That AppleTV is something that fits their statement? Or not?
The part you quoted is kind of incomplete. At the beginning of the paragraph that follows that one, the author notes "Apple has that but nobody else does. That will make it very hard to compete against Apple TV, even harder than the competitive efforts mounted to displace the iTunes Store, where small profits require large volumes of sales to break even."
I really shouldn't have emphasized that part as I can now see how it might be misleading; it really had nothing to do with my point. I'm mainly trying to bring attention to the fact that AppleTV is a slow-growth device. I wasn't saying an AppleTV refresh is in the wings, just responding to AZ.
My guess is AppleTV will be updated with a new chip, possibly an ARM optimized by the PA Semi team or an ultra efficient Power based chip.
They could change chips. But the AppleTV is pretty well configured for what it was meant to do at the moment and uses pretty standard (cheaper) chips. It does get hot and it also gets bad reviews for things like "can't play 1080i" - even though internet downloads at 1080 are impractical for now.
AppleTV's next move should include 1080 support for the future to avoid that. I'd like a DVR but I can see that anyone with payTV would find the lack of support a worry. (For me... it would mean there was no appeal to payTV at all - just record from FTA and rent other shows).
All that said - I doubt Apple can sell enough new AppleTVs of any description to lose the margin they're forecasting. Let alone the other arguments
Whatever it is (whether a new or existing product), it is going to be very aggressively priced. That's the only way it would affect Apple's profit margins.
Whatever it is (whether a new or existing product), it is going to be very aggressively priced. That's the only way it would affect Apple's profit margins.
I think the fact that Oppenheimer called it a "product transition," it implies that it will be an existing product(s) that will be transitioning into something with more capabilities.
the author notes "Apple has that but nobody else does. That will make it very hard to compete against Apple TV
I'm mainly trying to bring attention to the fact that AppleTV is a slow-growth device. I wasn't saying an AppleTV refresh is in the wings, just responding to AZ.
So overall, you think the AppleTV is already in a good place, and the product transition does not refer to the AppleTV?
I think the fact that Oppenheimer called it a "product transition," it implies that it will be an existing product(s) that will be transitioning into something with more capabilities.
I agree totally... but with Apple's range of products it doesn't narrow it down much!
Whatever it is (whether a new or existing product), it is going to be very aggressively priced. That's the only way it would affect Apple's profit margins.
They certainly have to sell a lot of whatever is coming out.
However... IF they did something like added touch to iMacs and laptops without changing the price, they'd still be pricey (but worth it IMO) laptops and Apple would lose at least the profit margin they're talking about.
I think the margin decrease is related to a Apple needing to step up and replace many Macbook Air notebooks.
The current note book has a faulty design which is related to the Intel GPU (graphics) causing the notebook to shutdown a core cpu. The problem exists in excess of 50% of the notebooks and accentuates most prevalently when the MBA is used in an environment where the ambient temperature is higher than the typical air conditioned room. This is amplified by viewing videos or using an additional screen. This is an Intel and Apple issue, perhaps Intel eats part of the cost, however Apple has to eat the other. Thus causing the margin depression.
Interesting ideas on the product transition - my thoughts most likely the profit generator - macbook pro.
What you want to watch - when you want to watch it.
Get AppleTV (with no hard disk).
Select iTunes TV Plan - where you decide what channels you want to pay for on a monthly basis, and what channels you want to watch PPV.
Depending on your channel selection, you pay a monthly fee. Ranging from $9.95 to $29.95 per month. You can watch programs from your channel selection whenever you want for free.
The price you have to pay upfront for AppleTV depends on your channel selection plan - if you pay $9.95 per month, you buy the Apple TV for 99.95, if you pay $19.95 per month you pay $49.95 upfront, and if you pay $29.95 per month, the Apple TV is yours FREE!
In addition, you can use PPV to get other programs.
All programs are instant streaming, using QT instant streaming feature.
The reason this shuts out the competition, is that people need to create the ENTIRE ECOSYSTEM to make this possible - not enough to just have a device, need to have the iTunes store as well. No one has managed to create this ecosystem for music, other than Apple. Secondly, you need relationships with network companies - Apple already has a relationship with AT&T - which could help them get the network side of the equation into play.
Something about the iPhone 3G makes me think that AT&T actually agreed to a very raw deal on the device. The actual upfront payment AT&T makes to Apple is about $525, but the user can theoretically buy an iPhone 3G for $199, keep it for a month at $70, and cancel for $170 -- effectively getting the device for $440. There is ABSOLUTELY no way AT&T would expose themselves to this kind of risk - unless they were promised something else by Apple in return.
