Analysts Like Apple Mac mini; See iPod shuffle as MP3 Contender
TMO at MWSF - Analysts Like Apple Mac mini; See iPod shuffle as MP3 Contender
by , 5:35 PM EST, January 11th, 2005
SAN FRANCISCO -- Analysts who watch Apple Computer and the personal computer market for a living feel the iPod shuffle and Mac mini will help Apple solidify its music player position and gain back small fractions of its market share from Windows-based PCs.
Steve Baker, an analyst with NPD feels the Mac mini will not displace inexpensive PCs like those from eMachines and HP, but will gain market share slowly as "an adjunct US$999 notebook."
"It's not a volume PC, "Mr. Baker said. "It's aimed squarely at the consumer adding multiple PCs to the house and who want a small form factor."
"I don't expect the $499 Mac will greatly affect purchases of more powerful, Macs," said Joe Wilcox, an analyst with Jupiter Research. "But I do see it as a potential suitor to Windows users, particularly those that have iPods and enjoy the experience delivered by Apple. Apple might even increase market share. That said, I would discourage anyone from over-excited expectation that the Mac will surge against Windows PCs."
Mr. Baker said he doesn't think the Mac mini is a "volume shovel-ware product" that will be sold at WalMart, for instance. What he sees is interesting uses and users for the inexpensive Mac.
"I think you'll see a lot of uses for this product, given the form factor and it being so quiet," Mr. Baker commented. "I can see this in a lot of environments that you normally wouldn't see. And I think education will be a big buyer."
"The Windows market is huge, with massive, entrenched infrastructure," said Mr. Wilcox. "Apple could gain a few points of share--and the planets will have to align just so, as they appear to be moving--but doubtfully denting Windows PC market share in any immediate significant way. Still, if the mass-market strategy succeeds and ekes out even a few percentage points of share, the significance could be huge for Apple."
Mr. Baker believe Apple will slowly gain "marginal" market share in the next 12 months, but is cautious.
"This is not the PC to make them competitive with HP or anyone," Mr. Baker said. "I think it's going to be a difficult sell in a mass merchandiser because they haven't bundled it with a monitor and keyboard. Best Buy could probably sell it if they wanted to."
Mr. Wilcox believes distribution could be the 'make or break' for the Mac mini.
"With iPod, Apple got many of the most important features right--size, battery life, functionality and, most importantly, synchronization," said Mr. Wilcox. "But iPod's success also comes from good distribution. Consumers can buy the music player in thousands of retail outlets, not just Apple retail stores or CompUSA. HP opened up Radio Shack, adding thousands more available locations. If Apple's initial target audience is the Windows user, then the iMac must be available where that consumer shops. Distribution needs to be broader than just Apple stores or CompUSA."
Mr. Baker also said that despite its price, retailers and customers will quickly realize the Mac mini will end up costing a lot more before it ends up on a home or office desktop.
"It's not really a take home Mac at $499. You're going to have to add stuff to make it usable," said Mr. Baker. As for the flash-based iPod shuffle, starting at $99, Mr. Baker believes the price is right.
"It seems to me to be targeted at those who are multiple iPod owners," Mr. Baker said. "I don't think it's likely to cause cannibalization of the iPod mini. It will be a good solid product, to help them get additional (market) share."
Mr. Baker was unwilling to take a guess at what type of share Apple could get in the first few months, but did say they will have an impact as soon as it it is available through the majority of its mass retailers like Target, Sears, Best Buy and more.
"This is a market killer at $99," said Mr. Wilcox. "It's very aggressively priced."
"There are two buyers for this," said Mr. Wilcox. "Consumers who won't pay $249 for a iPod mini, and existing iPod owners who want something small to run with."
Mr. Wilcox said it's important to remember that Jupiter surveys have clearly shown most U.S. consumers have far less than 1,000 songs they would want to listen to on a regular basis, "so the capacity of one gigabyte will be plenty for most," he said.
But for Mr. Wilcox, the success of the iPod shuffle -- without a display -- will come down to how easy it is to use its iTunes music software.
"If iTunes handles the workload to organize, shuffling will be fine," he said. "If it doesn't, shuffle is going to be a lot more cumbersome."
Mr. Baker cautioned his optimism of the iPod shuffle based on what happened in the past to Apple's MP3 competitors, who have previously released players with no display.
