AAPL@34 13/16, An Opportunity To Buy March 1st, 1999 An Opportunity to Buy This week's article was supposed to conclude a two-part exposé of the horrible conditions at most CompUSA's Apple Store within a Store. But, there is no conclusion. Nor is there a clear-cut solution. It's a continuing story that we'll just have to wait for signs of change. I'll be watching. As a work-around, may I suggest if you must shop for Apple products at retail outlets, rather than online, use the Micro Centers and Fry's. In all the hundreds of emails I've received on this CompUSA situation, numerous readers had only good things to say about the way Micro Centers, especially, sell and support Macs. Meanwhile, back at the NASDAQ, Apple bombed with the rest of the PC manufacturers last week because some analyst said he didn't like the way the market looked for PCs in 1999. Gateway lost 9.28 % on Friday. Apple is now below $35. That is my re-entry target level for all those out there who were wise enough to liquidate at $46 in early January. Things never look good for the PC manufacturers this time of year. Last March, the exact same market situation existed but only worse because no one could predict how far the Asian meltdown would go. Demand was dropping and a PC price war was heating up eroding profit margins. Analysts talked of the "commodification" of computer hardware. This year there is new, very low priced Asian competition coming on line. The sounds of doom and gloom to an investor. Other markets, like the Internet stocks, beckon with much more glamorous growth projections. It's a shame that Apple has to be dragged down with the rest of the box makers because Apple has immunized itself against most of the problems Gateway and Dell have to face. Sure, Apple has problems, they just aren't the same ones as box assembly lines. Apple also has potential that the others will never have. For instance, if you want an iMac you'll have to buy it from Apple. You can't do comparison shopping and decide to go with the iDell, cause there ain't one, not yet anyway. So Apple, in spite of a lot of ravings here and other places doesn't have anything like the type of price pressure that the PC blokes do. Apple's profit margin is already higher than any other computer manufacturer at this point so if Cupertino decided that market share could be traded off for a few points of the margin, they could go for it without upsetting investors or ruining their numbers. Another big plus for Apple during this current down draft is that one of Apple's targeted audiences is the new user and the home consumer. Both markets are set for massive growth in 1999 driven by the mushrooming popularity of the Internet. Soon every home will have to be online just as every home has to have a TV. Computer literate or not here comes the American consumer. Apple seems to be positioning itself to take full advantage of this onslaught. In some ways that makes Apple an indirect Internet play. Of course, it's always hard to get in at the bottom. Things always look so darn grim from down here. There is an ominous lack of news from Apple. Perhaps, the iMac mania has saturated the market and run it's course. Doubt weights on the soul (and the pocketbook) like a ton of bricks. Funny how emotions have so much to do with stock trading. Successful traders are made of ice. So buy now while you can get in cheap. My own anecdotal evidence suggests that Apple is going to do great this year. I track the Mac purchasing habits of the University of Texas. It may come as a surprise to you but there are thousands of IIsi's, IIcx's, LCIII's still in use at universities and small businesses everywhere. One of Apple's problems is that unlike PCs, Macs last longer than the energizer bunny. The University of Texas is just now being forced to replace these machines largely because the relentless advance of Moore's Law make a 25 MHz IIsi with a 50 MB hard drive seem like a Conestoga wagon on the wild information frontier. The iMac and the G3 are a dream come true for the desk bound clerk who has been using the same yellowing beige 68k Mac for half a decade. Apple certainly plans to expand market share to new users this year but 1999 is also going to be the year of the great Mac upgrade for many old users. (...to be continued) Your comments are welcomed.