2005 October | The Mac Night Owl

Archive for October, 2005

The Apple Hardware Report: Jobs Said it Wouldn’t be Done

Saturday, October 15th, 2005

So what can I say. One day, Steve Jobs poo-poohs a product, and a few months later, he brings out a version of the very same thing. But the question remains the same: Are you ready to watch Lost and Desperate Housewives on a 2.5-inch screen? Are you ready to pay $1.99 for each episode in low resolution versions? That’s a serious question that will have to be answered over the next few months as the new iPod, with built-in video playback capabilities, hits the stores for the holiday season.

In any case, the predictions from both the mainstream media and Mac rumor sites were right on the mark about this product, including pricing and configurations. The 30GB version is $299 and the 60GB version retails for $399. I wonder, however, whether we’ll hear any complaints about scratches on its “gorgeous, phenomenal” screen. Clearly Apple doesn’t regard this is a terribly significant issue with the nano, where demand apparently continues to outstrip supply.

One interesting sidelight in Apple’s presentation in San Jose, CA Wednesday morning was a new iPod commercial, featuring Eminem, the very same rap singer who had apparently objected to playing one of his songs in a previous ad. I suppose money talks, however, since it’s clear he got a nice paycheck to feature one of his tunes in an Apple spot. Now maybe that’s not a terribly significant issue, but a sidelight for the idle curious.

Perhaps the biggest story is the iMac. Apple says it sold a million of them during its first year, and the new model is Apple’s first foray into the media center arena. No, you don’t have built-in TiVo software to record your favorite TV shows; you still need a third party product, such as the Eye TV, for that task. However, I think the handwriting is on the wall, and we’ll see that capability soon enough. In any case, the rest of the stuff, such as the Photo Booth software, which lets you take self-portraits with the iMac’s built-in iSight camera in a variety of forms, including silly special effects, seems sufficient to entertain kids and those young in heart for hours.

The other media center element is the super-simple remote control, Front Row, which provides unique iPod-like simplicity to a product that can be mighty complicated. I mean how intuitive is your standard remote, with dozens of buttons, usually the same sized. I still have to take a second glance at the one I use for Dish Network, and occasionally press the wrong one. I know I’m not alone in this.

However, in the move from over 40 buttons to six, it seems as if there’s going to be lots of menu jumping to get to a specific function. More clicks for the same result, but at least you won’t need to figure out what button does what, and I rather suspect this is going to smoke the flagging media center PCs in the months to come.

The pricing of the iMac continues Apple’s increasingly aggressive posture. Compare any media center PC with the $1,299 17-inch iMac or the $1,699 20-inch version and you’ll see what I mean. No, those $299 Dells aren’t regarded as media center computers, in case one of your friends who extols the questionable virtues of Windows complains Macs are still too expensive.

The other notable development from Apple’s new product media event didn’t occur during Steve Jobs’ presentation. The eMac has apparently been quietly pulled from the consumer market, although it remains available for educators. I suppose the success of the Mac mini has thrown a wrench into eMac sales, which were never stellar. In a sense that’s unfortunate, because the eMac was a perfectly decent all-in-one computer, although rather a bulky product. At $799, it was a good value, although you could put together similar parts based on the Mac mini for less.

in any case, I’m not at all surprised by Apple’s optimistic forecasts for sales this quarter. I can see great potential for the new iPods and the iMac. The only fly in the ointment are those low resolution, 320 x 240 pixel videos. Remember, that standard definition TV is 640 x 480 and that’s not too great. I suppose it won’t make much of a difference on a 20-inch LCD, if you don’t look too close, and it certainly will look marvelous at 2.5-inches. But what about full resolution? Would that be worth, say, $3.99 for an episode of your favorite TV show? I’m asking.

And, no, folks, rumors of a pink Madonna iPod didn’t come to pass. Ah, all is indeed right with the world. Oh yes, the U2-flavored iPod is also history.

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The Apple Financials Report: Stock Tanks Over Record Profits

Saturday, October 15th, 2005

In the Wall Street universe things don’t always operate in a logical fashion. Take Apple’s latest quarterly report. The company reported record earnings of $430 million, or $.50 per diluted share. Revenue reached $3.68 million, and Apple shipped 1,236,000 Macs and 6,451,000 iPods. Compare this to revenue of $2.35 billion, and $106 billion, or $.13 per diluted share, for the same quarter last year.

Overall, Apple has achieved record earnings for its fiscal 2005 year, with total revenue of $13.93 billion and a net profit of $1.33 billion. Sales of Macs are growing faster than the industry at large, which means market share is expected to continue to rise. For this quarter, sales are predicted to reach $4.7 billion. This would seem to demonstrate the company is at the top of its game. Considering where Apple was just a few years ago, it’s a stunning turnaround.

Get the picture? This should be sufficient to keep Wall Street utterly delirious, but it’s not enough. Even though revenue and income bettered Apple’s own guidance for the quarter, Wall Street analysts decreed that Apple should have earned $3.74 billion instead, and when that didn’t happen, the stock tanked more than 10% in after-hours trading. The trend will probably continue for a while, although one hopes traders will come to their senses eventually.

So why didn’t Apple earn more money? Is the iPods popularity hitting the skids? Is that iPod halo effect not delivering as many new Mac sales as the so-called experts expect? Well as far as the iPod nano is concerned, Apple sold a million of them within the first 17 days, but apparently couldn’t keep up with the “staggering” demand. If it could overcome what it described as an “enormous backlog,” perhaps quarterly revenue would have been sufficient to satisfy Wall Street’s inflated expectations.

