Apple’s Retail head was recently replaced. The hire seems to have been a mistake dealt with quite swiftly. It is tempting to think that the firing of a manager is due to a failure in their performance, measurable in quarterly reported metrics. But this is not often the case. It may be true of sales or some operations, but most strategic management decisions take months to make and years to implement before you can have the luxury of measured results. And even then the dependencies of performance are many and outside the control of specific managers.
John Browett joined Apple in April and left in October. A mere six months. How did Apple retail perform in those two quarters? Very well actually. Which is to say, as well as it has previously given the overall performance of the company. The correlation can be shown between store revenues and iOS device shipments:
Store visits increased to 94 million in Q3, second only to fourth quarter of 2011. The growth was 21%. Year-on-year growth in revenues was about 17% for both quarters, in-line with company growth. Profits grew 5% in Q2 and 25% in Q3.
Average visitors per employee picked up slightly but remained largely unchanged since 2008.
Igloo powers intranets you’ll actually like. So, it’s no wonder IDC recently named Igloo as having the best overall solution capability rating of all the vendors profiled in the enterprise social software space.
In fact, IDC completed a thorough review of the market based on user interviews, buyer surveys and the input of a review board of IDC experts in each market. The inaugural report is titled IDC MarketScape: Worldwide Enterprise Social Software 2012 Vendor Analysis.
Get your complimentary excerpt of the report to see how the market shakes out or learn about Igloo’s latest update, Q, which brings amazing new collaboration features to every Igloo customer.
Sponsorship by The Syndicate
In addition to the video (On Capital Spending’s Transformation of the Electronics Industry – YouTube), you can download the presentation used as an iPad Perspective story here.
It is a featured story on Perspective App on the iPad and now on iPhone and iPod touch.
In this episode Horace and Moisés discuss the iPad mini launch weekend (vis-a-vis older iPads and Windows 8), the curious case of choosy late adopters of smartphones in the US and the mystery of Apple’s capex late in the year. Horace spins a yarn about how Apple is playing chess with Sharp and Foxconn (and others) vs. Samsung.
via 5by5 | The Critical Path #62: The New Chess Game.
The latest yearly report from Apple includes, as it has in the past, the forecast of Capital Expenditures. I’ve been tracking this data as an indicator of both strategic intent and potential forecasting tool for iOS device production.
Before exploring Apple’s own forecast, we should look at how they met expectations for fiscal 2012.
In October 2011 the company forecast was as follows:
The Company anticipates utilizing approximately $8.0 billion for capital expenditures during 2012, including approximately $900 million for retail store facilities and approximately $7.1 billion for product tooling and manufacturing process equipment
In October 2012 it reported:
The Company’s capital expenditures were $10.3 billion during 2012, consisting of $865 million for retail store facilities and $9.5 billion for other capital expenditures, including product tooling and manufacturing process equipment, and other corporate facilities and infrastructure. The Company’s actual cash payments for capital expenditures during 2012 were $8.3 billion.
There are two points that need to be highlighted:
- Expenditures overall were $2.3 billion higher than forecast. Nearly all of the over-spending was for “product tooling, manufacturing process equipment and infrastructure”. Retail was planned at $900 million and actual was $865 (an under-spend of $35 million). As no major real estate assets were acquired (change in those assets was $380 million, less than 2011 or 2010) the “deficit” in budgeted expenditures can be attributed entirely to product tooling and manufacturing process equipment. The $2.3 billion spending over expectations amounts to 34% of forecast.
- The cash payments for capex were $2 billion lower than expenditures. This is a curious situation which was not highlighted in previous 10 K reports. What this implies is that much of the “over-spend” was not paid for though cash and since no new debt was booked it’s likely to have been paid for through some form of vendor financing. I’ll explore some explanations below.
So it’s important to note that the company spent a great deal more (one third more) than expected and paid for some of the acquisitions through uncharacteristic or unorthodox means.
The historic budgeting for Machinery & Equipment (+Land & Buildings) is shown in the following graph: