Once again, Apple Chief Financial Officer Peter Oppenheimer has offered conservative and “disappointing earnings guidance for its current quarter. Not that Apple’s guidance is worth much — Apple blew past analyst estimates by a full 20 cents a share for its fiscal third quarter,” Caulfield reports. “The explanation for the weak guidance: higher component costs, back-to-school discounts and a mysterious ‘product transition’ will cause Apple earnings to come in lower than expected. Translation: Apple is going to shake up its product lineup.”
Caulfield reports, “Oppenheimer told investors to expect earnings to come in at only 65 cents a share for its current quarter, well below expectations of 82 cents a share. After Apple’s blowout quarter, at least one analyst wasn’t buying it. ‘You just guided to 66 cents and came up with 92 cents? Why should I believe it should be 65 cents when you’ve been so conservative?’ UBS’s Benjamin Reitzes asked Oppenheimer on a conference call after Apple announced its results.”
Caulfield reports, “Oppenheimer said, there will be a ‘product transition I can’t get into.’ Could that mean Apple is about to introduce some new products? If so, the possibilities include anything from a new version of the iPod music player to fresh versions of its hot-selling notebook computers. With Apple reporting surging sales of both its computers and music players, that would mean the company is about to go from one strength to another.”
Full article here.
[Thanks to MacDailyNews Reader “Dave” for the heads up.]
Whoa!
Bring it on Apple
I’m betting on new iMac lineup and new iPods before the holiday season.
product transition? Perhaps they are discontinuing a product? Mac Mini?
I’m with DaddyMac.
Gotta be new iMacs. They are the only Apple products that haven’t been updated significantly in a couple years.
Yeah, my money is on new iMacs too.
I’ve learned that with Apple there’s always something new in the pipeline.
@Mudflapper:
MacBook Pro
I have the money for the new 24″ iMac burning a hole in my savings account.
Both iMacs and iPods. I want a new iPod.
Here’s WOW?
“Apple managed to wring out 36.9 cents of profit for every dollar in sales, up from 30.32% during the same period last year. By contrast, Dell managed just 18.28% percent gross margins and Hewlett-Packard 24.67% in their latest quarters.” I wonder what Micro$oft’s margin was? Zune Tang, do you know?
Im betting the transition is more then a product refresh, this is going to be a major change, like touch interface ipods, or no more imac, back to desktop and monitors.. something totally different from its current form.
OR, this could mean they are going to Announce a bunch of products and then launch them a few months later, and they anticipate the “hold” on current sales until they are released..
I am thinking revamped iMac also, but it sure would be nice to get a new Mac Mini.
Mac mini has been languishing. It’s obviously popular– maybe something’s been brewing?
Wonder if the new iMacs are going to be touch screen. Can’t wait to see them!
Its going to be something pretty price competitive I bet, likely a low end targeting Mac. It explains why Apple guided down their margins by so much.
The product transition is going to selling just the computer Operating System and not both the OS and the hardware.
Just kidding.
Big Al, I was thinking precisely the same thing. They could be bracing for an initial hit on hardware sales before settling in to their new role as a seller of premium hardware running either OS X or Windows.
well, since no one else has mentioned it:
g5 laptops on tuesday!
In the little Apple Employee meeting in which Steve Jobs announced that all Apple Employees were getting free iPhones, he mentioned that the Mac is one leg of the vision, the iPod/iPhone is the second leg, and Apple TV is the third.
Having said that, I think that we will start to see some effort being exerted there, to make it a more well-rounded and appealing product.
Absolutely. iMac is about to go through a huge transition. This will be the true desktop computer.
The computer will be like a wedge.. you can put it on your desk.. and you interact with it using your hands. You can also use a mouse and keyboard (wireless or wired). Coming in 20″ and 24″ screen size, this will be the true engineering table turned surface computer that you want on your desk!
Enjoy now. Get used to seeing things flat on the table again!