Apple is taking a big chance going without a screen," he said. "Most MP3 players that came out without screens, came back having one, like the original Creative MP3 player."
He also cautioned that the iPod shuffle not having an FM radio, could be another negative factor.
"If the iPod has reached iconic status, this product will start snatching share immediately" said Mr. Wilcox. "But it has to be as widely available as the iPod and iPod mini."
Observer Comments
Tue Jan 11, 2005 8:09 pm Subject: Radio? Who CARES???
OK, maybe a few of you care that there's no radio... if I wanted a radio with a small form factor, I can get one that fits in my ear without any cables or anything for 6 bucks.. oh wait, I already have one. Personally, I can't stand FM radio; that's why I have an iPod. I would be more interested in having AM talk stations, but everyone that always harps about having a radio in the iPod is always talking FM. Hm, boring.
Tue Jan 11, 2005 8:41 pm Subject: Apple Stock Drops 6% On New Product Announcements
Tue Jan 11, 2005 9:19 pm Subject:
QuoteRealityCheck wrote:
Mac mini will cut into Apple's profits. Mac worshipers will replace their old Macs with the mini instead of the really overpriced iMacs and Power Macs. iMac and Power Macs sales have been slow, now with the mini expect further decline.
Uhhh...yeah...riiiiggghtt.
What a troll.
Tue Jan 11, 2005 9:44 pm Subject: Flash! Apple stock drops after introducing Original iPod!
ditdadididahditdaditdit!
Good Morning, Mr. and Mrs. America and all the ships at sea! Apple's stock dropped for THREE straight days after introducing the original iPod in 2001. Of, course we all know how badly THAT worked out for Apple. *snort*
Peddle it somewhere else RC.
(In the interests of disclosing "Reality"...on the fourth day it started climbing and never dropped as low as it had been at that point.)
RC, how's that crow, man? This is all you had to say? We'll all sell G5's to get G4's and the stock dropped less than it gained the day before? So, you indirectly admit you are a total idiot (more so than before) and you have nothing else to say? AAAAAAAHAHAHAHAHAHAHA. Major satisfaction. Have some more crow by the end of the month, if you don't own Apple stock. And go sell the bucket you have for a computer before you won't even be able to buy a shuffle for it. LOSER!
Tue Jan 11, 2005 11:10 pm Subject: I would.
I have an aging G4/450 that I use as a web server, as well as a game development platform. I live on one income, and there's no way I could afford a G5. And iMacs are not very optimal; I already own a monitor + keyboard + mouse. For me, the Mac mini is an attractive option.
I think it is also attractive for PC users who like the iPod and want to try more Apple stuff. They too probably have a monitor, keyboard & mouse. So $500 is way easier to stomach than $1000 or more.
AAPL basically dropped the 4 dollars it gained last Friday. Buy on rumor, sell on news.
Also, 4Q earnings on Wednesday. My guess is that it will exceed expectations. SJ gave a hint today when he mentioned that iPod sales at 4.5M, top end of analysts expectations. I don't think analysts are counting on the "halo" effect yet, but personally I am seeing it. One of my colleague, a totally Windows guy, bought a iBook for his own use instead the old Acer/Dell/Toshiba he used to buy. This is after he bought his daughter (at her request) an iPod mini.
Speaking of the iPod mini, I recall that most of us, myself included, did not think that it will sell. How wrong we all turned out to be. I am going to trust SJ's market research and judgement from now on. I think both the iPod Shuffle and the Mac Mini will sell like hot cakes.
I may be wrong or have a bad memory, but I believe the only "dog" that Apple produced during SJ's rein is the Lisa.
Wed Jan 12, 2005 12:39 am Subject: is RC vindicated? (+)
QuoteRetro wrote:
I have an aging G4/450 that I use as a web server, as well as a game development platform. I live on one income, and there's no way I could afford a G5. And iMacs are not very optimal; I already own a monitor + keyboard + mouse. For me, the Mac mini is an attractive option...
And this is exactly what RC was alluding to. However, what he fails to recognize is that Apple is able to effect a $500 sale today, versus hoping for some vague future "maybe" sale 3-5 years from now.
I believe that the old adage says: "A bird in the hand is worth two in the bush".
If you look at any typical consumer survey asking about product purchasing intentions, the timelines are, paraphrased: immediate, soon, or the vague "maybe someday". Relying on that last customer is the fastest way to starve.
In other words, RC is not vindicated. Not even close.
