Apple plans mystery "product transition" before September's end - Page 5

The new, unnamed product will continue to have "technologies and features that others can't match," according to the CFO.



Those words are very powerful.

This has to be the fastest growing thread ever, so I'll toss my WAG into the pile too.

I read "key product transition" as "key transition of existing product lines". They are going to do something to all their products to differentiate them technologically from all competitors, and it is going to cost them margin. This has been a problem for Apple since they switched to Intel... all of a sudden it became much easier to do 'fair' comparisons between Apple hardware and all other PC makers. I can imagine that Apple wants to change that, and do it in a way that doesn't raise their hardware prices beyond where they are right now.

Putting in hardware any manufacturer can buy doesn't accomplish this goal. It also doesn't leverage Apple's tight software/hardware integration. For decades Apple has been experimenting with adding custom hardware chips to the Mac lineup, but they've never done it pervasively. Perhaps now they are about to. They have acquired a couple of hardware design companies to supplement their internal teams and we've seen no obvious fruits from that. The PA Semi acquisition we've been lead to believe is for future iPhone/iPod hardware... but perhaps this hardware equally well applies to Macs. Its also not impossible that a design contract was in place before they were purchased -- often a company will contract another to do work and then buy them when that work turns out to be successful and they want to ensure total control over it. Or this may have nothing to do with PA Semi. Regardless, however, a low power / low cost part that delivers some kind of advanced functionality to be leveraged by components of MacOSX and will be rolled into all Macs simultaneously (or nearly so), possibly including AppleTV. Who knows, it might even be useful in certain iPods and the iPhone (although having just introduced the iPhone 3G I doubt we'll see an update of that for a while). No Macs have been updated since January, and only a few were then so they're all about due anyhow.

What could this mystery chip do? While there are numerous possibilities, I seem to recall rumours about an H.264 chip being added to all Macs floating around a year or two ago. Its also possible that this more than just a hardwired decoder and it might be useful for other data intensive operations in the various OSX system services... this could fit right into Snow Leopard's hints about Grand Central and OpenCL.

Wait a few weeks. You will.

yes, and the technologies are Apple's patented Multi-touch technologies.

Maybe I should wait to upgrade my 30gb iPod?

you have it backwards. the nano was a great compact music only device. with the iPod Touch apple found people like to browse. so their next product will be fitted for browsing. There will never be an iPod touch nano

Yes, the nano touch will have a Safari browser. But most importantly, it will have the "app store."

I like what someone suggested earlier: merging the MacBook and MacBook Pro into one product. I do realize that these are already two separate products for two separate demographics, but I love the idea, especially if the MacBook does indeed switch to aluminum casing.

This "key product transition," and the supposed effect it will have on sales, I think has to do with the iMac, though. Those of you claiming that this "has nothing to do with a computer" are forgetting that "shutting out the competition" could easily refer to all-in-one computers. I know many people who admire and even desire Macs, but cannot afford them. Imagine dropping the cost of an iMac to something well below $1000 (think $500!). WOW. A significantly higher number of people would purchase iMacs (especially considering Apple's growing appeal among customers), but Q4 would fall a few points because the computers would cost less, bringing in "less" money but propagating more sales.

I don't like the idea of an iPod nano touch - that's such a long product name. How many people do you know who already prefer saying (whether consciously or subconsciously) "iTouch" rather than "iPod touch." And an iPod nano? Personally I highly doubt this - If they could make the iPhone any smaller (while sustaining its key features), they would have with the 3G update. It just doesn't sound very appealing - let the iPhone continue to climb what will become a very high mountain.

I just don't see how an iPod "transition" would be brought about in order to shut down competition. The iPod line hasn't had a formidable competitor yet - I don't know the numbers, but come on, people... Until Apple sees a significant decrease in iPod sales / customer interest, I don't see any need for a dramatic "product transition."

This has everything to with Macs, in my opinion. The iMac is going to become more mainstream... Macs, Macs, Macs... We shall see!

