iMac Propels Apple to $106 Million in Earnings
Citing streamlined operations and strong unit shipments of iMacs and other G3-powered systems, Apple Computer has announced earnings of $106 million for the fiscal quarter ending 25-Sep-98. For the fiscal year, Apple’s revenue totalled $5.9 billion, with net earnings of $309 million, marking Apple’s first profitable fiscal year since 1995. Although total revenue dipped slightly from the same quarter a year ago, Apple’s nest egg grew by more than $300 million to a total of $2.3 billion in cash and short-term investments. Apple’s ending inventory was a lean $78 million, or approximately six days of inventory.
Apple’s renewed financial health is in part due to the popularity of the iMac. Apple says it shipped more than 278,000 iMacs during the product’s first six weeks on sale, making the iMac the fastest selling Macintosh in history. These strong sales may indicate the iMac could help expand Apple’s market share: Apple grew faster than the overall computer industry last quarter. Further, while a telephone survey of almost 2,000 early iMac buyers revealed the majority of purchasers (58 percent) are previous Macintosh owners, a surprising 29.4 percent were new computer purchasers, and 12.5 percent owned Intel-based PCs. According to Steve Jobs, "We now know from this research that the number one reason people are buying iMacs is for fast and easy access to the Internet." Although Apple will face many challenges trying to sustain profitability, Apple’s products are clearly striking a chord with Internet-conscious consumers.