Apple

(Credit: CNET)

After reading Engadget's report citing recent complaints about Flash video playback mucking up system resources on the latest 27-inch Apple iMacs, we decided to test out the claims using our own system. Users on the Apple Discussion threads noticed a bug in the Flash Player that bogs down CPU processes, resulting in choppy audio and video playback.

We visited several sites with heavy streaming video content like Hulu, YouTube, and the Break Media Network, and experienced similar issues: popping sounds and jerky video rendering the content unwatchable on several accounts. Like many of the users in the Apple thread, we called up the Activity Monitor and saw that the Flash Player demanded a surprising 114.4 percent of the iMac's CPU processes.

We were able to temporarily fix the problem by putting the computer to sleep and waking it up, but some people are speculating that a hardware malfunction could be to blame. We've also tried to contact Apple for official word, but our messages have been as yet unreturned.

If you're experiencing similar problems, we'd like to hear about it--leave a comment and let us know the issue and what you did to fix it.

Apple seems to be looking forward to the launch of Windows 7 almost as much as Microsoft, but for very different reasons.

(Credit: Apple)

While Microsoft may see Windows 7 as a way out of the failure of Vista, Apple plans to take advantage of the launch by catering to the customers who are fed up with the Windows user experience and want to make a change.

"Users are really growing tired of Windows and the headaches it brings," said Brian Croll, Apple's vice president of Mac OS X worldwide product marketing. "We've seen this with Vista, XP, and the other Windows operating systems going all the way back."

While Apple clearly believes Mac OS X Snow Leopard is a superior operating system, the company doesn't believe it comes down to a comparison of the latest releases that will make the difference. Apple believes that for a lot of users it is an accumulation of issues.

The latest issue will be the amount of work that Windows XP users have to go through to upgrade to Windows 7. The need to erase the hard drive, install Windows 7, re-install applications, and update everything may be too much for some users to handle.

"We think a lot of folks will look at that as the straw that broke the camels back," Croll said. "People are tired of the headaches with Windows and this is another great excuse for people to check out the Mac."

Apple is also betting that many XP users who will have to upgrade their computers in order to run Windows 7 will instead choose to check out a Mac. But the cost of the new computer isn't the only thing users have to look forward to; there's also the software price tag.

For many consumers, Apple feels it has that covered too, especially with iLife, its suite of applications that includes iPhoto, iMovie, GarageBand, iWeb, and iDVD. iLife is included for free with every Mac.

"That's huge. It's a key part," Croll said. "You have the entire software environment, and you have iLife built-in. Everything you need is right there. With Windows 7 there is a lot of assembly required and even after that, it doesn't compare with what you get in iLife."

Apple declined to say if it was planning any price cuts, TV commercials, or special events at the its retail stores to welcome potential Windows 7 users.

"There's not going to be a lot of change in the Windows world," Croll said. "At the end of the day it's still Windows."

New evidence from Apple resellers suggest that updated Macs are on the horizon, according to a report from AppleInsider.

(Credit: Apple)

Apple resellers are reporting shortages of both Mac mini models coming from Apple. The company also reportedly issued an advisory earlier this week to its own retail stores that the Mac mini models and all four iMac models would not be restocked.

Reports surfaced in late September suggesting a new iMac with a thinner enclosure and possibly a Blu-ray optical drive is ready to be rolled out by Apple before the end of the year.

The wait time for Apple authorized resellers to get a Mac mini is currently two to three weeks, while the Apple online store lists the wait time as one to three business days. Having to wait one to three days for a computer may not seem that long, but all other systems on the online store ship within 24 hours.

Apple's MacBook could also be in line for an update before the end of the year. While the new models are thought to be similar to the existing MacBook, the update would most likely include processor and hard drive capacity updates.

The timing of the new Mac models makes a lot of sense. With the busiest shopping period of the year fast approaching, Apple is already set for iPods. The release of new Macs now would round out the offerings for the holidays.

Apple may be ready to introduce a new line of iMac all-in-one desktop computers before the end of year, according to a new report on AppleInsider.

Citing "people familiar" with Apple's plans, AppleInsider said the new iMacs got the go-ahead in early September and have been in production for the past couple of weeks.

