What is the "product transition" Apple alluded to?

What is the "product transition" Apple alluded to?

Summary: During Apple's Q3 2008 Earnings conference call with analysts, Apple's Peter Oppenheimer (CFO) and Tim Cooke (COO) both mentioned a "product transition" that Apple is preparing for that will cut profit margins to help shut out rivals.Both executives punted on several analyst questions for more "color" on the mysterious transition with the familiar refrain that they don't comment on unannounced products.

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What is the “product transition” Apple alluded to?During Apple's Q3 2008 Earnings conference call with analysts, Apple's Peter Oppenheimer (CFO) and Tim Cooke (COO) both mentioned a "product transition" that Apple is preparing for that will cut profit margins to help shut out rivals.

Both executives punted on several analyst questions for more "color" on the mysterious transition with the familiar refrain that they don't comment on unannounced products.

Some hints can be found by reading the tea leaves though.

Apple announced that gross margin was 34.8 percent in Q3 2008 – down from 36.9 percent in the year-ago quarter. Apple also stated that it expects gross margin to drop to 31.5 percent in the July-to-September quarter, eventually settling at about 30 percent during Apple's fiscal 2009.

Apple also released conservative guidance for Q4 2008 of earnings of US$1.00 per share and revenue of US$7.8 billion compared to Reuters estimates of US$1.25 per share on US$8.3 billion in revenue.

So what does this mean? Obviously lower margin products are coming, but will they be entirely new products or lower prices on existing products?

Piper Jaffrey's Gene Munster thinks there's "an 80% chance Apple will introduce redesigned MacBooks and possibly new MacBook Pros at lower price points" and "slightly redesigned iPods" including "lower-cost touch-based iPods."

The MacBook and MacBook Pro are due for updates, as is the Mac mini. Cheaper and/or faster versions of the MacBook Air aren't out of the question. iPods could easily go all-flash and all-touch, perhaps keeping one HDD-based classic model for music hoarders. The iTablet has been rumored forever. A Product Red iPhone?

Some of my favorite theories on the "product transition:"

MacBook touch – "Think MacBook screen, possibly a bit smaller, in glass with iPhone-like, but fuller-featured Multi-Touch. Gesture library. Full Mac OS X."

The Cloud –  "Automatic sync over the air. For music, apps... not just calendars and bookmarks."

What about you? Chime in...

Topics: Apple, Hardware, Laptops, Mobility

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12 comments
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  • On the concept of...

    A Macbook touch, I doubt it.

    Why? How do you look at what you're typing if the screen is both flat in front of you, and your fingers are covering up a significant part of the screen real estate.

    Mind you, I'm prepared to be totally wrong and proved clueless on this.
    zkiwi
  • Yes, We'll all be in Mac nirvana by October

    Let's see, it's a MacBook that looks like an oversized iPhone, and it's got some cool iPhone hardware, and it runs iPhone Apps, and it runs standard OSX, and it's got a Superdrive, and it's not too expensive. Why not go all the way and say it will have a replaceable battery?
    Mac Hosehead
  • Could it simply be the drop ....

    .... in price of the iPhone? Must we always be bomabarded with the Cult of the Mac's fantasies?
    ShadeTree
  • It's a health issue.

    They'll now be serving sugar-free blue Koolaid to the Apple zealo.. er faithful.



    (twaj)
    Hallowed are the Ori
  • Actually...

    It was Grape flavoraid used in Jonestown.
    I believe it was the first anti-apple zealot-zealot who made the factual error but then it became a standard idiom in the anti-Apple zealot's small library of tired chestnuts and wisecracks because [b]everyone[/b] knows that PC zealots are so much less creative than their [i]malusian[/i]counterparts.

    For sake of historical acuracy...
    Tigertank
    • Oh well.

      I was actually referring to the phenobarbital and vodka cocktails that cult in California drank because they were convinced a UFO hiding behind comet Hale-Bopp was coming to take them to a higher plain of existence. (How can you not trust a guy who calls himself "Do"?)
      Hallowed are the Ori
      • My favourite cognitive dissonance story...

        is the cult that warned that the "end of the world was
        nigh", and that people needed to get ready by ending their
        greedy, gluttonous ways. When the fateful day came and
        passed the press asked the cult what happened. The cult
        assured the press that the world had indeed ended,[b] but
        that nobody had noticed [/b] - too busy being greedy and
        gluttonous.

        Wish I could remember more details, we studied this in
        Sociology over 25 years ago. It still cracks me up - 'no
        had noticed' the end of the world.
        snberk203
  • RE: What is the

    Why use a RED iPhone when they don't exist unless you had in Colorwared?
    chriscoyne
  • RE: What is Apple up to with lower margins?

    I think two things:
    (1) lower priced MacBooks in the $795-$995 range to grab
    larger shares of the educational and family markets who
    have tended to buy on price rather than functionality-
    performance. And prices of the Mac Book Pro line coming
    down.
    (2) Redone MacMini that looks a lot like Apple TV or vice
    versa and with decent size HD like 160 gb. The mini I use
    for specific computing tasks that can be put anywhere, on
    a shelf, under the large screen TV, in the kitchen, etc., with
    new and more powerful high bandwidth wireless ability,
    maybe the UWB for living-dining-kitchen rooms. Priced
    between a Mini at $599 and Apple TV at $299.

    Anyway IMHO thats what I see in the tunnel.

    Rick
    Santa Cruz
    cruzdude
  • transition to "Licensed" Clones

    A technology refresh is NOT a transition!

    A new product is not a transition! Was the iPhone a
    transition?

    The transition is opening up OS X to be installed on a PC.
    I know people keep harping about how hard it is for
    microsoft to support the HUGE number of hardware
    configurations out there.

    Give me a break! Windows does not suck because of trying
    to support all kinds of hardware. Windows sucks because
    the way it is designed anything that misbehaves can take
    your system to its knees.

    No matter how you slice it the best way to sum it up for
    why apple should do this is the phrase.

    "OS X on a PC is a gateway drug to a MAC!"
    jahrends
    • that would be great...

      that would be great if the opened up 3rd parties for licensed OSX machines... as long as they did that and not just started selling OSX and say install it on anything you want...
      doh123
  • What does Apple mean by "transition"?

    In my mind transition would mean a
    significant move of an existing product.

    That might be moving the version of OS X
    used in the iPhone to all iPods, except the
    shuffle.

    On the Mac side, it could well refer to
    pricing, or it could be adding a touch
    display to the MacBook Pro line - and
    keeping the keyboard.

    There is also Snow Leopard in the works
    that will drop PPC. There may be some
    hardware changes related to the transition
    that will be delivered with Snow Leopard -
    especially in the multi-core processor
    areas.

    The interesting thing about Apple is you
    never really know what they will
    announce.o Far from dull.
    Ken_z