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SPECULATION: Apple’s “Product Transition” can only be one thing…

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Apple’s “product transition” that was mentioned in the recent earnings call has generated quite a bit of speculation. The “never-going-to-die” iTablet rumor made its way to the top of the list, and some have also speculated that Apple is referring to their notebook line.

When you think about it, though – neither of these make a whole lot of sense.

First, the iTablet isn’t happening. I know a handful of people would really like it if it existed, but for right now, the product does not fill a mass market consumer need, and until it does it won’t happen. We have absolutely no proof that this device even exists anywhere beyond the minds of some hopeful Apple enthusiasts. If it did come out it would not be a “product transition” of any kind either. It would be a new product.

The suggestion of the notebook line would certainly qualify as a “product transition”, but Apple has also stated that they will be offering this “mysterious” product at a price the competition just can’t match.

That throws all notebooks and desktops out the window as far as I’m concerned. Apple does not sell cheap computers. They never have, and I doubt they ever will. If Apple is going to make a statement that they’re going to create a product that’s priced in such a way that the competition can’t match it – they’d have to release sub $500 notebooks and sub $300 desktops.

First, that would make for some crappy Macs. Second, Mac sales are at an ALL TIME HIGH – so why on earth would they go slashing the prices of their computer hardware line?

It just doesn’t make sense.

There is this other product, however, called an iPod. Apple has sold a gazillion of them, and the market for them is growing stagnant. It’s time to transition consumers to the next generation of iPod.

Apple has also recently purchased chip maker PA Semi, which will bring their chip making “in-house” and reduce overall production costs on mobile devices like iPods and iPhones.

So, what’s the “mystery product”?

Easy – it’s the iPod Touch.

Getting consumers to make the transition from their traditional iPods to the iPod Touch will not only bring sales back up to where they need to be, it will also increase the App Store install base, which will, in turn, increase digital purchases and App Store profits.

By offering an iPod Touch at an extremely affordable price Apple will gain an ongoing customer through the App Store, and bring iPod sales back up at the same time.

With all of that said, I fully expect to see an iPod Touch for $199 (or less) just in time for Christmas.

What do you think?

Kossi Adzo

Kossi Adzo

Kossi Adzo is a technology enthusiast and digital strategist with a fervent passion for Apple products and the innovative technologies that orbit them. With a background in computer science and a decade of experience in app development and digital marketing, Kossi brings a wealth of knowledge and a unique perspective to the Apple Gazette team.

24 thoughts on “SPECULATION: Apple’s “Product Transition” can only be one thing…

  1. I agree. The days of the click-wheeled, platter-based iPod are dead. It’s iPhones and Touches from here on out. I even see there being some sort of mini version to replace the nano and/or shuffle. Well, maybe they’ll keep the shuffle.

  2. For the computer part, I agree, BUT, the fact that the Mac Mini didn’t have an real upgrade recently, like the iMac, let me think this “mysterious product transition” is all about Mac mini…

  3. You’ve nailed it Michael. I couldn’t make sense of them doing much to the MacBack line right now, there is no reason for them to. But refreshing the iPods and lowering the prices on the hardware to drive profit on the iTunes store makes complete sense.

  4. Does this mean an upgrade in storage? That’s the only thing keeping me from getting an iPod touch. 32GB is still too small for the touch to be my main portable media device.

  5. Well, whenever anybody does the “This product does not fill a need,” I’m always reminded that back in 1984, nobody was saying, “Gosh, I really need a personal computer that displays icons for all my files.” So I wouldn’t ever say, “This will never happen.”

    One of the popular items for cost-conscious consumers are laptops in the $600-$1000 area. Apple has nothing in this area. Now, sure, they could drop the price or build a cheap MacBook to try to compete in this area. But Apple doesn’t usually do that because, at that point, you’re in a race to the bottom: How much can you slash margins?

    Consider an iTablet based off the MacBook . No keyboard (on screen, like the iPhone). No mouse. One USB port (like the MacBook Air). For $899. Now Apple has something in the “cheap laptop” area that is “better” than everyone else’s cheap laptop.

    So I wouldn’t bet against an iTablet.

    The iPod, though, is a definite. I’ll be curious to see how or whether Apple will manage to shrink multi-touch to a 2 inch display…

  6. @Peter

    I understand the idea, and I respect your opinion on it, but I have to disagree completely. No mouse, no keyboard, and running OS X with applications that are designed for a keyboard and mouse will not be efficient in any way.

