What's Apple's Mystery Product?

According to AppleInsider, Apple's chief financial officer Peter Oppenheimer revealed that the company will make a key "product transition" that cuts back on its profit margins to help shut out rivals.

As such, the forums and chat rooms are busily dissecting each and every word and attempting to apply them to Apple's product line. Are we talking new MacBooks? New desktops? New iPods? What?

Personally, if Apple's serious, and if they REALLY wanted to take a crack at an aging product line with the highest price and fattest margins... I'd look at the Cinema Displays.

Take the 20" LCD display as an example. Plenty of them from Samsung and ViewSonic and all of the other major brands on sale on Amazon in the $250 to $350 price range. Apple's version? $599. Double the price of almost all of them.

You can get a 24" Widescreen LCD Monitor by Hewlett-Packard for just $464. Apple's 23", however, is $899. Still twice as much money.

HP's 30" monster can be had for $1,410. Apple's 30" Cinema Display is closer here at $1,799, but that's still a $400 premium. And not only is the HP cheaper, it has both a built in DVI switch and USB 2.0 hub.

Apple needed to upgrade their display lineup years ago. In fact many, including myself, expected them to do so LAST year when the dropped the stand-alone iSight camera from their product line. Didn't happen.

According to Oppenheimer, the new product will continue to have "technologies and features that others can't match."

So build in touch screen technology, an iSight camera, USB 2.0 ports, a DVI switch, and heck, throw in a TV PIP tuner while you're at it. (Okay, the last bit may stretching.)

And then price them COMPETITIVELY.

After all, does it make sense for a $3,000 Dual Quad-Core tower to have less capability in the display department than a mere $1,200 iMac? To have a super-powered machine that can't even do a video chat?

And reasonably priced monitors at the lower end would also make the Mac mini's a lot more attractive to the budget-minded entry-level buyer.

In fact, this needs to be done regardless of whether or not it's Apple's "mystery" product. Come on Apple, make a great set of monitors at an affordable price.

You can always make up the profit in iPhones...

[via AppleInsider]

Comments

[James R. Taylor]

I agree. Apple's current monitor lineup is an expensive joke.

[Jared]

I don't think monitor pricing will affect Apple's gross margin on the whole (they sell a lot more iMacs and MacBooks than monitors with Mac Pros or Mac minis), although I agree that it would be nice if they reduced the price of the monitors a bit since I really want a 30 incher.

A new low end Mac (probably laptop?) would significantly affect their margin since so many people are switching to Macs and this would entice and satiate a lot of the "I would buy a Mac but they are too expensive" crowd. Macs make up a large proportion of Apple's revenues so I think this is likely.

In addition, I think a few price drops are obvious: the 8GB iPod nano is now priced the same as the 8GB iPhone, the 8GB iPod touch costs MORE than the 8GB iPhone, and ditto for the 16 GB iPhones and iPod touches. I'm hoping there is a drastic price drop on the touches (and all iPods) and that they introduce a new 64GB iPod touch for a reasonable price ($399, leaving the 32GB and 16GB touches at $299 and $199 respectively). When Apple says they want to pressure their competitors with technology that can't be matched, they are probably talking about the iPod touch and iPhone. Nothing comes close, and a competitively price line of iPod touches will totally outpace their competitor's offerings. Consider this: the 8GB Zune is priced roughly the same as the iPod nano (On Amazon, the Zune is $162, the iPod nano $185). Imagine if an 8GB or 16GB iPod touch sold for $199. Who in their right mind would buy a Zune or any other player? Unless they want something smaller (physically) or cheaper, in which case it's possible Apple may eliminate or seriously drop the price for nanos (and shuffles), which would lower margins (what they claim will happen this coming quarter) and force all the iPod knockoffs to drop prices too.

I see Apple's long term market penetration for the touch platform as more important than margins and I suspect they understand that lower prices will really cement the iPhone/iPod touch platform as the dominant mobile development platform, like Windows on the desktop or in business.

Apple is really good at all this stuff: timing (including seasonal), pricing tiers/price discrimination and ensuring clear product choices. You might say that this is their bread and butter. Right now the iPod/iPhone price lineups are convoluted and it is obvious Apple needs to fix that. Dropping iPod prices also makes sense for their long term strategy and overall growth, especially since six months ago investors were worried that iPod growth was slowing. Bearing the torch with a new mobile development platform on affordably-priced devices will kick off yet another growth phase for Apple, making investors happy in the end, despite the short term dip in margins.

[Eric Gibbon]

Cinema displays are not a sufficiently big product to warrant a special event or to get too excited about. I love them, they are too pricey and of is time to update them and drop price a bit, but I imagine this would be done to go with a Mac Pro or Xserve update. I have compared the Cinema displays with 23-inch Dells and I would go for a Cinema display at more money and less ports as I consider the quality to be far superior.