Blog Post

Apple Conference Call: Yes on “Pro,” Cannibalizing iPods, No on Netbooks

Apple Logo

Peter Oppenheimer and Tim Cook hosted Apple’s (s aapl) third-quarter fiscal 2009 conference call, the “best non-holiday quarter ever” for revenue, and the second-best quarter for Mac sales.

For investors, if you didn’t suffer through the conference call, transcripts will appear sooner or later, but within the dry financial data there were few interesting facts for consumers. I counted three.

Slapping the “Pro” moniker on the 13″ unibody MacBook was a brilliant idea.

While no figures were released, portable sales saw a 13 percent increase year-over-year, and an “acceleration of sales” after the new laptops launched at WWDC. The response to the 13″ MacBook Pro has been “very favorable.” The point was made that previously you had to pay $2,000 for a pro laptop, but now pro machines start at only $1,200. Before the transition, the white MacBook was the leader in consumer sales, but now the 13″ MacBook Pro is selling fast enough to constrain supply.

Apple is OK with declining sales of “traditional” iPods.

The company is “cannibalizing” itself — surely there is a better metaphor — by upselling consumers from Shuffles, nanos, and Classics to the iPod touch and iPhone, though how that would account for an overall decline in iPod sales of 7 percent year-over-year was not explained. Nonetheless, it was announced that iPod touch sales are up 130 percent year-over-year. Based on a comment about “45 million” iPhone OS 3.0 users, we can subtract 26.38 iPhones sold to date to arrive at some 18.62 million iPod touch users. Clearly the iPod touch is becoming as important to Apple as the iPhone. It wouldn’t be surprising if rumors of a new iPod touch ushered in a segmentation of models and a price drop, like the iPhone 3G and 3GS, probably at an Apple Event in the fall.

Apple still hates netbooks.

Tim Cook deflected a question about a device with a “larger screen where you can do more than on the iPhone” using the same talking points: slow, cramped, small keyboards and displays. While not wanting to “discount anything in the future,” the company does not “see a way to build a great product for this $399, $499 kind of price point.” Apparently people who buy netbooks often become “disenchanted,” and most want “full-featured notebooks.” That may be true, but considering Toshiba and Acer both saw double-digit jumps in market share last quarter, clearly there is strong demand for netbooks.

Let’s hope that if no MacBook mini is on the horizon, there will soon be a fabulous tablet device that will be the subject of next quarter’s conference call.

10 Responses to “Apple Conference Call: Yes on “Pro,” Cannibalizing iPods, No on Netbooks”

  1. I am quite happy with my dell mini 9 hackint0sh. I do everything I normally do on my iMac (code, analyze stats, watch movies, listen to music/radio…) and I don’t have to break my back with a 5lb laptop (its roughly 2lbs). Apple is missing the point of the usefulness of netbooks. It’s not about how much horse power you can pack into a tiny package. It has to be functional. If the proof of concept of hackint0sh netbooks haven’t persuaded Apple of the usefulness of OSX on a1.6GHz Atom with 2GB ram, then they are just blind and greedy. They are obviously not going to cannibalize their current 13″ Pro or the soon-to-be-extinct Air. For Apple to start making a tiny Mac and sell it at $400-500 would be disaster since their phone costs more than that ($800 no contract). Basically, it is impossible for Apple to make a netbook and to justify a low price. If they made one, it would be expensive and wouldn’t sell. So you keep hearing the stupid excuse about shoddy parts, cramped keyboard (it’s not thaaaaat bad), etc. So that’s my take on the Apple’s stance and netbooks. If they trim their lineup and make a subsidized netbook (like some companies sell the Dell mini 9 along with a 3G stick subscription), they might make some money.

    A tablet would be good for reading (it would be a kindle and Sony ebook reader killer) and maybe video editing (unless it’s got an Atom, but image typing on it. How are you going to hold it while you stand waiting for a bus? Are you proficient with one hand (well, maybe a dumb question, caz you might be)? At a coffee shop, are you going to lay it flap and bend over it just to see the screen without distortion? Regardless, a tablet only seems cool. But you soon realize that everything you can do on it, your iPhone or iPod touch or my netbook can do and does it better. It’s an unnecessary expense during this economy without which most can definitely survive (not fanboys though). I predict that this will be a flop unless they pull some crazy shtuff with it.

    My 2 pennies.


  2. In response to the decline ipods (classic) the main reason why I bought the classic over touch after my previous one died was storage. I would rather have 120 GB of storage than 32, especially for the long trips and commutes I go on.

  3. “Cannibalization” isn’t so much a metaphor but a very common and long-standing business term. Still, it’s interesting that Apple is alright with iPod touches and iPhones stealing market share from traditional iPods… it probably aligns with their long-term strategy.

  4. I have to, regretfully, agree with James Dempsey…24hr battery life? on a tablet? with 3G? not only no, but hell no! Not in any tablet you’d be able to carry with you (never mind willing to…just able to).

  5. 24-hour battery life on a large screen tablet with “full-time” (assuming you mean “always-on”) connection – LMAO!!!! I would love a million dollars… and I think I **might** have a better chance at getting it than you do of getting that device! ;)

  6. Numerius Negidius

    I want an iTablet.

    The current iPhone and iTouch are nice, but the screen is too small for serious reading of web surfing, the battery wears out quickly, and there’s not enough storage for my music collection – let alone movies and photos. Also, my employer already provides me with a Blackberry, and I don’t need another phone.

    I want my iTablet to have a full-time 3G Internet connection, lots of storage (256GB+), and long battery life (24 hours+). I’m don’t really care about the purchase price, as long as the monthly service fee is low.

    I’ll have my entire library of books on it, and I’ll re-subscribe to magazines and newspapers which I let lapse due to all the unwanted stacks of paper. I’ll download the movies on my “wish list”, and take my entire music and photo collection with me everywhere I go.

    I’ll have it with me in the living room when I watch TV, and I’ll curl up in bed with it for late night reading. When I go out, I’ll put it in my bag, in the space formerly occupied by books and magazines. I’ll use it for reading on the train while I listen to my favorite tunes. I’ll check email at work. When I’m planning with friends, I’ll use it to find movie listings, maps, and restaurant reviews. I’ll use it to play a game or watch a movie when I’m killing time at the airport or on a long flight.

    When can I have it?

  7. After carrying around my HP notebook for a trip I wouldn’t trade it for my full sized laptop. At about 5 lbs with the power supply it still worked for my writing as it has a 90% solution keyboard. Technically I can do the work I need on my iPhone but it wouldn’t be anywhere as easy.