long spiral downward 12 of december, 1997 by johnmichael patrick monty monteith

The reason I have not written about the computer industry in a while is because I am disgusted by the progress (or lack there of) down in Cupertino.

Lets forget for a moment all of the different directions Apple Computer has taken in the last couple years to try to save themselves. Lets forget the revolving door in leadership. Lets forget the fact that the company to this day still does not have a sense of direction. Lets instead, treat Apple Computer as though it was any other for profit company. Bottom line: Show me the money. After you have managed to get past the Apple distortion field, you will find it does not exist. And in the corporate world, that is death.

Look at it through the eyes of an investor. No company with Apple's track record could be considered viable again until it can show a full year's worth of being in the black. But the truth of the matter is that Apple has not been able to have two consecutive non-loss quarters in a row for years. It has slowly, but steadily, lost money, more money, and a lot more money. The stock has shown the same trend, continuing to reach new all time lows, and showing no sign of reversal. When do the optimistic big-wigs in Cupertino predict operations to be in the black? We've been hearing the same "in two quarters" reply since this spiral began. What did they say this quarter? You guessed it. Two quarters down the road. (In fact, they might actually be predicting their earnings for next year: Two quarters.)

What also tends not to make investors real keen on your company is indecision. Apple may not have much left, but over the last couple years it has been the absolute king of indecision. It reversed decisions on it's operating system. On Newton. On it's CEO. On it's board. On it's relationship with Microsoft. On it's licensing. On it's direction. On it's advertising. On it's open architecture. And to this day Apple continues to operate without someone in charge.

Which brings us to another thing that makes investors a little queasy. When a company can not stop the losses, it is usually wise to put someone in charge that can turn the company into a profit-making machine. Someone with good business sense and a track record for managing corporations into a healthy and profitable future. Not only does Steve Jobs have a track record that shows the exact opposite of what Apple needs, but he is so uncertain of his abilities with Apple that he will not take responsibility for making the big decisions. Think about it. If Apple by some miracle of God starts making money, Steve Jobs is the savior. If they go bankrupt, Steve says, "hey, I'm only the interim CEO."

But what about all of those large sums of cash Apple has on hand? Pure distortion boys and girls. Sure, Apple has approximately 1.5 billion in cash. Yet, if Apple were to close it's doors right now, that money would no longer exist. Over half of that amount would go out to current debts alone. They keep a steady one and a half billion in the bank as risk reserve, and simply borrow the money to cover their losses. Looks good on the financial statement. Unfortunately most stock purchasers see beyond the distortion field and recognize Apple's true financial position. Hence the $14 a share offering. And dropping.

Notice I have not mentioned a word about their products. Not a word about advances in their technology. Not a word about what you hear about from Apple and it's fans all day long. Why? Because it does not matter. Because all of that neat technology they think is so important, if Apple can not turn things around financially in 1998, you can kiss it all goodbye.

Maybe the goal of Apple's new board of directors was to do exactly this: reverse all previous decisions and watch Apple go down the tubes. But, I will assume they actually want to see Apple survive. If that is the case, they need to make some profitable decisions. Let me name a few off the top of my head: Hire a CEO that knows how to make a profit, get involved in making machines people are buying (WinTel), and cut the fat not the future (cut Newton and other non-profitable companies, not the people building the future of Apple).

Fact is that Amelio (Apples last real CEO) had the company heading in the right direction. They were just around the corner from making a profit and securing some sort of a future. Today Apple seems further away from that goal than ever. For 1998 needs to give Apple fans a gift. Give us something we have not had in years, and something none of the experts think we will ever see from Apple again. Give us the only real thing that will turn the spiral around. Just show us the money.