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High hopes for Macworld

Early buzz on Apple expo kindles expectations of a budget iMac and a flash iPod.

Ina Fried Former Staff writer, CNET News
During her years at CNET News, Ina Fried changed beats several times, changed genders once, and covered both of the Pirates of Silicon Valley.
Ina Fried
6 min read
If the rumor sites are even half right, Apple Computer is about to release a bumper crop of gear.

Among the products Apple CEO Steve Jobs is expected to introduce at the Macworld Expo in San Francisco this week are a flash memory-based iPod, an office productivity software package called iWork and a low-end iMac in the $500 price range.

Historically, Macworld has been Apple's prime venue for presenting new products. It was at Macworld Expo in 2002, for example, that Apple debuted the original flat-panel iMac. More recently, the company has tended to spread out its product launches, in part to keep the shelves of its retail stores fresh. This year may represent something of a return to the old style.


What's new:
Apple is expected to unveil a flurry of gear at this year's Macworld: a flash memory iPod, an office productivity software package called iWork and a low-end iMac.

Bottom line:
This year's Macworld is opening to feverish anticipation. With Apple riding high on the monumental success of the iPod, Wall Street is hoping the company can convert some iPod buyers into Mac users.

More stories on Apple Computer

Piper Jaffray analyst Gene Munster said the hype for this year's Macworld is particularly strong, coming not only from Mac fans but from Wall Street and the mainstream media. "It's through the roof," he said.

Apple stock, which has steadily risen in the past year, soared further in the first days of 2005, nearly touching $70 a share. Much of the enthusiasm has come from skyrocketing iPod sales, with analysts projecting that the company may have sold 4 million of the personal music players during the holiday shopping season.

With the Macworld announcements, Wall Street is looking for Apple to prove that the iPod is not a one-hit wonder and deliver on predictions that it will convert some iPod buyers into Mac users. A low-end Mac could help Apple in those efforts.

Rumors always swirl before Macworld, but this year, legal maneuverings by Apple give the hearsay more bite. The company has sued several unnamed people for leaking information and has also taken legal action against one of the sites itself.

In the latter lawsuit, Apple specifically calls out Think Secret's articles on iWork and the sub-$500 G4-based iMac, as well as updates to iLife and a new music device code-named Asteroid that would allow musicians to plug their analog instruments into a Mac.

Apple claims in its lawsuit that the postings contain Apple trade secrets, though specifics are not given. Apple has declined to comment on which products it will roll out at Macworld.

While the suit indicates that Apple is working on such products, nothing in the suit states specifically that the gear will be introduced at Macworld.

Abuzz about Macworld
High hopes for this year's Apple
show include a low-end desktop
and a flash-based iPod. Here's
what could be on the agenda:

Apple office software seems
(Jan. 4, 2005)

A new iMac for under $500?
(Dec. 31, 2004)

Will Apple flash iPod rock market?
(Dec. 20, 2004)

Apple details plans to Spotlight
desktop search
(Nov. 10, 2004)

Apple strikes cell phone music
(July 26, 2004)

In addition to the lawsuit, there are other indications that the iWork rumor, in particular, is true. Apple has trademark applications pending for both iWork and Pages, the name of the word-processing program the company is said to be preparing. Also, small Mac developer IGG Software changed the name of its iWork application to iBiz. According to Think Secret, iWork would consist of Pages as well as a revamped version of Keynote--Apple's presentation program.

A $500 Mac would represent a bold move for Apple, which has largely stayed out of the low-end PC market in recent years.

The current low-end Mac is the eMac, an all-in-one built around a 17-inch CRT monitor that sells for $799. The rumored new model would come without a monitor.

A flash-based iPod, though widely expected for some weeks now, also represents a big departure for Jobs, who, in the past, criticized flash MP3 players as devices that people buy but never use. Since Jobs made those comments last year, however, flash memory prices have continued to fall, paving the way for devices that can hold far more than the hour or two of music typical of such devices.

Such a player would also help Apple keep building on its tremendous growth for the iPod line, whose sales seem to double every quarter. Bear Stearns analyst Andy Neff said in a research note last month that Apple could sell 6 million flash iPods in the current fiscal year and 13.5 million the following year.

Think Secret said Apple is likely to introduce a 1GB player for $149, with a 2GB version also quite possible.

Jobs could also show off the first iTunes-compatible phones, developed as part of a partnership with Motorola. Motorola execs discussed the phone at last week's Consumer Electronics Show in Las Vegas, and Apple executive Eddy Cue said last month that Apple was pleased with progress on the phones, which are due out in the first half of this year.

Apple is expected to update its iLife suite,

which includes programs such as iPhoto, iMovie and GarageBand. It is unclear whether the move is related to a GarageBand update, but Apple said on Monday that it has discontinued its standalone Soundtrack movie scoring program. The program continues to exist as a feature within Apple's high-end Final Cut Pro HD movie-editing program.

Piper Jaffray's Munster said he believes that a flash iPod is likely, as is an upgrade boosting the capacity of the iPod Mini from 4GB to 5GB. However, while he said he believes that Apple is working on a low-cost Mac, he thinks it most likely will debut later this year rather than at Macworld.

As a result, some people may walk away from the show disappointed, Munster predicted.

But even if Mac fans don't get everything they want on Tuesday, Munster said he expects Wall Street to get better-than-expected results when Apple posts earnings on Wednedsay.

In addition to the rumored new product introductions, Jobs is likely to spend a fair amount of time on Tiger, the next version of Mac OS X. When Apple unveiled the latest cat last June, the company said the OS would come out in the first half of this year. Jobs could well announce a specific date for that release, as well as pricing and other details.

While the biggest announcements will be those from Apple itself, Macworld will produce plenty of other news. One of the more popular Mac add-ons is Elgato's EyeTV, which turns the Mac into a TiVo-like device capable of recording video programs onto a hard drive. A current version supports recording of over-the-air high-definition programs, but the company is expected to unveil a version at Macworld that will enable the recording of high-definition cable as well.

Elgato's product is important for the Mac platform because Microsoft has a version of Windows XP--Windows XP Media Center Edition--that bundles TV-recording features. Apple, meanwhile, has shied away from that realm, with Jobs saying he sees a limited market for watching television on a computer.

Drive maker LaCie is also announcing that it will offer drives with LightScribe, a technology developed by Hewlett-Packard that allows labels to be etched onto CDs and DVDs through the use of a laser built into the drive. Last week, HP announced that LightScribe would be available on its PCs this month, as well as later this quarter from third-party drive makers such as Royal Philips Electronics and BenQ.

And what would Macworld be without a protest? Past Apple events have seen demonstrations or threats of demonstrations from people unhappy about their iBooks, as well as from disgruntled Mac dealers. This year, an environmental group is targeting Apple for its policies on recycling old gear.