Amid the fanfare accompanying the noisy launch of the iPad mini
this week, Apple Inc also took the wraps off new Mac computers.
facelift may help revitalize an important lineup that while seeing
growth tail off in the early part of 2012 yields 14 percent of revenue
and still racks up sales growth numbers that are the envy of a flagging
On Tuesday, Apple took the lid off a slimmed-down iMac
and a 13-inch laptop with a vastly improved screen, setting the stage
for a potential revival in sales even as Hewlett-Packard and Dell Inc
struggle just to stay level.
Earlier this year, Apple had also
launched an updated MacBook Air a product analysts say spawned over 20
touch-enabled designs from rivals called "Ultrabooks," which run
Microsoft Corp's upcoming Windows 8 software.
Apple remains No. 3
in U.S. market share behind HP and Dell. But the Mac's premium pricing,
at $1,000 and above, and its subsequent outsized margins mean a spike in
revenue growth can give its bottom line a significant boost.
pricing and feature set of the refreshed iMac present an attractive
combination, and I would not be surprised to see the new iMac stimulate
desktop sales in the December quarter and beyond," Barclays analyst Ben
The decades-old Macintosh line that helped set a
stumbling computer company back on its feet today overshadowed in both
revenue and media appeal by the popular iPhone and iPad -- saw growth
drop to single-digit percentages in the first two quarters of 2012 for
the first time since 2009.
Yet sales outgrew the PC market,
overall, by more than seven times over the 12 months to June, according
to CEO Tim Cook, and has outpaced PC growth over the last six years.
reports fiscal fourth quarter results on Thursday. The company will
likely have sold 5.1 million Macs in the October quarter, up just 5
percent, Piper Jaffray & Co analyst Gene Munster estimates.
Tuesday, Apple Marketing Chief Phil Schiller called the Mac "what began
it all," and he claimed the Mac was America's No. 1 laptop and desktop
among individual models. Research houses Gartner and IDC figures place
Apple third in the United States with a market share of about 13
Regardless where it places, at prices starting at $1,000
for its MacBook Air and going all the way close to $4,000 and growth
while well off the 30-percent range of 2010 still defying the market,
the Mac has proven a consistent money-spinner for the company even
during troubled times for the traditional PC.
Intel Corp, HP and
other stalwarts of the PC industry are now fighting to sustain growth as
tablet computers eat into their PC-related businesses.
Mac line has not completely side-stepped PC market trends, it has held
up better partly because it is targeted at a higher-spending clientele
that values its consistency, vis-a-vis the often fragmented PC, where
multiple vendors supply different components that don't always work
But it also owes its success in large part to a
so-called halo effect stemming from consumers' experiences with the
iPhone and iPad, said Loren Loverde, analyst with research firm IDC.
are on the positive end of halo effect both in terms of traffic and
brand image," Loverde said, adding that Apple also has yet to fully
realize the international growth opportunities for Mac, and expects the
new products to see good demand during the holiday quarter.
Apple co-founder Steve Jobs introduced the Macintosh in 1984, and it
became the first successful computer to feature a mouse and a graphical
user interface a model that has stayed intact through the succeeding
decades. The desktop Mac itself stuck to that interface but has
radically shifted in design over the years, to today's slim, all-in-one
Analysts say the redesigned Macs may give Apple's December
quarter an extra lift, but the quarter will hinge mostly on how many
consumers bought iPads and iPhones, which combined accounts for 72
percent of the company's revenue.
Cook and other executives are
likely to be questioned on the smartphone's supply issues and the
ramp-up of the new "iPad mini," available in stores on November 2.
bigger question is likely the company's ability to ramp supply to meet
the strong demand," Baird Equity Research analyst William Power said.
Recent investor concerns regarding Apple have included "perceived
slowing iPhone innovation, the lack of a strong developing market
strategy for iPhone and current iPhone supply constraints."
stock has reflected some of those concerns. While the stock is up 52
percent this year, it is down 12 percent from its record high of $705 on
September 21. Despite the pullback, Apple is trading at 11.6 times next
year's estimated earnings, same as the S&P 500 and far lower than
some rivals like Amazon.com Inc, which trades at 100 times estimated
Investors will focus initially on the headline
shipment numbers during the fiscal third quarter on Thursday. It is
estimated to have sold between 24 million and 26 million iPhones in the
And Apple said on Tuesday that it sold its
100 millionth iPad two weeks ago, which means that the company sold
under 16 million last quarter. This is below the 17 million to 18
million some analysts had forecast.
Longer term, Apple could also
face margin pressure as smartphones pass the 50 penetration rate in
major developed markets, said BGC analyst Colin Gillis.
stage of smart phone growth could be more focused on mid-to-lower priced
offerings," Gillis said. "Apple may find it difficult to maintain
margin while growing massive scale, particularly as the overall market
for smartphones slows."
© Thomson Reuters 2012
Apple special event in pics