Of course it does. The very reason the iPod line is still the leader is because they've constantly evolved it. Always a step ahead of the competition. This transition would "shut out" the competition because multi-touch technology is patented by Apple. The competition could never copy it.

The mobile platform is Apple's future. They've already got a great lead with the iPhone/iTouch and all the developers on board with the "app store." Bringing this technology to Apple's best selling mobile device would cement OSX/multi-touch technology as the de facto standard mobile platform.

Besides, how much more can they really innovate the current nano and classic line? It's about as thin and small as it can get. Time for a real "transition" into the next generation of touch mobile devices.

I understand your point to a certain extent, but I still see no idea for a DRAMATIC change. I'm not suggesting that Apple rest on its laurels - in fact I'm sure a "refresh" for the iPod line is in the works. But I think what's key to this "product transition" is its relevance to competition. Unless the iPod touch is set to drop to $99, I don't see how a few evolutionary changes to the iPod line would affect Q4 figures as Apple is suggesting.

I'm as stumped as everyone else, but remain convinced that hefty changes (design, price, what have you) to Macs are key, here.

Chuck,

You don't really think things move from acquisition of key personnel through all phases of development (design, prototype, improve, systems integration, system design document, fabrication orders, parts acquisition, manufacturing, & shipping) in just two months do you?

The payoffs from PA Semi are at least two years out. And don't tell me that you don't think Apple looks ahead that far. I guarantee you their draft roadmap goes out at least 5 years.

The thing that makes the most sense is that the Macbook Airs are ALL going to be getting solid state drives (some of them quite large in terms of data storage) and will all be significantly cheaper. This will damage margins in a significant way.

Another prediction. If margins are really going to be damaged to the tune of 3% on the September quarter, then the release of this product is either going to be fairly soon, or it is expected to be a huge launch (or both).


Thompson

I'd bet on a new Apple Professional Cinema Display Line for both the Technical and Consumer markets.

It's not about dropping prices, it's about keeping prices the same and including mulit-touch.

The current nano starts at $149... If Apple keeps the price the same but adds multi-touch and wifi. It will shut out the competition.. They won't make as much per unit, it will definitely affect their profit margin, but it will bring 10's of millions of new customers into the "app store" and onto Apple's new mobile platform.

This is going to bring even more developers in to the gates, and as I said, it will turn Apple's mobile platform into the de facto standard. Competition could never match what Apple would be doing.

You mean like iPods?

If it's not about dropping prices, then why would the whole "expensive at first, less expensive later" thing be mentioned? I think this is about making Apple's products (again, I'm vying for Mac products) more accessible to a wider array of people.

The immense success of the App Store (and, as I'm sure you'll agree, I think this thing is really only just beginning to take off) is definitely worth mentioning - and you are right, what with its wild popularity among customers AND developers, I don't think it's something that competitors could even begin to match/copy. But designing a nano with touch capabilities would be both difficult and risky - I'm getting better each day with the "touch keyboard" on my iPod touch, but I still know a good number of people who are put off by the small "keys" and lack of tactile feedback. The iPod nano is a hugely successful product, so it certainly is a key player...

I just feel as though (and maybe this is just a personal preference/bias) Apple's real treasure is its Mac product line. I'm still astounded by how well my iMac functions - I knew NOTHING about Macs and within weeks was getting things done faster and more efficiently due to Tiger. Using the computer has become less of a chore and more of a pleasure. I understand that "the industry" is still controlled by Windows, but why anyone would prefer, in some sort of "blind test", a PC over a Mac is truly beyond me.

Extending this type of enthusiasm from a small percentage of computer-users to those who know Macs only as "cool but expensive" MUST be a goal of Apple's - and significantly slashing the price of iMacs and MacBooks would certainly help them attain it.

