#CBM Red Ink
22 messages in this thread
More info and thoughts for public discussion:
CBM today (in the first day of news involving more than one story in the
NewYork Times about CBM) announced that they may have some red ink a-flowin'
this quarter due to the value of the dollar (since they are an international
company, CBM is somewhat affected by fluctuations, although Gould has
previously said that any effects due to currency fluctuations ought to be
minor, due to balancing between different countries' currencies).
In view of recent discussions concerning Amiga's early marketing and the effort
to stanch the flow of red ink by immediately cutting marketing and advertising,
thus almost leading to the stillbirth of the Amiga, and in view of recent
statements by some concerning the low R&D spending of CBM, what do people here
think is likely to happen, expecially in view of recent hirings (including Mr.
Copperman) and announcements (including 1.4 stuff)?
Andre, do you have any comments?
–Gabe
Gabe,
A quarter or two of loss will in all likelyhood have no effect on the
overall plan, althou it may cause CBM to re-emphasize efforts here in the US
where dollar fluctuations abroad have minimal effects on CBM US's profit/loss
column. There would be some effect due to parts costs differences but not as
significant as overseas operations profit/loss numbers.
If the loss continues into 3 or more quarters, it would be cause for
concern again. We went thru about 7 quarters of losses back in '85/'86 and
things were getting pretty grim as far as the Amiga was concerned.
Obviously, this is all guess work on my part, I have no inside
knowledge of what will really happen. I suppose much of it depends on the
banks.
Don
That's more or less my feeling on the matter. If it's really all because of
the dollar fluctuations, although I have not seen the balance sheets so I
couldn't say, then development and R&D ought not to be targeted. Certainly US
sales ought to be targeted for improvement to help prevent the dollar
sensitivity of the profits. To that end, improving Amiga sales would be an
important step.
To achieve that goal, Commodore MUST make some solid moves into corporate
America, REAL SOON. I know that I have been banging this drum for some time
now, but it still holds true. Real profits will NOT come from home computer
sales. They are still the bread and butter of the company, and that's a
dangerous thing, since luxuries such as computers (and they ARE luxury
purchases for MOST consumers) are the first things cut in a downturn. Since a
recession, mild or not, is being predicted by many practitioners of the dismal
science (that's Economics, to the uninitiated <grin>), CBM had best get off its
collective rump and start things rolling by:
1) Announcing the 3000
2) Announcing the development of connectivity to major networks such as Novell,
3Com 3+, and TCP/IP (which they already have)
3) Coming out with 1.4 before year's end.
Of these three the second is perhaps the most important, since that
connectivity would permit corporate users to push for the acceptance of the
Amiga in business without the sacrifice of compatibility.
–Gabe
Gabe, agreed. If I could pick any one of the 3 choices, it would be choice 2,
networks. Nobody disagrees on that. However, I do not believe that the A3000
and 1.4 are vital, since the outsider just knows that they want a solution, not
a version number. That's more marketing, not engineering.
Talking about engineering releases, has anyone gotten their hands on
NuPrometheus' Mac QuickDraw source code? 🙂 Hee hee, what a mishap… has
anyone heard about that? andre
They also need to get the UNIX ™ Amiga out the door. Marlene
Andre,
HA! After hearing about the NuPrometheus offer, I thought of placing the
required ad to receive the code, but just for one second <grin> only! I figure
that anyone placing an ad now would have private Apple detectives all over
their house after that….
Besides, I'd rather disassemble stuff instead of looking at source <smile>; you
spot all the mistakes quicker!
Kev
Yes, but the solution is often CPU dependant regarding perceived speed. I
think no one here who has seen one in operation, can deny that the MAC IIx
operates faster than an Amiga 2000. Now, I have not seen the 2500 vs. the IIx,
and I am sure it is more than competitive, so perhaps, since we are avoiding
direct competitor bashing by the Company, the user community should be
educating the journalists, and the rest of the supposed opinion-makers to the
speed and capabilities per buck of the Amiga.
Even so, the public now responds very quickly to numbers and hype, much less to
facts. So, presenting an AMiga 3000 with 68030 to compete directly with the
MAC IIx, such that it is much faster than the MAC, would be a far more
representative, and effective IMHO, approach. Thus the 3000 is neccessary.
1.4? OK, I can hold on for that, and I agree that the potential user won't
care, so long as the OS is stable.
NuPrometheus? Heard of it, could care less. Though it IS a hoot!
–Gabe
Gabe,
I've come to the conclusion that CBM has a death wish. It produces computers
and then says "here they are, take 'em or leave 'em." There seems no desire to
aggressively compete against anyone at any time. They are like an eccentric
recluse that hides in a cave, invents a great product, shoves it outside the
cave and doesn't care whether somebody notices it or not. They just return to
the cave to work on something else. (A-3000, 1.4?)
