Apple's new Macs: Headwinds into tailwinds
Photo: Apple Inc.
Apple's (AAPL) surprise announcement Tuesday of four new or updated product lines — iMac, MacBook, Mac mini and a touch-sensitive "Magic Mouse" — does at least three things:
- Builds on the momentum created by the blowout earnings announced Monday
- Gives customers a reason to reconsider Apple's desktop machines
- Keeps the press from writing about Microsoft's (MSFT) Windows 7 — set for release Thursday — for at least another day.
The second point was underscored in a note to clients issued Tuesday afternoon by Piper Jaffray's Gene Munster. He points out that Apple achieved an 17% increase in computer sales last quarter despite fighting the "headwind" of desktop machines that had grown increasing long in the tooth. Desktop unit sales were down 16% year over year last quarter, compared with an astonishing 35% increase in MacBook sales.
The new machines — especially the thinner, faster iMacs — could change that.
"In other words," writes Munster, "the headwind that existed in the Sept. quarter due to aging Mac desktops has now turned into a tailwind for Mac units in the Dec. quarter."
The best place to learn about the new machines is probably Apple's own website. We're particularly fond of the little video industrial designer Jonathan Ive recorded about the new iMacs, pasted below the fold.
Apple store back up. New Macs today.
The rumors of a flurry of new machines were true
Photo: Apple Inc.
UPDATE: Apple's online store came back online shortly before 1 p.m. Eastern with new iMacs, a new MacBook, a new Mac mini and a new "Magic" Mouse (the Mighty Mouse having run into trademark problems). The products are displayed on the reconfigured website and described in a series of press releases:
Apple's website describes a new "mightier" mini, but no press release on that yet.
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Apple's (AAPL) online store went off line Tuesday morning, adding fuel to rumors that it held its quarterly earnings call a day early to clear the decks for the release of some new hardware.
The Apple blogs have been predicting this for weeks, none more succinctly than Daring Fireball's John Gruber, who responded to a provocation from Dan "Fake Steve Jobs" Lyons with this cryptic note:
Unseemly for the Fake Steve character to be so wrong (or, frankly, even to care) about what I know.
By Thursday, I'm sure everybody will be talking about Windows 7 again.
[Follow Philip Elmer-DeWitt on Twitter @philiped]
Looking back at Apple's fiscal 2009
Apple's (AAPL) fiscal year, which ends Saturday, finished on a strong note.
The company won't release its earnings for a few weeks, but shareholders can already see the most visible rewards — a stock that returned gains of nearly 45% over a 12 month period in which the S&P 500 lost 15%.
The last eight months were particularly impressive. The stock climbed from a 2-year low of $78.20 a share on Jan. 20 to close Friday at $182.37 — up 133%.
The stock's roller coaster performance over the first four months were driven in part by broad economic trends and in part by concerns about Steve Jobs' health. But its recovery, I suspect, had less to do with Jobs' return than with the company's underlying strength.
Below the fold: The year's highlights (with links to Apple 2.0's coverage).
Barclays talks to Apple execs, raises target to $208
"We just met with Apple executives at the company’s headquarters in Cupertino, CA, including Peter Oppenheimer, Greg Joswiak, and Eddy Cue."
Thus begins a note to clients sent Thursday by Barclays Capital analyst Ben Reitzes. The note ends with Reitzes raising his Apple price target to $208 from $188 — one of the sparks that sent Apple (AAPL) shares up 1.88% to close at $168.42 for the day.
In between, Reitzes rattles off a list of new products he expects Apple to introduce in the months ahead. Although he insists the Apple execs he met didn't divulge any major secrets, Reitzes sounded pretty sure of himself. Among the coming attractions, as he sees them:
Apple reports record Q3 earnings
Apple (AAPL) blew past expectations — its own and Wall Street's — to report record third-quarter earnings Tuesday.
Buoyed by strong sales of its new iPhone, an explosion of iPhone applications and price cuts on its flagship MacBook line, the company earned $1.35 per share on revenue of $8.34 billion — up nearly 12% year over year.
Analysts were expecting earnings of $1.17 on revenue of $8.2 billion, according to Thomson Financial.
Apple's shares, which had closed at $151.51, down 0.91% for the day, rose sharply in after-hours trading. By 5:49 p.m. its shares had climbed 4.3% to $158.03.
The stock has been one of the market's best performers of 2009, having risen nearly 80% against the Nasdaq's 21%.
The strong results in the face of a global economic slump could be viewed as vindication of the company's decision to stay out of the market for low-cost netbooks — which now dominate the consumer PC business and are squeezing the profit margins of Apple's competitors. More
MacBooks flew off the shelves in June
Photo: Apple Inc.
Piper Jaffray's Gene Munster issued a note early Monday morning warning clients that for Apple (AAPL) to sell the 2.45 million Macs the Street was expecting this quarter, there would have to be good news in the data due out from the NPD Group Monday afternoon.
"Mac NPD for the month of June needs to be flat in order for the entire quarter to be tracking in line with Street Mac consensus," he wrote, adding — in a golfing metaphor salesman slang — that he expected "slight upside to the flat bogey for the month of June, between flat and +5%" year over year.
Well, the NPD numbers came out and they blew past even his most optimistic expectations. Rather than up 5% in June, as he hoped, they were up a whopping 16%. More
Mac vs. PC: Microsoft lowers the bar to $700
It's been three and a half months since Microsoft (MSFT) put owners of Apple (AAPL) computers on the defensive with the first (and perhaps the best) "Laptop Hunters" ad — the one featuring a perky actress named Lauren who does a price comparison and decides she's "just not cool enough to be a Mac person."
