With record market-share gains, a surging market capitalization and gobs of cash on hand, 2007 will be a tough act to follow for Apple. Yet based on the company's fourth-quarter financial guidance -- and what looks to have been a stellar holiday season -- the Cupertino, California, company seems more than ready for the challenge.
At the Macworld Conference and Expo in San Francisco on Jan. 15-18, we'll get our first glimpse of what Apple has in store for 2008. Apple is traditionally tight-lipped about its plans, and rumors are thick in the weeks leading up to any of the company's big events. Yet there's one thing analysts who cover Apple agree on: This year's Macworld will likely focus on upgrades and tweaks rather than breaking new ground. Expect the company to fortify its existing product lineups with redesigns, firmware updates and more deals with outside parties -- specifically movie studios.
We'll have to wait for Tuesday's keynote by Apple CEO Steve Jobs to see which rumors stick and which don't. In the meantime, here's a taste of what (possibly) could appear at Macworld.
The addition of rental movies to iTunes may be one of the major announcements slated for the Stevenote on Tuesday. Someone's got loose lips, though. According to reports, Jobs will announce the ability to rent movies from at least one studio, 20th Century Fox, during Macworld. Disney, which currently sells movies through iTunes, is also said to be close to reaching a similar deal with Apple. While pricing schemes and rental timelines remain unknown, movie rentals would be a good start in reviving sales of the lackluster Apple TV, if the company can convince enough studios to offer their content.
In addition, 20th Century Fox has reportedly agreed to use Apple's FairPlay DRM and will include a digital file protected by FairPlay in its future DVD releases. This will allow DVD buyers to transfer a copy of the film from the disc to computer and iPod without the need for additional ripping software. Fox tried this earlier in the year with Microsoft Window's DRM, but the system doesn't work with Macs or iPods.
Along with movie rentals, support for high-definition content will be critical for Apple's video ambitions. A client report released by American Technology Research's Shaw Wu says Apple is set to begin including Blu-ray drives in a handful of Macs.
Wu expects the announcement to be made at Macworld and that Apple's line of Mac Pro workstations will likely be among the first systems to include Blu-ray drives. That announcement may be retroactive: On Tuesday, Apple debuted new Mac Pros, sans Blu-ray drives.
This is by far the rumor with the longest legs. Curiously, it started out as two separate rumors. Murmurs that Apple would be introducing an ultraslim, flash-based laptop at Macworld started circulating months ago. Shortly thereafter, the company was also said to be working on an internet tablet of sorts, or a kind of giant iPod Touch on steroids.
Late last year, the two devices became one, at least in some analysts' minds. Blackfriars' Carl Howe speculates that Apple will indeed offer a new MacBook in the form of a MacBook tablet. According to Howe, this device will come with a reversible touch-enabled display, a multitouch keyboard and sexier packaging and materials like colored aluminum.
Playing up the success of what some have already dubbed the fastest-selling consumer electronics device in history will be an obvious move for Apple. Sources have suggested that Apple is planning to announce that it has sold 5 million iPhones worldwide since the phone's release in June 2007. If true, that means the company is exactly halfway to meeting its stated goal of moving 10 million of the devices by the end of this year.
To help pique the interest of those who haven't yet bought an iPhone, Apple will offer more native applications. The iPhone software-development kit will be ready for third-party developers sometime in February, so Macworld is a logical time to preview a handful of these applications.
As far as what developers are expecting from the SDK, most are hoping for an Objective-C, Cocoa-based development kit, says Daniel Jalkut, founder of Red Sweater Software. Jalkut says the kinds of apps people are going to want and expect will require access to the device's core features, something that hasn't been possible with Apple's existing web-centric approach to iPhone applications.
"What it comes down to is right now is, the universe of ideas that are available to developers is limited by browsers. We all have our own imagination we want to let loose on platform," Jalkut says.
Apple itself seems prepared for the onslaught of native applications, too. Leaked pictures and a video of the upcoming 1.1.3 iPhone firmware update show the ability to drag, drop and rearrange application icons on your home screen -- which would make sense if Apple is expecting the home-screen real estate to fill up quickly with new applications.
Speaking of aluminum, the metal will almost certainly play a dominant role at this year's expo. By the looks of it, the whole black-and-white coloring scheme at Apple seems to be on its way out. How fast this transition will take place is still a matter of speculation, but the trend is clear. The company recently got rid of the white iMacs in favor of a new brushed-aluminum version, and it appears to be doing the same for its iPod lineup.
It also happens that aluminum is more eco-friendly then the molded plastics Apple currently uses for its MacBooks. And with Steve Jobs vowing to completely eliminate the use of PVC plastics and brominated flame retardants by the end of 2008, the move to aluminum could be a key part of that plan.
Apple TV (aka the device that Apple forgot) is most in need of content, not a cosmetic upgrade. That said, over the last couple of months we've heard curious whisperings about an LCD screen that will supposedly be included in a revamped version of the device. That could be announced at Macworld. Granted, that addition would be a bit of a head-scratcher given that the more appealing move would be to simply combine the Mac Mini and Apple TV into one device and sprinkle in rentals, HD content and better codec support. Nevertheless, most analysts expect some update to the languishing Apple TV sometime during 2008.
"I definitely think it's going to be more of an evolutionary year (for Apple)," says Yankee Group analyst Josh Martin, who, along with others, expects the focus to be on the Mac lineup. That includes the possibility of a new addition to the MacBook family in the form of an ultraslim, flash-memory notebook, possibly sporting Intel's new Penryn processors. It could also entail a major redesign to the lineup as a whole -- something that hasn't happened since Apple moved to Intel processors two years ago.
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