Apple 1997 Annual Report Download - page 14

Download and view the complete annual report

Please find page 14 of the 1997 Apple annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 187

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185
  • 186
  • 187

International net sales represented 50% of total net sales in 1997 compared with 52% of net sales in 1996. International net sales declined 30%
in 1997 compared with 1996. Net sales in European markets and Japan decreased during 1997 compared with 1996, as a result of decreases in
Macintosh computer and peripheral unit sales and the average aggregate revenue per Macintosh unit in Japan, which were partially offset by an
increase in the average aggregate revenue per peripheral unit. Further discussion relating to factors contributing to the decline in net sales in the
Japanese market may be found in this Part II, Item 7 of Form 10-K under the subheading "Global Market Risks" included under the heading
"Factors That May Affect Future Results and Financial Condition," which information is hereby incorporated by reference.
Domestic net sales declined 26% during 1997 compared with 1996, due to decreases in unit sales of Macintosh computers and peripheral
products and in the average aggregate revenue per peripheral unit. The average aggregate revenue per Macintosh unit in the U.S. did not
change in 1997 compared with 1996.
During 1997, as compared with 1996, the Company's estimated share of the worldwide and U.S. personal computer markets declined to 3.6%
from 5.7%, and to 4.6% from 7.4%, respectively, based upon current market information provided by industry sources.
The Company believes that net sales will be below the level of the prior year's comparable periods through at least the second fiscal quarter of
1998, if not longer.
Q4 97 COMPARED WITH Q4 96
Net sales decreased 30% in the fourth quarter of 1997 compared with the same quarter of 1996. Total Macintosh computer unit sales and
peripheral unit sales decreased 30% and 32%, respectively, in the fourth quarter of 1997, compared with the same period of 1996, which the
Company believes was due principally to continued customer concerns regarding the Company's strategic direction, financial condition and
future prospects, and the viability of the Macintosh platform, and to competitive pressures in the marketplace. The average aggregate revenue
per Macintosh unit decreased slightly in the fourth quarter of 1997 compared with the same period of 1996, as a result of continued pricing
actions, including increased rebates, across most product lines, partially offset by an increase in the average aggregate revenue per Powerbook
unit. The average aggregate revenue per peripheral product also decreased slightly for the foregoing reasons. The average aggregate revenue
per Macintosh computer unit and per peripheral unit will remain under significant downward pressure due to a variety of factors, including
industrywide pricing pressures, increased competition, and the need to stimulate demand for the Company's products.
International net sales represented 42% of total net sales in the fourth quarter of 1997 compared with 47% of net sales in the same period of
1996. International net sales declined 38% in the fourth quarter of 1997 compared with the same period of 1996. Net sales decreased in the
European markets and decreased significantly in Japan during the fourth quarter of 1997 compared with the same period of 1996, as a result of
decreases in Macintosh and peripheral unit sales in Europe and Japan and in the average aggregate revenue per peripheral unit in the European
markets and the average aggregate revenue per Macintosh unit in Japan. These decreases were partially offset by increases in the average
aggregate revenue per Macintosh unit in Europe and the average aggregate revenue per peripheral unit in Japan. Further discussion relating to
factors contributing to the decline in net sales in the Japanese market may be found in this Part II, Item 7 of Form 10-K under the subheading
"Global Market Risks" included under the heading "Factors That May Affect Future Results and Financial Condition," which information is
hereby incorporated by reference.
Domestic net sales declined 24% in the fourth quarter of 1997 over the comparable period of 1996, due to decreases in unit sales of Macintosh
computers and peripheral products and in the average aggregate revenue per Macintosh unit, partially offset by an increase in the average
aggregate revenue per peripheral unit.
11