Apple CEO hints at no ARM-based MacBook Air as iPad to "soon satisfy" that niche

Posted:
in AAPL Investors edited January 2014


After meeting with Apple chief executive Tim Cook and chief financial officer Peter Openheimer, Citi analysts noted a strong iPad outlook leaving little likelihood of an ARM-based MacBook Air, vast growth potential in China, an indistinct future role for Apple TV, and the strength and importance of iCloud.



iPad expansion, no ARM Macs



Citi analyst Richard Gardner reported Cook reiterating his comment, originally made during the quarterly earnings conference call, that the market for tablets would eventually grow larger than the conventional PC market.



Apple doesn't refer to iPad as a PC, but as a "post-PC device," leaving the ARM-based tablet distinct from the company's Intel-based Macs. Gardner further indicated the meeting dispelled the notion that Apple might introduce ARM-based Macs, countering rumors that a new MacBook Air featuring an ARM processor might appear sometime soon.



Gardner cited Cook as alluding to "rapid innovation on the iOS platform" that will "significantly broaden the use case for tablets," and stated he "walked away from this meeting with the impression that Apple feels iPad satisfies—or will soon satisfy—the needs of those who might have been interested in such a product" as an ARM-based MacBook Air.



Speculation about a MacBook Air or other low end Mac models beginning to incorporate ARM processors has been fueled by rapid advances in ARM's chip designs as well as Microsoft's Windows 8 strategy that envisions future tablet and clamshell PC devices built around ARM chips rather than Intel x86 compatible processors that Windows has historically been tied to as a platform.



While Apple could deliver ARM based Macs, it appears the company is more focused on increasing the desirability of its existing iPad and leaving Macs as a higher end alternative rather than bringing them into directly overlapping use scenarios.



China's huge opportunity



While Apple's sales in Greater China now make up 12 percent of Apple's revenues (up from just 2 percent in 2009), Oppenheimer described Apple as “just scratching the surface” in the region, noting that Apple has yet to establish distribution agreements with the largest mobile carriers, Chian Mobile and China Telecom (which are also the largest carriers globally).



Gardner stated that Citi's "checks suggest that iPhone 5 will support [China's unique] TD-SCDMA [mobile networking protocol] in addition to LTE, opening the door for a distribution agreement with China Mobile this year."



The note also stated that "Apple’s new retail head has been tasked with expanding the company’s store presence in mainland China more aggressively."



Apple's Steve Jobs previously stated that the company's retail stores (then principally in the US) were built to launch iPhone, indicating that the company also plans to prepare for a wider launch in China by aggressively building out a retail presence first.











From hobby to focus: Apple TV



The report also noted that Cook "reiterated the view that costly cable bundles will unravel eventually as one or two key content providers decide to make their content available à la carte" rather than largely being tied up in exclusive agreements with cable operators.



Gardner wrote that Cook's comments suggested AppleTV "would not graduate from 'hobby' to 'focus' unless it could scale across multiple cable operators and multiple geographic regions."



Apple highlighted sales of over 4.2 million Apple TVs over the past five quarters since the company transitioned to an iOS-based device, although after noting the sales figures, Tim Cook said, "in the scheme of things, if you dollarize it, we still classify it as a hobby."



Price sensitivity on iPhones, value of iOS ecosystem and iCloud



Rather than seeming concerned about reaching lower price points for its iPhones and Macs, Oppenheimer indicated the company remained focused on creating "great products" in the belief that customers will pay a premium for them.



Backing up that view is the fact that the premium priced iPhone 4S continued to make the vast majority of Apple's sales in the quarter, despite the availability of the cheaper iPhone 4 and the free with contract iPhone 3GS.



Apple also noted the value of iOS ecosystem, which has now paid out more than $4 billion to third party developers, another factor that attracts and retains the interest of consumers.



Cook also emphasized the role of iCloud, comparing it in importance to the "" strategy Jobs unveiled in 2001 and which shaped virtually everything Apple did over the last decade.



iCloud, which Jobs unveiled last summer at Apple's Worldwide Developer Conference, serves a role in attracting new buyers to Apple's platfoms and retaining them as customers. The company recently noted attracting 85 million subscribers to the service.



[ View article on AppleInsider ]

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Comments

  • Reply 1 of 73
    snovasnova Posts: 1,281member
    with Apple.. sometimes a "no" means "yes".
  • Reply 2 of 73
    Dan_DilgerDan_Dilger Posts: 1,583member
    Quote:
    Originally Posted by snova View Post


    with Apple.. sometimes a "no" means "yes".



