(Cupertino, CA, 2/27/98)
Apple Computer (AAPL) announces a new, more focussed, line of it's new G3 personal computers. To complement this product strategy the Company is also announcing a new sales channel and marketing direction. Noted CEO Steve Jobs "This new direction is a logical extension of the decision to drop Newton."
Apple announces that, effective today, it is dropping all products except the 233 mhz G3 Minitower machine. The Company wants to focus on a carefully identified group of induhviduals who want, and can afford, the very best Apple machine that money can buy. The specs of the remaining machine are:
Power Macintosh G3 Minitower - 266MHz G3 processor - 512K L2 "backside" cache - 128MB RAM - 4GB Ultra/Wide SCSI hard drive with PCI card - 24x (max) CD-ROM drive - ix3D Ultimate Rez graphics accelerator card (8MB RAM) - 6MB SGRAM video memory - 10/100BASE-T Ethernet PCI card - Apple ColorSync Display (20"/19" viewable)
It is estimated that the market for this machine is about 5,000 per year. Therefore, to make this decision revenue-neutral the Company also announces that the remaining G3 will be priced at $1,200,000.00, each. While this is somewhat of an increase compared to the current price of $5,448.00, Apple will install, absolutely free, copies of BOTH Netscape and Microsoft Internet Explorer on all of these machines. Apple will also include a free mouse pad with each machine.
In order to help achieve success of this new product and pricing direction Apple is also announcing a new "push" sales and marketing strategy. Apple will ship, effective 3/15/98, it's entire 1998 sales of 5,000 machines to the first 5,000 persons with valid Visa or Master Card accounts in its customer service database. Each lucky recipient of one of these machines will be billed on his or her credit card in 12 easy monthly installments of $100,000.00, plus 18% interest. Apple is sure that the lucky customers who receive these machines will be more than happy to cough up this modest amount to ensure the survival of the Apple brand.
In related announcements to be made tomorrow Apple will reveal it's new outsourced manufacturing contractor in Iraq, it's decision to terminate all support personnel and the immediate layoff of all R&D, marketing, sales and support personnel. Following this restructuring the only remaining employees will be Steven Jobs (CEO, COB, President, Vice President of all Divisions, and Director of all Departments) and Julio Hernandez (night watchman, janitor and company pilot).
It is expected that these moves will both reduce costs and enhance the Company's image as a highly focussed competitor. Profitability for current quarter is expected to improve to approximately $50 million. Mr. Jobs explained that the profit figure could have been higher, but he has accepted the $1,400,000,000.00 quarterly bonus that he granted to himself for improving the long term position of Apple.
In conclusion, the Company wants it's long term customers to know that these moves are being made to ensure that Apple will continue in it's long term direction of ever-smaller market share and outrageously priced machines. According to Mr. Jobs, "In making this bold stroke we are simply accelerating the long term trend and moving our market position to our current forecast for 2004. We will, with this one move, achieve both the world's smallest market share and highest price, all at the same time. We think that this will go down as one of the most innovative and creative changes in the history of personal computing."
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