That AppleTV is something that fits their statement? Or not?
Not to answer for wobegon, but I think the key here is software platforms. Many here have speculated on undercutting competitors through incorporating emerging hardware at below market price points or broadening the current product line into existing commodity spaces. None of these seem to fit with AAPL's strategic direction over the last few years nor do they provide any sort of competitive advantage that locks out competitors. if anything, they merely bring on a "price" or "feature" war. Who out there thinks that Michael Dell would let Jobs take share simply by undercutting him on HDD's or by introducing a low priced desktop. Who out there doesn't see that even touch technology, despite the elegance with which AAPL has brought to the interface and the 200+ patents they claim exists in various forms from other manufacturers.
No the key to everything is and has been expanding the reach of AAPL's software, chiefly OSX, in now its various flavors (read PC, iPod Touch, iPhone, iTV) to improve on the user experience. And software, namely OSX and its surrounding technologies, is the one direction from which APPL derives competitive advantage that could "shut out rivals". Additionally, computer industry historians would note that the key to competitive advantage is often developer support and, as many here have noted, APPL has clearly begun to emphasize the combination of App store and handheld units (running OSX) as a new direction and revolutionary platform on their own. SJ himself has numerous times referred to his 5 year head start in technology in the iPhone while also demonstrating that he phone market is several time the size of the PC market.
So what specifically might we expect? My magic 8 ball is not giving me a clear read, but I would bet that Jobs & Co are clearly happy with the worldwide reception the iPhone and App store platform are receiving while simultaneously witnessing considerable industry resources being dedicated to copy what they have started. So they very likely could look to expand that platform (yes, already) with a different form factor. My bet would be on a cheaper price point to set themselves up to capture massive share (how else would one "shut out rivals" without undermining the product just introduced and numerous distribution relationships just formed). I'd personally love to see a physical keyboard, but don't think that this fits with APPL's other strategic pushes which include media/entertainment distribution and touch technologies (or perhaps more broadly stated, reconfigurable interfaces). On the margin front, this new product would likely be introduced and near give away levels up front, much like the majority of the phone industry. But in order to appropriately differentiate it from the iPhone, AAPL would probably have to decontent it very significantly, leaving out what? Wifi? 3g? Apps? Storage? None fully compute to me yet, so I'm unsold.
Of course, we could see APPL, push deeper into iTV category, and certainly they will over time. But as many have stated, this still is a small business, such that giving the sets out for free might not impact margins as Peter Oppenheimer guided. And notwithstanding the considerable number of HDTV's sold in the last year, with more every day and holiday season, HDTV's installed footprints are clearly not at a critical mass. I, for instance, do pretty well financially and have five TV's in the house, but only one HDTV and I have no plans to buy another HDTV just to park an iTV next to it no matter how much i love the product on its own merits.
Now while I previously threw the PC side under the bus, I'd consider it a dark horse that APPL might finally introduce a cheaper desktop, or headless mac, as we've all come to know it. APPL's halo is clearly shining bright such that they are consistently taking share in the PC space, so perhaps they could look to begin competing more there. But while, perhaps strategically attractive in certain respects, I just don't think that that direction fits with the concept of locking out competition, nor is it sexy enough for S.J. It's old, 80's technology. he might as well go one or two more decades back and compete in the mini or mainframe spaces. No, SJ wants to create new markets and experiences which he feels he can lock up with proprietary software.
But to quote, there could just be "pne more thing", or direction they could go. First, let's not forget that it is highly unusual for SJ to allow anyone other than himself to hint at new directions or products of any sort, although we all know that he loves to play with the media and rumor mill. So it is certainly quite possible that the transition might involve something a whole lot less sexy such as a change in pricing or revenue recognition approaches on an existing product line. Could be, perhaps, moving to subscriptions for certain distributed media. I don't know, just guessing. This would also seem to be unlikely since there is nothing proprietary about a distribution agreement(s) with media co(s).
AppleTV's next move should include 1080 support for the future to avoid that. I'd like a DVR but I can see that anyone with payTV would find the lack of support a worry. (For me... it would mean there was no appeal to payTV at all - just record from FTA and rent other shows).
All that said - I doubt Apple can sell enough new AppleTVs of any description to lose the margin they're forecasting. Let alone the other arguments
One advantage of a Apple branded HDTV with integrated AppleTV technology that they would not have to compete or try integrate domestic USA cable technology. Everybody would just use their standard cable box they already have and Apple doesn't have to compete for space on the shelf.
Apple already like to have the top end of a really large market and the world is currently having to upgrade all the old analog TV systems for digital and HD technologies.