In its conference call with analysts, Apple had a lot more good news to offer, by the way. Higher education sales have grown 38% over last year and the total education arena has seen the best sales in 10 years. Maybe the school systems that have settled on Dell are beginning to come to their senses now that they have entered the world of malware.

Right now, the iPod continues to hold 75% of the U.S. market, and iTunes occupies 80%. But this isn’t terribly different than what Steve Jobs told us all a few weeks back when the iPod nano was first introduced. And, apparently, claims that the nano is more prone to scratching than other iPods aren’t being taken seriously. Apple calls the issue “very, very minor.” Of course, the technology press has been somewhat divided over the issue. Some report it is more scratch sensitive, others say it isn’t. My experience is closer to the latter, at least so far.

Over the next year, there will be between 35 and 40 new branches of the Apple Store, which indicates accelerating growth for the chain. It may be great news for the company, but not so great for third party dealers that are feeling more and more threatened by Apple’s presence in their back yards.

Inventory of new Macs is below the usual four- to five-week target, meaning that more Macs were sold than the company expected. Portable sales amounted to 634,000 and desktops came in at 602,000. Apple, however, doesn’t provide model breakdowns anymore, so let the guessing games begin. During that conference call, one analyst tried to pin down Apple’s people on Mac mini sales, but failed.

In any case, it also appears that fears that the switch to Intel processors would hurt sales haven’t been borne out, at least so far. But I suppose you could argue that situation could change next year, as the expected mid-year introduction of Macintels approaches.

That covers the essence of Apple’s performance, for now at least. But we’ll all convene three months from now for more financial fun and games. So get ready to break out those tea leaves, Wall Street, and tell us all how Apple should perform next time.

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Browser Market Share: A Reality Check

Saturday, October 15th, 2005

You’ve got to be encouraged by the latest figures of browser market share. Considering the Mac’s allegedly tiny corner of the market, statistics from Net Applications putting Safari at 2.39% as of September is quite an achievement. This is especially true when you look at the October 2004 statistic of 1.46%. Does this represent a massive influx of new Mac users over the past year? I won’t go that far, but it appears to be an impressive development.

The big story, however, at least as far as the mainstream tech press is concerned, is that Firefox’s stellar growth has apparently hit the wall. After peaking at 8.71% in June, the latest stats put the upstart’s percentage of Internet surfers at 7.55%. So what’s going on here? According to a published report, a spokesperson for Net Applications, a company that tallies these numbers, says that part of the share drop is due to Netscape 8.0, which is only available for Windows users.

The latest Netscape is designed to deliver pages using the Mozilla Geko engine, same as Firefox, or Internet Explorer. Apparently earlier versions of Netscape were erroneously identifying themselves as Firefox, which accounted for the some of the growth of the latter. The latest figures, showing Netscape at 2.15% and a corresponding reduction in Firefox, are supposedly more accurate.

At the same time, the precipitous slide of Internet Explorer has apparently halted, and it increased from 86.31% in August to 86.87%. Or maybe not. Let me explain. You see, Netscape will render some pages as Internet Explorer, which clearly impacts the latter’s stats. So maybe some of those figures weren’t generated by Internet Explorer after all, but it appears this is one point that isn’t being discussed.

Another is the down-in-the-dumps rating for Opera, a mere 0.51%. Opera has been stuck in that narrow range, give or take a small number, for the past year. Is this the reason why Opera Software decided to ditch the banner ads for the free version, and change the premium version to a premium technical support deal? Perhaps we’ll see the answer over the next few months.

But does Opera really have such a small impact on the market? That, my friends, is the big question mark, and again the numbers aren’t being questioned by tech commentators. You see, by default Opera identifies itself as Internet Explorer! That’s the secret, and I doubt that Net Applications or any other statistical survey attempts to parse the real Internet Explorer from the faux version. Opera does this for compatibility reasons, in part because some sites may not render properly or at all for anything but MSIE. But it also means that Microsoft’s browser is erroneously being credited with a higher market share than it really has. Worse, Opera isn’t getting the numbers it deserves. And, yes, you can change the browser to call itself Mozilla or Opera, but most people won’t bother touching that preference.

Now I suppose this disparity can be addressed by Opera just identifying itself as Opera, although I understand there may be complications with some sites. At best, you can look at Opera’s own download numbers, which may not realistically indicate its impact on the market, since many potential users may simply try it out and go back to another browser. But it ought to show a trend. For example, within two days after dumping its ad banner in late September, some one million copies had been downloaded. As of October 5, Opera claims its daily download rate has quadrupled.

It sounds like Opera is poised for impressive growth, but how are we to tell, if most of its users aren’t getting counted? I suppose, of course, that Opera can switch that default, so its real user base will be known, at least so long as folks don’t change it and new copies replace the older versions. But will that reduce Opera’s compatibility? Good question, and one that I’m not about to answer, although I have made just that change to see whether page rendering quality or the ability to connect to a site is altered.

As much as I’d like to see all browsers correctly counted, I’d also like to see if the people at Net Applications and other firms that provide statistics of this sort would try to figure out a better way to deliver fair counts. And maybe a few of the folks who aren’t paying attention to such obvious matters will begin to do their homework.

And, by the way, I’m mostly pleased with the latest Opera, version 8.5. It does a fair job of delivering pages accurately and speed is superior to previous versions. In trying to have all platforms present a similar look, though, the Mac version has some interface glitches and there are some printing-related issues that I’m watching. I’ll let you know if that change of identity alters its compatibility. It certainly won’t do a lot to alter Opera’s market share rating, since I don’t expect many to make a similar preference change.

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