Apple

Is Apple giving its last remaining MacBook a makeover?

(Credit: CNET)

Apple is getting ready to introduce a slimmer, lighter MacBook, according to an Apple blog citing unnamed sources.

Apple's 13-inch notebook in currently undergoing an industrial redesign that will also feature new internal architecture, according to a report on AppleInsider. The redesign, which would be the entry-level machine's first overhaul in three years, is expected to be unveiled in the coming months, the site reported.

At its annual Worldwide Developer's Conference in June, Apple introduced new versions of its 13- and 15-inch notebooks that use the same battery technology found in the 17-inch models. The rebranding of the 13-inch unibody MacBook to the MacBook Pro line left the polycarbonate white plastic casing as the only true "MacBook."

That move left many speculating on the lone remaining model's chances of survival. But the MacBook remains very popular with consumers. AppleInsider notes that Apple's online store says the white MacBook is the second best-selling model behind the iMac.

Indeed, Mac sales have been very impressive lately. Data provided by market research firm IDC showed the entire PC industry down more than 3 percent for April, May, and June, but Apple sold 4 percent more computers that quarter than it did during the same quarter in 2008. The company's laptops were responsible for that surge: MacBook and MacBook Pro shipments were up 13 percent.

However, Apple typically unveils new or redesigned products at media events, but after the September 9 music event, Apple has no such events on the calendar for the rest of the year.

It's been an eventful quarter for Apple, but can it keep up its momentum? We'll find out Tuesday when Apple releases its fiscal third-quarter earnings.

Recent company news has been mixed, but certainly more positive than negative. During the quarter, which ended June 30, the company released the third-generation iPhone, the iPhone 3GS, which by all accounts, was a blockbuster. But its Mac and iPod divisions didn't experience the same kind of runaway success. Apple has had a string of successful quarters, even in the midst of the worst economic environment since the Great Depression.

One thing the company did do, in a nod to consumers' tight budgets, was lower prices on its Mac notebook lineup. On Tuesday we'll see if it was able to continue attracting shoppers.

Analysts are expecting revenues for the quarter between $7.88 billion and $8.44 billion, and earnings per share between $1.02 and $1.31. Apple itself--which always gives guidance on the low side--is anticipating revenue between $7.7 billion and $7.9 billion and earnings per share between 95 cents and a dollar.

Apple stock has jumped 21.4 percent, rising to $147.52, since its last earnings report in late April. Chief Operating Officer Tim Cook, who stood in for CEO Steve Jobs while Jobs was on medical leave for a liver transplant, has received high marks for keeping the company running smoothly in its leader's absence. Jobs has been back at work, at least part-time, since the end of June.

Apple announced it had sold 1 million iPhones worldwide in the first weekend the 3GS was on the market, and AT&T said the first day the phone was available marked the best sales day in the carrier's history. So while we know iPhone revenue will look good, Piper Jaffray says more specifically that it anticipates total iPhones sold for the quarter will be 5 million.

Mac revenue will show if price cuts are helping. Piper Jaffray analyst Gene Munster says Apple sold 2.2 million Macs during the quarter, and says it is getting a boost from the price cuts it applied when it upgraded its entire aluminum MacBook line to MacBook Pros. But recent counts from IDC, which only tracks Apple's sales in the U.S., showed that Mac shipments dipped more than 12 percent during this quarter. The entire PC industry was down 3.1 percent worldwide.

iPods' annual tuneup is expected in September, when it has taken place the past few years. The iPod business has also been slowing down a bit. Piper predicts sales to be down 7 percent from a year ago. But Apple has been increasingly focused on its iPod Touch, which has access to the popular App Store and is expected to get a reboot in September similar to the iPhone 3GS. With a camera and digital compass, the device can offer an even more compelling platform for playing games.

Expect analysts to ask lots of questions Tuesday about the economy. Though Apple has sailed through what seems to be the worst of it, its performance is an important bellwether for the rest of the industry. Intel and Dell both said last week that the tech sector is now looking up for the rest of the year. There will also be interest from analysts in more possible price cuts, and future products like the much-rumored tablet.

