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Problems continue for local computer giant
By KEVIN FAYLE
Anyone who lives in Cupertino has probably heard of Apple Computer's recent downturn on the stock market, but many may wonder how it will affect the city and just how the giant computer manufacturer stands after the staggering past few weeks.
Apple's stock prices plummeted from $53 a share to $26 a share during after-hours trading from Sept. 28 to 29. The stock price had continued to slide, but at this time, it has experienced a slight gain to bring it up to $20 a share.
The enormous downturn came on the heels of a press release that announced lower than expected third-quarter earnings for Apple. Apple said its gross revenues would be between $1.85 billion and $1.90 billion, with actual earnings coming in at approximately $110 million--$55 million less than the company had expected.
While Apple's low stock prices are mostly a concern for frustrated individual investors in the company, the announcement of the lower-than-expected earnings could affect the city of Cupertino adversely. The city receives the largest portion of its sales-tax revenue from Apple, and sales-tax revenue represents the largest source of the city's funds.
Some city officials see little need for concern. Sandy James, a member of Cupertino's Economic Development Team, says that while the city has gained a large percentage of its budget from Apple's sales tax, the city did not view that money as a permanent fixture when designing its budget. James doesn't "see any impact on our budget," and Carol Atwood, director of finances for the city, agrees: "I don't expect there to be an effect with the revenues received from the company."
Both remain confident that Apple will continue to provide a large amount of money for the city's coffers, despite the report released last month. "Apple is the city's No. 1 sales-tax producer, and I expect them to continue in that position," Atwood says.
The Courier attempted to contact Apple, but no direct contact was made. Public relations representative Lynn Fox left a brief voice message stating Apple was "really not going to be commenting anymore than what was said in the press release."
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Cupertino, California Since 1947