[QUOTE=Programmer;1282489] They have acquired a couple of hardware design companies to supplement their internal teams and we've seen no obvious fruits from that. The PA Semi acquisition we've been lead to believe is for future iPhone/iPod hardware... but perhaps this hardware equally well applies to Macs. Its also not impossible that a design contract was in place before they were purchased -- often a company will contract another to do work and then buy them when that work turns out to be successful and they want to ensure total control over it.


That is a really good thought, I never thought about the possibility of apple already being in a position to use a PA Semi hardware. I always thought the rumor of the video conferencing on the iPhone was a Killer application,but thought it probably got pulled because of poor performance. Maybe with the help of PA Semi they will have the power to add this to their new product. iPod web

Because if you listen to the call, Oppenheimer repeatedly talked about bringing technologies into the un-released product (line) that would shut out the competition.. He said nothing about cutting prices affecting the profit margin, he clearly said the technologies used would affect the profit margin..

Since Apple has patents on multi-touch, and they've aleady used on it on the top end of the iPod line, incorporating this technology further down the line is into the nano is the logical next step. Especially since it will be so beneficial now that the "app store" is here. This would shut out the competition.

Two assumptions:

A) The profit margin will stay at 35% until this new product is released.

b) This product won't be announced until August 19th at the earliest.

That means if the plan is to have a 30% unit margin at the end of the quarter, they are going to have something like a 25% margin for the second half of the quarter. Now since they are reducing the margin, we know they are planning to increase the volume. This means the mystery transition cannot be a new product. No product, however cool, is going to sell over a million units in the first month. There is literally no new product that Apple could introduce that would sell enough units within the first month to lower the per unit margins by 10%. So the change must involve some existing product.

I think there are two realistic options here. First, they sell more by reducing the price of the new MacBooks and MacBook Pros. A real possibility. Second, they sell more by keeping the price the same and adding an expensive component to one of their existing products. If the margins do go down because of more expensive components, the only real options are the MBP and the iPod. The iPhone isn't in for an update, and none of the other products ship enough units to have this big of an effect on the unit margins. In terms of components, the options are basically SSD, Blueray, or DDR3 for the MB and MBP and more SSD for the iPod. Blueray and faster RAM are unlikely to generate enough excitement among the general public to increase the units shipped enough to make up for the smaller margins, unless DDR3 uses so much less power that it drastically increases battery life. This is unlikely. So almost certainly what we are looking at here is either a sharp price drop in MBs and MBPs, or else adding SSD to the MB and MBP or else adding massive amounts of SSD to the iPod touch and eliminating the other iPods.

I see your point clearly and do think you are very right - but I stand by my belief that we will see significant price-cuts and modifications to the Mac product line.

Good post. I agree that adding SSD to the Macbook and MBP could create the same profit margin effect..

However, I don't believe a move like this could be seen as "shutting out the competition." Any of Apple's competitors could also add SSD to their notebooks and quite frankly, most of Apple's competitors sell more units and operate on much slimmer profit margins to begin with.. So a move like this would not so much "shut out" the competition as it would bring Apple more in line with the competitions margins.

I'm still convinced it's the iPod line going touch. nano included.

New MacBook/Pro refresh with 4 cores and Snow Leopard at a killer price. Maybe a discount or even free for Snow Leopard upgrade. New Cinema displays - Dell is killing Apple there. A subsidized AppleTV with enhanced features, including "home server" - Not too long ago Jobs hinted at that.

Subsidized by whom?

@Solsun:

One other thing worth noting: We know the new Montevina chips use about 30% power. The new NVidia 9M cards also use less power. DDR3 uses less power, and SSD has the potential to if Intel gets it right. The Montevina and the 9M are a given, so if Apple can add one more expensive power saving technology (DDR3 or SSD) then they could potentially have a laptop that lasts 7 hours. That would be enough to get a lot of people to switch, although you're right that there doesn't seem to be a way to prevent others from doing the same.

My guesses:

-- something using that USB port on TV.

