The Cupertino, Calif.-based company also unveiled an upgrade program for owners of new PowerBooks released in October. Starting in mid-January, those Mac owners will be able to upgrade their notebooks' DVD drive or CD-rewritable drive to a combo unit for $299.
Many PC notebooks now ship with combo CD-RW/DVD drives, with at least one model selling for as little as $1,300. By not offering the same drives, PowerBook could be seen as a less-attractive option to some people, especially considering that Apple long ago abandoned floppy drives on its systems.
"DVD/CD-RW has been a big-ticket item for the higher-profile--a high-end user or business user that has wanted that flexibility," ARS analyst Matt Sargent said.
Such combo drives have been available for some time on high-end PC notebooks. "The problem is that is right where Apple wants to play in terms of audience," Sargent said. "The fact (that) they are behind the curve is disconcerting because some of those people may have chosen not to wait and switched to other vendors, like Dell."
Sargent noted that high-end notebooks are the fastest-growing segment of the overall portable market. "In fact, it's the only part of the market that's growing right now," he said.
In addition to including the combo drives, Apple doubled the memory to 256MB on the $2,299 entry-level PowerBook G4, which sports a 550MHz PowerPC G4 processor and a 20GB hard drive. The company also doubled the memory to 512MB in the $2,999 model, which features a 667MHz G4 chip and a 30GB hard drive.
Apple's lag getting combo drives on the PowerBook G4--also known as the Titanium because of its exterior--had to do with the company's original decision to use a slim, slot-loading optical drive, analysts said. Although the skinny drive allowed Apple to pack a 15.2-inch display into a one-inch thick, 5.4-pound case, it created logistical problems for combo drive manufacturers.
The biggest advantage of combo drives is that they offer the option of playing DVDs, archiving data and making music CDs. This is particularly important considering the DVD's ever-increasing popularity on notebooks, particularly higher-end models.
"This is something people have been longing for, and we've got it now on the PowerBook line," said Sandy Green, Apple's PowerBook product line manager. "People can now do their DVD playback and CD burning all in one system."
Combo drives are quickly carving out an important place alongside CD-RW drives, according to Gartner Dataquest. Manufacturers will ship 5.5 million combo CD-RW/DVD drives this year, the majority of which are for the notebook market. CD-RW drive shipments are expected to top 39 million this year. By 2005, combo drive shipments are expected to nearly match those of CD-RWs, at 89.3 million combo drives vs. 98.9 million CD-RW drives.
In addition to falling behind PC notebook makers, the Titanium also ran afoul of Apple's own marketing, which had been emphasizing digital music. The company's iTunes 2 software, for example, easily rips MP3s from CDs or allows consumers to make their own CDs. But PowerBook couldn't offer this feature without sacrificing DVD playback or by requiring people to buy an external CD-RW drive.
"We're seeing a more complete product now," Technology Business Research analyst Tim Deal said. "Considering Apple's software offerings are digital video and audio oriented, it's good to finally see a laptop that takes advantage of the full line of software."
Apple bulked up Titanium in October--the first major upgrade since the portable's introduction in January--with faster processors, big hard drives and beefier graphics. But people buying those models had to choose either a DVD drive or CD-RW drive.
The release of the models upgraded with combo drives could be important to boosting Titanium sales, which slumped badly during Apple's fourth fiscal quarter that ended in September. Titanium's year-over-year sales dropped 34 percent in units and 36 percent in dollars, according to Apple. And Titanium sales plummeted 46 percent in units and 51 percent in dollars, compared with Apple's third quarter.
"When Titanium was released, we saw a significant sales leap that quarter. It was a pretty hot item," Deal said. "Then we saw the introduction of the iBook and Titanium sales dropped off. This is a good way to invigorate sales, and I think sales will ramp up because of these upgrades."
Green wouldn't disclose sales figures so close to the end of Apple's fiscal first quarter, but she did describe the kind of people buying the Titanium.
"We have one segment which we call the creative professional, and that breaks down into people doing high-end graphics work...and a lot of people in the video-editing field," she said. "They can be out on location and can do their quick edits." Apple also sees demand for PowerBook among sales professionals and in the education market, where the wireless networking features are a big draw, Green added.
Despite doubling the memory and adding the combo drives, Apple did not raise the price of its new Titanium machines.
Deal praised Apple for the move. "Apple once again is increasing features and functionality, while keeping that price tag under control," he said.