Apple also continues to put away cash. As Brian Marshall of Broadpoint AmTech pointed out, Apple added $800 million in cash during the last quarter, bringing its total to $28.9 billion. Only Cisco's $29 billion in cash is better among technology companies. Among computer makers, Hewlett-Packard has $12 billion, Dell $9 billion. So analysts are going to want to know if they're investing it in a new product, a new company, or giving some back to shareholders.

Click the photo for more pics of last year's iPhone launch.

(Credit: James Martin/CNET)

This post was udpated with information about AT&T store hours at 3:45 p.m. PDT.

Apple offered clarification Wednesday for when exactly the new iPhone 3G S will go on sale.

Though Apple Senior Vice President of Marketing Phil Schiller said during his keynote speech at the company's Worldwide Developers Conference that the phone will first be available in the U.S. and seven other countries on June 19, he didn't offer a specific time. The 3G S will go on sale starting at 8 a.m. (in all time zones) next Friday. We know that many stores will open early that day for the occasion.

AT&T Stores will open even earlier, at 7 a.m., just for those who have pre-ordered an iPhone 3G S from the carrier. Those who haven't will have to wait outside AT&T stores until 8 a.m. with the rest of the public.

As usual, we'll be following iPhone sales in various time zones. Will Apple fans stand in line for the third straight year? We'll find out. In the meantime, click the photo above for a gallery of very committed line standers from the 2008 launch of the iPhone 3G.

Apple's clearly onto something with its 24-hour store plopped down in a tourist hot spot.

The New York Post reports that as of sometime last year, Apple was pulling down $440 million a year in sales at its Fifth Avenue Apple Store in New York City. The numbers surfaced in the paper's investigation of empty retail space along Fifth Avenue.

The Fifth Avenue Apple Store in New York City.

(Credit: Marguerite Reardon/CNET)

Even if it is a high-end retail outpost for Macs, iPhones, and iPods, that's an impressive amount of money coming in when seemingly every retailer was clobbered by the arrival of the current recession. By comparison, the SoHo Apple Store rakes in about $100 million per year, according to the Post. And one of Apple's newest locations, in the prime shopping district of the ritzy California coastal town of Santa Barbara, is expected to pull in $20 million annually.

It's interesting insight into the company's flagship location, since Apple does not break out individual stores' take. The company did report in its second-quarter earnings filing that its 252 stores worldwide brought in $1.47 billion collectively for the quarter.

All of this explains why the company has not stopped investing in its retail presence. Apple's senior vice president of retail, Ron Johnson, said last week that 100 of its stores will be remodeled this year to allow for bigger displays and room for customer training courses.

The shopping frenzy at the tourist-clogged Fifth Avenue location isn't like to abate anytime soon, particularly if Apple releases new iPhone hardware next month, as is widely expected.

The newest addition to the iPod lineup may have slightly boosted overall sales numbers for April.

(Credit: Apple)

Just like February, April was a gloomy month for Apple retail sales of Macs and iPods, according to data gathered by the NPD Group.

Piper Jaffray analyst Gene Munster analyzed the monthly data from NPD's April roundup of Apple sales. He said in a research note Monday that April Mac sales were down 1.8 percent from a year ago. Assuming similar patterns for May and June, that should lead to total quarterly sales of 2.1 million to 2.3 million Macs, which would be an 8 percent to 16 percent decline in unit growth, he writes. If that does happen, it would represent the second quarter in a row of falling Mac shipments. Munster puts a positive spin on it, saying that the drop in sales was not as bad as expected given the current shape of the economy. Plus, Apple's situation appears rosy compared to its PC brethren, whose growth collectively was negative 7 percent in the most recent quarter.

It also appears iPod growth is headed downhill. Munster points to 9 percent declines in iPod sales in April, which puts the business on track for 9.5 million to 10.5 million units for the quarter, or anywhere from a 5 percent to 14 percent dip. That's despite the introduction of the updated iPod Shuffle, introduced in March.

Declining Mac and iPod sales amid Apple's continual overall solid performance only serve to underscore the importance of the iPhone to the company's bottom line.

This week Apple made a very small, but important tweak to the user rating system on its iTunes app store. It now shows which version of an application the user was running when they wrote the review. This has been applied retroactively, so that reviews written before the change will show which version the users had installed at the time they wrote it.