Leopard is coming early, we are finally getting a full sized Mac Tower to have users upgrade easily, we will get touch screen iPods and iMacs, Mac Mini’s with docking stations, and an iDVR for the living room.
For real though, Steve told the employee’s that the iPhone was the 3rd leg on a chair that previously only had two legs. Most chairs I see have 4 legs. They will announce something this quarter that will ship in time for the holiday season, it’ll be the 4th big product announcement. They also probably will have a different version of the iPhone, something smaller, that does iPod and phone only. I am excited. And Apple estimates are always low, but better to disappoint now than to over estimate and let down later.
It cannot be a new iMac or a new Mac Mini, because everybody seems to line up for one of these new Macs and they therefore wouldn’t down-grade next quarter’s earnings.
It must be something they won’t make a lot of money on! What about a Macbook Thin with a SSD?
The earning estimate will be lower because they are scrapping the Mac mini. The product transition will be about moving those users to the other lines of computers, like iMacs and MacBooks. Steve just hates the mini.
I’m thinking the lower guidance is being caused by a problem with Leopard. There will be a release delay announced for past October. This will impact the people who put off buying a new Mac this quarter because they were waiting for the new OS version. Lower Mac sales for the quarter.
Wow. It is going to be a very interesting year or two from Apple.
@BrianD
Your analysis seems the most likely to me – if we “product transition” is what we think it is.
John
@BrianD
Your analysis seems the most likely to me – if “product transition” is what we think it is.
John
Scott: Steve said the AppleTV would probably become the fourth leg. Maybe it’ll merge with the Mac mini to become some sort of iHub or iHome.
30″ iMac please.
Maybe it’s a transition to 45nano, which might be a bit pricier chip.
BrianD
Leopard isn’t being released until October anyway, which is already next quarter.
A faster mac mini would be cool. I don’t want a big desktop, but could use a mini for a video server. AppleTV is too limited at this point.
The widescreen iPod is what I’m really waiting for.
Obviously, new “big” iPods and new iMacs. Maybe a new (or replacement of) Mac mini.
Apple has no motivation to NOT be conservative on guidance. Apple takes more risks than most tech companies. Things have been going great recently, but the iPhone was (still is) a huge risk. Doing things like canceling the most popular digital music player at that that time (the iPod mini) to replace it with the unproven flash-based iPod nano is risky.
Things can go wrong – that’s why Apple is conservative on guidance. If it gave overly optimistic guidance and it fell short due to some unexpected problems, investors would be all over Apple after the stock drops. Since it can’t “win” either way, Apple wisely errs on side of being conservative.
My guess is that the new hardware (iMacs, MacBooks, etc) that they clearly have in the pipeline will require Leopard. Therefore they can’t release major hardware improvements until October, hence a lean current quarter.
I doubt this applied to the 6th Gen iPod though, so hurry up and release it already!
I really hope this means that this transition will eventually lead to multi-touch screens made of glass, multi-touch trackpads, and those multi-touch mice!
They said ‘higher component prices’ and ‘product transitions’
Maybee they are goiing to replace the hard disk in some ipods (30 G) and in some laptops with flash ram. If they keep the existing prices this would lower their margin.
Since the macbook and macbook pro have just been renewed and the flash memory would require leopard for instant wake up, and all , and leopard is not out until october ( already 4th quarter ) it must be a transition from hard disk ipods to more flash based ipods with probably bigger screens, maybee wifi.
Like an iphone with more memory without the phone.
New RAID with SAS disks, RAID 5 hardware support back and new blades server, plus the new MacMini
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higher sales with lower margins
1. new desktop replacing the mac mini with a very competitive price.
2. transition of the video ipods to system X with touch screen. requires faster processor and more expensive electronics. keeping the same price.
3. New expensive keyboard with toutchscreen built in.
4. flash replacing the hard disk in all ipods
Well that’s all I could think off.
PRODUCT TRANSITION = end of the Macintosh.
OS X on PCs.
