Does the Mac still matter?

Apple updates its top-of-the-line laptop, the MacBook Pro. In exclusive interviews, Apple executives explain why it was over four years in the making, and why we should care.

When he unveiled the iPhone in January 2007, Apple co-founder Steve Jobs made headlines with other big news. The company, which had become a household brand with the Macintosh, was dropping "Computer" from its name and would now be billed as just Apple Inc.

"We've added to the Mac and the iPod. We've added Apple TV and now iPhone. The Mac is the only one you really think of as a computer," Jobs told more than 5,000 cheering Apple fans at the Macworld Expo in San Francisco. "So we thought maybe our name should reflect this."

Nearly a decade later, that bet shows just how good Jobs was at seeing into the future. Apple has morphed from a niche computer maker into a consumer electronics juggernaut, with nearly two thirds of its $216 billion in annual sales now from the iPhone. The Mac, including laptops marketed under the "MacBook" brand, represents just 11 percent of revenue. Even so, those computers make up a healthy $20-plus billion a year business.

Those numbers are worth noting, given that Jobs started talking up the "post-PC" era in 2010, saying we'd eventually favor mobile devices over computers. And it goes some way toward explaining why die-hard Mac fans complain that Apple has been neglecting its computers and tinkering instead with the iPhone, iPad and Apple Watch.

Which brings us to today.

Twenty-five years and one week after Apple introduced the PowerBook, its first real laptop (the 16-pound Macintosh Portable doesn't count), CEO Tim Cook on Thursday unveiled a brand new architecture for its priciest and most powerful laptop line, the MacBook Pro. The news comes two days after Apple showed the latest signs of phone fatigue, reporting a drop in sales and profit as yearly iPhone orders fell for the first time since the blockbuster device hit the market.

How's that for timing?

Marketing chief Phil Schiller, software engineering lead Craig Federighi and top designer Jony Ive explained, in exclusive interviews earlier this week, why the Mac matters. Since they say it's so important to Apple, we asked them why it took four years, four months and 16 days to deliver what they call a "milestone" and a "big step forward" for its top-of-the-line laptops.

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"The calendar isn't what drives any of the decisions," Schiller says in a 90-minute briefing at Apple's headquarters in Cupertino, California. "We challenge the teams to do great work and sometimes that great work can be done in one year, sometimes it takes three years.... What we really care about is creating new innovations in the Mac and continuing the story that has really defined Apple for so many years."

The right touch

The latest story about the MacBook Pro includes lots of noteworthy adjectives, including thinner (millimeters have been shaved off) and lighter (half a pound less than the current models). The bezel around the screen is also narrower, so designers could pack the same 13-inch and 15-inch, high-resolution Retina displays into smaller aluminum bodies. And it borrows the Touch ID fingerprint sensor that the iPhone 5s pioneered to verify your identity and so you can buy stuff online with Apple Pay.

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But what this design will go down in laptop history for is a slim, multitouch strip that replaces the function keys at the top of your keyboard. The rumor mill has been calling it the "Magic Toolbar." Apple calls it simply the "Touch Bar."

Designed to work with Apple's MacOS Sierra software, that black OLED display lights up to serve a changing menu of buttons, control sliders, dials and even emojis geared to the app you're using. Ive, who says his team worked on it for at least two years, calls the Touch Bar "the beginning of a very interesting direction" that combines "touch and display-based inputs with a mechanical keyboard."

CNET reviewer Dan Ackerman says you should think of the Touch Bar as Apple's version of a touchscreen Mac -- without actually adding a touchscreen to the Mac.

"What's amazing is, it is just throughout the system," Federighi says, showing how the context-sensitive bar displays everything from the tabs you have open in Safari, to your calculator and strips of images from the video you're watching. It also works with software from third parties like Adobe and Microsoft.

"No app went untouched," Federighi adds.

Separate and equal

A Touch Bar instead of a full-on touchscreen means disappointment for anyone hoping for iPads and MacBooks to merge into some new mobile gadget. That's just not happening, the executives insist. It's not because Apple can't make a touchscreen Mac. It's because Apple decided a touchscreen on a Mac wasn't "particularly useful," says Ive. And on the MacBook Pro, which gets progressively thinner and lighter, it could be "a burden."

"Doing something that's different is actually relatively easy and relatively fast, and that's tempting," Ive says, telling us Apple decided against touchscreens for the Mac "many, many" years ago. "You can become fairly comfortable that you have a design direction that's compelling. But if you can't work out how you can refine that" without compromising the final product, "you can still undermine a big idea."

Even so, Apple realizes it's hard to know whether to opt for a laptop or tablet, particularly when you compare, say, the 12-inch MacBook and comparably equipped 12.9-inch iPad Pro (with a detachable keyboard and stylus). They cost about the same at nearly $1,300.

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Even Cook questioned why anyone would buy a personal computer instead of an iPad Pro, saying in an interview last year, "Why would you buy a PC anymore? No really, why would you buy one?" Cook didn't answer our question about that.