This is important on two levels, with the first being how transparent user reviews are. No longer do you have to wonder what version a user had installed when they said there was a problem, or broken feature. If you find several reviews chiding a bug that has since been fixed, it may lead you to dismiss them and make a purchase, which could end up bringing in more sales for both Apple and the developer.

It also doubles as a permanent record of application updates, that is assuming the user reviews make mentions of new or updated features. When an application is updated the developer can put out a list of what's been fixed, added, or removed, however Apple does not offer users a way to go back and review a change log. Sites like AppShopper.com have started to build an archive for this very purpose, and with this update this is the closest thing users have received.

In addition to showing you which version users had installed from the mobile version of the App Store, Apple has also built this into the latest version of iTunes. Here, as usual, iTunes users get an extra layer of depth compared to their mobile brethren in being able to sort the reviews by version number. Unfortunately, Apple does not let you skip to a specific version, it simply puts them in order, which forces you to skip through several hundred pages to get to the version you're looking for.

This is a promising sign of further changes coming to App Store reviews, but on the mobile side it's still a long ways off from offering some of the great sorting features iTunes users are able to get on the desktop.

App reviews on both iTunes and the iPhone's App Store now show which version fo the application the reviewer was running on. Click to enlarge.

(Credit: CNET Networks)

Despite public statements to the contrary, Apple did lay off around 50 enterprise salespeople last week, CNET News has learned.

Sources who wished to remain anonymous for fear of reprisal confirmed reports by Valleywag and 9to5Mac.com that roughly 50 salespeople were let go by the company for "business and economic reasons," according to one source. An entire sales group based in Austin, Texas, was let go as well as workers in Cupertino, Calif., where Apple is headquartered. Those affected were given severance packages and the opportunity to apply for other jobs inside Apple.

Apple spokesman Steve Dowling, when asked Tuesday about Valleywag's report regarding the layoffs in the sales group, declined to comment. An unnamed Apple spokesman then told Silicon Alley Insider on Wednesday that the Valleywag report was not true, the same language Dowling used on Friday in a brief interview with CNET News to describe another report that Apple had laid 50 people off in its Mac Hardware and Pro Applications groups as well as the original report involving the sales group.

Reached on Monday, Dowling declined to comment on the situation beyond the statements provided last week.

However, the layoffs in the sales group did happen, according to several sources who were brought into conference rooms in Austin and Cupertino last Tuesday and given white manila envelopes informing them that they had been laid off, amid plainclothes security officers. It's still not clear whether the Mac Hardware layoffs occurred on Friday.

The seeds for the layoffs began last year, when Apple began de-emphasizing its direct enterprise sales force in favor of a sales strategy that embraced resellers and channel partners as ways of getting its products into the hands of businesses. That shift, believed to come directly from Apple COO Tim Cook, started when former the Apple senior vice president of enterprise sales, Al Shipp, left the company. Shipp, now the CEO of software start-up 3VR, did not return a call seeking comment.

John Brandon, formerly the head of Apple's sales for the Americas resellers like Best Buy and Wal-Mart, assumed control of the group when Shipp left and began making changes. Under Brandon, Apple began to shift away from a sales strategy where representatives built personal relationships with business customers in favor of a channel business that will depend on resellers like Ingram Micro and possibly CompUSA to sell Apple products to business customers.

The decision does not seem to have been prompted by falling sales or poor performance within the group, rather a change in philosophy embraced by Brandon and Cook. But the enterprise group has never been the hot group inside Apple, famous for its consumer retail empire and led by Steve Jobs, a man who disdains much of the entrenched corporate IT mindset.

Apple's shift in its enterprise sales strategy isn't all that remarkable, but Apple's willingness to publicly deny that layoffs took place is another blow to its credibility, already having taken a hit this year over its handling of disclosures involving the health of its CEO, currently on a medical leave of absence until June.

Confirming that a few dozen enterprise salespeople had been laid off as part of a strategic shift--and not a downturn in business--probably would not have made that much of a ripple in the tech media, currently more interested in Apple-related topics such as Netbook rumors and Apple co-founder Steve Wozniak's debut on ABC's "Dancing With the Stars" later on Monday.

Although Apple has been considered one of the more resilient companies in tech after posting strong earnings in January, the continued economic decline is believed to be affecting Mac sales and has prompted some analysts to reduce their expectations for Apple's current quarter. Perhaps the company felt that anything that might be perceived as bad news could hurt its stock price, and since it didn't have to report the layoffs to the Securities and Exchange Commission because they made up a small fraction of Apple's workforce, it didn't have to acknowledge them, period.