Globally there is probably 60-100million HDTV's sold annually. 28 million alone in Europe in 2007. ( http://www.electronicsweekly.com/Art...-this-year.htm ) Taking just 5% of the global HDTV sales and making sure it's the top end could add over 10Billion in revenue. And I'm sure Apple can make the best unit on the planet. Steve Job's hobby becoming the fourth leg of Apple's revenue is do-able.
I actually think that it will be the imac that is the mystery product seeing as competitors like DELL, HP, Sony and to some extent the Averatec All-in-One already offer an all in one where else does apple need to keep its bread winner. Its an area where it needs to "Shut out rivals" and as we see on reviews after reviews these other all in ones look snazzy but the iMac whips them and with all of that said my money is on the iMac.
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.
Quote:
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.
Quote:
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".
Quote:
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.
Quote:
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".
Quote:
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.
Quote:
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..
Quote:
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.
Quote:
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.
Quote:
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.
One advantage of a Apple branded HDTV with integrated AppleTV technology that they would not have to compete or try integrate domestic USA cable technology. Everybody would just use their standard cable box they already have and Apple doesn't have to compete for space on the shelf.
Apple already like to have the top end of a really large market and the world is currently having to upgrade all the old analog TV systems for digital and HD technologies.
Globally there is probably 60-100million HDTV's sold annually. 28 million alone in Europe in 2007. ( http://www.electronicsweekly.com/Art...-this-year.htm ) Taking just 5% of the global HDTV sales and making sure it's the top end could add over 10Billion in revenue. And I'm sure Apple can make the best unit on the planet. Steve Job's hobby becoming the fourth leg of Apple's revenue is do-able.
Why not take it a step further, put an HDTV tuner in the iMac line.
Jobs is laughing his head off at all this free press. He's done it again.
The "announcement" was clearly designed to make sure younger folks (who hear this kind of news a lot more) would put off purchases until September. It's a product transition, not a new product. It's aim is to prevent other computer makers (who are already in this market) from underpricing Apple's offerings. Apple's high margins will take a significant hit, so it concerns a product currently giving Apple high margins.
Apple is simply acknowledging reality in today's computer space, and making a 15" consumer laptop.
Comments
What exactly are you trying to say wobegon?
That AppleTV is something that fits their statement? Or not?
The part you quoted is kind of incomplete. At the beginning of the paragraph that follows that one, the author notes "Apple has that but nobody else does. That will make it very hard to compete against Apple TV, even harder than the competitive efforts mounted to displace the iTunes Store, where small profits require large volumes of sales to break even."
I really shouldn't have emphasized that part as I can now see how it might be misleading; it really had nothing to do with my point. I'm mainly trying to bring attention to the fact that AppleTV is a slow-growth device.
'Oooh close but no cigar, but thanks for playing along...next!"
My guess is AppleTV will be updated with a new chip, possibly an ARM optimized by the PA Semi team or an ultra efficient Power based chip.
They could change chips. But the AppleTV is pretty well configured for what it was meant to do at the moment and uses pretty standard (cheaper) chips. It does get hot and it also gets bad reviews for things like "can't play 1080i" - even though internet downloads at 1080 are impractical for now.
AppleTV's next move should include 1080 support for the future to avoid that. I'd like a DVR but I can see that anyone with payTV would find the lack of support a worry. (For me... it would mean there was no appeal to payTV at all - just record from FTA and rent other shows).
All that said - I doubt Apple can sell enough new AppleTVs of any description to lose the margin they're forecasting. Let alone the other arguments
Whatever it is (whether a new or existing product), it is going to be very aggressively priced. That's the only way it would affect Apple's profit margins.
I think the fact that Oppenheimer called it a "product transition," it implies that it will be an existing product(s) that will be transitioning into something with more capabilities.
the author notes "Apple has that but nobody else does. That will make it very hard to compete against Apple TV
I'm mainly trying to bring attention to the fact that AppleTV is a slow-growth device.
So overall, you think the AppleTV is already in a good place, and the product transition does not refer to the AppleTV?
I think the fact that Oppenheimer called it a "product transition," it implies that it will be an existing product(s) that will be transitioning into something with more capabilities.
I agree totally... but with Apple's range of products it doesn't narrow it down much!
Whatever it is (whether a new or existing product), it is going to be very aggressively priced. That's the only way it would affect Apple's profit margins.
They certainly have to sell a lot of whatever is coming out.
However... IF they did something like added touch to iMacs and laptops without changing the price, they'd still be pricey (but worth it IMO) laptops and Apple would lose at least the profit margin they're talking about.
