Apple Juice

Apple Computer (Cupertino, Calif.) reported that it lost money in its fiscal first quarter 2003, which ended Dec. 31, 2002, on revenues that were slightly weaker than analysts' expectations.

Apple executives said business conditions would probably remain difficult in the current quarter, expecting a “slight profit” with revenues about the same level as in the December quarter.

However, the 51 Apple retail stores generated 45 percent more sales than in the previous three months, and retail losses declined to $1 million in the December quarter from $3 million. Furthermore, the company said half of the people who bought Apple computers in the stores had never owned a Mac before, reinforcing the company's retail strategy of using the stores to entice users to switch from PC's running Microsoft's Windows operating system.

The company also said its quarterly revenues, while below the analysts' consensus estimate, was still 7 percent higher than the quarter a year earlier (which compares favorably with most other personal computer makers except for Dell Computer). And while Apple shipped about the same number of its Macintosh computers as a year ago, higher selling prices boosted revenue. In particular, the iMac models with flat-panel screens, which are more expensive than conventional desktops, contributed to the trend.

Apple ceo Steven Jobs insisted the company would not waver from its strategy of spending to develop new hardware and software products and opening stores. “We're going to keep investing through this downturn,” he said. “When the economy rebounds, we will be positioned for growth.”