Apple earnings down; stock tumbles; G4 Cube problems cited

Whoa! What happened to the floor? In a press release, Apple announced that "earnings for its quarter ending September 30, 2000 will be substantially below expectations due to slower than expected sales in the month of September." Apple cited three factors as causes of this sales slowdown: (1) a business slowdown in all geographies; (2) lower than expected sales in education in particular, which normally peak during September; (3) a slower than expected start in Power Mac G4 Cube sales. [See also this cnnfn story.] Analysts have focused on the last of the three causes as especially troubling. It raises questions as to whether there is really a market for the G4 Cube. After eliminating iMac buyers and Power Mac G4 buyers, who is left that wants to buy a Cube? Not helping matters is continuing controversy over whether "lines" in the clear plastic case of the G4 are "mold lines" (as Apple contends) or actually cracks. In either case, owners do not like the look of them. The bad news sent the price of Apple stock tumbling, in after hours trading, from its closing high of 53.5 to below 30. As of 11:30 a.m. ET, it was trading at about 26.5.