Correction, 11:06 a.m. PST: This story initially misstated the day the report was released. It was Friday.

Update at 10:31 a.m. PST, with more information from the analyst report and a chart.

A J.P. Morgan analyst cut his financial estimates for Apple's fiscal second quarter and fiscal 2009 on Friday, pointing to expectations that its iPhone and Mac sales may be weaker than previously anticipated.

Apple fell as low as 7.3 percent in early morning trading Friday to $82.33 a share.

"We are lowering our estimates for the March quarter and beyond," Mark Moskowitz, a J.P. Morgan analyst, said in his research note. "The deepening global downturn is a driver."

Moskowitz lowered his quarterly earnings estimates to $1.01 a share from his previous estimates of $1.02 a share. And he dropped his quarterly revenue estimates to $7.62 billion from $7.72 billion.

And for fiscal 2009, Moskowitz cut his earnings estimates to $4.73 a share from $4.82 a share, and dropped his revenue projections to $32.98 billion from $33.97 billion.

In light of the weakening economy, Moskowitz also cut his estimates for Mac unit shipments to 2.19 million in the fiscal second quarter, down from his previous estimates of 2.39 million.

iPhone unit shipment estimates were also lowered to 3.4 million in the fiscal second quarter from Moskowitz's previous projections of 3.8 million.

"While a lot remains to the March quarter, inputs from our primary research contacts suggest that Mac and iPhone volumes had been trending below our prior expectations," Moskowitz noted in his research note.

Here's a look at Moskowitz's revised estimates for Apple's revenue, unit shipments per category, profit margins and earnings for the fiscal second quarter and fiscal year 2009:

(Credit: J.P. Morgan Securities)

In further elaborating on Apple's product line, Moskowitz notes in his report:

We acknowledge that there could be a channel fill benefit over the next 30-45 days related to the Mac refresh. While this is still a potential, we do not expect any fill period to fully counter the bigger issue of weakening PC demand in general. Apple's desktop line had been the last to be updated, so we think the company could partially offset the weakening demand environment for desktop PCs with potential buzz around new features and price points.

Looking ahead, we expect investors to key in on the iPhone new product funnel. with the Mac refresh out of the way and summer approaching, it is our view that investors expect a June launch of the next iPhone. We expect Apple to follow the iPod expansionary course with the iPhone over time. In other words, refresh the original form factor in the first two years or so and then introduce newer form factors. While only conjecture on our part, we expect the next iPhone addition to be a smartphone but one with a smaller footprint. We do not expect too much fluctuation in the feature set or pricing, though.

The analyst also cut his price target on Apple's stock, predicting it will hit $100 a share by the December period, versus his earlier prediction of $102 a share.

Apple has been something of a golden child among makers of computers and consumer electronics. But now it, too, is showing at least a hint that the good times can't last forever.

In November, says market researcher NPD Group, sales of the company's Mac products slipped 1 percent from the same month a year ago, even as industrywide PC sales were up 2 percent, according to a report in the online edition of The Wall Street Journal.

The 24-inch Apple iMac.

Apple has been the pacesetter amid overall PC sales for some time. And it does continue to hold those honors, at least in laptop sales during November, the Journal reported. But NPD's numbers showed the company taking a serious hit with its desktop Macs, sales of which fell 35 percent.

Early reports from Black Friday, the traditional sales bump right after Thanksgiving, had indicated that Apple did relatively well--in part because of modest discounts--even among consumer worries about tough economic conditions.

Pricing of Macs versus other computers were likely a key factor in the November decline seen by NPD. The Journal cites Gene Munster, an analyst at Piper Jaffray, and others on "price sensitivity" among consumers:

Apple rivals like (Hewlett-Packard) and Dell offered discounts weeks earlier than usual this holiday season, dropping some prices by as much as 50 percent. Mr. Munster said since last December, the average Windows PC price is down 35 percent to 45 percent; in contrast, Apple has offered only modest discounts of 5 percent to 10 percent on its PCs, analysts said.

Still, the analysts cited seemed generally upbeat about Apple's sales prospects overall.