Culture

Apple may unveil new notebooks at Macworld

As far as some Mac enthusiasts are concerned, the real millennium celebration is still two weeks away.

As far as some Mac enthusiasts are concerned, the real millennium celebration is still a week away.

Macworld, which runs from Jan. 5 through 8 in San Francisco, is traditionally Apple's showcase for displaying new products. Last year, for instance, it used the event to debut more iMacs, in five colors. Although it is uncertain what exactly will be announced or discussed officially at the show, sources have said that dual processor servers as well as a PowerBook for business users are in the works. Apple is also working on new iMacs, sources have said.

In any event, the show coincides with Wall Street's bullishness on the company, which many wrote off for dead a couple years ago. Apple's stock hit new all-time highs during the year, at one point reaching 118 before moving back to today's 98.19, more than double where it started this year.

While some analysts are predicting only a moderate gain--most of a possible run-up could coincide with the rise of the Nasdaq exchange--others such as Salomon Smith Barney's Richard Gardner think Apple is poised to announce a stock split and a continued rise. So far this year, anticipation of a split has helped propel the stock prices of many other companies.

Products, however, will likely be the focus of the show, a subject that Apple has declined to comment on.

"We don't comment on rumors or speculation," said an Apple representative.

Apple is working on a revised notebook design that it hopes will be lighter and faster than the current models, said sources. The recently introduced G4 chip won't be built into the new notebooks just yet--Motorola has said the chips currently consume too much power to be used in mobile applications.

"I'd be amazed if you don't see a new PowerBook," said Lou Mazzuchelli, financial analyst with Gerard Klauer Mattison. "[The PowerBook is] getting a little long in the tooth. It's due for some periodonture," he added.

Dealers might also be amazed. Apple told some dealers that no new PowerBooks or iMacs would be announced in January, according to sources close to the company. Mazzuchelli noted that Steve Jobs, Apple's interim CEO, might still decide to show the new notebook and tell people it will ship later, as he has done with various other models such as the iBook consumer portable.

Apple had dual processor servers ready to go for the Seybold trade show in August but held back because of a shortage of the then new G4 processors.

Adding servers to the lineup is an essential component to a successful strategy for reaching the growing small business market, which some calculate to be a $50 billion-a-year segment. The company has been slowly adding the pieces of a small business offering but is lacking some of the applications desired by certain vertical market segments, said Mazzuchelli.

Apple has a small business services Web site that offers information on special leasing programs and hardware and software bundles. Mazzuchelli said he thinks that a more formal announcement of such a strategy will come later once iMacs with the 17-inch screens that are reported to be in development become available.

Will Apple elaborate Net strategies?
But hardware is not the main surprise Apple could deliver. Analysts are still hoping to see Apple elaborate on an Internet strategy because services are an area where a hardware maker can more easily boost profit margins.

Apple has already delivered one part of the Net strategy--the iMac. The company claims that some 90 percent of iMac owners connect to the Internet. However, the ongoing revenue from service fees and any slices of e-commerce revenues are being lost to the service providers and partner companies. Apple needs to expand on this component of its product strategy to give analysts a better idea of the company's growth prospects.

One possibility is that Apple will set up its own portal site and use it in conjunction with related technologies to make online shopping and Web surfing easier. Last year, the company registered the domain names MyApple.com and MyApple.net, which could potentially serve as the name for Apple's portal.

Apple could also use other sites to boost traffic--and revenues--through the portal. One such site is its QuickTime "Showcase" site, a competitor of RealNetworks' Web site that features multimedia content such as movie trailers, news reports from around the globe, and music videos.

On the other hand, analysts have been hoping to hear about an Internet strategy since before July. Mazzuchelli thinks the strategy is taking time to evolve because it will be more complete than just reselling Internet access under Apple's own name. He doesn't expect AOL, which negotiated an extensive arrangement with Gateway in October, to be doing a deal with Apple, however.

"I just think it's because there are different visions about who owns the customer relationship down the road," he said. The Gateway-AOL deal features extensive arrangements of profit sharing and even joint product design, he noted, and since Apple may already be further down the road in some areas, it may not be as willing to share profits.