Bob
Bob,
Judging from what I and others here have seen and reported, you may be in for a
rather sudden awakening and a surprise when Commodore begins advertising in
force this fall, and begins to announce new product developments. And 1.4 a
"something else? " I am afraid I will have to disagree. With the ARexx
capabilities being built into that release, hypermedia-like capaibilities are
just around the corner. Direct competition to the ol' Mac. <grins>
–Gabe
We really don't know most of what is going into 1.4. Apparently screens
which don't have to extend from the bottom and can move right and left are in
store, although I might be misremembering a lengthy message. I'm sure there are
many other enhancements. Simple ones would be good and powerful icon and font
editors and a new method for handling icons (such as only needing a .icon file
if you want to override a default icon).
— Ethan
Gabe,
All I can say, is that it's hard to win a championship when you are playing
"catchup ball" all season long. Where was CBM when the Mac was making a beach
head? CBM should have been fighting tooth and nail all along the way. And
another thing, every time I turn around, CBM is hiring this guy or that guy
that is really going to get the ball rolling. It's like politics. We get all
the rhetoric while others (IBM, Mac, etc.) get all the action.
Don't get me wrong, I love the amiga, but there doesn't seem to be anyone there
to take the bull by the b—-, er, horns. That old saying still goes; "actions
speaks louder than words".
-Bob-
Gabe,
I only know that they have been hiring lots of technical staff lately.
Betty
The problem seems to be manufacturing expenses are incurred in countries like
Taiwan where the currency is tied to the US dollar and most (~75%) of revenues
are in Europe, Germany in particular. A stronger dollar results in a margin
squeeze. While C='s announcement is news this relationship is not.
Sales volume abroad continues to go up, up, up. Fundementally the company is
in good shape. I think the stock is a screaming buy at 14.
If the strong dollar continues (Art sez it won't) a couple steps CBM could take
are moving more, or all, cost centers like R&D to where the revenues are –
Europe. OR they could concentrate on getting US revenues up to a bigger slice
of the pie. This latter step they've been working on for years without much
success (as we all know). — Art
Have you read the news that Commodore Magazine will stop publishing in October?
-Bob-
Commodore's stock did take a huge 3 point plunge just a week or so ago.
— Ethan
P.S. For commodore, 3 points is huge.
True. Many of the staff have been transferred to other areas, especially the
Education Division (growing about as fast as CATS, about about 100% a quarter!)
More news as it happens. andre
I for one don't believe that this will change any of the things that Mr.
Copperman has gotten a commitment on and is in the process f planning. Namely
those are new targeting (education/government), more advertising, and more
development. Again, we can only see and watch and wait. They may surprise us
or not. I'm a tech manager, not a soothsayer. 🙂 andre
Sooth to say, soothe that savage breast. The man of Copper has many hopes
riding upon his coattails, and he must hurry lest they rust. Advertising is
but one key, product is another. Whither R&D?
–Gabe
Since this is a possible loss due to currency fluctuations, and NOT due
to slackening demand for Commodore's products, expect CBM to raise prices of
overseas products. Quite frankly, I'm not too worried about this. The dollar
is already starting to weaken again, which should help Commodore's bottom line.
Commodores announcement was unexpected. But my opinion is that things should be
back on track soon. The dollar did rise strongly, and affected sales in DOLLAR
terms, but the german mark is back down now, to around 186 from its high of
210. The reason the dollar had been so strong was 1> China fears 2> Political
problems in Germany and Japan 3> A 10% withholding tax on German interest
income which has been repealed effecive July 1, 1989. The dollar is back down
SIGNIFICANTLY now, so I think the dollar translation effect will diminish from
here on in. Commodore, as a company is doing OK. Sales were up worldwide,
probably at double digit rates in LOCAL currency terms. This is despite a
general slowdown in home computer sales. All this means that the Amiga is doing
just fine, and probably the clones are too, and markets are beginning to expand
in niche areas. The worse than expected earnings comparison is almost purely
caused by currency translation, not lack of business. Meanwhile, Commodore is
continuing to build infrastructure, particularly with the hiring of a number of
experienced top executives. In the past few months they have hired AWAY from
IBM, Compaq, Apple, Xerox, HP, Olivetti and NEC. These guys would not be going
to Commodore if they thought prospects were lousy. The U.S. market will still
take some work, but if anyone can do it, Copperman can. A year from now, we
will all look back at the June quarter, and say it was a blip in the big
picture, and that the Amiga was transformed from a subsurface cult machine, to
a mainstream, accepted computer.
Commodore sales are up over the same quarter 1 year ago. I think it was
by 5%. Maybe people were expecting more but that's nothing to complain about.
— Ethan
Dave,
I appreciate your taking the time to give us that analysis of the CBM red ink.
Thanks.
Betty