Remember the eMate!

the current line is ancient. really going out on a limb to pridict 80% chance of new imacs.

Could "Subscription-based Accounting" affect current quarter margins? If so, Apple could be introducing another major product with this kind of accounting applied.

Come on, these people are idiots. The topic of product transition was in the context of Apple guiding lower then general expectations. Thus, it is clear by product transitions, Apple is referring to the transition from OSX Tiger to OSX Leopard that is scheduled to take place this quarter. That type of transition could possibly hurt Apple's earnings because the closer we come to the release date of Leopard, the more people will possibly put off buying a Mac until Leopard ships. I know I will not be buying a new Mac until Leopard ships. If you are in the same situation as I, wanting a new Mac, but not really needing one, I suspect you'll put off your purchase until Leopard arrives. However, Apple isn't going to remind people of Leopard shipping this quarter until it actually ships. It doesn't want to lose sales. All this other speculation about new Macs is likely to occur, however, the introduction of new product doesn't usually hurt sales, but helps them. So, again, Apple clearly means its OS transition.

By waiting, not only do I avoid paying the $129 for the OS, Apple generally ups the specs on all its machines prior to a major OS release, thus I will likely be getting a more capable machine.

I think the product transition is moving optical drives to blu-ray. That would definitely lower margins. It's time to put a nail in the coffin that is this HD format war. Apple adopting blu-ray across the board could do that. They often aren't first out of the gate with new technology but once they adopt it, it becomes the defacto standard. I believe that will be true here as well... and it's about time.

Just my thoughts.

No way, there is no real benefit for doing so right now. First, Apple protects its margins. Apple is not going to take a loss to push a format that it really doesn't gain much by pushing. Blue-Ray costs too much right now, and Apple will not add the players until the costs come significantly down. If anything, it will add a player to the high end Mac Pros. However, that wouldn't hurt its profit very much, as it doesn't sell many of them. Second, I love to burn DVDs of movies I own. With Blue-Ray I cannot do that. As it is, I can hardly fill a DVD with backup information, so expended capacity disks will not benefit me at all.

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Guest wrote:
I think the product transition is moving optical drives to blu-ray. That would definitely lower margins. It's time to put a nail in the coffin that is this HD format war. Apple adopting blu-ray across the board could do that. They often aren't first out of the gate with new technology but once they adopt it, it becomes the defacto standard. I believe that will be true here as well... and it's about time.

Just my thoughts.

Also, Apple often uses its back to school promotions to clear house for new products. For instance, it will give away an iPod Nano, making room for new iPod Nanos later. That is a product transition that will also hurt Apple.

I agree that transition to Blu-Ray (at no increased price) is the likely culprit for the guidance riddle. It also explains dropping the 17" iMac. A Blu-Ray drive was probably what we witnessed (streaming HD content) during Apple TV's debut (watch sales of those little boxes really take off now). The following quarter we'll see the release of Leopard, which will enable multi-touch across the entire Mac platform: laptops, iMac & Mac Pro multi-touch keyboards and maybe even a resurrection of the "Newton". I would wager MacWorld 2008's keynote will be dedicated to these new and upgraded machines.

Sounds authoratitive:
"Come on, these people are idiots. The topic of product transition was in the context of Apple guiding lower then general expectations. Thus, it is clear by product transitions, Apple is referring to the transition from OSX Tiger to OSX Leopard that is scheduled to take place this quarter. That type of transition could possibly hurt Apple's earnings because the closer we come to the release date of Leopard, the more people will possibly put off buying a Mac until Leopard ships. I know I will not be buying a new Mac until Leopard ships. If you are in the same situation as I, wanting a new Mac, but not really needing one, I suspect you'll put off your purchase until Leopard arrives. However, Apple isn't going to remind people of Leopard shipping this quarter until it actually ships. It doesn't want to lose sales. All this other speculation about new Macs is likely to occur, however, the introduction of new product doesn't usually hurt sales, but helps them. So, again, Apple clearly means its OS transition.

By waiting, not only do I avoid paying the $129 for the OS, Apple generally ups the specs on all its machines prior to a major OS release, thus I will likely be getting a more capable machine."

but shows serious ignorance. OS 10.4.10 is an outstanding OS and, having been through 4 versions already, there is never any astounding difference, except for a few convenience features, between OS. That's why a new version is only $129 with no installation restrictions. That isn't to say I won't be buying it, of course I will. But to put off purchasing a new Mac just because you can get it for free when you do is hardly worth it. It will run fine even on my original PowerMac G4 400 (one of three including a PowerMac Quad Core G5) so there is absolutely no concern about hardware requirements. These are Windoze fears that Macsters have almost never had to worry about.

