Filed under: Analysis / Opinion, Apple Financial
Earnings call takeaway: New products in September
Apple posted record earnings yesterday, yet the stock still dropped amid concerns over Steve Jobs' health (I'll refrain from speculating because I find it tasteless and it's none of my business) and lower projected gross margins for the September quarter (Q4). Although Apple is famous for under-promising/over-delivering, especially when it comes to projected sales and gross margin performance, during yesterday's call, CFO Peter Oppenheimer offered up a very interesting explanation for Apple's lower estimates: new products!Although Apple historically has a lower gross margins in the September quarter because of the Back-to-School promotion, Apple also added that a "new product that [it] [couldn't] discuss" would also result in lower gross-margins. Throughout the call, Oppenheimer kept throwing out phrases like "product transition," "new additions to the product line" and a little mantra that went something like, "Apple makes state of the art new products that the competition just can't match. When we do that earlier in an introduction, costs are higher."
We had a good time speculating what new products/changes to the product line will appear in September (or in the 4th quarter, more accurately) in the liveblog and the press has joined in that speculation today. ZDNet thinks that products will be brought out at lower prices, so that Apple can drive volume and gain marketshare. Over at eWeek, they are guessing everything from a shift in microprocessors, to low-cost portables aimed at schools to revamped AppleTVs.
The general thought (or wish) in our chat last night centered around new MacBook Pros, lower priced Airs and revamped Minis or other headless Macs.
My personal speculation is that while I expect current line products to drop in price a bit (not a huge drop, but a drop), and think it is high time for a MacBook Pro redesign, I'm going to guess that new displays are part of the "transition." The Apple Cinema Display line is not only overpriced, it is long-in-the-tooth when compared to products in its pricepoint (or even lower pricepoints). OLED displays could be expensive, and it would certainly be technology that no one else is pushing.
For me, the key to Oppenheimer's words wasn't just the talk of lower gross margins -- because that doesn't necessarily mean lower prices -- it was all the talk of "state of the art products that the competition just can't match." That signifies something that the competition (presumably, HP and Dell) isn't already selling a product or technology that Apple is looking at introducing. With the number of patents Apple has, there is plenty of room for speculation.
What are your best (or most outrageous) guesses? Leave them in the comments and we'll all see how wrong (or right) we are in September.
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Reader Comments (Page 1 of 4)
James Donevan said 3:13PM on 7-22-2008
The product transition most likely refers to a touch screen product. Apple has to ramp up its introduction of a touch screen product to retain its market leader reputation. It's not likely Oppenheimer would use such language were he only referring to revamped product lines.
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Josh said 3:46PM on 7-22-2008
I would love to agree with you. We all love the multitouch interface... at least I do. I think they would stomp the competition if they introduced the table that rumored to 1.5 times the size of the iPhone. That would only encourage developers more to adapt to the Cocoa Touch interface and it would give my site another Cocoa Touch device to review. All around good for all lol.
There are a lot of things that we all would like to see, but I imagine that, if Apple is really introducing a whole new product and not just a refresh of their current line, it's going to have something to do with Cocoa Touch.
http://cocoatouchapps.com/
PJ said 3:25PM on 7-22-2008
MacBook Touch: Twin Touch Display, no keyboard!
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d said 4:49PM on 7-22-2008
PLEASE NO! I like my keyboard! but a small alteration for my prediction: A slate style like the ModBook or tablet with a spinning screen and keyboard. A pen would be appreciated to go along with the multi touch.
Leiria said 7:51PM on 7-22-2008
Itablet or Airtablet or Ipod tablet
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BitBoy said 3:28PM on 7-22-2008
Here's what I'd like to see...a consumer version of the XSERVE home server for managing a household's media library. Currently I have movies, music and photos spread across a Mac Pro, a Mac Mini, a Macbook and an Apple TV. It would be nice to have a single, synchronized repository that could be accessed via the network and has intelligent syncing capability to recognize and archive new content that has been added to any of the client computers.
