I'm as baffled as everyone else. I see a lot of ideas, but none of them really fit the criteria.
1) They said "product transition", so it can't be an entirely new product line except if it actually replaces an exisiting product line.
2) It will have a somewhat substantial negative impact on gross margins
3) CFO says unnamed product(s) will have "technologies and features that others can't match" and will basically shutout their rivals from even properly competing
I'm trying hard to think of something that could possibly fit in that criteria, but I think we are going to be in for a big surprise in the coming months! Considering it has to represent a lot of sales volume to have such an impact on the margins, and the fact that it is characterized as a "transition", I would think instead of many un-related updates, this would have to be one wide spread, major update or updates, and it would most likely involve radical changes to their laptops, or maybe their entire Mac computer line. Not SSDs, not Blu-ray, not highend GPUs, not LED-lit LCDs, not Cinema display updates. None of these fit the "others can't match.. shutout rivals" comments. I also don't think PA SEMI has anything to do with it.
The only technology that readily presents itself as a possible game-changing development that "competitors just couldn't match" on the Mac is an advanced multi-touch interface... what form that would take I don't know, but it would match the above criteria fairly well. The problem would be understanding how that would fit in with OSX and Snow Leopard.
IPods are the other major revenue source for Apple, but they basically have the whole market tied up! Of course they will always be creating new models, and will probably focus the iPod line on mobile OSX and touch interfaces, but there is no real reason why the margins of new iPods would have to take a hit.
Multiple new models of iPhones? Well, a lower end version would make sense, and could possibly sell millions of units, but again doesn't really fit the idea of a product "transition" nor the "technologies others can't match" bit.
As far as major changes to the AppleTV like a DVR, Blu-ray, etc, I don't think it could generate enough volume to have the product margin impact, and it doesn't really fit the "technology that others can't match" bit either.
Originally Posted by chuckgaudette
My guess is they are replacing the chips (possibly in laptops) with chips of their own design. Isn't that why they acquired PA semi? That would be a transition to shut out rivals.
There are many reasons why this would be unlikely (enormous costs of modern CPU design, economies of scale, insufficient technology/experience), especially if you are referring to ditching x86 (removing ability to dual-boot/virtualize Windows). PA SEMI was acquired to create low-power, ARM-based SoC designs for iPods, iPhones, etc -- NOT replace Intel's CPUs in the Mac. Keeping up with Intel/AMD would be literally impossible, a huge waste of money, and be of virtually no benefit.
Originally Posted by astrosmash
It's a MacTablet, obviously. A merging of a full Mac and the iPhone in terms of functionality and UI. It's the last remaining "poorly defined" market to be conquered before Steve-o retires.
I don't think this would have the volume to affect the gross margins as much as they projected, in addition to not fitting with the narrative of a product "transistion".
Originally Posted by echosonic
*snip* or could it be another phone? Perhaps something lower down the food chain for the folks who can't afford the current model, or maybe even a NEW device that utilizes some of that 700mhz bandwidth that Google bought? Oh, this is really going to be fun.
Lower end iPhone model introduced? I think it will happen at some point, but is not related to this "product transition". And Google never acquired any spectrum, it was mostly Verizon/AT&T, and it won't be able to be used until they shutoff OTA analog television broadcasts, which is where the spectrum is coming from.
Originally Posted by johnqh
One thing for sure, this product transition is NOT a computer. Apple can grow Mac share, but no matter what it does, it cannot shut off rivals because 95% of the market is still Windows PC. *snip*
I agree, but at the same time maybe the CFO meant the new technology (say fully-multi-touch Macs or something) was so good that "rivals won't even be able to compete" more than "we'll dominate the whole market".
Originally Posted by StrangeThingInTheLand
Suggestions that the product transition involves the mac mini or apple TV don't seem to fit the facts, given that these products lack the volume required to have that much of an impact on overall margins. Of course, the lowered margins for Q4 is partly due to the ipod touch giveaway. Still, that one quarter event doesn't affect the 2009 margins down to 30% news. This has to be something that sells currently in significant volume.
Yep, agreed. Even with a brand new AppleTV-type product/ecosystem, I'm just not seeing a large enough volume to have such an impact on margins, especially with the CFO saying this margin drop is going to happen this quarter. Even a very popular new device would take awhile to have such sales, therefore I think it has to be related to the Mac.
Originally Posted by palegolas
Perhaps they do a HDD to SSD transition across the whole Mac line shocking us all. Doesn't Intel have this supposedly "fantastic" SSD tech on the way that they brag about being superior to all other SSD's out there with some (seriously) extraordinary test results? If they're ready to deliver they would defenitely catch the competition off guard. Product transition though sounds a bit bigger. New macs with ssd + bluray + on board h.264 dedicated chip..
Originally Posted by jacob1varghese
Guys, he said Product Transition not new product. Costly product transition that would lower the profit margin - SSD storage. all macbooks and imacs with SSD storage only? Samsung did release the cheaper 128gb SSD drive.
SSDs don't match the "[It will have] technologies and features that others can't match" line from the CFO, nor does adding Bluray, etc. dedicated H264 is already on most (all?) nVidia and ATI graphics cards.
Originally Posted by pmjoe
I have to wonder if that has something to do with "Snow Leopard", which IMHO has the potential to be a slow starter because they may not support it on some platforms currently in use. I've also found the feature list so far un-compelling. *snip*
PowerPC on the Mac is basically dead, and poeople will continue to buy new x86 Macs. I'm sure Apple is going to focus all their efforts on optimizing Snow Leopard for x86. As for the features, I'm sure there will be some user level features that Apple is holding back, but even most regular users (i.e. non-developer) should appreciate that Apple is going to be focusing on performance and stability with Snow Leoaprd, especially with the vast parallel processing power available on new Macs that will be put to good use.
Originally Posted by acr4
OS X and OS X Server are products. Could this transition be away from Apple-branded hardware and to virtualization technology? There is nothing hardware-wise that truly differentiates an Apple system from its competitors. Just look at the Mac Pro. It's practically the same thing as the Dell Precision T7400 and HP x8600. The biggest difference in my opinion is the Dell can run 128GB of memory. Of course, the nice thing about Apple systems is they control the hardware, thus reducing hardware issues/driver incompatibilities. On the flip-side, maybe Linux(probably)/Vista(unlikely) will be a BTO option on new Macs?
Under the current model, every computer sale = OS sale. There's a significant profit margin built in to that combo, but does it inherently limit market-share? Will the life-long Windows be more willing to try OS X if he can run it along-side Vista on his brand-new HP/Dell/IBM/etc? I'd bet 50%+ of OS X installs on non-Apple hardware will result in a Apple computer purchase next time around, because everyone knows that Apple's attention to detail usually puts the competition to sham.
I don't see any reason for Apple to offer any form of Linux or Windows pre-installed on their computers, as users can easily do so themselves. As far as the age-old OSX licensing debate, I *highly* doubt Apple would ever do that.
First of all, Apple would most likely lose money as sales of OSX would not make up for the large amount of Mac-owning defectors buying more affordable PCs to run OSX on in the future. Secondly, It would be a complete mess trying to build in support for the millions of different low-level hardware components, peripherals, etc into OSX. Think driver nightmare.