Friday, April 25, 2008

Strong Mac sales lead Apple earnings growth

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SAN FRANCISCO (MarketWatch) -- Apple Inc. shares bounced back from a weak start Thursday as investors got behind the company following its second-quarter report in which strong sales of Macintosh PCs helped drive Apple's earnings up 36% from a year ago.

Apple rose $6.05 a share or 3.7%, to close at $168.94 after the company reported earnings of $1.05 billion, or $1.16 a share, on $7.51 billion in revenue for the quarter ended March 31.

During the same period a year ago, Apple earned $770 million, or 87 cents a share, on sales of $5.26 billion.

The results topped Apple's forecast for a profit of 94 cents a share and $6.8 billion in revenue. Analysts surveyed by FactSet
Research had estimated Apple would earn $1.05 a share on sales of $7 billion.

The highlight of the quarter was 2.29 million Macintosh computers sold, a 51% increase over the past year's second quarter. Barry Jaruzelski, a managing partner with Booz, Allen, Hamilton, said the results show that the Mac is now the driving the Apple machine.

"The Mac is on a tear," Jaruzelski said. "The halo effect of the iPod has resulted in a broader product portfolio, and now the Mac can pull the boat along for a while."

While the Mac has picked up steam, iPod sales showed some signs of reaching the plateau that had long been anticipated. Apple said it sold 10.6 million iPods during the quarter, just a 1% rise from the same period a year ago.
Gross margins as a percentage of revenue were 32.9%, down from 35.1% a year ago.

"The revenue and unit (sales) were very strong," said Shaw Wu, of American Technology Research. "However, the margins were lighter than expected." Wu cut his rating on Apple's stock to hold from buy on Tuesday. Complete technology coverage.
Apple also said it sold 1.7 million iPhones during the quarter. Chief Operating Officer Tim Cook said, "We're confident in hitting the 10 million (sales target) for the year."

In recent weeks, questions were raised about iPhone shortages at Apple retail stores, with speculation rising that the company was working through its inventories in order to prepare for the release of a third-generation, or 3G iPhone.
However, Cook said he believed the main reason for the lower stock of iPhones was because, "there are more phones being bought there with the intention of unlocking (the phone), which remains a significant number."

The upbeat earnings report had been tempered somewhat by one of Apple's typically conservative third-quarter outlooks, which came in shy of Wall Street analysts' estimates.

For its fiscal third-quarter, Apple expects to earn $1 a share on revenue of $7.2 billion. Analysts had previously forecast Apple would earn $1.09 a share on $7.23 billion in sales.

But Apple has a history of lowering quarterly estimates and then turning in results that are higher than expected.
BMO Capital Markets analyst Keith Bachman said in a research note that for the past three years, Apple has given a fiscal third-quarter outlook for earnings that would be below its second-quarter results, and then exceeded both numbers.

For example, last year, Apple reported second-quarter earnings of 87 cents a share, then forecast a third quarter profit of 66 cents a share. Apple ended up earning 92 cents a share for the quarter.

Bachman holds an outperform rating on Apple's stock. He also raised his current fiscal year earnings estimate for Apple to $5.13 a share from $5.10 a share.

Prior to the earnings call, Apple said it had acquired P.A. Semi, a privately held chipmaker based in Santa Clara, Calif. which makes power-efficient chips that are mostly used in networking and telecom equipment.
Apple didn't disclose terms of the deal, but reports said Apple paid $278 million.

3G iPhone Presents Stealth Opportunities

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One of the first events to follow the debut of the Apple (AAPL) 3G iPhone, whenever that happens, will be the ritual ripping apart of the device by various analysts to figure out who is making the guts of the thing. Since no one had a 3G iPhone yet - heck, Apple has not even officially said there will be one - it would be a challenge to do a tear down just yet. But Craig Berger, of Friedman, Billings Ramsey, today took up the challenge.

Berger said some digging with supply chain sources finds that most of the component suppliers will be comparable those in the existing EDGE version of the phone. Here's a rundown on what he thinks will be found inside:

Broadcom (BRCM), he says, keeps the touch screen controller socket in the 3G iPhone and a potential iPod Touch refresh design. He also thinks the company could have a Bluetooth/WiFi combo chip in the next iPod Touch.

Marvell (MRVL), Berger says, likely keeps the 802.11 WiFi socket in the iPhone, but may have lost the WiFi socket in the Touch to the Broadcom combo chip mentioned above.

Infineon (IFX) and Samsung "remain overall device winners," he says. Berger says Infineon may be providing the 3G baseband chip, the RF transceiver, a power management chip. (The company supplies the EDGE baseband chip in the current iPhone.) Samsung is likely to provide the application processor, as it does in the current phone.

NXP and Texas Instruments (TXN) "also have peripheral smaller sockets in the 3G iPhone," he writes. ))
My take on all this:

First, this is all speculation, but isn't that what we do? We won't have a real life tear down until either a beta or the real deal's released. Based on what's in the current phone and the fact that AAPL will want to maximize manufacturing efficiency, the number of significant changes to the 3G iPhone will likely be kept to a minimum, though I think the 3G version may yet hold a surprise or two. Note the BRCM and MRVL commentary.

