Minority Report: 12 months of Apple

The year of the iPhone - again

The year of the iPhone - again

From scads of new products to a Jobs health scare, it's been another exciting year for Apple. Seb Janacek clocks the highs and lows for the Mac maker.

If last year was an A on the report card for Apple, this year is perhaps a B - solid progress if not as spectacular. It's only once in a while you can release an industry-changing device after all.

Like 2007, the last 12 months have been very much about the iPhone - albeit with a number of significant additions.

The year saw Apple continue to build itself into an industry giant with record-breaking quarterly results for its Mac and iPhone businesses.

Walking on Air
In January, after the excesses of a festive period Apple immediately slimmed down with the launch of the ultra-thin MacBook Air - a laptop so thin you could cut a cake with it, which some people actually did.

As with many other Apple products, the laptop is a wonder of industrial design, featuring a thin enclosure but still managing to contain a 13-inch screen and a full-sized keyboard.

The biggest threat to the Air came from its own stable mates, the MacBook and MacBook Pro - even more so since the relaunch of both notebook ranges in October.

Rumours that the company could introduce a low-cost MacBook as an attempt to increase market share were scotched by the company when it released new designs for the range and its higher-spec Pro relative.

Same old, same old
A Q&A session by Steve Jobs after the October MacBook relaunch reiterated that the company was sticking to its winning formula of selling high-margin quality kit to the markets the company "chooses to serve".

Jobs stated the company didn't know how to create a $500 computer that wasn't a piece of junk and that Apple's DNA wouldn't allow them to do so. With Apple relaxing its approach to secrecy it was an interesting insight into the company and its future plans.

As Steve Jobs pointed out in a 2008 keynote, there are three parts to the company now: the Mac, its music business (comprising the iPod and iTunes business) and the iPhone.

3G iPhone debuts
Without doubt, 2008 was the year of the iPhone. Again.

Since its launch in 2007, the device has lit a fire under the entire mobile industry. Apple's smartphone was the talk of the town at the Mobile World Congress in February. It was suddenly a contender in the corporate market, which has eluded it for so long, as well has having a huge effect on the rest of the market.

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The defining event for the company in 2008 was the launch of the iPhone 3G in July. In its opening weekend the company expanded its reach to more than 22 new territories and sold more than a million handsets.

Later in the year, Jobs attended an earnings call with CFO Peter Oppenheimer and analysts to reveal the extent of the iPhone 3G sales.

Apple follows accounting practices that mean it has to report sales of iPhones across eight quarters (representing the estimated economic lives of the product). However, the company was keen to shout about how much revenue it could have reported if it wasn't constrained by the need to defer the income for the quarter across the length of iPhone contracts.

The answer was a hell of a lot. Apple claimed it sold 6.9 million iPhones during the fourth quarter of 2008. It has sold more than 13 million to date, easily surpassing Jobs' target of 10 million sold by the end of 2008. According to the adjusted figures, iPhone sales represented almost 40 per cent of the company's revenues for the quarter.

During the quarter, Jobs said Apple had leapfrogged RIM in unit sales. Meanwhile, earlier in December it was reported that iPhone sales had also surpassed sales of Windows Mobile in the smartphone market.

Hello App Store
Along with the new iPhone came the App Store, a marketplace for the third-party developer community to develop applications for the device and the iPod Touch.

Apple came under criticism for restricting the kinds of applications that could be distributed via the App Store but the sales figures sent a clear message. Within a month, the store had sold 60 million apps and was drawing in $1m per day for Apple. Jobs was naturally ebullient and predicted the App Store could soon become a billion dollar marketplace.

Face the music
On the music front, the company's range of iPods got their now-traditional September update, with the entire range getting a facelift and a splash of colour.

Most notable were the changes to the iPod nano, which eschewed the chubby image of the previous model and got back to basics with a slimmer look and feel. To top off the event, Apple added a touch of Genius.

Jobs health watch
Apart from new products, Steve Jobs' health has remained in the spotlight all year.

The Apple CEO battled and overcame pancreatic cancer back in 2004 but following a number of public appearances where he appeared somewhat gaunt, the focus in the industry and the media switched from the products coming off the Cupertino conveyor belt and focused on whether the company's hugely influential leader had fallen ill again.

The company has denied the reports stringently stating at one point that the CEO had a common bug. However, the rumours endure and Bloomberg didn't help matters when it accidentally published an obituary of the Apple CEO on its site in August.

At the iPod event in September, Jobs' opening keynote slide simply read: "The reports of my death are greatly exaggerated."

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Greener Apple
This year also saw Apple fulfil many of its Greener Apple commitments on environmentally friendly manufacturing, following a savage campaign against it in 2007 by green lobby group Greenpeace.

The company has followed through on its promises to make its products and manufacturing processes greener, with a greater reliance on recyclable aluminium for its computers, glass arsenic-free displays as well as BFR- and PVC-free components.

Clone Wars
And let's not forget the latest battle in the Clone Wars. In November, Apple won a significant legal victory over upstart Mac clone maker Psystar (which launched its line of Leopard-enabled PCs in April). After Apple got around to launching a lawsuit against the computer manufacturer in July, Psystar countersued Apple claiming it was effectively running a monopoly.

However, last month a judge rejected the counter-claim and the case will go to court in late 2009.

Intriguingly, Apple recently amended its initial lawsuit with a claim that it believed Psystar was a front by a dozen or so John Doe individuals or companies - something that will add spice to next year's legal proceedings no doubt.

In the meantime, the message to the industry on Mac clones was unambiguous: Mac OS X is a Mac thing. End of story.

Looking ahead
As for 2009, in January Apple starts off the year with the traditional Macworld expo where it will be expected by analysts and consumers to turn the computing world on its head, as always.

Rumours are already spreading of a 'new generation' device with the inevitable predictions of tablets and netbooks. The latter persists despite Jobs' assertion the company would hold a watching brief on the nascent devices.

What's almost a given for 2009 is that Apple will continue to focus primarily on its iPhone business. The iPod market will continue to creep towards market saturation and upgrades to the iMac range of consumer desktops should top out a solid range of products. Who knows, even the Mac Mini might get some love in the Jobs keynote.

Snow Leopard
For this columnist, the highlight of 2009 will be Snow Leopard, the next generation of the Mac OS X operating system. The company has promised Snow Leopard will shy away from introducing hundreds of new features and instead focus on stability, speed and streamlining what already constitutes a mature and highly marketable OS.

At a time when both consumers and businesses are saying 'no thanks' to Windows Vista and the Mac is gaining ground on its old rival with market share in the US creeping towards the 10 per cent mark, 2009 has the potential to be another seminal year for Jobs and co.