I think the margin decrease is related to a Apple needing to step up and replace many Macbook Air notebooks.
The current note book has a faulty design which is related to the Intel GPU (graphics) causing the notebook to shutdown a core cpu. The problem exists in excess of 50% of the notebooks and accentuates most prevalently when the MBA is used in an environment where the ambient temperature is higher than the typical air conditioned room. This is amplified by viewing videos or using an additional screen. This is an Intel and Apple issue, perhaps Intel eats part of the cost, however Apple has to eat the other. Thus causing the margin depression.
Interesting ideas on the product transition - my thoughts most likely the profit generator - macbook pro.
Get AppleTV (with no hard disk).
Select iTunes TV Plan - where you decide what channels you want to pay for on a monthly basis, and what channels you want to watch PPV.
Depending on your channel selection, you pay a monthly fee. Ranging from $9.95 to $29.95 per month. You can watch programs from your channel selection whenever you want for free.
The price you have to pay upfront for AppleTV depends on your channel selection plan - if you pay $9.95 per month, you buy the Apple TV for 99.95, if you pay $19.95 per month you pay $49.95 upfront, and if you pay $29.95 per month, the Apple TV is yours FREE!
In addition, you can use PPV to get other programs.
All programs are instant streaming, using QT instant streaming feature.
The reason this shuts out the competition, is that people need to create the ENTIRE ECOSYSTEM to make this possible - not enough to just have a device, need to have the iTunes store as well. No one has managed to create this ecosystem for music, other than Apple. Secondly, you need relationships with network companies - Apple already has a relationship with AT&T - which could help them get the network side of the equation into play.
Something about the iPhone 3G makes me think that AT&T actually agreed to a very raw deal on the device. The actual upfront payment AT&T makes to Apple is about $525, but the user can theoretically buy an iPhone 3G for $199, keep it for a month at $70, and cancel for $170 -- effectively getting the device for $440. There is ABSOLUTELY no way AT&T would expose themselves to this kind of risk - unless they were promised something else by Apple in return.
What exactly are you trying to say wobegon?
That AppleTV is something that fits their statement? Or not?
Not to answer for wobegon, but I think the key here is software platforms. Many here have speculated on undercutting competitors through incorporating emerging hardware at below market price points or broadening the current product line into existing commodity spaces. None of these seem to fit with AAPL's strategic direction over the last few years nor do they provide any sort of competitive advantage that locks out competitors. if anything, they merely bring on a "price" or "feature" war. Who out there thinks that Michael Dell would let Jobs take share simply by undercutting him on HDD's or by introducing a low priced desktop. Who out there doesn't see that even touch technology, despite the elegance with which AAPL has brought to the interface and the 200+ patents they claim exists in various forms from other manufacturers.
No the key to everything is and has been expanding the reach of AAPL's software, chiefly OSX, in now its various flavors (read PC, iPod Touch, iPhone, iTV) to improve on the user experience. And software, namely OSX and its surrounding technologies, is the one direction from which APPL derives competitive advantage that could "shut out rivals". Additionally, computer industry historians would note that the key to competitive advantage is often developer support and, as many here have noted, APPL has clearly begun to emphasize the combination of App store and handheld units (running OSX) as a new direction and revolutionary platform on their own. SJ himself has numerous times referred to his 5 year head start in technology in the iPhone while also demonstrating that he phone market is several time the size of the PC market.
So what specifically might we expect? My magic 8 ball is not giving me a clear read, but I would bet that Jobs & Co are clearly happy with the worldwide reception the iPhone and App store platform are receiving while simultaneously witnessing considerable industry resources being dedicated to copy what they have started. So they very likely could look to expand that platform (yes, already) with a different form factor. My bet would be on a cheaper price point to set themselves up to capture massive share (how else would one "shut out rivals" without undermining the product just introduced and numerous distribution relationships just formed). I'd personally love to see a physical keyboard, but don't think that this fits with APPL's other strategic pushes which include media/entertainment distribution and touch technologies (or perhaps more broadly stated, reconfigurable interfaces). On the margin front, this new product would likely be introduced and near give away levels up front, much like the majority of the phone industry. But in order to appropriately differentiate it from the iPhone, AAPL would probably have to decontent it very significantly, leaving out what? Wifi? 3g? Apps? Storage? None fully compute to me yet, so I'm unsold.
Of course, we could see APPL, push deeper into iTV category, and certainly they will over time. But as many have stated, this still is a small business, such that giving the sets out for free might not impact margins as Peter Oppenheimer guided. And notwithstanding the considerable number of HDTV's sold in the last year, with more every day and holiday season, HDTV's installed footprints are clearly not at a critical mass. I, for instance, do pretty well financially and have five TV's in the house, but only one HDTV and I have no plans to buy another HDTV just to park an iTV next to it no matter how much i love the product on its own merits.