Definitely an 8″ multi-touch Mac.
Just adorable…
Lower guidance means lower sales. Could it be Leopard is going to be delayed again? New iPods are going to be announced but not available until after the quarter ends. Same for the new iMac.
That is my professional analysis.
OS X on PCs doesn’t sound as crazy as it once did. With the industry-wide disappointment over Vista, now would be the perfect time for Apple to capitalize (and it would be crazy for MS to retaliate by pulling Office, as OS X would soon make up a considerable proportion of its customer base).
We should go back to Bill Gates’ original vision: Apple does the OS and Microsoft does the productivity apps.
How about a 24 inch iMac with a fast low power Penryn quadcore CPU. That would trigger me to buy my second Mac this quarter — the first being a MacBook Pro for my wife, on which I am now posting.
A few months ago, someone mentioned flash drives of 64 gig (maybe 128). Perhaps the whole portable product line is being re-vamped.
Anyway, I don’t care what it is – I want it and I want it NOW
Sounds like more to this than just an iMac refresh. That wouldn’t cause significant downward guidance unless they havent ramped production and expect huge demand and low supply.
I sense something bigger on the horizon.
“I wonder what Micro$oft’s margin was? Zune Tang, do you know?”
Gross margin of 76% last quarter reported. 82% on average over the last 5 years.
The VistaMac is coming!
You knew the minute Apple went to industry standard PC hardware that “product transition” was coming.
Apple makes a boatload of money on Macs (with more and more sold each quarter)… why in the world would they kill that off for a $129 piece of software on PC?
Get ready for the Zune Killer – it’s been under wraps for a while. Monkey Boy is doomed.
Been saying this for a while. Why don’t they open up 10.2 or 10.3 for PC? Sell it for a nominal shipping and handling price and state that it doesn’t include tech support? Or better yet, put them on bit torrent?
It’ll grow market share, as kids and tight a$$es install it to try it out, may give mac developers an incentive to create more apps (and cause others to become mac developers). Apple would lose nothing by it, and have everything to gain.
And put something on the disk telling people that if they want the latest version of osx, its available on any new mac. It will also get the PC fanbois to STFU about the ‘you’ve only got 5% of the market’ argument.
“Product transition”?
It’s as plain as the nose on your face. Apple has finally seen the light and will discontinue OS X and replace it with the magnificent Microsoft Windows Vista.
Your potential. Our passion.™
Hopefully the product transition will include Macs. I’m putting my personal laptop purchase on hold for 3 more months.
how about a Macbook Pro Intel Core 2 Duo Duo Dock! or a tablet.
iPod will upstage MS’ Zune by renaming it:
iPune by Zpple
Seriously though, who cares? Right now, Apple’s product line is unlike ever before, let’s be happy with the current products and allow Apple space to work it’s magic.
Transition: 10.4.xx to 10.5?
The new iMac will be released as one more thing…
First Gen will be eaqal to MacBook Pro in specs but be 42 inchs.
It will include PVR software that will allow file distribution to PC’s and Macs anywhere in the home via ATV.
Apple custom orders for MacBook Pros will end, 5 week delivery is inexcusable.
“transition – passage from one state, place, stage or subject to another: change.”
I predict the mini will become the headless Mac some of people have been wishing for, including myself.
iMac in 20, 24 and 30 and maybe a 32 inch BTO model and will have a TV Tuner built in.
That’s my take.
Product transition? Leopard is due in October.
New monitors are LONG overdue.
I’m assuming that Apple is waiting to transition their entire line to LED backlit monitors, hence the delay?
I saw a new Sony 24″ advertised the other day and may just take the bait.
When I think of product transitions I think OS 9 to OS X, Power PC to Intel. I think there might be something a bit more up their sleeve and it will be coming within the next three months. I just dont think new iMacs are enough for Oppenheimer to stress that it will impact their earnings that drastically in the future.
