a slowdown in PC demand and a worldwide economic slowdown. The slowdown in demand for desktops is "well beyond our expectations" said Apple's cfo Fred Anderson.