Anaylzing Apple's Strategic Mac Releases in 2006

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Nov
10

By: switchtoamac at: 12:06 PM on November 10, 2006 | Comments (0)

When Apple introduced the Core 2 Duo based iMac on September 6, 2006, the Mac faithful were excited to get their hands on the first Intel based Mac revisions.  It was only back in January 2006 when Apple's CEO Steve Jobs unveiled the first Intel powered Macs at MacWorld.  The first Macs to get those chips were the iMac and the newly introduced MacBook Pro.

Over the course of the year, Apple continued to roll out new Intel based Macs and the company completed the transition on August 7, well ahead of schedule.  Here's a summary of the releases during 2006:

January 10, 2006

  • Apple Introduces MacBook Pro (starts shipping on February 14, 2006)
  • Apple Unveils New iMac with Intel Core Duo Processor

February 28, 2006

  • Apple Unveils Mac mini with Intel Core Duo

April 5, 2006

  • Apple Introduces Boot Camp
    • Although not a Mac release, the software was significant as it allowed Intel Mac owners the ability to boot into Microsoft Windows.

May 16, 2006

  • Apple Unveils New MacBook Featuring Intel Core Duo Processors

August 7, 2006

  • Apple Unveils New Mac Pro Featuring Quad 64-bit Xeon Processors
  • Apple Introduces Xserve with Quad 64-bit Xeon Processors

First Intel Mac revisions

September 6, 2006

  • Apple iMac Line Now Features Intel Core 2 Duo Processors In Every Model
  • Apple Updates Mac mini Line to all Dual Core

October 24, 2006

  • Apple Updates MacBook Pro Line to Intel Core 2 Duo

November 8, 2006

  • Apple Updates MacBook Line to Intel Core 2 Duo

When Intel released the Core 2 Duo processors to manufactures in July, many were eager to see when Apple would announce revisions to the iMac, MacBook Pro, and MacBook because the models were already using Intel's Core Duo chips. Just about every PC manufacturer launched new Core 2 Duo systems in August but Apple was in no rush.  When September rolled around, many were wondering when Apple would refresh any of their Mac models with the new Core 2 Duo processors.  Apple finally released the first Core 2 Duo Macintosh, the iMac on September 6.  When Apple announced that the company opted to use the mobile version of the Core 2 Duo, codenamed Merom, many were quick to assume that the company would soon ship Core 2 Duo revisons to the MacBook Pro and the MacBook portables.  With each passing week, potential buyers were getting more and more anxious.  The wait was finally over on October 24, 2006 when Apple launched the Core 2 Duo MacBook Pro.  The MacBook then gained the Core 2 Duo on November 8, 2006.

It's no surprise that Apple has historically taken their time to release updated Macs.  When the company used PowerPC processors in their computers, many argued that the Apple was at the mercy of PowerPC manufacturers such as IBM and Motorola.  Once the transition to Intel was announced, it was expected that Apple would be quick to release new Macs to the market following the latest Intel processor releases.  We've seen with the Core 2 Duo that this is not necessarily true.

Why does Apple take their time to release new or updated Macs?  Some may argue that the delayed releases can be justified from a quality control perspective.  I take the position that the answer has two key reasons.  The first and probably most important is to get people excited about a pending release.  The longer wait times generate buzz and pent-up demand that eventually leads to a buying wave once the systems are released.  The second reason is to satisfy Wall Street.  Over the past few years, more and more investors have been keeping a close eye on Cupertino.

In a May 17, 2006 post titled The MacBook Release - Strategic and Just In Time, I put forth the position that Apple timed the release of the MacBook and I also took the position that Apple would strategically time Mac revisions for the remainder of 2006.  I described how Apple would future Mac releases to smooth the growth of Mac units and prevent sales spikes.  As you can see from the following graph (click on it for a larger view), it's clear that Apple accomplished this with precision.  Note the almost consistent slope over the past two fiscal quarters.  It doesn't get any better than that.

Mac Sales over the past 8 quarters

Wall Street historically makes year-over-year and quarter-to-quarter comparisons to guage the underlying performance and growth trend of a company.  Since 2001, sales and popularity of the iPod have transformed Apple into a growth company.  From a Mac perspective, if Apple were to release broad stroked revsions within a short period of time it would not only cause spikes in unit shipments but it could also have detrimental effects on the supply chain, distribution channels, and the ability to meet demand.  The potential downside, Apple would then have to out-do itself in future quarters.

We've likely seen the last of the Mac revisions for calender year 2006.  The timing of these releases can not be understated as the holiday season is fast approaching.  Apple now has a full line of revised Core 2 Duo iMacs, MacBook Pro's, and MacBooks as well as revised Mac mini models ready for the upcoming holiday season.  It's no suprise that Apple decided to release Core 2 Duo iMacs in September, during the 2006 fiscal fourth quarter.

Apple strategically timed the release of the MacBook Pro and the MacBook for the 2007 fiscal first quarter to capitalize on portable sales.  It's well known in the industry that portables now outsell desktops.  Furthermore, it's no suprise that Apple rolled out the MacBook Pro just over two weeks prior to releasing the MacBook.  Although the MacBook Pro was first released in January, I feel that Apple released Core 2 Duo MacBook Pro's first in order to book as many initial sales as possible.  Many of those eagerly waiting for a Core 2 Duo MacBook decided to purchase the Pro system simply because there was speculation that Apple may not release a MacBook revision prior to MacWorld 2007.  Just visit a popular Mac forum for the evidence.

It clear that Apple took it's time to ensure that they can scale production, stuff their supply chain, and get new Macs to Apple Retail locations and Apple Authorized Resellers and ready to place in the hands of holiday buyers.  Apple is well positioned for a blow out quarter.

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