-- maybe a tablet which will also interface with TV and let you surf the 'net, check e-mail, etc. wireless on your HDTV from your couch

-- TV transitions to also allow on-air recording...functionality more like a TiVo

You know, this is a great resource for Apple, even better than their own focus groups.

Good post!

The article said "Apple's gross margins [will drop] from 34.8 percent in the spring quarter to just 31.5 percent in the July-to-September window in which the update takes place, ultimately settling at about 30 percent during Apple's fiscal 2009."

That could mean 2 drops! This quarter (till Sept) we will see a drop to about 28% (so that on average we end up at 31.5, down from 35%) and until March (Apple's fiscal year ends March) we'll see another drop to probably around 25-26% so that the average is 30%.
Or it means the new product will show up really late in the quarter, more like September than mid August.

In regards to iPods going all touch, I can't really see then go past 128GB SSD storage on the 'classic', but dropping maximum storage from 160 to 128GB will not make everyone happy. And will certainly leave room for the competition to keep offering higher storage capacities with HD based units.
Unless Apple goes 256GB SSD I don't think this would qualify as 'shutting out the competition'.

As other have said, merely putting in an SSD drive doesn't really differentiate Apple from the competition that much anyway as every manufacturer can do that.

But how about breaking the SSD drive up and mounting the chips behind the LCD in a laptop? This requires hardware integration average OEMs can't do. And would allow laptops to go even slimmer. But also means no user-replaceable HD anymore. But for the MBA this could be doable.

Or how about OLED screen? What if Apple forged a deal with one of the manufacturers to be the first to offer laptops with OLEDs?
Combine that with above idea and you get a screen that's the same thickness as current MBA screens (probably needed for stability reasons anyway, any thinner and the screen starts bending) _and_ save the HDD space in the base unit. Add Montevina space savings and the base unit could be lots slimmer than even today - and have room for more USB ports!

Such a combination would certainly leave the competition scrambling.

Let's hope that the transition is to quad-core CPUs and Blue-Ray drives on all computers. That would complete the transition to High Definition, started more than 2 years ago (4 years, is it possible?)

so this looks like an easy guess:
1) AppleTV: this is not a big market and shutting out competition is neither easy nor is a technique involved others couldn't compete with.
2) MacBook/iMac/Macmini: this is a huge market but Apple will not be able (on a short term basis) to shut out competition regardless of pricing. And there is no technological advance for Apple (beside Mac OS X)
3) iPod: Apple has virtually shut out competition so the only thing needed to completely shut out competition would be price reductions and not a technology transition
4) iPhone/Smartphone market: this is going to be a huge market even on an short term basis, so with a product transition (e.g. iPhone nano or similar) they would be able to shut out competition from Nokia, RIM, SonyEriccson, Microsoft, HTC. Also a high volume product would be needed to reduce overall margins that much. So this would be my most probable guess.

Compelling argument, chr203.

My guess is new Multi-touch Cinema Displays and Multi-Touch Macbook Pros

Ala Cintiq, but with multitouch, and sits on a nice CD like base with iSight built in of course.

Reason why noone else could do it-- patent on multi touch
Reasons why profit margins would be good-- apple gets a great deal on new shit hot panels, and sells them for outrageous prices

The competitors have been trying to make a functional tablet pc and monitor for years now and have failed miserably, Apple could do it right.

I know, I know... no computing firm has broken into WATCHES recently! What, Casio and their stuff? Some watches have GPS functions and what not, why not an iWatch? The iPod Shuffle is already small enough! Slap on a small color screen, there you go. Bluetooth to stereo headphones and maybe a pedometer, and you've got the next big exercise thing. I dunno. But watches my boy, watches.

Nah, the "transition" is OS X being ready for deployment on a standard PC.

Analogous.

(Or maybe its just hype to get the stocks up more?)

Ahh... lets go out on a limb. Why not Touch on EVERYTHING (Of course, once you do that you don't have to name anything "touch"). iPod Nano, iPod classic, iPod Air (renaming iPod Touch), MacBook Air, MacBook, MacBook Pro, iMac, Cinema displays. Lets make everything touch.