    A larger iPhone, which is the other big rumor, wouldn’t work right now either. Applications a being designed for the iPhone and iPod Touch – they won’t work as well on a moderately larger screen – and Apple is busy building an entirely new market with the App Store for both devices. They’re not going to start a third development system right now.

    People are still figuring out the iPhone and how to best use it – an iTablet just crowds the market. It’s just not happening right now.

    Maybe in a few years something like this will happen, but its not coming right now.

    Even if it was – its not a “product transition” device.

  7. I read this “transition” as across the board. What makes sense to me is a move from the hard drive to the flash drive. Yes, the iTouch is the iPod product to accomplish this, however, I think we will see reasonably priced flash drive options in all laptops and possibly desktops as well. The hard drive is on the way out. Who but Apple to announce it’s demise. Remember the floppy drive?

  8. That is exactly what i thought when i herd him say that. i immediately stopped my plans to get a deactivated iphone as an ipod touch with a camera…
    Thank you Michael. im glad someone else came up with the same resolution.

  9. Please. iPod sales have no particular need to be “back up there”. Only the RATE of sales increase is slowing. This means that sales keep increasing, but at a slower pace than before.

    Let the Thurrott’s of this world convey simple-minded perceptions if they must. After all, they’re on MS payroll. But you’re not. So please stick to facts when it comes to the maker of the computers we love, and which you chose to use.

  10. @patz

    I am sticking with facts – and the fact is iPod sales are growing stagnant. Apple doesn’t want them to be that way. Apple wants to sell MORE than they have before, and at a faster rate than they are currently doing so.

    The only reason for this is because so many iPods have already been sold – and they need to give people a reason to buy a new one.

    And yes, iPod sales do have a particular need to be “back up there” – it’s called profit. Apple is a for-profit company, always has been – always will be.

  11. You may be right, but your timeframe can’t be. Apple stated it would affect next (this) quarter’s margin, so whatever “product transitions” are coming, at least one has to come soon – like in the next 2 weeks. So maybe it is a revamp of the iPod, and your timeframe is right (end of year), and that affects 2009. This quarter’s product transition affecting margin may be the MacBook/MacBook Pro re-design.

  12. @John D.

    September would still be in this Quarter, and in September of last year they announced the iPod Touch and the price reduction on the iPhone.

    So the time table should be fine.

    I expect for their to be an Apple Special Event in September to announce the iPhone 2.1 update and to showcase the Holiday buying season iPod offerings, including a $199 iPod Touch.

    When I say just in time for Christmas, I mean just in time for the Christmas shopping season.

  13. Well, if you like facts, then you’re gonna like this. Apple sold 11,011,000 iPods during the last quarter ( That is 12% more than the year-ago quarter (or roughly 2 million more iPods). That’s not stagnation. No, it’s called growth.

    Now, relative to the previous quarter, Apple sold about 500,000 more iPods this quarter. That’s also called growth. In fact, any way you look at it with the actual numbers in front of you, it’s called growth.

    Only the *extent* of growth is slowing. Which is exactly what I said in my post. Now, there’s a tendancy towards stagnation, I’ll give you that. But there’s still no stagnation whatsoever as we speak. Besides, if sales are ever flat, you’ll hear about it ad nauseam from the PC press.

    You can be sure that Jobs and friends are aware of the current trend, and that they worry about it even more than we do. I agree with you that a refresh of the iPod Touch is probably spot-on in terms of product transition. But please leave it to MS shills to spread FUD about a supposed stagnation when all one needs to do is consult Apple’s quartely reports to realize that there’s no such thing happening.

  14. @patz

    Seriously, you’re being ridiculous.

    There is no FUD being displayed in this post or anywhere here on this site. I AM NOT and HAVE NOT said that the iPod was in any danger of being BEATEN by any other company, and I have not said ANYTHING even remotely close to that.

    I say “growing stagnant” you say ” a tendency towards stagnation”.

    You’re arguing over wording here – and trying to make it look like I’m running around claiming that the sky is falling in around Apple because of the iPod.

    That’s just absurd.

  15. Michael, I’ve never mentioned anything about other companies, or implied that you did. Dunno where you got that from. Or is that another “fact” perhaps?

    FWIW, you did state in your post that sales are stagnant, I didn’t dream this up. And twice you mentioned sales needing to be “back up “.