(Credit: Apple)

In addition to a new thinner enclosure, the new iMac line is rumored to possibly include a Blu-ray optical drive. This would mark the first time Apple would include a Blu-ray drive in one of its desktop or portable computers.

Based on previous updates from Apple, it's reasonable to expect the company to also include faster processors, perhaps newer graphics cards, and increased hard drive capacity. Current models feature processors ranging from 2.66GHz Intel Core 2 Duo to 3.06GHz Intel Core 2 Duo.

Hard drive capacities go from 320GB on the low-end model to 1TB on the high end.

Apple also usually keeps the prices of its updated machines pretty close to the previous ones, although they have reduced prices on occasion. Current prices range from $1,199 to $2,199.

It's been a busy day for Apple.

In addition to quietly updating the consumer-friendly MacBook, Apple on Wednesday also launched an iPod promotion targeted to students.

The iPod Touch

(Credit: CNET)

With the promotion, students, faculty, or staff members can buy a MacBook, MacBook Pro, MacBook Air, or iMac and get a free iPod Touch. Of course, students and educators can also see if they qualify for additional savings through Apple's education store.

There is a bit of a catch. You have to buy the iPod Touch at the same time as the Mac to qualify for a rebate. After the purchase, you fill out the rebate online and wait for the money from Apple.

To qualify you have to be a student or employee of any K-12 or higher-education institution. Parents of a higher-education student are also eligible for the program. Full details are available from Apple's Web site. The promotion ends September 8. Rebates must be submitted by October 9.

Apple has a long history of offering its education customers discounts and incentives when they head back to school. However, this year is a bit different because many students haven't even left school yet.

Typically, Apple starts this type of promotion in the summer and ends it in September. The earlier start date may be a way for the company to try to boost Mac sales over the summer.

Update at 8:52 a.m. PDT, with additional information from the research note and charts.

A Wall Street analyst on Monday lowered earnings estimates for Apple's fiscal second quarter and year, marking a second whack from a financial soothsayer in the past few days.

Doug Reid, an analyst with Thomas Weisel Partners, lowered Apple's fiscal second-quarter earnings estimates from $1.10 a share to $1.05 a share. Its fiscal second quarter ends in late March. For the fiscal year, Reid cut estimates from $5.31 a share to $5.10 a share, according to his research note.

He also dropped Apple's 12-month stock price target by $10 to $120.

The lowered outlook for Apple comes amid a painful recession.

In checking with retailers and suppliers, Reid estimated that Mac unit sales are declining at a steeper rate than previously expected. He now expects Apple's second quarter to yield shipments of 2.1 million units, compared with his prior expectation of 2.4 million units.

For the full fiscal year, he now expects 9.6 million Mac units to ship, compared with his previous prediction of 10.7 million. Most of this downward revision is expected to come from Apple's notebook line. Reid now expects Apple to ship 6.7 million notebooks in fiscal 2009, compared with his earlier estimate of 7.5 million.

(Credit: Thomas Weisel Partners)

(Credit: Thomas Weisel Partners)

Despite his decision to lower his earnings estimates, Reid did note that he views Apple's stock price as undervalued:

Despite our reduction in estimates, we believe AAPL shares are undervalued given the company's strong cash generation capabilities, balance sheet, and clear Mac market share gain momentum. With respect to Mac market share in the 228mn unit worldwide PC market, we expect Mac market share to increase from 3.3 percent in (calendar year) 08 to 3.7 percent in (calendar year) 09. We expect that driving Mac market share gains in (calendar year) 09 will be (1) lowered priced all-in-one desktops released on March 3, 2009, (2) positive impact on Mac unit sales of introduction of DRM free music on iTunes at Macworld on January 6, 2009, and (3) continued momentum from the company's refreshed Macbook line released on October 14, 2008.

We also believe that negative investor sentiment around rising app store competition is misplaced. Specifically, we estimate that app store revenue to AAPL wil be only 0.5 percent of (fiscal year) 09 revenue based on a $23/user spend on applications and that the rise of all app stores, AAPL-controlled or not, serves to increase the desirability and loyalty of users on the iPhone and broader AAPL hardware and software platforms.

Apple was up 2 percent to $87.02 a share in early morning trading.

