financial/investor
06/22/2005, 7:20am, EDT
Wednesday, June 22nd
Apple's Intel transition could slow Mac sales
Apple's move to the Intel architecture may affect sales in the near-term, according to a TheStreet.com columnist. The announcement earlier this month could reduce the surging momentum generated by the iPod and the associated "halo effect," which has been largely been seen as the reason for increasing Mac sales in recent quarters. "While Apple has seen an uptick in Macintosh sales in recent quarters, that momentum may be slowed by the recent announcement that it is switching the processor at the heart of its computers from the PowerPC line produced by IBM/Freescale to chips made by Intel. Although Apple offered valid reasons for the switch, it could lead customers to delay computer purchases or choose rival systems based on Microsoft's Windows operating system. Even with a recent drop, Apple shares -- at 29 times earnings estimates for the current year -- still are trading at a premium to its PC rivals. This implies big growth expectations for the company and particularly its computer business."
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I put my feelings aside and started to look at the facts. I am waiting until after the next MacWorld and I will purchase a new G5 iMac. Here are the facts I used to make my decision:
- The Intel switch is going to take about 2 years. I will have the processor used before the switch. It will be the people who are buying the new Intel Mac's that will suffer waiting for the lazy developers to upgrade. They will also be the ones using the Rosetta feature to go backward to my processor.
- After the switch it will take months and months of upgrades, waiting for developers and possibly even Apple to get the bugs out. I remember when this flat panel Mac came out and ran to buy it and a few months later the 17" came out.
- Once the dust settles and the new models upgrade and improve it will be 3 to 4 years. That's how old my Mac is now I am waiting to replace. This thing is a slow dog and I can't wait to hand it down to my daughters for a new G5 20" iMac.
- The bottom line is, while everyone is going through the change and waiting, I will be enjoying the speed and reliabilty of my new G5 iMac doing what it has always done for me. Once the dust settles and everything is Intel compatible I'll be ready to switch from my newest slow dog.
PS. I use XP at work. I even went so far as to look at a HP at Best Buy after the announcement. They really have some great features with the built in media card slots, iPod dock built into the top and the light scribe DVD burners. Everyday I was torturing myself with the Intel announcement, looking at PC's for the time in over 12 years. Then I bought the new Foo Fighters CD at Tower records. I put it in my PC at work and couldn't import it due to the new copy right protection. Brought it home to my Mac and everything went fine. I learned three lessons that day: 1. I will never buy a physical CD from a store again. I will always use the iTunes Store. 2. My Mac has always did what I expected. It's the OS I use the Mac for. It is superior. 3. Looked at everyhting I use on a daily basis on my Mac and most of it is an add on with XP. Apple has never nickeled and dimed my on the basic computer features I always needed.
Apple's market share has been in a steady, slow decline for a long time though aggregate users have increased as the market has exploded. I don't believe that Mac market share would be higher today if we'd stayed with the old stuff. On the contrary, I think the switch to mainstream processors will precede an increase in overall Mac market share.
I work in a Apple Authorized retail store, and have had customers say point-blank that they are going to wait until Intel machines are ready. I was going to sell my iBook and buy a mini, until I heard about Intel machines. Now I'm going to wait a year or two.
What changed his mind was when I showed him how easy it was to edit video in iMovie / Final Cut Express compared to his 'crashes every 5 minutes' experience of video editing on his PC using Pinnacle software.
The Intel news on 6/6 did delay his purchase decision by a couple of weeks but he finally went with it because he knew the iMac was the right tool for his needs.
Um, even if Apple didn't announce Intel, the only reason anyone would buy a mac today would be if they needed one. The towers are nothing more than slightly faster versions then their 2 year-old siblings. The iMacs are exploding left and right. The iBooks are stuck with lousy graphics and all laptops are stuck with the 8 year-old G4 processor.
As for slowing sales, they'll start to pick up again beginning of next year, as the Intel switch comes closer, and all those people out there who still require Classic support (because Apple has made platform switch after platform switch over the years, driving away developers tired of rewriting and rewriting their code, thus orphaning a slew of users of software to use old OS 9 and even 680x0 software to this day!) will realize they need to buy an existing powerPC based mac in order to protect their investments.
Of course, its not like Apple helps the situation. You'd think they'd be able to put more conversions into Appleworks and Pages, but nope, not them, can't be bothered into writing converters for anything older than 2 years.
Now is the time to buy if you want to avoid the transition glitches in 2 years. I waited for PowerPC and bought a 6100 which was a very average Mac. Apple's current product line is the best they've ever had...
Greetings
Thomas