Apple says it doesn't have a problem with the Mac and iPad overlapping, since each approaches tasks in a different way. They won't remove the iconic menu bar from the Mac desktop, for instance, just as they'd never add it to the iPad. "It is great to provide two different ways to solve some of the same things, but they also do very unique things that the other doesn't," Schiller says. "Having them separate allows us to explore both, versus trying to force them into one -- and only one -- model."

So instead of worrying about one device supplanting another, Apple has focused on features like "Continuity," which makes it easier for different devices to talk to each other. With "Handoff," you can, for example, start writing an email on your iPad and finish it on your Mac. You can even take calls on your Mac and use Siri voice commands on your computer.

That thinking explains why Apple is keeping two operating systems. MacOS is meant to be operated with a mouse and keyboard. Apple says it doesn't make sense to lean forward to touch your Mac screen. An iOS-powered iPad works best with fingers, which mean you can just lean back while using it.

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"We did spend a great deal of time looking at this a number of years ago and came to the conclusion that to make the best personal computer, you can't try to turn MacOS into an iPhone," Schiller says. "Conversely, you can't turn iOS into a Mac.... So each one is best at what they're meant to be -- and we take what makes sense to add from each, but without fundamentally changing them so they're compromised."

The money question

"Can you move your bottled water?" Schiller asks us, before whipping off a black cloth from a stark white coffee table to reveal two aluminum laptops -- one silver, the other space gray. They were so slim we didn't even know they were there when we'd put the bottle on the table.

The big unveil happens in a stylish black-and-white conference room directly above Apple's Town Hall center on One Infinite Loop, where the new MacBook Pro will make its official debut Thursday. Outside, banners emblazoned with the Apple logo for the "Hello Again" event flutter in the breeze.

Superlatives fly almost immediately: Thinnest, lightest, smallest and most powerful. It's an entirely new architecture, with a bigger touchpad and the shallow "butterfly" keyboard that first appeared in last year's 12-inch MacBook.

Apple also ditched its magnetic charger and USB ports for four USB-C plugs. A cool X-ray image of the inside shows off the quad-core processors, an Apple-designed T1 security chip, faster memory, revamped thermal architecture -- including new fan design and heat pipes -- and speakers that can deliver twice the dynamic range of sound.

But is that enough to get people who've never owned a Mac to buy one now?

All this oomph comes at a cost. The three new models cost at least $200 more than their older siblings. The 13-inch MacBook Pro -- which Apple says is the mainstream version -- doesn't have a Touch Bar but does offer the thinner, lighter, smaller unibody design. It's available now; prices start at $1,499. Prices for the 13-inch and 15-inch models with Touch Bar and Touch ID start at $1,799 and $2,399, respectively. They go on sale in mid-November.

In comparison, you can pick up the entry level MacBook Air, a 13-inch, 3-pound super thin laptop for $999. (Apple isn't updating that model and is discontinuing the 11-inch, $899 Air, except for use in schools.) Or you could opt for a lightweight, touchscreen Windows machine, like the $1,000 Razer Blade Stealth. There are even Google Chromebooks from a variety of manufacturers -- Acer, Asus, HP and Samsung -- that can be had for under $200 and are already challenging Apple in the education market.

Affordability is "absolutely something we care about," Schiller says. "But we don't design for price, we design for the experience and the quality people expect from Mac. Sometimes that means we end up at the higher end of the range, but not on purpose, just because that's what it costs."

The new laptops join a lukewarm computer market. For starters, people are holding on to their PCs longer, anywhere from four to six years. Most people in emerging markets, like China and India, are skipping out on laptops and going for smartphones and phablets -- one sign that Apple's post-PC era is coming true. The other sign: Computer shipments dropped for the eighth straight quarter in September, research firm Gartner said, calling it, "The longest duration of decline in the history of the PC industry."

Even so, Apple has been selling more Macs every year in the past decade, except in 2013 and 2016, according to data compiled by Statista.

"People will give them a big hearing because they're Apple," says longtime PC analyst Roger Kay of Endpoint Technologies Associates. "I can say almost without second guessing myself they will get some share bump just from introducing new products."

25 years in the making

Apple fans trace their devotion to the very first Mac, the all-in-one desktop launched in 1984 with what may be the most famous Super Bowl commercial in history. With its icon-based operating system and mouse, the $2,500 computer showed the world that Apple's Macs were fun and easy to use.

There have been plenty of Mac tweaks since then, including color screens, graphics boards and chips that enable wicked fast desktops to help designers, filmmakers and photographers unleash their creativity.

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"The Mac has always been about letting you work with ease," says Raines Cohen, who co-founded the Berkeley Mac User Group (BMUG), in 1984 and often invited Jobs to demo new products at its lively Thursday night meetings. "They put together the whole experience all the way through the stores. That sense of there's one ultimate responsible party and folks from near you to corporate are there to make it work. "

Getting a winning formula for a Mac laptop took a while longer.

After jettisoning the ambitious but unwieldy $6,500 Macintosh Portable, Apple got serious with 1991's PowerBook. With a built-in trackball, it was the first of several models to push laptop design. The iBook followed with brightly colored (tangerine! blueberry!) clamshell cases. The MacBook Pro, introduced in 2006, kicked off the MacBook lineup and marked the switch from IBM chips to Intel's more popular processors.