The shrinkage in gross margins WILL be because the latest and greatest technology (that will be used in the up coming revisions to the iMac and MacMini) like bigger LCD screeens at the same price points as the older units by necesity requires gross margins to contract. Their blowout quarter was to a large extent due to the drop in costs of the older technologies they are still selling (lcd screens, memory, hard drives......). So when Oppenheimer said "transition", that's exactly what he meant.

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Anonymous wrote:
Sounds authoratitive:
But to put off purchasing a new Mac just because you can get it for free when you do is hardly worth it. It will run fine even on my original PowerMac G4 400 (one of three including a PowerMac Quad Core G5) so there is absolutely no concern about hardware requirements. These are Windoze fears that Macsters have almost never had to worry about.

Ignorant or not, that is exactly what happens. If you read Apple's prior financial statements, it even warns of this happening. You see very few Apple customers actually need a new Mac, as they already have one. They are just interested in upgrading.

However, if you know a new OS is coming out just around the corner, many people who do not really need a new Mac would find it hard to justify buying a Mac today. There is no reasons to, as I already said, I do not need a new Mac, I just want one.

Moreover, there are benefits for waiting besides not having to pay for the OS. For instance the new OS will already be installed on the new Mac as well. In addition, I know the system specs of the new machine will likely be appropriate for the new OS. In addition, when you buy a new Mac with a brand new OS, it really feels like you are getting your money's worth. So for most people, I think it is silly to buy a new Mac now unless you really need one. Apple knows many people think like me, and provided a transition warning just in case this effects Apple's sales.

I have been watching Apple for a long time. Transition in this case means just that: a transition to a new OS. You will notice when Apple moved to the Intel processor it also referred to that as a transition. In its financial statements, it warned there might be a lull in sales because of people waiting for the transition to the new machines to be complete.

You will also notice that Apple hasn't ever referred to the typical introduction of an updated product as a transition because in Apple's eyes it isn't one. For instance, adding Blue-Ray to Apple TV or to new Macs isn't a transition, it is merely adding a feature. Moreover, if Apple adds Blue-Ray, that will help sales, not hurt them (assuming cost isn't effected). If this wasn't so, Apple would warn you ever quarter that sales may be down because of a transition to new features. That makes no sense.

Finally, people are aware Leopard is coming out. Apple knows this might effect sales, thus the warning. Context is everything, Apple said this in it's earnings call. Let me also say it is rude to call somebody's view ignorant especially when it is obvious the person put some thought into it. Ultimately, I may be wrong, but this doesn't translate to ignorance.

PS:

I own Apple stock, so I hope everybody in the world besides me buys a new Mac today, tomorrow, and the rest of forever. I, however, am waiting.

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Guest wrote:
Sounds authoratitive: . . .
s

To me that makes no sense. Apple may be backing Blue-Ray, but whatever format ultimately wins out will not really have a material effect on Apple. Not enough that it is going to start selling a product at a loss, which I cannot think of any time in Apple's history it willing to do that (except maybe to educational institutions). It is not like Apple is losing sales because it doesn't sell a Mac with Blue-Ray (it just had its highest selling Quarter ever). Even if it were, selling a product at a loss doesn't help Apple any.

Moreover, I doubt Apple wants to piss Universal off even more by rushing out and equipping all its Macs with Blue Ray, thus becoming the axe that officially killed the format backed by Universal. Don't think Universal isn't thinking about Apple's support of Blue-Ray when it is sitting in the room with Apple discussing its future on iTunes.

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Guest wrote:
I agree that transition to Blu-Ray (at no increased price) is the likely culprit for the guidance riddle. It also explains dropping the 17" iMac. A Blu-Ray drive was probably what we witnessed (streaming HD content) during Apple TV's debut (watch sales of those little boxes really take off now). The following quarter we'll see the release of Leopard, which will enable multi-touch across the entire Mac platform: laptops, iMac & Mac Pro multi-touch keyboards and maybe even a resurrection of the "Newton". I would wager MacWorld 2008's keynote will be dedicated to these new and upgraded machines.

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Terrin wrote:
However, if you know a new OS is coming out just around the corner, many people who do not really need a new Mac would find it hard to justify buying a Mac today. There is no reasons to, as I already said, I do not need a new Mac, I just want one.

Moreover, there are benefits for waiting besides not having to pay for the OS. For instance the new OS will already be installed on the new Mac as well. In addition, I know the system specs of the new machine will likely be appropriate for the new OS. In addition, when you buy a new Mac with a brand new OS, it really feels like you are getting your money's worth. So for most people, I think it is silly to buy a new Mac now unless you really need one. Apple knows many people think like me, and provided a transition warning just in case this effects Apple's sales.