Apple: Back to the Mac (and the future)

Apple's Mac business is an unappreciated juggernaut--it's delivering big time, but the pyrotechnics from the iPhone and iPod overshadow old reliable.

Apple's fourth quarter report on Monday will change that equation. Most earnings previews (New York Times, Tom Krazit and TheStreet.com) about Apple's September quarter note the company's big Mac sales (expected to be about 2 million units or so) and then fall into the iPhone-iPod go round. For the record, Apple is expected to report earnings of 86 cents a share on revenue a bit above $6.07 billion.

Both IDC and Gartner rate Apple as the third largest PC company. Apple trails Dell and Hewlett-Packard by an obscene margin, but topping Gateway and Toshiba isn't a small feat.

Yet nearly everyone focuses on the iPhone and iPod. So here's an ode to the Mac and a few thoughts for the future. As today's Apple, the Mac business is the pillar that makes these other businesses possible. The Mac's the reason OS X was developed. Now that operating system just happens to run the iPhone. If the Mac business to stumbled Apple's so-called halo would be seriously hurt. And if Apple can get all of those Mac users currently in college to demand workplace equivalents there's a ton of upside.

Yes folks, Apple is still a "CPU story," according to BMO Capital Markets analyst Keith Bachman. Bachman estimates that Apple will report Mac revenue of $3 billion, up 37 percent from a year ago, on shipments of 2.15 million units. The average price for a Mac is estimated to be $1,410.

For those keeping score at home Mac revenue is expected to be nearly half of Apple's total this quarter. You'll never know it by all the iPhone yapping you'll hear later. Apple's quarter will be fueled by the new iMac and back-to-school sales. Bachman expects Apple's December quarter to deliver about the same results with revenue of $3.1 billion on shipments of 2.14 million units.

However, the more interesting Mac developments will play out in upcoming years. Ask any parent and they'll tell you that Apple is a powerful brand among the younger set. Colleges are loaded with Macbooks, high schoolers all have Apple products and my 4 year old can spot the logo a mile away.

To date, none of Apple's fan base has mattered in corporate America. You use a Mac at school and get a PC when you go corporate. That's why the Mac is so important. As these kids/students get some corporate clout the Mac will be an easier sell. Can Apple's fan base open up the corporate market?

So while we're all focused on the iPhone don't forget that old Mac business. Over the long term the Mac is infinitely more important to Apple's long term health than the snazzier more press friendly businesses.