Low End Mac Reader Specials

TypeStyler For Mac OS X is Now Shipping! Download The Free Fully Functional 60 Day Tryout at www.typestyler.com

OWC: Get the Right Memory / Ram for your Mac. Top Quality, Competitive Prices, Lifetime Warranty. Expert Support and Video Installation Guidies too! 4.0GB Matched Sets from $87.99, Options up to 32GB. Click here

Poker Mac Don't install Parallels to play poker online! Poker Mac will show you how to download and install a native Mac poker application such as Full Tilt Poker Mac.

Laptop Hardware Provided by TechRestore - Overnight Mac & iPod Repairs.

Compare products like desktop computers, apple laptops, apple macs, and LCD Monitors side by side! All the information and reviews to make the best purchasing decision for new mobile phones, sat nav systems, or MP3 players. The Ciao online shopping community makes searching products easy for you.

Taking Back the Market

The Macworld Bonus

Tim Nash - 2002.03.29

For shareholders, there was a huge bonus. After a rash of warnings from analysts about dire flat panel iMac shipments and the effect on this quarters' results, there is some hard news. With 125,000 already shipped and daily shipment rates of over 5,000, the problems have been sorted out. So we can look forward to shipments of 170-180,000 flat panel iMacs by quarter end. This compares to the 200,000 that most analysts were looking for, so it is unlikely there will be a profits warning.

The $100 increase in iMac prices shows that Apple has not managed to lock in enough flat panels at low prices. Flat Panel iMacDespite the comments in DigiTimes about Apple being unable to provide Quanta with a stable supply of flat panels, this is very unlikely to be true. Apple made an investment in Samsung to guarantee a stable long term supply.

A previous report by Gillian Munson of Morgan Stanley indicated that Apple had contracted for 100,000 panels a month for the next year. Apple would have also contracted for the rest of the iMac components, including memory, at the same rate, and would not have launched the product without having these supply contracts in place.

These supply contracts will help Apple maintain margins over the next quarter while it is clearing the backlog and honoring the old prices for existing orders.

What is clear is that Apple underestimated demand for the new iMac. This is probably fallout from the costs of the failure of the Cube. As I pointed out in The New Order, the flat panel iMac is the new midrange, and therefore it is the Cube's replacement. If this iMac had failed to sell, part of the cost of failure would have been questions from analysts and shareholders as to why management had made the same expensive mistake twice. This would have had a long term negative effect on the share price and therefore management made the safe bet and was only willing to commit to the numbers that could easily be sold.

Nevertheless, if the new pricing does not kill the iMac momentum, shareholders can look forward to a very good next quarter. Unit sales of all systems should be close to or over 1 million - and with the usual margins.

The Other Bonus

Losses in the Apple Retail Division will be much reduced this quarter. Certainly this is a short term fix, but allocating 10% of iMac production to the Apple stores means they should have sold 17-18,000 flat panel iMacs by quarter end. When sales of other systems are factored in, total sales should exceed 25,000 - compared to 14,000 last quarter. As the analysis by Charles Woolf of Needham & Co. shows break even at roughly 1,000 system sales per store per quarter, the retail division should at least be close to reaching that.

The New iPod

Apple has now launched a 10 GB model which, at $499, is $100 more than competitors and yet has half their capacity. This is not the way to dominate a consumer electronics market, and the danger is that iPod will become another Newton - an excellently designed product that is priced out of the main market. If Apple had launched the new iPod at $399 and cut the price of the 5 GB model, the iPod range would have been well placed, continuing to be attractive to Wintel users and keeping the pressure on competitors such as Rio and Archos.

As it is, Gateway has already launched a USB 2.0 model. As soon as this new standard becomes more common in the Wintel world, the iPod will have lost its main advantage: fast transfer rates. The iPod's other advantages can not maintain such a big premium, so pricing needs to be competitive long before USB 2.0 is widespread.

The new software, which allows up to 1,000 contacts, will extend iPod's reach into the PDA market. It also helps to show iPod's versatility. However it will take relentless price cutting to make the Wintel market wait for iPod.

Bluetooth

Showing this working well will keep Apple in the forefront of the digital hub providers as many smaller devices will use Bluetooth rather than the 802.11 (AirPort) standards.

New Cinema Display

At 23", this is a minor step from the previous top of the range. The press release showed this to be aimed at media editors for use with Final Cut Pro on HDTV programs. This positioning again shows Apple's interest in reinforcing its user base in film and TV.

Although the keynote was less than well received by many Mac sites, there was more useful information than in previous years. Also, announcements in Tokyo are primarily for the Japanese. This is the most important market for Apple outside of North America, and it sounds as though the new Kanji software from Ergosoft will help to strengthen the Mac's position there. LEM

Tim Nash lives with his wife, her website on the area ariege.com, two daughters, a cat, and a dog in the French Pyrenees. He has worked for computer companies for more years than he cares to remember, lapsed for a while after the Apple II, but became a Mac fan when his wife introduced him to the IIsi. If you find his articles helpful, please consider making a donation to his tip jar.

Recent Taking Back the Market columns

Links for the Day

Recent Content on Low End Mac

Recent Deals

About LEM | Support | Usage | Privacy | Contacts

Entire Low End Mac website copyright ©1997-2009 by Cobweb Publishing, Inc., unless otherwise noted. All rights reserved. Advice presented in good faith, but what works for one may not work for all. Please report errors to .
  LINKS: We allow and encourage links to any public page as long as the linked page does not appear within a frame that prevents bookmarking it.
  Access our RSS news feed at http://lowendmac.com/feed.xml.
  Email may be published at our discretion; email addresses will not be published without permission, and we will encrypt them in hopes of avoiding spammers. If you prefer your message not be published, mark it "not for publication." Letters may be edited for length, context, and to match house style.
  PRIVACY: We don't collect personal information unless you explicitly provide it. For more details, see our Terms of Use.
  Low End Mac is an independent publication and has not been authorized, sponsored, or otherwise approved by Apple Inc. Apple, the Apple logo, Macintosh, iBook, iMac, eMac, iPod, iPhone, PowerBook, MacBook, MagSafe, Mac Pro, Apple TV, and AirPort are registered trademarks of Apple Inc. Additional company and product names may be trademarks or registered trademarks and are hereby acknowledged.

Custom Search

Amazon.com

Navigation

Used Mac Dealers
Apple History
Video Cards
Email Lists

Favorite Sites

MacSurfer
MacMinute
MacInTouch
MyAppleMenu
InfoMac
Macs Only!
The Mac Observer
Accelerate Your Mac
RetroMacCast
PB Central
MacWindows
The Vintage Mac
   Museum
DealMac
DealsOnTheWeb
Mac2Sell
ramseeker
Mac Driver Museum
JAG's House
System 6 Heaven
System 7 Today
the pickle's Low-End
   Mac FAQ
Abandonware
   Petition
Mac vs. PC Info

Affiliates

The Apple Store
Mac Connection
B&H
MacMall
TechRestore
ExperCom
Crucial Memory
batteries.com

Advertise

All of our advertising is handled by BackBeat Media. For price quotes and advertising information, please contact at BackBeat Media (646-546-5194). This number is for advertising only.

Open Link

Problems viewing this page with Internet Explorer 5.5 or 6? It works fine in other browsers, including IE 7. We recommend Firefox for those using Windows, as it is standards based and more secure than IE 6 (and earlier). More LEM visitors use Firefox than any other browser.