    So call it ridiculous all you want, but sales are NOT stagnant. And they simply cannot be back up, because they were never so high.

    Forgive me if I I do not share your opinion on something, and if I happen to back my claims with hard facts that do not fit your views. I just acn’t help it. And please do not try to second-guess my intentions. Of this, you also have no idea.

  16. @patz

    “There is this other product, however, called an iPod. Apple has sold a gazillion of them, and the market for them is growing stagnant. It’s time to transition consumers to the next generation of iPod.”

    It says growing stagnant.

    You already agreed that there was a “tendency towards stagnation” – we’re saying the same thing there.

    getting sales “back up where they need to be” is in reference to the growth that the company and the stock holders want and need to see to be satisfied with iPod sales.

    I’m not going to continue this little back and forth because it serves no purpose. Others reading it can clearly see what’s been written and decide for themselves.

    Have a good weekend.

  17. Looks like we cannot agree, except perhaps on the fact that going on is futile.

    Other readers can also clearly see who’s been calling the other one names as a substitute for debating. But hey, it’s your site.

    This said, I also wish you a good weekend.

  18. Apple is giving away the 8Gb iPod touch with a BACK TO SCHOOL promotion right now – a friend of mine picked one up this afternoon along with his new 20″ Aluminum iMac. Apple tends to do weird things like giving away $299 iPods when they’re getting ready for some serious updating – it’s called “clearing inventory”!

    My guess would be that the iPod touch is going to see some kind of alteration – get rid of the 8Gb unit, drop the price – the usual Apple type stuff. But I do think that something else is in the works as well. My guess would be performance and RAM increases on the Macbooks coupled with a small nudge lower on the price to put the bottom of the line Macbook under $1000 (like at $999). As well as the iPod alterations.

    And how about this for wild speculation – a joint venture with EyeTV to add their product to AppleTV creating an over air antenna DVR right out of the box . . . that certainly would be a “product transition” that competitors couldn’t match. DISHNetwork is supposed to be offering a stand alone OTA DVR this fall – priced at $199 – and it would NOT include the ability to download movies or access your digital media from your other computers. The thought alone makes me put my plans to build my Mac Mini Media Center on the back burner for a few more months.

  19. I absolutely agree with you about the transition from the old iPods to the new iPod Touch iPods but, the first thing that I thought of when I heard about this “product transition” was the Apple TV. I thought about the idea that Apple would release an SDK for the Apple TV and through a small add-on that plugged into the USB port on the back you could purchase game controllers for the Apple TV and now the Apple TV would be a game console that finally deals with media right. The games would be sold through an App Store, just like the iPhone and would sync to the Apple TV over the network.

  20. I think what Michael said in the article is what it most likely will be. I think the iPod Touch will be thinner and have more memory. As much as we all wish for the iTablet I don’t think it will happen. If it would it would pretty much be an Air with a Touch Screen and on screen keyboard with no physical mouse or keyboard. I don’t think it will be a sub notebook. As people will soon learn. You buy a $500 notebook from your retailer and it dies in a year you will stop buying them. Those $500 laptops have parts from the lowest bidder in them. They are priced to sell, not to last. And about the Apple TV. Apple will not do over the air. They want you to buy the TV Shows on iTunes.

  21. hopefully they come out with a new line of macbooks and have it so the starting comes with 2g and is under 1k.

  22. I, for one, think it could be MANY things. Here’s some random speculation; comments appreciated.

    First, PA Semi is known to have developed capabilities on a speculative basis in the past (a power-efficient PPC chip, frinstance). Why might they not have an OpenCL and/or graphics chip up their sleeves based off their PPC experience, maybe extended to The Cell, ready to give lower-power devices such as the phone or ‘books a way to get FAST graphics AND fast computations such as H.264 or MPEG require? Perhaps, even, their purchase by Apple was in response to their having a prototype or similar.

    The other beauty to me (tho I acknowledge it’s VERY non-Apple in design): a new MacBook with a removable trackpad; that removable device is… an iPod Touch. Getcher synchronizing & recharging done in a flash, as well as have an extended keyboard for the Touch and a great trackpad for the ‘book. Not much synergy of the Touch’s CPU, GPU, display and battery, unless the Touch had enough oomph to replace enough to make the ‘book a glorified docking station; no CPU (it’d upclock the Touch), just big display, battery & keyboard.

    Yeah, you could put the two together. Unstoppable.

    (As I said, kinda klugy, but maybe Apple could make it Kool.)

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