That'd get people's attention.

Yeah it'd be nice if Apple made the AppleTV work with multiple other services. There are several services for paid streaming of payTV channels now too. Let Apple make money on the AppleTV and work with all the services. Even Unbox.

The other option is to make the AppleTV really cheap, and keep selling their own ever expanding service (expanded into subscriptions and ads maybe).

Oh, come on, people. It's so obvious.

It will be Apple-branded interactive adult entertainment using multi-touch technology. The possibilities are endless. And the new adult films with this technology will be available same-day.

Why play Super Monkey Ball when you can fondle Jenna Jameson's breasts in real time while waiting at the bus stop?

I can just see the tagline to the ads now... "When I think about you, iTouch myself."



GTSC

:-)
"Pinch me, again"

I hope that whatever this 'transition' is, it is properly considered and executed unlike the recent MobileMe 'fiasco'.

"The new, unnamed product will continue to have "technologies and features that others can't match," according to the CFO."

What kind of technologies and features does Apple currently have that competitors can't match?

Iphone? Nope, everything in the iphone is available on other competitors products.

Ipods? Not really.

MacBooks seem to be the only product that has a feature that no other company has: multi touch gesture.
They might improve the technology in the next line of notebooks, or they could introduce a new tablet notebook. Either way, this will be a unique selling point to all the people who already experienced the multi-touch gestures in the macbook and the iphone.

Read this to see what they've been workin on recently:
http://forums.appleinsider.com/showthread.php?t=89272

Also, this new thing has to be really revolutionary (as opposed to evolutionary) in order to achieve huge sales.

That has to be Mac OS, because Apple's competitors will be able to match everything else if they put their minds to it.

Mac OS is the only thing that Apple has exclusivity on, and when Apple is selling Mac OS it often refers to it's 'technologies and features'.

Transition would suggest to me that Apple is taking an existing entity, and shifting the goalposts. They are moving to a new house, rather than buying a second additional house. Apple used the word 'transition' when it moved the Mac OS from PowerPC to Intel, and likewise when it talks about moving from 32-bit to 64-bit? Transition seems to suggest that they are abandoning whatever they are transitioning from.

Would Apple regard the unbundling of Mac OS from Mac hardware as a 'transition'? Every other product in their current offer works with both Macs and PCs – why not the Mac OS?

I can hear the cry from the naysayers already, but consider this - where would Apple be today if they had never opened up the iPods / iTunes / iPhone to PC users? Would they have enjoyed the same market share and the pennies that that brought?

If Apple opens up the Mac OS, it still retains exclusivity of the Mac OS. The question is not whether Mac OS will trounce Windows et al, but whether people will still buy Apple hardware - and I think that the MacBook Air has shown that there are a huge number of conspicuous consumers out there with more money than sense. Apple could end up building only high-end, high-margin hardware... whilst still making money out of the budget PC market where there is little or no margin in the hardware itself.

It's amazing you are the first to say this after so many posts. It sounds pretty clear to me:

"the company will make a key "product transition" that cuts back on its profit margins to help shut out rivals"

Apple is working hard on Snow Leopard and we all know it won't have much new features. They told us they are improving stability and such. My guess is that they are adding drivers and making the OS ready for mainstream pc's! It's a small step to make while it could mean a huge step in the desktop market. This would be a tremendous hit to Microsoft. Since Vista is doing so terrible companies are looking hard for a replacement and that replacement could very well be OSX. It will put big pressure on the margins on Apple computer hardware, like they said.

personally i think Dell's and HP's all in ones look shit

my first thought was"bye bye Classic iPod" the Touch will get a capacity boost and a price drop down "NEAR" classic pricing, this will halo effect/promote the App store.

the other product transition it COULD be, that would be costly to apple if they keep the prices the same is transitioning EVERY iMac into a touch screen iMac..

THAT should be fun!