Macsimum News

Apple may expand beyond the Mac -- but won't leave it behind

by Dennis Sellers

As we reported last week, Goldman Sachs research analyst David C. Bailey said in a note to clients that he expects Apple to gradually expand from its “Mac core.” That has some folks worried (again) that the iPods success means Apple plans to leave the Mac behind at some point in the future. Don’t worry, Bailey’s comments were blown out of proportion, and the Mac’s not going anywhere.

“2006 will undoubtedly mark another major year in Apple’s transformation, but its new markets bring together tougher competition,” the analyst in a recent research note to clients. “If early indications from suppliers prove correct, Apple is likely to move further from its Mac core in 2006, leveraging its brand and building on the consumer success of iPod.”

Bailey feels that Apple may announce new products over the next few months that could shift its center of gravity further into the consumer electronics realm. But note that he feels Apple could announce its first real move into the digital entertainment hub market as early as next month’s Macworld Conference & Expo in San Francisco, in the form of an updated Mac mini that includes a remote control and Front Row software. That’s a Mac mini, folks, as in Macintosh.

I have no doubt that Apple will increasingly move into other areas beyond the Mac and the iPod in the months and years ahead. However, many (if not all the new products) will spring from an iPod and/or Mac OS X base, as will the digital entertainment hub Bailey forecasts.

In fact, with Apple moving to Intel processors for future Macs, I expect to see an increased focus on the Mac and Mac-related products. Look for a strong push for “Mactel” laptops in the first half of 2006. Apple’s core business is still making and selling hardware. Certainly, over time the computer will be merely one component of Apple’s strategy and initiatives as the company grows into a Sony-like company with a variety of product lines—with the Mac remaining one of Apple’s most important products.

After all, Apple’s fiscal 2005 fourth quarter that ended Sept. 24 saw the second highest quarterly shipments of Macs in the company’s history. Both laptop and desktop sales were way up, and Macs accounted for approximately 60 percent of Apple’s total revenue. The company sold 634,000 laptops, which is 41 percent year-over-year growth. Apple shipped 602,000 desktop systems, which is 56 percent year-over-year growth. Expect those figures to be good over the months ahead. The iMac G5 is reportedly selling like hot cakes—and Apple doubtless has some fascinating Mactel systems coming in the next two years as the entire Mac line moves to Intel chips.

Thoughts? Write me at dsellers@macsimumnews.com