That's my $.02
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JaceFace said 4:15PM on 7-22-2008
put me down for 2.
James said 4:29PM on 7-22-2008
With:
NAS, including home directories on network
iLife media syncing
Infinitely expandable storage (ala Drobo, but based on ZFS)
MyHome with personal domain(s), web mail, Home iDisk, and Back To MyHome
James said 4:46PM on 7-22-2008
I also forgot:
Application syncing
Time Machine
CoreService and a remote installer for adding other capabilities in an Apple-esque way (for example, making a caching web proxy or adding a bit torrent service)
DTemp said 1:46AM on 7-23-2008
What you're talking about is a software solution, not a hardware solution. Unless you want something rack-mountable?
You can install Leopard Server on nearly any Mac. It can run on Intels, G5s, G4s... the only somewhat steep system requirement is 1GB of RAM.
Almost everything you want could be accomplished with an update to iTunes, you wouldn't even need a server OS for that. You know your regular Leopard installation has file sharing, right? If you want a cheap server, get a Mini, attach a couple external hard drives and put them in RAID-1 in disk utility, and put the whole rig on a UPS.
I've purchased XServes for a design team that I'm on, and you don't need server hardware for nearly anything a home would do. Do you need ECC RAM? Redundant, hot-swap power supplies? A 1U chassis so you can stack 42 of them in a rack for maximum computing density? Lights-out management?
James said 11:50AM on 7-23-2008
Yes it's a software solution, but if you need a separate computer anyways, Apple might as well sell the software and the hardware together.
Note that it is not possible to do this as a "roll your own" right now. Forgetting my wish list, let's just look at iPhoto.
Take your MacBook on vacation with you. Take some pictures, download them to the MacBook, make some edits, and then publish a web gallery for good measure.
Now go back home and merge all of that into your iMac's iPhoto library. Don't forget to get the originals, the edited pictures, the events, and the gallery.
Oops. Not possible. That missing sync is the part Apple would provide in a new product. People that have a MacBook Air, another desktop Mac, and massive music libraries would probably also want the ability to sync selected songs to the MBA as if it was just a really big iPod.
Now my wish list can be done on a "roll your own" server, but not by the average consumer. Making it all easy to do would be the selling point.
Paul Kierstead said 3:20PM on 7-22-2008
Cheaper MacBook Air.
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JohnPQ said 3:24PM on 7-22-2008
I wish that Apple would get rid of the iMac and come out with a proper mid-range desktop.
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Fred said 5:58PM on 7-22-2008
I love my iMac
LuminousNerd said 10:03PM on 7-22-2008
that is absolutely ridiculous, the iMac is fantastic not to mention hugely successful. If you don't like if that us fine bit you must recognIze that it is a great product for a lot of people and they should NOT do away with it!
Jason said 3:29PM on 7-22-2008
I'm interested in seeing what happens, but my leaning is towards less revolutionary devices as redesigned laptops with 16:9 hi-def screens and a boost to the display line in general.
Of note, Peter was referring to products being launched before the end of the current quarter in late September. I strongly suspect that at least some of their new product line will see the light of day long before then though (especially if the laptops are to take advantage of the College buying season).
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Bungles said 3:32PM on 7-22-2008
32GB iphone w/ 2.5 firmware
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Spencer McManus said 5:40PM on 7-22-2008
Too soon after the iPhone 2.0 launch for the 2.5 software, 32GB isn't too "revolutionary".
Eckofish said 3:31PM on 7-22-2008
I don't see what all the fuss is about. It's like Apple saying, "Yes, we plan to expand our company, come up with new products and make improvements to business."
Oh, how strange.
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atuck said 4:42PM on 7-22-2008
haha I hear you. The only thing is that they rarely PRE-announce a new product line. I think it was mostly done to attempt to offset bad news (or the refusal to comment positively) on Steve's health. So yes, this is kinda like saying "Get ready, something good is actually coming" which they almost never do. Its also been well over a year since I was solidly impressed with a product announcement. (iPhone was cool, but who could get excited by 8 gigs?)