Lauren, you may recall, started with a $1,000 budget but ended up with a $699.99 Hewlett Packard (HPQ) machine.
Someone in Redmond must have liked the way that $700 price point played in the focus groups because a cut-down version of the original Lauren ad was back in heavy rotation last week, and this week it was joined by a new TV spot in which an equally photogenic laptop hunting family starts with a $700 budget, rejects the $999 white MacBook, and ends up, like Lauren, with an HP Pavilion dv7.
MacBook back on top at Amazon
In a sign that should bode well for Apple's (AAPL) earnings in its third fiscal quarter — which ended Saturday — the MacBook has clawed its way back to the top of Amazon's (AMZN) bestseller lists.
The Mac, which once led the pack in the online retailer's Computers & PC Hardware Bestsellers category despite its $1,000 to $2,000 sticker prices, had fallen behind the blistering sales pace set by netbooks like the Asus Eee and the Acer Aspire One, which sell in the $300 to $400 range.
By June 1, the bestselling Apple computer on the list — a white plastic MacBook — had been pushed down to the No. 14 position.
But netbooks have started to fall out favor recently — as witnessed by reports of return rates as high as 30% and an NPD study that found that 60% of consumers who bought them didn't understand the difference between a netbook and a notebook.
Meanwhile, Apple announced on June 8 that it was refreshing its notebook line and lowering its prices. Result: its computers have become hot sellers on Amazon once again.
Apple's entry-level 13-inch unibody MacBook, renamed the MacBook Pro, has been one of Amazon's top 100 bestsellers for 20 days — basically since the moment it went on sale. As of Monday morning, it was the site's No. 4 bestselling computer overall and No. 1 in the laptop category.
In fact, three of the top 10 and five of the top 20 bestselling laptops on Amazon are now MacBooks.
Apple is not the only beneficiary of what some see as growing consumer disillusion with netbooks. HP (HPQ) Pavilions, Toshiba Satellites and Samsung Mini Notebooks are also selling briskly online.
See also:
The buzz about Apple's new batteries
There's a surprising level of awe and wonder in the tech press about the batteries in the MacBook Pro computers that Apple (AAPL) unveiled last week — especially since they've been around for more than a year.
"Battery life to die for," was the headline of a widely quoted review in AnandTech.
"Battery technology simply doesn't advance this fast," wrote Computerworld's Seth Weintraub.
"This kind of battery life is reserved for iPods and mobile phones, not laptops," gushed Leander Kahney in Wired's Cult of Mac. "Who cares if the battery is sealed in?"
That last remark is especially surprising given that one of the knocks against the first Apple computer to deploy the new battery technology — the MacBook Air that Steve Jobs introduced in January 2008 — was that its battery couldn't be replaced with a fresh one if it ran out of juice in mid-flight over the Atlantic.
But the first MacBook Air only promised 5 hours of computer power. Apple claims the new MacBooks will deliver 7 or 8 hours on a single charge and last up to 5 years — longer than the expected life of the average laptop.
AnandTech tested the first claim in a series of benchmarks reproduced below the fold. Bottom line: the new MacBook Pro delivered …
- 8.13 hours of light wireless Web browsing, and
- 4.92 hours of heavy downloading.
According to Anand Lal Shimpi, who ran the tests, he saw 50% to 100% improvement in battery life over the old MacBook Pros — considerably better than the 46% theoretical improvement he expected based on the new battery's capacity.
His review offers several explanations for the improvement:
- new battery technology (lithium polymer vs. lithium ion)
- new form factor (rectangles vs. cylinders)
- better battery management (adaptive charging that senses the power needs of each cell).
Whether Apple can deliver on its promise of five years of battery life (based on 1,000 recharges vs. 300) remains to be seen. If the battery does need replacing before the computer dies of natural causes, Apple technicians will do the job (and dispose of the old one) for $120 a pop.
You'll might be able to get an independent technician to do it for less, but probably not without voiding your warranty.
Below the fold: AnandTech's benchmarks. To view an Apple promotional video about the new batteries, click here.
Battery graphics courtesy of Apple Inc.
Analyst: The $99 iPhone will increase sales twofold
The price cuts Apple (AAPL) announced Monday on the MacBook and iPhone lines are "significant" and surprisingly aggressive, writes Piper Jaffray's Gene Munster in a note to clients issued after the WWDC keynote was over.
Historically, he writes, a 50% cut in iPhone pricing has increased demand twofold.
He's referring to the last year's cut to $199 from $399. That price reduction was actually accompanied by a tripling of global unit sales (from 4.7 million to 15 million), but some of those sales were in overseas markets. U.S. sales in that period, he estimates, increased twofold.
The MacBook price cuts were more modest — between 5% and 15% — but make Munster "increasingly confident" in his near-term Mac estimates (2.2 million Macs in the third fiscal quarter; 2.4 million in fourth quarter, which ends in September).
The pricing on OS X Snow Leopard was even more aggressive; it's scheduled to ship in September for $29 (for current Leopard users), as opposed to the typical $129 operating system upgrade.
Munster says he's not worried about the impact on Apple's bottom line, however. He notes that when Leopard shipped in 2007, the Mac user base was about 23 million. Today Apple announced that its user base has grown to 75 million active OS X users.
Munster, having predicted that Jobs would return to Apple by the end of June and not before, claims he is not surprised that the CEO was a no-show Monday.
Apple's World Wide Developers Conference runs until Friday.
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