September 26, 1997: In one in every of his first duties after returning to Apple as interim CEO, Steve Jobs reveals the corporate’s large quarterly lack of $161 million. It’s Apple’s largest loss ever.
Giving buyers the dangerous information is depressing, however issues are about to vary dramatically for Cupertino.
Apple’s largest loss isn’t fairly as dangerous because it appears
For one factor, Jobs didn’t trigger Apple’s largest quarterly lack of all time. The earnings massacre stemmed from choices made by Jobs’ predecessor, Gil Amelio. Throughout Amelio’s 500-day reign at Apple, the corporate misplaced an enormous $1.6 billion. That primarily worn out each cent of revenue Cupertino earned since fiscal 1991.
Amelio stepped down from his function working Apple on July 7. Jobs took over working the corporate, whereas supposedly searching for a alternative.
Extra importantly, nonetheless, Apple’s $161 million loss truly mirrored some good issues beginning to occur. The loss included a $75 million write-off as Apple purchased again its Mac OS license from Energy Computing. This signaled the top of the disastrous “clone Macs” period.
Mac OS 8 boosts Apple’s backside line
Apple additionally was buoyed by the current launch of Mac OS 8, which bought an infinite 1.2 million copies in its first two weeks. That marked essentially the most profitable gross sales efficiency for an Apple software program product on the time.
Though Mac OS 8 wasn’t sufficient to claw Cupertino again into profitability, the brand new working system considerably outperformed many expectations. It additionally demonstrated that Apple nonetheless benefited from an enormous, supportive fan base.
“We remain focused on our primary goal of returning Apple to sustained profitability,” Apple CFO Fred Anderson stated when the corporate’s on-the-face-of-things-dismal quarterly numbers had been introduced. “Our goal for fiscal 1998 is to continue to reduce Apple’s break-even point through a combination of further expense reductions and gross margin improvements.”
As with Apple’s present “under-promise and over-deliver” technique, the forecast proved overly cautious. The corporate carried out fairly nicely the next yr.
The good Apple turnaround begins
Whereas it sounded considerably ridiculous in a yr that noticed Apple’s worst-ever losses, 1998 marked the start of a turnaround. The corporate launched the colourful first iMac that yr, returning to profitability the very subsequent quarter. And Apple hasn’t slowed down since.
However earlier than that, Apple needed to get by the disappointing earnings name that passed off on at the present time in 1997. Shareholders prepared to carry on for a bit of bit longer reaped nice rewards, although. Right now, Apple’s market cap sits north of $3.45 trillion.