Now while I previously threw the PC side under the bus, I'd consider it a dark horse that APPL might finally introduce a cheaper desktop, or headless mac, as we've all come to know it. APPL's halo is clearly shining bright such that they are consistently taking share in the PC space, so perhaps they could look to begin competing more there. But while, perhaps strategically attractive in certain respects, I just don't think that that direction fits with the concept of locking out competition, nor is it sexy enough for S.J. It's old, 80's technology. he might as well go one or two more decades back and compete in the mini or mainframe spaces. No, SJ wants to create new markets and experiences which he feels he can lock up with proprietary software.
But to quote, there could just be "pne more thing", or direction they could go. First, let's not forget that it is highly unusual for SJ to allow anyone other than himself to hint at new directions or products of any sort, although we all know that he loves to play with the media and rumor mill. So it is certainly quite possible that the transition might involve something a whole lot less sexy such as a change in pricing or revenue recognition approaches on an existing product line. Could be, perhaps, moving to subscriptions for certain distributed media. I don't know, just guessing. This would also seem to be unlikely since there is nothing proprietary about a distribution agreement(s) with media co(s).
Or maybe he'll just start wearing button down shirts and loafers.
AppleTV's next move should include 1080 support for the future to avoid that. I'd like a DVR but I can see that anyone with payTV would find the lack of support a worry. (For me... it would mean there was no appeal to payTV at all - just record from FTA and rent other shows).
All that said - I doubt Apple can sell enough new AppleTVs of any description to lose the margin they're forecasting. Let alone the other arguments
One advantage of a Apple branded HDTV with integrated AppleTV technology that they would not have to compete or try integrate domestic USA cable technology. Everybody would just use their standard cable box they already have and Apple doesn't have to compete for space on the shelf.
Apple already like to have the top end of a really large market and the world is currently having to upgrade all the old analog TV systems for digital and HD technologies.
Globally there is probably 60-100million HDTV's sold annually. 28 million alone in Europe in 2007. ( http://www.electronicsweekly.com/Art...-this-year.htm ) Taking just 5% of the global HDTV sales and making sure it's the top end could add over 10Billion in revenue. And I'm sure Apple can make the best unit on the planet. Steve Job's hobby becoming the fourth leg of Apple's revenue is do-able.
30" iMac!
I actually think that it will be the imac that is the mystery product seeing as competitors like DELL, HP, Sony and to some extent the Averatec All-in-One already offer an all in one where else does apple need to keep its bread winner. Its an area where it needs to "Shut out rivals" and as we see on reviews after reviews these other all in ones look snazzy but the iMac whips them and with all of that said my money is on the iMac.
Did you read the rest of my post?
I said ALL iPODS will transition into touch versions, including the "iPod nano touch."
It's all about getting the "app store" on as many devices as possible. This is a clear way to shut out the competition..
Time to get smaller fingers I guess?
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.
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.
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".
*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.
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".
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.
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..
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.
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.
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.
One advantage of a Apple branded HDTV with integrated AppleTV technology that they would not have to compete or try integrate domestic USA cable technology. Everybody would just use their standard cable box they already have and Apple doesn't have to compete for space on the shelf.
Apple already like to have the top end of a really large market and the world is currently having to upgrade all the old analog TV systems for digital and HD technologies.
Globally there is probably 60-100million HDTV's sold annually. 28 million alone in Europe in 2007. ( http://www.electronicsweekly.com/Art...-this-year.htm ) Taking just 5% of the global HDTV sales and making sure it's the top end could add over 10Billion in revenue. And I'm sure Apple can make the best unit on the planet. Steve Job's hobby becoming the fourth leg of Apple's revenue is do-able.
Why not take it a step further, put an HDTV tuner in the iMac line.
20, 24 & 32" iMacs
Why not take it a step further, put an HDTV tuner in the iMac line.
20, 24 & 32" iMacs
How would that shut off the competitor? That's old tech on Windows PC, won't shut off PC competitors and won't shut off TV competitors.
The "announcement" was clearly designed to make sure younger folks (who hear this kind of news a lot more) would put off purchases until September. It's a product transition, not a new product. It's aim is to prevent other computer makers (who are already in this market) from underpricing Apple's offerings. Apple's high margins will take a significant hit, so it concerns a product currently giving Apple high margins.
Apple is simply acknowledging reality in today's computer space, and making a 15" consumer laptop.
That's all, move along.