Apple's Financial Struggles Continue as Profits Decline 41%

From Wininformant:

Apple Computer sold just over 2 percent of all computers in the quarter ending June 30, as year-over-year Mac shipments fell yet again for the company. Apple sold 770,000 Macintosh computers in the quarter, down from 880,000 in the same quarter a year ago, a decline of 12.4 percent. But from a financial perspective, the situation is even more serious: Apple's profits nosedived 41 percent year-over-year to just $19 million on sales of $1.545 billion; the last time the company's revenues were that high, its profit was over $40 million, or more than double. But wait, it gets worse: Most of Apple's profit didn't come from selling computers, software, or accessories, but from "interest income [on its] $4.5 billion in idle cash and short-term investments," according to the Motley Fool. Apple CFO John Connors admitted in a conference call this week that sales of the company's recently announced PowerMac G5 will not improve matters much, as Apple's customers are increasingly turning to notebook systems, making the next quarter another financial wash: Connors noted that total G5 sales should top out at just 200,000. On the other hand, at an average selling price of over $2500, not including a display, the G5 should probably do pretty well per-machine. Also, Apple's iTunes Music Store (6.5 million song downloads and counting, though the service lost money in the quarter), iPod (304,000 sold in the quarter, largely due to a major model change, but up significantly from 54,000 in the same quarter last year), and the PowerMac G5 continue to provide the company with positive press, a situation that, hopefully, will eventually lead to more sales and higher profits.

News source: Wininformant.com

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