    Cook didn't actually say "no," but when Apple suggests no they actually usually mean no.



    No... actually Yes



    - video iPod



    No... no really, no



    - Flash on iOS

    - Silverlight on iOS

    - Java on iPhone

    - stylus

    - 7" tablet

    - WebM

    - Xserve
  • Reply 3 of 73
    MacProMacPro Posts: 19,483member
    It makes sense to me. The Mac is growing in market share this is not time to dumb it down. iPad and Mac can grow while PCs decline.
  • Reply 4 of 73
    wardcwardc Posts: 150member
    I just hope Apple doesn't consider discontinuing the MacBook Air because it is such a great product, Apple really has a gem with the MacBook Air.
  • Reply 5 of 73
    cgjcgj Posts: 276member
    I think it would make more sense for Apple to co-develop special Intel chips for their Macs. Perhaps they could say to Intel that co-developing their own chips would be the only way they would even consider using Intel chips in iOS devices.
  • Reply 6 of 73
    solipsismxsolipsismx Posts: 19,566member
    Quote:
    Originally Posted by snova View Post


    with Apple.. sometimes a "no" means "yes".



    I could see an ARM-based Mac notebook after ARMv8 (post Cortex) which will be 64-bit. The issue with x86 Mac apps not working isn't an issue because the Mac App Store and an updated SDK will take care of that. Apple has switched CPU architectures many times with great success and has been using OS X for iOS for enough years that I don't see any major hurdles if they went this route.



    The question is whether this will be better than Atom or CULV for Mac notebooks in 2014 or later. Intel is actually doing a pretty good job with Atom right now and I don't see them slowing down their progress anytime soon. That might be a better option for Apple if they wish to create a lower-end Mac notebook, especially since Thunderbolt seems to be tied to Intel and Apple for various reasons.
  • Reply 7 of 73
    wizard69wizard69 Posts: 13,377member
    First off comments about potential future products often have lots of wiggle room. Apple often dismisses competeing technologies until they have their own solution. Case In point iPods, especially flash storage iPods.



    As to iOS devices, I take the comments to indicate that they are indeed thinking about broadening the iOS devices line up. You can't meet diverse users needs on the back of one device. So while I don't know exactly what Apple is up to I expect that they will be delivering new or heavily refactored devices relatively soon. That could be a 7" device, a more capable Touch or something entirely different.



    I suspect that Apple realizes that the tablet game is theirs to loose right now. One way to loose is to ignore the market for physically different sized devices.



    Quote:
    Originally Posted by Corrections View Post


    Cook didn't actually say "no," but when Apple suggests no they actually usually mean no.



    No... actually Yes



    - video iPod



    No... no really, no



    - Flash on iOS

    - Silverlight on iOS

    - Java on iPhone

    - stylus

    - 7" tablet

    - WebM

    - Xserve



  • Reply 8 of 73
    kpomkpom Posts: 656member
    Quote:
    Originally Posted by WardC View Post


    I just hope Apple doesn't consider discontinuing the MacBook Air because it is such a great product, Apple really has a gem with the MacBook Air.



    The MacBook Air would be the last Mac they ever discontinue. It seemed pretty clear to me in 2008 that Apple saw the MacBook Air as the future of PCs (in the generic sense), and it should have become obvious to everyone in July 2011 when they dropped the base MacBook.
  • Reply 9 of 73
    irelandireland Posts: 17,783member
    iAAPL
  • Reply 10 of 73
    Quote:
    Originally Posted by wizard69 View Post


    One way to loose is to ignore the market for physically different sized devices.



    Just like they lost the phone market because they kept a 3.5" screen. Or how they lost the PMP market by not supporting FLAC or WMA.



    Wait?
  • Reply 11 of 73
    wizard69wizard69 Posts: 13,377member
    Seriously the performance difference between ARM and Intel is so massive right now that this isn't even a practicle concern. It will be a couple of years before ARM will have a solid 64 bit platform and at this point there is no sense in even considering 32 bit systems for a Mac OS based device.



    The AIR is a gem no doubt. Mind you IVY BRIDGE will turn that gem into a fine jewel effectively addressing GPU performance issues. Along with the nice GPU boost we will see about an 8% increase in performance from the CPU. ARM is very long way from delivering the sort of performance that comes with Intel Hardware.