In between, Apple unveiled the iPod music player and iTunes store.

By the iPhone's debut, iPods and iTunes brought in half of Apple's revenue. Macs were no longer Apple's big moneymaker, accounting for only 38 percent of sales. That prompted Jobs to describe his product strategy as a "three-legged stool," with the iPhone, Mac and iPod supporting the newly minted "Apple Inc."

But lately, those three legs have morphed into just one -- the iPhone, which is slipping. Apple on Tuesday said it sold 45.5 million iPhones in its fourth quarter -- 5 percent fewer than the 48 million it had sold in the same quarter a year earlier. It was the third straight quarter of lower iPhone sales. Meanwhile, the number of iPads sold fell for the 11th consecutive quarter. The tablet now accounts for less than 10 percent of revenue.

The Mac, meanwhile, has been doing fairly well even as the rest of the market slumps. In the 2015 back-to-school shopping season, for instance, Apple sold a record 5.7 million Macs, up 3.4 percent from the prior year, even as the rest of the PC market dropped 7.7 percent, according to Gartner. That was the same time that Microsoft's Windows 10 software hit the market, hoping to revive PC sales.

Apple is now the world's fifth largest PC maker, Gartner says, with about 8 percent of worldwide market share. Yet the Mac accounts for at least half of the PC industry's profit, thanks to Apple's hefty price tags. People pay an average $1,200 to $1,300 for a Mac versus about $400 for a Windows PC, says Asymco analyst Horace Dediu. "Those are all very good stories for Apple."

The catch: Apple is "winning a bigger and bigger slice of a shrinking pie," he adds.

Mac, be nimble?

Schiller and Federighi are confident Apple's laptops will be around for at least another quarter century. "The idea of a laptop ... with a surface on the table that you can type on and a vertical screen has made sense for 25 years," says Schiller. "As far as our eyes can see, there will still be a place for this basic laptop architecture."

As far as others can see, though, the future of computing may not even be computers at all. It could be virtual reality, holograms, PCs on a "stick" that you can plug into any monitor or some other tech we can't even imagine. If that happens, the Mac as we know it may no longer exist. Apple says it's not afraid of that future -- or of disrupting its own products, as long as it's the one doing the disrupting.

Maybe so.

Still, Apple does have to worry about the losing its most ardent user base -- creative types -- to PCs and tablets running Microsoft's Windows software. "Apple has definitely left their customers behind in the last four years or three years in not having updated over that period," says Brian Hall, corporate vice president of marketing for Microsoft devices. "They're just following right now."

That's just what you'd expect Microsoft to say. But some creatives did tell us that Apple's slow pace of upgrades convinced them to abandon Macs. Dawnrunner, a San Francisco video production company, previously used MacBook Pros and Mac Pro desktops. It ditched them six years ago for Dell PCs. "We need nimble machines that are as powerful as they can be," CEO James Fox says. For Dawnrunner, the Mac fell short for processing production-quality video, fast.

The new 15-inch MacBook Pro is squarely aimed at impressing people like Fox, with faster graphics processing and ability to run two 5K monitors at the same time -- which Apple says is a first for any laptop. But it still lacks something other PC makers deliver to those high-end users, like OLED screens that boast better picture quality.

Fox says he'll evaluate this year's models, like he does with every update, to see if his team should go back to Apple. "If they come out with something amazing, I'm going to have to switch," he tells us. But "my gut says no way is it going to be that powerful."

Other creative types, like rapper T-Pain, do love their Macs. He uses a four-year-old, 15-inch MacBook Pro that's beefed up with faster memory and bigger storage for editing videos and composing music. He calls the MacBook "the computer" and says he'd love to have something like Touch ID to secure his creations. But even T-Pain doesn't think he'll completely replace his souped-up MacBook with the new model.

"There's so much I can do with the old one," T-Pain says.

No speed bumps

Near the end of our conversation, Schiller returns to the first question we asked him: Why the Mac still matters and why it took Apple so long to bring a new design to market.

"We didn't want to just create a speedbump on the MacBook Pro," he says. "In our view this is a big, big step forward. It is a new system architecture, and it allows us to then create many things to come, things that we can't envision yet."

That might not be completely candid. Ive tells us he and his team have spent the last 20-plus years learning and building from each new design. Along the way, they've experimented with anodizing and finishes, played around with new materials beyond aluminum (or "ah-loo-MIN-ium," as anyone who has listened to him narrating new product videos knows). And, of course, new ways to interact with Apple's products, like the Touch Bar.

"We unanimously were very compelled by [the Touch Bar] as a direction, based on, one, using it, and also having the sense this is the beginning of a very interesting direction," Ive said. "But [it] still just marks a beginning."

He won't tell us what it's the beginning of.

"It's difficult to talk without going into a lot of details... about things that we are working on," he says, with a laugh. "I don't really want to talk much more about it."

So does the Mac still matter?

It depends on your read of the MacBook Pro story. Apple insists it's the best laptop they've ever made. Now we'll have to see if the rest of the world agrees.

With reporting by Dan Ackerman, Rochelle Garner and Stephen Shankland.

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