This is juicy. At first I thought it might me an iCar, or an iPlane, or an iSub or something more exotic. There has always been the possibility of OSX on PC’s, but the legacy driver issue could be a problem for Apple and they make more money with there “small” market share selling the whole widget. Maybe its something more focused like a deal with IBM for the iClone. After all OSX is Unix which is infinitely scalable to the biggest iron and runs on their powerpc chips. IBM has the enterprise with its legions of handholding marketing/support staff. What better way to crack this nut. All Apple has to do is rake in the licencing fees while IBM does all the enterprise heavy lifting. Anyway, it would have to be something that would impact Mac sales. Just a theory. Rumor sites, get to work!
I don’t think that the word “transition” would mean a new product. I think that it is referring to replacing one product design with another. Probably some of the desktops, iMac, mini.
OSX for PCs? Blasphemy!
Oh, wait, You weren’t talking Leopard, or even Tiger, but Jaguar (no) or Panther (YES!). I can actually see how that could work – a new version of “Panther” that will run on just about any PC. Not perfect, no support and not a whole lot of drivers (etc), but more than enough to give the curious young a taste. Going back to 10.3.10 (new version, remember?) introduced with – or shortly after – Leopard, would provide some distance while maintaining the “modern” feel.
Cost? Download for free, packaged (CD with OSX/Panther, the missing manual) for $35 – NO support included beyond “how do I load this up and boot it?” basics.
OK … this is a pipe-dream. A Marketing pipe-dream. Still … 10.6 will be introduced before Seven, and 10.7 at about the same time. That would give Vista owners a year to play with 10.4.(11-15) before Seven hits the street … major dis-satisfaction!
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DLMeyer – the Voice of G.L.Horton’s Stage Page Pod Cast – currently discussing Mumbet
Some of Apple’s product transitions have included changing what’s under the hood, like when the Motorola CPU became the IBM CPU, and then the Intel CPU. Those were “transitions” that Apple was understandably insecure about, especially the Intel switch which some loyal Mac users still haven’t completely gotten over.
So Oppenheimer’s under-the-breath comment about product transitions might be little darker than simply more new and awesome products from Apple. There could be something that’s going to change that’s leaving Apple wondering how the faithful are going to initially react.
And on a final note, I really hold in high disregard the language that is used to describe Apple’s earnings guidance – “…disappointing earnings guidance…” My feeling is that it shows the better part of wisdom to be reasonably conservative when it comes to the market place whether you’re buying or selling, or offering. Among other things, being conservative allows some fudge room for Apple to make changes as it feels it needs to being that Apple is still relatively early on in what is still going to be a real power-house corporation, eventually on the order of MS, but with a much more diversified offering.
By the way, @IT Guy, every Mac that has ever come out has always been the true desktop computer of the time –
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Product Transition: The 6G iPods will migrate from its current embedded OS to OS X.
I think Zune Tang is secretly Steve Ballmer visiting MDN. Our favorite Troll… is Ballmer, he looks like a troll, so why not.
Good to have you on-board ZT, you always give me a good laugh.
Something’s up, for certain.
Several weeks ago, a poster on a forum of another Mac site reported getting a brand new MacBook to replace one needing some minor repair.
A couple of weeks ago, I get a call from the tech guy of an Apple authorized service center (not an Apple store). I have a 5 year old, 17″ iMac that’s been waiting (since about April) for a part on back order. He says that Apple has an offer for me. They can send the replacement part for my old Mac, or I can buy a brand new, mid-range 17″ iMac for only $300. All I have to do is ship them the old Mac…and Apple will paying shipping.
Apple just got $300 (plus local taxes) of my money.
It’s just anecdotal I know, but I’ve heard similar stories for years and they always precede changes to the Mac lineup.
Here’s my guess:
New machines with much higher-DPI displays. Leopard is ready for resolution independence, and the higher-quality LCDs are going to be much more expensive. Apple will keep their price points nearly the same, and take lower margins for a while.
