Apple plans mystery "product transition" before September's end
During his quarterly financial results call, Apple's chief financial officer Peter Oppenheimer revealed that the company will make a key "product transition" that cuts back on its profit margins to help shut out rivals.
A frequent point of discussion during the hour-long call, the mystery transition will drop Apple's gross margins 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.
Oppenheimer is deliberately short on details, not wanting to pre-announce the product or allude to its nature, but explains that cost will be a driving factor.
The Cupertino, Calif.-based company often introduces products to the market with new technology at a high price, according to the executive, but often seeks to drive the price lower over time. It never wants to create a profit margin so wide that it creates an "umbrella" for rivals that lets them safely undercut Apple's pricing and steal sales.
The new, unnamed product will continue to have "technologies and features that others can't match," according to the CFO.
While notions of what this transition entails are likely to become clearer soon, several product categories are just now reaching the ends of their typical cycles, with updated MacBooks, the Mac mini, and new iPods all due for refreshes or replacements in the near future. Apple is also still believed to be developing its multi-touch tablet but has slipped out little extra information beyond leaks near the start of 2008.
A frequent point of discussion during the hour-long call, the mystery transition will drop Apple's gross margins 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.
Oppenheimer is deliberately short on details, not wanting to pre-announce the product or allude to its nature, but explains that cost will be a driving factor.
The Cupertino, Calif.-based company often introduces products to the market with new technology at a high price, according to the executive, but often seeks to drive the price lower over time. It never wants to create a profit margin so wide that it creates an "umbrella" for rivals that lets them safely undercut Apple's pricing and steal sales.
The new, unnamed product will continue to have "technologies and features that others can't match," according to the CFO.
While notions of what this transition entails are likely to become clearer soon, several product categories are just now reaching the ends of their typical cycles, with updated MacBooks, the Mac mini, and new iPods all due for refreshes or replacements in the near future. Apple is also still believed to be developing its multi-touch tablet but has slipped out little extra information beyond leaks near the start of 2008.
Comments
This should be fun.
Yup
Here's my take:
Tablet : unlikely, as that would be a totally new product, not a transition.
Mac Mini becomes the xMac: I wish, but I don't think so. Oppenheimer said Apple "often introduces products to the market with new technology at a high price, but often seeks to drive the price lower over time". The Mac Mini is hardly new.
MacBook plastic -> aluminium transition: very likely.
Radical MacBook Air price drop: highly probable.
Radical MacBook Air price drop: highly probable.
The first thing that popped into my mind was the iPod Touch. But does Apple sell enough iPod Touches to account for much of a drop in gross profits? I like your idea: a price reduction in the MBA.
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1. merger of macbooks
two models - all alu, new cpus, discrete graphics card, ....
$1099, $1299
2. price drop in MBA
3. touch screen on all the iPods except iPod shuffle
4. Merger of macbook and macbook pro
no new products ....
and one more thing
sep is just a month away!!!!!!!!!!!!!!
No, no, it's the G5 Powerbook!
No, no, it's the...
So mysterious - a "new product" that will shut out rivals. The only products Apple sells that can shut out rivals are iPods, and there already are no real rivals, and not likely to be any in the future. The iPod Touch is of course due for a price reduction.
The Apple TV? I don't see how anything regarding the Apple TV could shut out rivals, since the market is so small and fragmented right now, and Apple doesn't have enough content.
Maybe it's a big push with notebooks, which are due soon anyway. Big price drops, is that it? Could be a good idea, back to school season (slightly late), but with the gains in market share already this year, maybe it would start a flood of new buying (but it wouldn't "shut out rivals").
Better call Chief Inspector Foyle...
Addendum: As pointed out above, the Macbook Air - that could shut out rivals in that category (adding some needed features along with a good size price reduction).
Is it not a transition from one product into another?
It's the last remaining "poorly defined" market to be conquered before Steve-o retires.
So...what is a "product transition?"
Is it not a transition from one product into another?
It's the same as "evolution". Uh-oh, let's not debate that again....
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.
MacFolio.... and you heard it here first.
It's very important for Apple's future and just isn't doing the job at the moment....
AZ
So mysterious - a "new product" that will shut out rivals. The only products Apple sells that can shut out rivals are iPods, and there already are no real rivals, and not likely to be any in the future. The iPod Touch is of course due for a price reduction.
The Apple TV? I don't see how anything regarding the Apple TV could shut out rivals, since the market is so small and fragmented right now, and Apple doesn't have enough content.
Ah but wait, that isn't true. The iPods have already "shut out" rivals. They don't need to, they have 90% of the market.
But iPhone is a product in which Apple could "shut out" rivals, and Lord knows, there are rivals to the phone.
Could this be another price drop, 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.
It's the same as "evolution". Uh-oh, let's not debate that again....
Let's hope the designers are really intelligent.
They do know how to stir the pot of rumor and speculation. 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.
Keep guessing.
Let's hope the designers are really intelligent.
Lets hope they don't exist.
plus, nothing like a smaller entry level iphone to upsell the big iphone. apple does love the upsell.
I read it as we are going to get the jump on our competitors by announcing a Nehalem Mac Pro before anyone else! It seems that all the other product lines are sexier than the Mac Pro, but I honestly want a good tower upgrade. Please?
Interesting ideas about the MBA... could be all-new form factors for MacBook Pros, with all the extra bells and whistles the first batch of MBAs lack.
I keep trying to breath some life into this one. Never seems to get much traction.
http://www.macnn.com/articles/08/01/...notebook.dock/
As a designer who needs a professional grade laptop and a larger display in my office, this would be a perfect solution.
The accompanying laptop with this "dock" would seem to qualify as a transition.
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.
I already said in the other thread - it can be an iPhone Nano - a smaller iPhone with T9 keypad. Apple's trying to pre-empt the market segment of smaller touch screen phone with touch screen, mainly Android phones.
It could be a game pad, but I don't see how Apple should shut off rivals with GB and PSP already in the established market.