September 1991


Sales gain in Q2

by Simson L. Garfinkel

Redwood City, CA: Fueled by the availability of color systems and strong international sales, NeXT's revenues grew to $46 million in the second quarter, an increase of 86 percent over the year's first-quarter sales.

Sales were boosted by shipments of the NeXTstation Color and NeXTdimension. NeXT also has started shipping a Kanji version of its operating system in Japan, which should further boost sales in that country.

Steve Jobs, president and CEO of NeXT, attributed the sales to NeXTstep, NeXT's object-oriented operating system. "Companies are buying NeXT computers because our object-oriented system software enables them to develop their mission-critical custom applications many times faster than on any other platform," said Jobs. "The investments we have made are beginning to pay off."

The investment is paying the biggest dividends overseas. According to NeXT, more than 49 percent of NeXT's total shipments went to customers in Europe and Asia. Seventy percent of NeXT's shipments in those markets.went to customers in business and government; the education market consumed the remaining 30 percent.

Jobs said that the increased sales were an indication that computer users want the technology that NeXT is selling and that major computer companies agreed, as evidenced by the recent technology-sharing agreement between IBM and Apple.

"We view the Apple/IBM announcement as a 100 percent endorsement of the strategy we embarked upon more than five years ago and are delivering today," said Jobs. "Our customers are choosing to get object-oriented system software now, rather than waiting for the rest of the industry to catch up in three to five years."

Even though NeXT is now shipping an advanced, object-oriented operating system, it's still a bit player among giants, said Peter Rogers, an analyst with Robertson, Stephens & Co. of San Francisco. "Those two vendors (IBM and Apple) have somewhere north of one-third of the market share in the worldwide PC business. NeXT has somewhere south of a third of a percentage point. They can afford to take a little longer."

But don't write NeXT off yet, he added: "I wouldn't be surprised if Steve keeps surprising us. It wouldn't be the first time that he's pulled a rabbit out of his hat."

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