On Friday, Apple's stock fell as much as as 7.3 percent to $82.33 during intraday trading, after a J.P. Morgan analyst cut his earnings estimates and price target on the company.

That analyst's decision was also driven by the recession's grip on consumer spending.

Apple changed little on the new iMacs introduced Tuesday, including their pricing.

(Credit: Apple)

Apple's long-awaited Mac desktop refresh Tuesday is evidence of the company's determination to preserve its margins in a category that's fast going out of style.

Three Mac desktop categories were updated Tuesday, but only one really matters: the Mac Mini and Mac Pro aren't nearly as popular as the all-in-one iMac. Apple did improve the specifications of the iMac at the same price points, lowering the cost of acquiring a 24-inch version to $1,499. But it made few significant changes to a design that hasn't been updated since September 2007 and resisted calls to reduce the price of the iMac below $1,000, a psychological barrier that in troubled economic times could hurt Apple's sales, according to that line of reasoning.

In doing so, Apple is signaling that it cares more about margins than market share, at least when it comes to the iMac. After all, when people think about buying a new computer these days, they are shopping for a notebook, not a desktop.

Desktop sales are in freefall around the world; Gartner expects desktop shipments this year to decline 31 percent as the entire market for personal computers contracts by 11.9 percent. And Apple hasn't been immune to those trends. In the company's first fiscal quarter, Mac desktop sales were off 25 percent, which was actually steeper than the overall market decline during that period.

The interesting thing is that Apple doesn't seem to think price is the reason behind that decline. That's probably because Apple's customers are willing to pay slightly more for Mac desktops than they are for Mac notebooks, according to data from NPD Group. That is not the case in the Windows world.

The average selling price of a Mac desktop in the U.S. over the last six months was $1,503, while the average selling price of a Mac notebook was $1,493. Windows customers paid an average of $545 for their desktops over the last six months, while they paid $637 for their notebooks.

The reality is that regardless of price, desktop computers have fallen out of favor with the public, and Apple's pitch for the new iMacs--with a heavy emphasis on old-fashioned speeds and feeds--suggests that it no longer views the iMac as a product that is driving its growth, said Stephen Baker, vice president of industry analysis for NPD.

New Mac users are more likely to want notebooks, rather than desktops, because that's just how the overall computer buying patterns have shifted over the last five years, Baker said. There's a core group of Mac loyalists that might be faithful to the iMac, but new users intrigued by the Mac are far more likely to consider a MacBook than an iMac.

So, you give the older Mac fans what they want: faster iMacs with a more attainable 24-inch screen that could entice an upgrade from an aging 20-inch model. And by keeping the prices the same, you preserve profits that can be used to invest in other areas that are growing, such as notebooks and iPhones.

And those are the areas where Apple can choose more aggressive pricing strategies, said Baker. That may not come in the form of the oft-rumored Apple Netbook, but Apple has already shown a willingness to reduce MacBook prices, cutting the price of the entry-level MacBook below that $1,000 barrier to $999 in October.

Apple probably isn't going to get much more desktop market share: the category is crumbling, customers who buy solely on price aren't going to even consider Apple, and the iMac is no longer as unique a product as it was two or three years ago, when most major PC companies were still mostly selling bulky towers in the desktop category. So why lower the price, and therefore the profits? After all, once you lower prices in the computer industry, it's almost impossible to go back.

Tuesday's launch might be the beginning of the iMac's fade into the back corner of your local Apple retail store. It's arguably the computer that brought Apple back from the depths in the late 1990s, but 11 years later, mobile computing is the norm.

(Credit: Apple)

Editors' Note: As of October 20, 2009, the iMac reviewed here has been replaced by 27-inch iMac models.

In addition to updating its Mac Minis this morning, Apple has new iMacs. Each of the four default models received an update, so we'll break them out below list-style for convenience, with new specs in bold.

