BBC Homepage World Service Education
BBC Homepagelow graphics version | feedback | help
BBC News Online
 You are in: Business
Front Page 
UK Politics 
Market Data 
Your Money 
Business Basics 
Talking Point 
In Depth 

Friday, 29 September, 2000, 11:55 GMT 12:55 UK
Apple slump rattles tech sector
Apple Cube computer
The Cube: sales disappointing
Confidence in US technology firms took another battering as Apple became the second IT giant in a week to announce a profits warning, and Microsoft lost one of its founders.

Apple expects fourth quarter revenue of $1.85-1.90, "substantially below expectations", the firm said in a statement on Thursday.

The firm blamed the figures, which are about one third less than analysts' predictions, on a "business slowdown" worldwide in September.

"We've clearly hit a speedbump," Steve Jobs, Apple's chief executive, said on Thursday.

In afterhours trading, Apple's share price dropped by 50%.

Tech share trouble

The announcement was made after the close of US stock markets, which are still digesting last week's profits warning by Intel, the world's largest chip manufacturer.

Steve Jobs, Apple chief executive
Steve Jobs: "We've clearly hit a speedbump"
And it came shortly before Paul Allen, who co-founded Microsoft with Bill Gates, announced he will be one of two directors stepping down from the firm's board next month.

Apple, while one of the pioneers of the home computer, suffered a decline in the mid-1990s such that by 1997 its share of its home US market had fallen to 4.3%.

But investor confidence returned after the firm launched a series of cutting edge products, including the iMac, which heralded a revolution in hardware design.

Cube struggles

Apple in July unveiled the Cube, a single processor computer housed in an 8-inch box.

But sales of the machine "had got off to a slower than expected start", Apple's chief finance officer Fred Anderson said.

Sales of education products, which normally peak in September, were also lower than predicted, he said.

Billionaire leaves

Paul Allen, the US's third richest man with a fortune estimated by Forbes magazine at $28bn, will remain a "senior strategy advisor" to Microsoft, the firm said on Thursday.

Paul Allen, co-founder of Microsoft
Paul Allen: worth about $28bn

"This [resignation] will relieve him of some of his time demands," a spokeswoman for Microsoft said.

He previously left the company in the early 1980s to battle Hodgkins Disease.

Earlier this year he sold about $3bn of his Microsoft, but has invested in cable companies, including Oprah Winfrey's Oxygen Media.

Double resignation

Microsoft also announced the resignation of director Richard Hackborn after six years on the board since Mr Hackborn recently resigned as chairman at Hewlett-Packard.

Apple shares closed up $4-9/16 at 53-1/2 on Thursday, ahead of the profits warning.

Intel's profits warning, which sent its shares down 21% last Friday, depressed stock markets worldwide.

Search BBC News Online

Advanced search options
Launch console
See also:

22 Sep 00 | Business
Intel shocks high-tech industry
19 Jul 00 | Business
Apple unveils the 'Cube'
16 Jun 00 | Business
Tech billionaires dominate rich list
16 Feb 00 | Business
Apple - back to the future
14 Jul 99 | The Company File
Apple's comeback: Mirage or reality?
13 Jun 00 | Business
Internet multimedia deal agreed
06 Jan 00 | Business
Jobs bites the Apple
22 Jul 99 | The Company File
Apple gambles on laptop success
13 Oct 99 | The Company File
Apple beats expectations
Internet links:

The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.

E-mail this story to a friend

Links to more Business stories