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Apple cuts jobs, discloses store revenue

Slims margins

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Apple has taken a $24 million hit and shed 425 jobs, according to the company's latest SECC filing. The cuts fall on Apple's IT, operations and admin, and the bulk of the expense is cancelled equipment leases, as opposed to cancelled human being leases.

And for the first time Apple has put a meaningful figure on revenue from its "Gapple" venture: 27 pine-strip floored retail stores. The operation snagged $48 million in the first quarter of fiscal year 2002, with an operating loss of $8 million. The period included the pre-Xmas shopping season, and in the headline earnings announcement made on January 16, Apple said it expected the stores to continue to run at a loss throughout 2002. Apple hasn't disclosed the capital cost of the retail foray.

There's good news however, in that Apple notes that 44 per cent of retail sales were from peripherals and software, exactly twice the proportion for the company as a whole. So there's promise that the Apple stores could yet morph into a general purpose electronics boutiques. (This is easier to imagine from University Avenue, Palo Alto than it is in Poughkeepsie, NY). But they do need to sell more stuff.

Apple again warned that margins will be down, citing the new iMac pricing "as aggressive". The flat panel iMac uses an expensive LCD and G4 chip in place of the the obsolete, and dirt cheap 15" CRT monitor and G3 combination.

And although the old iMac prices were low and sales falling, the bill of materials meant Apple still saw a tidy sum on each one sold. Apple also cited low memory prices as contributing to healthy margins, but the RAM price spike since the new year cancels that one out.

Sales of ARM shares contributed $35 million to Apple's bottom line. You can read the full filing [348k] here. ®

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