-hh
Wed Jan 12, 2005 12:43 am Subject: RC missed again
Quoteoldmac wrote:
I may be wrong or have a bad memory, but I believe the only "dog" that Apple produced during SJ's rein is the Lisa.
Um, I think you forgot the Cube.
The unit itself isn't a dog - we have one at work still - on the reception desk, very pretty, and doesn't need to be fast. The thing sold like a dog as I recall though. Everyone thought it needed to be priced like the Mini. Hmmmm
I've been playing around on the store with the pricing options. It's pretty clever how they've worked it out. It's very affordable at the base end, but if you start tricking it out you do better to move up to a fancier machine.
To trick out the Mac Mini with 1.42 GHz, 512M RAM, 80G HD, DVD-R, Airport, BlueTooth, Apple Wireless keyboard and mouse, you are at $1002. Add the Apple 20" Cinema Display for another $999.
That's $2001.
A comparably equiped 20" G5 iMac is about $150 more but you get a 1.8GHz G5 and 64M video instead of 32M video.
However, if you go the way Apple intends to market this, base model plugged into a physical network connection (it is a desktop system so wireless isn't that important), upgrade the RAM to 512M for $75, add a 3rd party wired keyboard AND mouse for $49, a cheap 17" CRT display for $120 and you're only at $743. That's not bad for a very useable system, consider the functionality of the bundled software and it's pretty nice for basic home stuff. You can add more speed, a bigger HD, and a SuperDrive and you're still under $1000. That's cheaper and faster than the top of the line eMac.
*shakes head...
stop talking about adding anything..
this Mac is for those millions upon millions who have a PC on their desk at home.
period.
you should be able to walk out of an Apple reseller with the adorable Mac mini lunchbox (hehe) and plug it in (some converters MAY be required.. come on.. I thought the PC world was all about standard parts.. it's called USB.. get with the program) and go.
It really is a beautiful thing to see OS X on a Dell or HP flatscreen.. basically.. imagine if Apple lisenced OS X. That's what it would look like. This is even better because they can maintain the excellence that comes from the whole 'widget.'
The truth is, Macs are already incredibly affordable.. but.. just not for switchers. Until today, switchers were looking at the iMac G5 (their best selling mac, btw) and thinking.. if only i could use that with the display i already have.
This is it, PC users.. for a couple paychecks, you can check out the glorious Panther OS and the mindblowing ease of use and creativity of iLife 05.. totally unmatched on WIndows.
And we have Safari. You will never touch IE again. (Unless you want to. We have IE of course. And Firefox. And any other browser ever made, worth talking about.)
Apple still doesn't get it. dumb idea not bundling this with a monitor and keyboard and mouse. since it's a barebones machine, they should have priced the thing less. You can get a PC with similar specs in CPU, ram, harddisk etc at 499. . .AND that includes monitor, keyboard, mouse and speakers already!!!!!!!
I totally agree /w you. That bunch of people who love Apple, mod their Windows to look like Panther, would like to have a mac for under 500$. Now they got it. Use their Dell TFT, their Logitech mouse/keyboard wireless pack, and their uop with a mac not reinvesting on equipment already owned. Kudos to Mr. Jobs. I own an iBook, and I'll get a Mac mini. Period.
Yeah, but what IF YOU WANT A MAC? Lots of people want a mac but end up buying a PC 'cause they really can't afford spending 799$. This people really don't want the best deal-for-the-buck but just a Mac powerful enough to handle their daily work and leisure. Now they can get it so cheap. Nice and clean. And it fits soooo well next to a plasma TV.
Wed Jan 12, 2005 8:38 am Subject: Apple still doesn't get it
QuoteGuest wrote:
Apple still doesn't get it. dumb idea not bundling this with a monitor and keyboard and mouse. since it's a barebones machine, they should have priced the thing less. You can get a PC with similar specs in CPU, ram, harddisk etc at 499. . .AND that includes monitor, keyboard, mouse and speakers already!!!!!!!
Maybe you don't! It's hardly barebones, it's a G4 iBook...OK the memory is down, but all standard macs are. Look at it's target audience, re keynote, and it's more than OK. I know folks that have bought PC's recently, that are pulling their hair out trying to use digicameras and camcorders with them.
They drop by and I show them iLife, and they love it.
