subliminal reporting.

by sam on 01/14/2005

I know the point of this article in the Post is to highlight the fact that Apple’s new products are lower-margin, and thus have the potential to lower Apple’s overall profit margin if they sell really well, but a few things stuck out to me in a way that was perhaps unintended, particularly this:

Not only do the new products carry lower gross margins, but Apple’s costs are also higher than that of other personal computer makers. Apple’s selling, general and administrative expenses and its research and development spending accounted for 17 percent of revenue in the most recent quarter. For Dell Inc., the same percentage in its most recent quarter was 10 percent.

I realize that it’s supposed to highlight that Dell manages expenses more effectively, but all I thought when I read it was, "hmm, no wonder Dell computers suck ass."

If there’s anything that a high-technology company should be funneling as much money as possible into, I’d think it would be R&D. And maybe that’s why, regardless of market share, Apple has always had the reputation of having the highest quality products on the market. I mean, if over 90% of Dell’s money is not being spent on R&D, what’s it being spent on?

Tags: ,