Apple has successfully attracted global media attention in the prelude to Macworld Expo San Francisco, with pre-market share trading reaching a new 52-week high.
Rather than silencing speculation, the company’s move to litigate against Mac Web site, Think Secret, has fanned speculation. Two rumours lead the discussion - the flash-based iPod and the sub-$500 headless iMac.
Apple’s move against the Mac Web caused Jupiter Research analyst Michael Gertenberg to observe: "It's possible that Apple is doing this to spread misinformation," warning the company not to alienate its core audience of passionate Mac users.
Wired this morning quotes sociologist Gary Allen Fine, who believes Apple timed its lawsuit against Think Secret in order to generate publicity for itself.
"If the story gets into the broader media, and you get them reporting as news a $500 computer, that's a lot of free advertising," he said.
Like Gertenberg, he warned: "You don't want to antagonize your greatest fans," he said.
Apple loses its head?
Apple’s move into the sub-$500 computer market is raising much comment. It’s a major strategic shift for a company that has always seen itself as generating sales by focusing on quality and design.
“If Jobs is actually preparing to plunge into the Best Buy and Circuit City world of razor-thin consumer electronics margins, he would finally be paying heed to the industry pundits who have repeatedly claimed during the seven years since he has returned to run Apple that the company is inevitably doomed by its higher-priced computers”, observes the International Herald Tribune (IHT).
With its low price, such a product would be a viable offering to Windows-using iPod owners - and such purchasers would be able to use their old monitor, too.
"Apple wasn't building market share because of the switching costs," Charles Wolf of analyst firm Needham and Co told the IHT. "It's such a logical move."
The report observes a risk that Apple may cannibalize sales of its more costly Macs through the release, unless the device lacks features, which may limit the success of such a strategy.
Despite sheer speculation, doubt remains: Apple CEO Steve Jobs has rarely played in the PC retail bargain basement, but has a reputation as a man who can generate success.
iPod crazy, iPod mad
Apple’s success in new markets is clear in the shape of the phenomenally strong-selling iPod, which is predicted to have sold in quantities of up to five million in the October-December quarter.
It’s not just in consumer markets that Apple has reason to celebrate. In recent years, the company has also seen success in the video and broadcast industries, where Final Cut Pro is now well-established; is winning hearts and minds in the enterprise market with its Xserve products; and has an established bridgehead in the scientific research markets with its Xserve research clusters, as seen at Virginia Tech.
Apple’s challenge remains that of transforming iPod sales into Mac marketshare, writes MacNewsWorld.
This report confirms that Apple’s new UK Regent Street store to be selling products in quantity, with queues at the well-manned checkouts. And this observation also leads to a headless iMac: “Apple could be about to launch a version of its much-coveted personal computer but within the price range of far more consumers - the sorts of consumers who were busy snapping up iPod music players yesterday."
Apple could double sales
When compared to mass market PC manufacturer Dell, Apple has a 3.5 per cent share of the US computer market, and its market capital is $27 billion: Dell’s market capital is $100 billion. However, Apple is the only PC maker, other than Dell, to return consistent profits.
Piper Jaffray analyst Gene Munster expects five million iPods to have been sold between October and December - and is positive about an affordable entry-level Mac.
Speaking to USA Today he predicted that cheaper iPods and Macs could double Apple’s sales.
“Apple sells around eight million computers a year; a $500 Mac could add five million or six million to that,” he said.
On the deluge of recent products introduced at CES to compete with the iPod, he said "There was no iPod killer”.
iPod a cultural icon
Business Week writes: “The iPod has established itself as the century's first blockbuster product - a cultural icon”.
A move into the flash-based music player market makes a lot of sense, this report explains: “One chip supplier says around 23 million flash-memory-based players were sold in 2004, versus fewer than nine million hard-drive-equipped models.”
GartnerG2 analyst Mike McGuire said: "Steve Jobs's mission has always been to innovate and deliver things that consumers really want and need," says McGuire. "Can they innovate in this part of the marketplace? That will be interesting to me."
Apple conquers the mainstream
Predicting the most interesting Macworld Expo San Francisco yet, Business Week observes that a move by Apple into the budget PC market may define the company’s future: “It could that that tomorrow's Mac addicts will look back on 2005 as the year Apple set out to conquer the mainstream - or shot itself in the foot trying.”
Despite the focus on iPods and headless Macs, other rumours remain in the frame. Technology columnist Sandy McMurray has published his predictions as to what Jobs’ keynote speech will include. He expects a PowerBook speed-bump, iLife 05, and an eMac revision.
Apple closed at $69.25 last week, climbing 7.28 per cent on Friday alone. This trend continues in pre-market trading today, where Apple currently stands at a new 52-week high, $70.73, up $1.48.