With a boatload of announcements dancing through their heads, users reacted to Apple’s new products with optimism while industry analysts worried about the effects of the economy and competition on Apple’s bottom line.
“The new ‘i’ products I think were most significant,” said Eric Moorehead, a graphic designer from Phoenix. “I liked the new PowerBook too, but I think the software products will show new potential customers that have never used a Mac that Apple is on the cutting edge.”
Sarah Ferguson of Los Angeles was most impressed with the new PowerBook G4, but couldn’t decide if it was the size or the new look that impressed her most.
“Others might say it was the PowerBook features and G4 speed that are most impressive, but I think it just looks cool and really professional,” said Ferguson, a 38-year-old executive management consultant. “I know executives who will want this.”
Graphic designers and scientists on the show floor were most impressed with the new enhancements to the G4 towers, saying the step up in processor speed — despite only one dual-processor BTO option — will help keep pace with critics who tout Intel speeds.
“The CD-R and DVD options make them flexible,” said David Livingston, an IT specialist for a small accounting firm in Denver. “But, the megahertz jump is going to make a difference, especially for graphic designers.”
“I’m going to really explore video production as a hobby and possibly a career, now that I’ve seen what you can do with iDVD and the fact that the G4s now have so many burning options,” commented Bob Nibeck, from Seal Beach, Calif. “I can see people starting a whole new business just around creating innovative DVD projects for companies and home users based on this technology.”
All customers interviewed by MacCentral were pleased with the pricing of the new products, based on their features, but some balked at the $129 price tag for Mac OS X, which will be released in its final form on Sat., March 24.
“I was hoping it was going to be closer to $100,” said Pamela Hatcher of Las Vegas. “But maybe I’m just cheaper than some. I’m trying to remember that it’s completely new and featured packed.”
Analysts mixed
Possibly as no surprise to some, analysts who watch Apple stock and the personal computer industry for a living were pleased with the announcements, but have concerns about Apple’s potential for dramatically improving the bottom line in the wake of a softening PC industry and an apparent slowing economy.
“The new products, especially the hardware, are what Apple needs. It’s a boost,” said David Bailey, an analyst at Gerard Klauer Mattison & Co. “But I’m concerned that no matter what they would come out with, the short- to near-term outlook for Apple isn’t so strong and bright because of factors they can’t control.”
Bailey cautioned that a continued glut of old products — leaving some eight weeks of inventory — is still of concern as the company lowers prices and attempts to clear inventories.
“The new (hardware) products keep them fresh, something they don’t do as often as they should,” said Richard Gardner, an analyst at Smith Barney. “While the new software products might help to sway some customers, it’s the whole picture of solutions that will make the difference in the long run.”
“Value is what I think Steve Jobs highlighted on the hardware side,” said Andrew Neff, an analysts with Bear, Sterns & Co. “You position the products with certain functions and add extra hardware such as DVD R and CD-RW in a number of configurations and you give people options and price points they can accept. Jobs did that very well today (Tuesday).”
Earnings report due
But while an upbeat Macworld Expo might raise morale, inventories of Apple products remain high and demand is low — a fact the company has not disputed.
“They’ve got a lot of old machines to clear out,” Neff commented. “With a slowing economy affecting the entire PC industry, Apple always gets hit a little harder than say a Dell or a Compaq.”
Apple’s earnings report for the quarter that ended Dec. 31 is due next Wednesday, and the company has said it will lose between $225 million and $250 million. Analysts surveyed by First Call/Thomson Financial are projecting a loss of 64 cents per share.
Analyst Richard Gardner reduced his estimate for this quarter to a loss of 24 cents per share, reiterating its “neutral” stance on Apple stock.
“While Apple’s shares may receive a boost from Tuesday’s product announcements, we would not be buyers (of the stock),” Gardner’s report said.