Despite the 75% plunge, Apple Computer Inc’s were better than expected as cost-cutting and restructuring measures began to pay off. For the first time in its history, Apple sold more than a 1m Macintosh computers in the quarter, but gross margins are still falling as the company strives to liquidate its built-up inventory and cut prices to keep the Mac in line with rock-bottom pricing on Windows machines. Apple attributed the drop to price competition and its decision to offer superior technology at or near rival product prices. Customer demand for Macintosh systems in the last quarter reached an all-time high, and we again gained market share, said Michael Spindler, president and chief executive. Shipments through retail outlets in the US and Japan more than doubled in the quarter from a year ago. Sales of the PowerBook portables were also good, with nearly 200,000 units sold worldwide during the quarter. Apple said its gross margins were just 24% of total sales in the quarter, down from 25.7% in the previous quarter to September. Apple has had some success in shifting its inventory, which stood at $1,300m, down from $1,500m in the previous quarter, but analysts told Reuter that it may see further margin pressure as it continues to slash prices to move product. Apple also needs to clear its warehouses to prepare for the launch in March of the PowerPC Macintosh – which Apple said only was on track for the first half of calendar 1994, but when asked about this insisted there were no delays at all.