IFX: this stock is currently dirt cheap and, as speculated above, could be a big winner from a 3G iPhone. However, IFX has been weighed down by various items, not the least of which is continuing writedowns of its QI ownership, which got even uglier yesterday. However, even while IFX's book value is declining due to these writedowns, the stock is still trading below book and IFX just reaffirmed FY'08 EBIT. Given a revenue growth catalyst the shares may find a foothold after declining to multi-year lows recently and digesting the latest writedown from QI. The worst case is that IFX may be a value trap, but downside (after the latest writedown), should be limited. On any more weakness the risk reward profile looks pretty compelling here.

InterDigital (IDCC): While IDCC has been embroiled in patent disputes with Nokia (NOK), it doesn't seem to have these issues with AAPL, who's paying them for the current iPhone and AAPL signed a seven-year deal with IDCC related to the current and future versions of the iPhone. Based on IDCC's much stronger 3G portfolio, it's probably well positioned to generate even higher royalty fees from the 3G iPhone. As I mentioned previously, this name could be one of the best, if not the best, tertiary plays on the coming 3G iPhone. Note that IFX's 3G chips carry licenses from IDCC.

Logitech (LOGI): This company just reported overnight with another very solid quarter and cited various products that benefit from the AAPL food chain. Stock is cheap with solid growth, lots of cash and the company mentioned it's not seeing negative experience from the reported slowdown. In fact, it reported solid growth in its U.S. markets. Bottom line, if the 3G iPhone is the huge hit I think it will be then LOGI that will get some solid downstream sales.

BRCM: As mentioned above, it makes the chip that is key to making all that cool touchscreen technology happen. If BRCM wins even more slots that certainly doesn't hurt. One slot the analyst doesn't mention is for GPS. I would be surprised if a 3G iPhone doesn't include GPS and I think BRCM has better than a 2/3 shot at winning this as well.

Moreover, as I've speculated before, I think it's just a matter of time before we see AAPL incorporate its touchscreen technology into its Mac lineup, most likely starting with laptops. This would be a leap in the evolution of GUI (graphical user interface) related to computing, and after years of the mouse, we are due. This would be simply huge for AAPL and BRCM.

MRVL doesn't generate a lot of revenue from the iPhone. However, I thought that the iPhone might initially carry the core application processor from MRVL (based on Xscale purchased from Intel (INTC) ), instead of Samsung. As it turns out, I wasn't alone with this assessment.

Anyway, MRVL supplies this for Research in Motion (RIMM) and I'm still holding out hope that the die is not cast for Samsung. At this point it doesn't look like there's any expectation for MRVL to win this business, so if it did, MRVL could see a significant move higher.

Wednesday, April 16, 2008

IBM launches internal pilot program to test migration to Macs

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Long-time Microsoft Windows supporter IBM has recently initiated an internal pilot program to study the possibility of moving a significant number of its employees to Apple's Mac platform, leaked company documents show.

The documents, obtained by Roughly Drafted, underscore the growing interest in Macs among enterprise customers and reveal IBM to among the high-tech firms actively working to reduce their dependence upon the Windows operating system.

The first phase of the pilot program is said to have run from October 2007 through January 2008, in which 24 MacBook Pros were distributed to researchers at different sites within the company's research division.

In the documents obtained by Roughly Drafted, the former PC-maker outlined a series of reasons for evaluating Apple notebooks as a replacement for the Windows-based ThinkPads currently used inside the company.

Specifically, it said Macs are less prone to security issues, are widely used in the academic world with which IBM Research has close ties, and that many new company hires have said they're more comfortable with Macs and would like to use them as opposed to their ThinkPads.

During the initial pilot, participants were allowed to keep their ThinkPads, but were asked to use them only in the event that they needed to use software that was not yet available on the Mac. After the four month test period, the 14 research scientists, 8 software engineers, a director, and a VP staff assistant participating in the pilot program were asked to provide feedback.

Of the 22 of 24 who responded, Roughly Drafted reported that 18 said that the Mac offered a "better or best experience" compared to their existing computer, one rated it "equal or good," and three said the Mac offered a "worse experience." Seven reported having no or marginal prior knowledge of using Macs, while 15 said they had moderate or expert knowledge of the platform.

While all of the participants reported that it was easy to install IBM’s internal software on the Macs, several noted weakness or drawbacks associated with applications that were not yet suited for the Apple platform, or faced support issues. Among these were Microsoft's Visio diagraming and NetMeeting software, and several of IBM's own applications, such as its DB2 database and Websphere application server.

However, when asked if they would rather keep their MacBook Pro or return to using their familiar ThinkPad, only three chose the ThinkPad; the rest decided to keep the Mac notebook and obtain VMWare Fusion licenses to run Windows when necessary.

