BMO Capital expects Mac OS X Lion to add to Apple’s gross margin

“BMO Capital’s Keith Bachman this morning updated his estimates for Apple (AAPL) to accommodate the introduction of the forthcoming ‘Lion’ version of the company’s Mac OS X operating system, which he thinks could produce 60 cents of extra earnings for Apple’s September-ending fiscal fourth quarter,” Tiernan Ray reports for Barron’s.

“Lion sales could boost gross margin overall by 1.5 percentage points, which, if true, means that Street consensus of $6.35 could go higher.,” Ray reports.

Read more in the full article here.

[Thanks to MacDailyNews Reader “Dan K.” for the heads up.]


  1. I know Lion is going to be great, inexpensive & readily downloadable, but…

    All I want is Lion to be as bug free as possible. This also means catching bugs on any update to all critical files possible. Failure to catch bugs causes users grey hair.

    The single most time consuming job is when the OS goes boom.

    Happened just yesterday after the pdf Font patch from Apple was run. For whatever reason all sorts of things suddenly tended to quit or not finish launching. Some critical file in 10.6.7 got damaged somehow.

    Even with a Super Duper copy on a partition from the day before the update, it still took several hours to backup the botched partition with all data files, wipe the boot partition, reinstall the OS and move the changed data files in.

    It is easier to handle this on a MacPro with multiple drives and where the BootCamp install can live on its own hard drive. MacBook Pros don’t currently have that option, but…

    Once the CD-ROM drive goes, you could easily fit 3 SSDs in a MBPro! Once that happens, it will be possible to work more like a MacPro. I hope.

    1. There are some real advantages to staying one version behind in Mac OS X. You get solid stability, almost no need to install updates, and solutions to software problems are easily found because so many other people have used the OS before you.

    2. It could be a bug, but file corruption will “just happen” even if the software is perfect. And if there is existing file corruption on the startup volume, installing system software updates can suddenly make it more apparent.

      I’m extra cautious whenever I do a Mac OS X system or security update (or any update that requires me to restart). I run Disk Utility and use Repair Disk Permissions, then restart from an external USB drive with a minimal system, run Disk Utility, and use Repair Disk. After that, I restart normally, and immediately (before doing anything else), I run Software Update.

      At the very least, before installing an update, restart your Mac. Then immediately run the update installation before doing anything else. If your Mac has been running for days (even a few weeks) without a restart, you don’t want some “rogue” background process to interfere or cause a “hang” during the update process.

      I’ve “test-run” the Time Machine feature that does a complete volume restore of the startup volume, just so that I’m comfortable with how it work (in case I REALLY need it someday). This is the process that requires starting up from your Mac OS X installation disk and selecting the “Restore” command from the Menu Bar (under Utilities). Unlike a cloned backup, you can select any available date/time archive, not just the “last” clone (which may be too old OR may be TOO NEW and have the “corruption” already). It is up-to-date to within the last hour of use. And the restore process is surprisingly fast. It also does a file-by-file (not block-by-block) restoration, which has the side benefit of eliminating file and free space fragmentation while it restores. Using Time Machine plus using a cloning method less frequently, is a good combination backup scheme that gives me confidence and convenience.

      FYI – OWC has a “kit” (called Data Doubler) for replacing the built-in optical drive in MacBook Pro with a bracket that holds a 2.5-inch SSD (or any 2.5-inch laptop hard drive).

  2. it seems that Lion will have major cost consequences if CS3 and CS4 are rendered inoperable upon it’s installation. I for one don’t want to have to buy CS5 so I may have to stay with Snow Leopard if it turns out as I am led to believe.

    Although I have the excellent Pixelmator it’s not a CS4 replacement as yet.

  3. Lion’s impact will come from helping to sell more Macs to those millions of “first-time” Apple customers who recently bought an iOS device. Lion is irresistible iOS-centric eye candy.

    Its impact will NOT come from selling upgrades (whether boxed or downloaded) to existing Mac customers. I think Apple will use a very low price to encourage adoption of Lion at the fastest possible rate.

    For iOS (iPhone, iPad, and iPod touch) customers, “OS” software updates are like a free value-added “service.” Apple is actually going back to its roots, back when Mac OS (“system software”) updates were free for anyone who owned the hardware. Going forward, I predict Apple will lean more and more in this direction, until all Mac “OS” updates become free, just like iOS updates are today.

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