My macs aren't the fastest in the land, but they are the slowest part of the chain...which they have realised...but they couldn't justify an iMac. Now they can play easier with the Mac mini and it's "perceived" low cost and use computers smarter.
They already have keyboards, multi button mice and flat panel displays, so they don't have excuses to try it now, nor are they giving them.
A Mac Mini that could compete with top-line PC graphics wouldn't be a $500 dollar Mac, and if it stops being a cheap Mac, there's no reason for it to exist. You want a competetor for top-line PCs, buy a competetive Macintosh. If you're in it for games, don't buy any Macintosh. It'll be awhile before it becomes a gaming platform with serious industry support.
QuoteGuest wrote:
Lets see...the mini for 499, a used 17 inch crt for 50 bucks, a basic keyboard for 10, a usb mouse for 10....yup up and running for 570 dollars. The only question I have is whether or not the mini will accept keyboards that have the "windows" button on them?
Yes, and the Windows key acts like the Apple key...
Wed Jan 12, 2005 10:31 am Subject: Re: Missed Opportunity for Gamers
QuoteAnonymous wrote:
Many PC hardcore users, especially gamers, will not be impressed unless
Apple can develop up a Mac Mini version with graphics engine to take on PC and Sony platforms.
What 'hardcore gamer' would want ANY computer that costs $500, no matter WHAT video card it has in it?
If you're really into it then you always want the best. And the "best" in the computer world will always cost between $2,000 and $3,000.
My favorite part of the keynote was when Steve said that the 4.5 m sold over the holidays made him very happy. Think about the planning that went into the shuffle ...
They didn't decide three months ago to come up with that. A year ago, they looked ahead, and a year ago, holiday sales were 700,000 something. Therefore, a year ago, these marketing and design people correctly predicted the pace at which the iPod would be come the market leader it now is. Steve is extremely pleased to see that things are going just as they hoped. It's an immense business accomplishment, explaining all the businessman of the year-type kudos he's been getting.
"Today, the iPod shuffle, tomorrow ..." /*recalls Franz Liebkin in the Producers on opening night*/
What imposible job.
HW perspective
I think Mac mini is a good choice for current Mac Cube user. Monitor, mouse and keyboard can be attached trouble
free. $500 sound reasonable for a major CPU box upgrade. Faster CPU, unfortunatelly memory can't be re-use (I'm assuming here, but since bus is faster too, old memory shouldn't work). better video card.
For Windows users....??? is a little bit more mind
complex decision than technical decision. Current USB Mouse shouldn't be a nightmare at all, Monitor not a problem, keyboard ??? well Windows keyboard have Control, Alt; Apple have Control, Option and Command, those key aren't listed on Intel Keyboard, so additional cost apply.
SW Perspective
Current Apple Cube user, will gain a major SW upgrade too. Again $500 sound reasonable. (Updated iLife'05 suite and Applework)
Windows XP user... like HW is a Complex mind make up.
No Windows SW will work. So if you invested heavely on Windows XP application switching to Mac is not a straight forward decision. Now, for those Windows users who
pretty much use PC for internet browsing, Videos and photos storage with a basic editing need, with kid at school, iLife will take care of them right away.
iPod
Since I'm not an IT analyst, I'll say it openly, I don't see people buying Mac mini or anyother because iPod.
After all iTunes was ported to Windows and as far as I have know, my fellow Windows friend are more than happy with HP iPod-iTune bundle. Frankly speaking all of us do same thing and heard pretty much same music, same quality an all, only diference, Windows PC uses USB to conect, I use Apple firewire, sort of downloading music are faster but not to the point to trash your Wintel and get a Mac.
One of the analysists, Mr. Baker, is quoted, "It's not really a take home Mac at $499. You're going to have to add stuff to make it usable." So what? The low price point for PCs without a monitor and other features available on the higher-end PCs is not often singled out as a problem for PC users, and has never deterred them from purchasing just the box. Why mention it now with the Mac? It looks to me like Baker is just going out of his way to find fault.
The BT keyboard and mouse will automatically connect without the need to configure them using a USB mouse (as long as you get BT for the mini).
I didn't know this, and it's good to know.
Back story: The mini finally gives me an affordable solution to switch back to Apple (from an AMD w/ Linux). Unfortunately, I don't have a USB keyboard or mouse with my PC. As I would like to deal with as few cables as possible, I called Apple and asked them if I needed a USB mouse/keyboard to to install their BT mouse/keyboard.
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