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Apple makes money; Gateway profits down 25%
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Sip!
Just heard on NPR that Gateway is hemorrhaging money, closing down stores, and the analysts rated their stock “junk” (I THINK I heard that right).
Sip!
This is the thing that the Apple bashers never want to admit. APPLE MAKES MONEY.
Sip!
Ten years from now, Gateway won’t be around; but you don’t hear anyone swinging at that clairvoyant softball.
Sip!
NOOOOOOO… they have to waste yoru time and mine “predicting” the Mark Twain-esque “greatly exaggerated demise” of Apple…
(iBrotha takes another big Sip! out of his beer, and crushes the empty can on his forehead).
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— iBrotha.com<font size=-1>[ This Message was edited by: iBrotha on 2002-01-09 19:19 ]</font>
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I find it humorous that Apple, a profitable company, is still “in danger” of going out of business, as it has been for 20 years.
Gateway has no hope of ever making money, yet they are in perfectly good shape.
On a somewhat related note, I love Steve Jobs’ quote regarding being profitable, as quoted by AtAT :
“Pretty much, us and Dell are the only ones in this industry making money. They make it by being Wal-Mart. We make it by innovation.”
If Apple were to buy out the Gateway Store in Sacramento (Might be two of em, not sure), and make it into an Apple Store, I’d be quite happy.
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Err.. wait…“If I were human, I believe my response would be, ‘Go to hell.’ If I were human.”
-Spock, Star Trek VI<font size=-1>[ This Message was edited by: x136 on 2002-01-09 19:16 ]</font>
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Curse your sudden but inevitable betrayal!
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DawnTreader
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Gateway can’t close many of its stores. The lease obligations most likely have stiff penalties if Gateway chooses to vacate locations. That’s a big part of their problem. it’s one of the reasons for the drop to junk status. They are carrying huge lease liabilities on their books.
It’s a classic Catch-22. The stores are expensive but may be even more expensive to close. Without the stores the compnay has little chance of generating the revenue needed to cover the cost of the leases.
Gateway’s business model is outdated and expensive compared to Dell. The suburban location of the Gateway Country Stores makes it very difficult for the company to sell business services through the store model.
Gateway will need to ride out the leases while at the same time making their products and services more attractive to businesses. When the founder came back to the company he scrapped many of the conmmercial programs that Gateway had developed in order to generate revenue outside the thin-margin consumer busness.
Obviously Gateway is having trouble in the consumer sector and is learning again that competing with Dell for consumer sales is not an easy business.
The company has over $1 billion in cash and can ride out 2002. They will need to do more than break even. The reduction to junk status is Wall Street’s statement that if Gateway wants access to capital at attractive rates, they had better come up with a more attractive business model and more profitable products and services.
Gateway can no longer balance the books just by cutting costs. They have all ready done that. In order to regain Wall Street’s confidence they need to grow revenue and increase margins.
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Has the merger with HP been accepted yet. I heard that they were going to, then I heard that the HP owners or something don’t approve of the deal.
I agree completely with what you guys said up there.
I think that if they do merge with HP it would be a very good move for them. Gateway is definitly on the better side of the deal.
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Britton,
There is only one problem with your stance, HP is merging with Compaq, not Gateway.
Gateway is in some serious trouble.
Pete
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Gateway’s problem is that my family and I devoured the Gateway cow for Christmas dinner. Now how are they going to figure out how to stay in business?
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Dang. That was you that beat me to that damn cow!
Bet it was chewy and stuff anyway.
</sour grapes>
BTW, it’s the Hewlett and Packard family members who were resisting the merger with Compaq.
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TMO Observer
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On 2002-01-10 09:59, Retro wrote:
Now how are they going to figure out how to stay in business?
Their going to steal a cow from Chick-fil-a. -
DawnTreader
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On 2002-01-10 10:28, Raena wrote:
BTW, it’s the Hewlett and Packard family members who were resisting the merger with Compaq.
Wow, Raena, you keep on top of things from “down under”. That’s correct. Members of the Hewlett and Packard families, as well as family foundations, have publicly opposed the merger.
The most frequently stated reason is that the Compaq acquisition would dilute HP shareholder ownership of the profitable HP printer business.
For her part, HP’s dynamic chairperson makes a compelling argument for shareholders to support the acquisition.
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I’ve never been in “Gateway Country,” but wasn’t the purpose of the stores just to show off the hardware—when you wanted to make a purchase you placed an order and it was delivered to you?
Is that still the case, or can you actually walk out of a Gateway Store with one of those fugly boxes in tow?
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DawnTreader
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On 2002-01-10 12:34, someToast wrote:
I’ve never been in “Gateway Country,” but wasn’t the purpose of the stores just to show off the hardware—when you wanted to make a purchase you placed an order and it was delivered to you?Is that still the case, or can you actually walk out of a Gateway Store with one of those fugly boxes in tow?
I believe Gateway shipped a limited number of boxes to the stores in the 4th quarter to help sell off inventory. Can you imaginje the inventory control costs of equiipng 200+ stores with product that is supposed to be configured by each user?
The only additional parts to add to an iMac or iBook are RAM and an Airport card. It makes inventory control much easier for the Apple Stores.
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computerarts
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I hate to see a business go down the tubes and people lose their jobs, it hurts the overall economy. Anyway, blame it least in part on bad management. Having been working for 40 some years now I have seen some real bone heads in position of authority.
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Apple may have only 5 % of the market, but it is the top 5%
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In comparison to Gateway, Apple seems to have developed a very effective business model. The only criticism I’ve heard of them is the price points of their computers. DawnTreader, what do you think?
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On 2002-01-10 12:34, someToast wrote:
I’ve never been in “Gateway Country,” but wasn’t the purpose of the stores just to show off the hardware—when you wanted to make a purchase you placed an order and it was delivered to you?Is that still the case, or can you actually walk out of a Gateway Store with one of those fugly boxes in tow?
I’ve never been in one either, but I was under the impression that you could actually buy the computer there. It’s an awfully big store to just have a few floor models to gawk at. But who knows? Maybe you order the computer there, then come back in a week or so to pick it up. When I worked at UPS, I got hammered with those damn cow boxes every day, so they must do a fair amount of shipping.
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Curse your sudden but inevitable betrayal!
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I have been into a Gateway Country store before. I was on the road, installing some equipment in a test lab and I had a bad NIC or sound card or mouse or something, I don’t recall exactly what. Across the street, I spotted a Gateway Country. I went in.
It was like a car dealership. There were lots of desks and office cubes, and a few floor models. No software, no hardware, just demo units. It did not feel like a computer store at all. Very upscale. I cannot confirm, as I had no interest in buying a computer (I build my own, which is largely what keeps me away from Macs), but I did not get the feeling that you could walk out with *anything* there.
I have not been in an Apple store either, but if they are NOTHING like the Gateway store, they should do fine.
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On 2002-01-10 16:14, x136 wrote:
I’ve never been in one either, but I was under the impression that you could actually buy the computer there.You can order a computer at the Gateway Country stores, but Gateway will ship it to your home—you can’t buy a unit right there and carry it out to the car.
In contrast, the Apple Retail stores do stock inventory; if you fall in love with a new iBook and want one immediately, that’s no problem. The only exception is build-to-order; then Apple’s salesfolks will help you get online and order a system through the Apple web site.
If Apple were to buy out the Gateway Store in Sacramento (Might be two of em, not sure), and make it into an Apple Store, I’d be quite happy.
You’d have to call in a priest and exorcise ‘em first.
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