I can’t wait for a 17″ laptop with a 160 DPI or higher screen. That’s going to be sweet.
-jcr
Here’s my guess:
New machines with much higher-DPI displays. Leopard is ready for resolution independence, and the higher-quality LCDs are going to be much more expensive. Apple will keep their price points nearly the same, and take lower margins for a while.
I can’t wait for a 17″ laptop with a 160 DPI or higher screen. That’s going to be sweet.
-jcr
Here’s my guess:
New machines with much higher-DPI displays. Leopard is ready for resolution independence, and the higher-quality LCDs are going to be much more expensive. Apple will keep their price points nearly the same, and take lower margins for a while.
I can’t wait for a 17″ laptop with a 160 DPI or higher screen. That’s going to be sweet.
-jcr
Here’s my guess:
New machines with much higher-DPI displays. Leopard is ready for resolution independence, and the higher-quality LCDs are going to be much more expensive. Apple will keep their price points nearly the same, and take lower margins for a while.
I can’t wait for a 17″ laptop with a 160 DPI or higher screen. That’s going to be sweet.
-jcr
Everything goes multi-touch. That’s what I’m callin. MBs and MBPs screen becomes multi-touch. Cinema display becomes multi-touch. iMac becomes multi-touch. Ok, it’s more like, that’s what I’m hopin, but still, it’d be cool.
Oh I just thought of something else. The reason going to multi-touch now would affect sales? Because you need Leopard for multi-touch. So a lot of people hold off until Leopard’s out in order to buy their new Macs. Now of course, that begs the question, why on earth would Apple do that? I dunno, they’d have a reason I’m sure. I just really really want everything to go multi-touch.
PPC?
Multi-Touch, Multi-Touch, Multi-Touch.
Think about it: OS X Leopard on the iPhone; it’s already there– just release the hardware. This will be like having the bridge of the Star Trek Enterprise in your home!
Perhaps the new rumored video ipods will also priced lower, which may not only explain the lower profit forcast for next quarter, but Apple’s idea to further separate it from the iphone. A stand alone widescreen multitouch ipod may indeed canibalize iphone sales.
My Dream Mac:
Something bigger than a mini but much smaller than the Pro.
A computer that we can open and add more RAM or switch out the HD without using a putty knife!
You could select one of three keyboard/mouse options:
1. Wired keyboard & mouse
2. Wireless keyboard and mouse
3. No keyboard or mouse.
It would connect to my LCD TV and become my home computer/media center.
Pretty please?
I’m hoping Apple are going to introduce iCamera and iCamcorder. Why should we have great iLife apps but sucky UI’s on our cameras?
All I can think of is a transition from LCD to LED screens.
They are initially more expensive and the cost cannot be covered by price increases. As costs drop profitability will be restored.
Some parts of Apple are being sold….
You heard it here first.
1) Buyers wait for Leopard
2) Mini towers
3) The Apple Game Console!!!
“OSX for PCs? Blasphemy!”
I don’t think we will ever see OSX run on any generic PC box. But, I do envision low end licensed clones being made by a top name manufacture (Toshiba or maybe Acer) …. This would be quite different than the clone experiments in the 90’s. I suspect Apple would have to approve every component and want a cut of every machine sold (maybe even selling them in the Apple Stores)…..
Regardless of who makes the hardware, Apple still needs to make sure the the hardware/software “just works”….
This would be unthinkable 5 years ago, but Apple isn’t the same company they were 5 years ago either..
How about just something simple like selling macbooks and imacs at a similar price point but taking less profit on the hardware due to adding blueray. It would seem that they would have to have some relatively custom part in the macbook and the imacs and that it will take a bit to realize manufacturing efficiencies. It would seem to me that apple is probably going to make the HD video transition in all of their products at once since they always seem to sell only the current versions of hardware and have a very limited lineup. Also.. isn’t there ussually a demand for some change in hardware when you release a new OS. There has to be some rollout costs that they are going to bear prior to Leopard coming out.