Apple 1997 Annual Report Download - page 15

Download and view the complete annual report

Please find page 15 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

During the fourth quarter of 1997 compared with the comparable period of 1996, the Company's estimated share of the worldwide and U.S.
personal computer markets declined to 3.1% from 5.2%, and to 4.3% from 6.6%, respectively, based upon current market information provided
by industry sources.
Q4 97 COMPARED WITH Q3 97
Net sales decreased 7% in the fourth quarter of 1997 compared with the third quarter of 1997. Total Macintosh computer unit sales decreased
8% in the fourth quarter of 1997 compared with the prior quarter 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, as well as continued easing of pent-up demand for new PowerBook products which were
introduced in the second quarter. In addition, unit sales in Japan decreased significantly in the fourth quarter of 1997 compared with the third
quarter of 1997, primarily as a result of a weaker personal computer market. Unit sales of peripheral products decreased slightly in the fourth
quarter of 1997 compared with the third quarter of 1997. The average aggregate revenue per Macintosh computer unit remained constant as
higher average aggregate revenue per "Value" (entry level Power Macintosh) unit was offset by a lower average aggregate revenue per
Powerbook unit and aggressive pricing on discontinued products. The average aggregate revenue per peripheral unit decreased 5% in the fourth
quarter of 1997 compared with the third quarter of 1997. Furthermore, the average aggregate revenue per Macintosh computer and peripheral
unit was unfavorably affected by pricing actions, including increased rebates, across most product lines.
International net sales represented 42% of total net sales in the fourth quarter of 1997, compared with 53% in the third quarter of 1997.
International net sales decreased 27% in the fourth quarter compared with the third quarter of 1997, primarily as a result of a significant
decrease in net sales of Macintosh computers and peripheral products in Japan and a decrease in the average aggregate revenue per Macintosh
unit, slightly 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 increased 15% in the fourth quarter of 1997 compared with the prior quarter, due to increases in Macintosh and peripheral
unit sales and the average aggregate revenue per Macintosh computer unit, which increases were slightly offset by a decrease in the average
aggregate revenue per peripheral unit.
During the fourth quarter of 1997 compared with the third quarter of 1997, the Company's estimated share of the worldwide and U.S. personal
computer markets decreased to 3.1% from 3.7%, and to 4.3% from 4.7%, respectively, based upon current market information provided by
industry sources.
YEAR ENDED SEPTEMBER 27, 1996 COMPARED WITH YEAR ENDED SEPTEMBER 29, 1995
Net sales trended downward beginning in the second quarter of 1996, decreasing $1,229 million, or 11%; $1,545 million, or 19%; and $682
million, or 23%; during the twelve, nine, and three months ended September 27, 1996, respectively, compared with the same periods in 1995,
due to a decrease in net sales of Macintosh computers and of peripheral products. Total Macintosh computer unit sales trended downward
beginning in the second quarter of 1996, decreasing 11%, 19%, and 26% during the twelve, nine, and three months ended September 27, 1996,
respectively, compared with the same periods in 1995. This decline in unit sales was a result of a decline or lack of growth in worldwide
demand for all product families, which the Company believes was due principally to customer concerns regarding the Company's strategic
direction, financial condition, and future prospects, and due to delays in the shipment of certain PowerBook products as a result of quality
problems. In addition, unit sales of peripheral products trended
12