    Note that ARM can hit or even exceed the clock rate of Intel hardware used in the AIRs but that is 32 bit hardware with performance no where near the Intel per clock. In any event I think Cook is on thE right track here, people that don't need the laptops performance or capabilities will quickly migrate to an iPad like device. Add a keyboard for desk usage and you are all set. The big limitation with iPad isn't processing power anyways, it is internal storage that limits the device. In the context of storage it is interesting that Apple is looking to coming iOS devices to better take on or replace laptops.



    March is going to be very interesting.





    Quote:
    Originally Posted by WardC View Post


    I just hope Apple doesn't consider discontinuing the MacBook Air because it is such a great product, Apple really has a gem with the MacBook Air.



  • Reply 12 of 73
    wizard69wizard69 Posts: 13,377member
    Quote:
    Originally Posted by Tallest Skil View Post


    Just like they lost the phone market because they kept a 3.5" screen. Or how they lost the PMP market by not supporting FLAC or WMA.



    Wait?



    Your arguements is hog wash. For one the pocket is a different place to store something than compared to iPad like devices. But what is more interesting it the PMP arguements or the lack of any supporting your position.



    There was many factors in Apples success with Music. One key element was continual evolution of the hardware, some of which was tailored to specific uses. Like wise Apple evolved the content and successfully engineered an agreement with The record companies for both better quality and open content (DRM free).



    The fact is if you look at both the hardware and software sides of the PMP business over the years you will see that my arguements are supported by Apples actions in that business. Apple has morphed that business significantly over the years.
  • Reply 13 of 73
    Just to be a little more accurate in the 'mobile standards' description: CDMA Is part of the 3GPP2 family - Qualcomm is just one of the vendors that participate to the standards.
  • Reply 14 of 73
    shaun, ukshaun, uk Posts: 1,050member
    They won't need to transition the MBA to ARM because we'll probably see a 13" iPad next year.
  • Reply 15 of 73
    In answer to the ARM based MacBook Air, since when does Apple follow suit with microsoft ? It's clearly been microsoft consistently follows Apple in OSes, phones, mp3 players, tablets, etc



    Cheers !
  • Reply 16 of 73
    Quote:
    Originally Posted by Shaun, UK View Post


    They won't need to transition the MBA to ARM because we'll probably see a 13" iPad next year.



    I hope not. I don't see the point in having a bigger device that you still can't type on.
  • Reply 17 of 73
    xsuxsu Posts: 401member
    Quote:
    Originally Posted by WardC View Post


    I just hope Apple doesn't consider discontinuing the MacBook Air because it is such a great product, Apple really has a gem with the MacBook Air.



    I think you can feel safe that would not happen. At least not until all Mac notebooks became "Air like". Then they may transition Air into something that blazes a new trail.
  • Reply 18 of 73
    pmzpmz Posts: 3,433member
    Quote:
    Originally Posted by AppleInsider View Post


    Rather than seeming concerned about reaching lower price points for its iPhones and Macs, Oppenheimer indicated the company remained focused on creating "great products" in the belief that customers will pay a premium for them.



    Backing up that view is the fact that the premium priced iPhone 4S continued to make the vast majority of Apple's sales in the quarter, despite the availability of the cheaper iPhone 4 and the free with contract iPhone 3GS.



    Thats one way of looking at it. Another way is that an iPhone plan for any of those devices is the same, minimum $75 a month, average $100.



    When you commit to a $2,400 2 year contract, it doesn't matter if they're giving it away for free. You're going to spend the small amount of extra money to ensure you have a quality device for that 2 years.
  • Reply 19 of 73
    Quote:
    Originally Posted by Shaun, UK View Post


    They won't need to transition the MBA to ARM because we'll probably see a 13" iPad next year.



    I don't know about 13", which seems a little big, but I sure do hope for a slightly larger iPad, about 11.8", 2048 x 1536 (double the current resolution), coupled with a good dock and a keyboard cover like the Zagg (but with full size keys like the 11" Air).



    This would make it a more viable notebook replacement for more common use cases, it would make it a much better magazine and illustrated book reader (size does matter), and it would reduce eye fatigue for those older than 40.



    I see the format as a complement, not a replacement. Just like today we have two sizes of Airs, there would be two iPad sizes.



    By the way, if the above does not happen I would love to see an ARM based Air. The point is not to make it cheap or low end. The point would be the all-day, worry-free battery life. If you spend all day with email and basic office apps, you don't need the high performance of an Intel chip.
  • Reply 20 of 73
    Quote:
    Originally Posted by PBRSTREETG View Post


    I hope not. I don't see the point in having a bigger device that you still can't type on.



    I can touch type on my iPad. Your argument isn't valid.
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