Shares in Apple Computer fell over 40% in after-hours trading after the company warned that its fourth quarter earnings would be “substantially below expectations due to slower than expected sales in the month of September.“
Chief financial officer Fred Anderson said:
“Three factors contributed to our revenues and earnings coming in below expectations… First, we experienced lower than expected September sales due to a business slowdown in all geographies. Second, our Education sales, which normally peak during September, were lower than expected. And third, our Power Mac G4 Cube is off to a slower than expected start, resulting in revenues below expectations.”
CEO Steve Jobs added, “We’ve clearly hit a speedbump.”
The announcement came shortly before Paul Allen, who co-founded Microsoft with Bill Gates, said he would be stepping down. Fellow Microsoft director Richard Hackborn also announced his resignation as a director. Allen, who is the world’s third richest man according to Forbes magazine, is continuing with Microsoft as a senior strategic advisor. He said he wants to spend less time involved in the day-to-day running of the company.
Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. However, its most recent innovation, the Cube, has been criticised by some as being over-priced for the technology offered.