$1,199 iMac

• 2.6GHz Intel Core 2 Duo
• 2GB 1,066MHz DDR3 SDRAM
• 320GB hard drive

• 256MB (shared) Nvidia GeForce 9400M graphics chip
• 20-inch LCD

$1,499 iMac

• 2.6GHz Intel Core 2 Duo
• 4GB 1,066MHz DDR3 SDRAM
• 640GB hard drive

• 256MB (shared) Nvidia GeForce 9400M graphics chip
• 24-inch LCD

$1,799 iMac

• 2.93GHz Intel Core 2 Duo
• 4GB 1,066MHz DDR3 SDRAM
• 640GB hard drive

• 256MB Nvidia GeForce GTS 120 graphics chip
• 24-inch LCD

$2,199 iMac

• 3.06GHz Intel Core 2 Duo
• 4GB 1,066MHz DDR3 SDRAM
• 1TB hard drive

• 512MB Nvidia GeForce GTS 130 graphics chip
• 24-inch LCD

As you can see from all of that bold text, this is a sweeping update across the entire iMac line. A few specs stand out, though. At $1,499, the 24-inch model is the most affordable all-in-one at that screen size from a major desktop vendor in the U.S. The larger hard drives are, of course, also welcome, and the roster of Nvidia graphics chips--in particular the higher-end models with dedicated GPUs--improve the iMacs' outlook for video editing as well as gaming. No other all-in-one approaches those specs at their corresponding prices right now.

(Credit: Apple)

We're glad to see the iMacs' CPU clock speed go up almost across the board as well, but Apple has also left itself vulnerable by sticking with dual-core CPUs. We'd agree that dual-core chips are generally preferable for single application performance, but quad-core excels at multitasking. Both Sony and Dell offer quad-core chips in their all-in-ones, and we suspect they'll play up that advantage as they refresh their own lines.

As with the Mac Minis, the new iMacs also come with updated ports on the back side. You get the typical USB 2.0 jacks, FireWire 800 output, and Gigabit Ethernet, but the Mini DVI port has been replaced by a Mini DisplayPort. As Mini DisplayPort is unique to Apple displays right now, you'll need to purchase an adapter if you want to connect a standard DVI monitor, at least until other monitor vendors catch up.

Related coverage:
• Apple overhauls iMacs, 24-inch models more affordable
• Apple finally refreshes Mac Mini with updated specs

Updated 8:25 a.m. PST with analyst note.

As expected, Apple announced desktop updates on Tuesday with a focus on energy efficiency.

There are new Mac Pro high-end desktops powered by Intel's Nehalem-based Xeon processors, new and more graphics-intensive Mac Mini machines, and updated iMacs that offer the lowest price yet on these consumer desktops.

Here are the new ports on the updated Mac Mini.

(Credit: Apple)

All the new machines meet the requirements for Energy Star 5.0 certification, which kicks in this summer.

The new Mac Pro is priced at $2,499 for the quad-core version and at $3,299 for the eight-core version, with the Nehalem-based Xeon processors running at up to 2.93 GHz. The interior of the machine has been cleaned up to make physical expansions easier.

The new iMac all-in-one desktop offers a 24-inch screen and is priced at $1,499, the cost of Apple's previous 20-inch iMac. The 20-inch model now costs $1,199.

The 20-inch version comes with a 2.66 GHz processor, a 320GB hard drive, and 2GB of RAM expandable to 8GB. The 24-inch model offers processor speed options of 2.66 GHz, 2.93 GHz (for $1,799), or 3.02 GHz (for $2,199). The 24-incher comes with a 640GB hard drive and 4GB of RAM expandable to 8GB.

As for the new Mac Mini, the big upgrade: the Nvidia GeForce 9400M integrated graphics chip, which Apple says will improve graphics performance as much as fivefold. The machine (sans a monitor) costs $599 for a lower-end edition (1GB RAM, 120GB hard drive) or $799 for the higher-end (2GB RAM, 320GB hard drive).

The Mac Mini is the "world's most energy efficient desktop computer," Apple Chief Operating Officer Tim Cook claimed in a statement. Cook is currently at the helm of the company while CEO Steve Jobs is out for six months for health reasons.

Analyst Maynard Um at UBS offered this assessment of Tuesday's news:

Not surprisingly, Apple unveiled a much anticipated refresh to its desktop line, though the timing was earlier than we expected. Updated iMac & Mac mini are available immediately with the new Mac Pro available next week. Though the new Macs may provide some boost to end of qtr Mac units (enthusiasts and reseller channel), investors may have been hoping for greater price cuts at the low end.

Rumors of new Apple desktop computers were first reported at AppleInsider.