"I commend IBM on taking this bold step in providing an alternative to Windows," one employee said following the initial evaluation period. "It will definitely allow us to think different."

Said another: "I have been a true PC stalwart for 2+ decades, but after trying Vista, I’m ready for a change."

Following the success of the initial pilot, IBM reportedly plans to proceed with a second phase of the program that will see 50 employees equipped with Apple notebooks during the first half of 2008. Pending feedback, the company will then add an additional 50 to 100 users in the second half of the year.

According to Roughly Drafted, IBM's internal "Mac@IBM" website references an official group for Mac users within the company's walls comprised of over 930 members in 26 countries. It's described as "one of the largest and fastest growing communities within IBM."

Friday, April 11, 2008

Windows is 'collapsing,' Gartner analysts warn

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Windows is 'collapsing,' Gartner analysts warn
The researchers damn Windows in current form, urge radical changes
Gregg Keizer 11/04/2008 07:20:42

Calling the situation "untenable" and describing Windows as "collapsing," a pair of Gartner analysts this week said Microsoft must make radical changes to the operating system or risk becoming a has-been.

In a presentation at a Gartner-sponsored conference in Las Vegas, analysts Michael Silver and Neil MacDonald said Microsoft has not responded to the market, is overburdened by nearly two decades of legacy code and decisions and faces serious competition on a whole host of fronts that will make Windows moot unless the Redmond, Washington developer acts.

"For Microsoft, its ecosystem and its customers, the situation is untenable," said Silver and MacDonald in their prepared presentation, titled "Windows Is Collapsing: How What Comes Next Will Improve."

Among Microsoft's problems, the pair said, is Windows' rapidly-expanding code base, which makes it virtually impossible to quickly craft a new version with meaningful changes. That was proved by Vista, they said, when Microsoft -- frustrated by lack of progress during the five-year development effort on the new OS -- hit the "reset" button and dropped back to the more stable code of Windows Server 2003 as the foundation of Vista.

"This is a large part of the reason [why] Windows Vista delivered primarily incremental improvements," they said. In turn, that became one of the reasons why businesses pushed back Vista deployment plans. "Most users do not understand the benefits of Windows Vista or do not see Vista as being better enough than Windows XP to make incurring the cost and pain of migration worthwhile."

Other analysts, including those at rival Forrester Research, have pointed out the slow move toward Vista. Last month, Forrester said that by the end of 2007 only 6.3 percent of the 50,000 enterprise computer users it surveyed were working with Vista. What gains Vista made during its first year, added Forrester, appeared to be at the expense of Windows 2000; Windows XP's share hardly budged.

The monolithic nature of Windows -- although Microsoft talks about Vista's modularity, Silver and MacDonald said it doesn't go nearly far enough -- not only makes it tough to deliver a worthwhile upgrade, but threatens Microsoft in the mid- and long-term.

Users want a smaller Windows that can run on low-priced -- and low-powered -- hardware, and increasingly, users work with "OS-agnostic applications," the two analysts said in their presentation. It takes too long for Microsoft to build the next version, the company's being beaten by others in the innovation arena and in the future -- perhaps as soon as the next three years -- it's going to have trouble competing with Web applications and small, specialized devices.

"Apple introduced its iPhone running OS X, but Microsoft requires a different product on handhelds because Windows Vista is too large, which makes application development, support and the user experience all more difficult," said Silver and MacDonald.

"Windows as we know it must be replaced," they said in their presentation.

Their advice to Microsoft took several forms, but one road they urged the software giant to take was virtualization. "We envision a very modular and virtualized world," said the researchers, who spelled out a future where virtualization -- specifically a hypervisor -- is standard on client as well as server versions of Windows.

"An OS, in this case Windows, will ride atop the hypervisor, but it will be much thinner, smaller and modular than it is today. Even the Win32 API set should be a module that can be deployed to maintain support for traditional Windows applications on some devices, but other[s] may not have that module installed."

Backward compatibility with older, so-called "legacy" applications, should also be supported via virtualization. "Backward compatibility is a losing proposition for Microsoft; while it keeps people locked into Windows, it also often keeps them from upgrading," said the analysts. "[But] using built-in virtualization, compatibility modules could be layered atop Win32, or not, as needed."

Silver and MacDonald also called on Microsoft to make it easier to move to newer versions of Windows, re-think how the company licenses Windows and come up with a truly modular operating system that can grow or shrink as needed.

Microsoft has taken some new steps with Windows, although they don't necessarily match what the Gartner analysts recommended. For instance, the company recently granted Windows XP Home a reprieve from its June 30 OEM cut-off, saying it would let computer makers install the older, smaller operating system on ultra-cheap laptops through the middle of 2010.

It will also add a hypervisor to Windows -- albeit the server version -- in August, and there are signs that it will launch Windows 7, the follow-on to Vista, late next year rather than early 2010.

Apple's OS Edge Is a Threat to Microsoft

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A recent upgrade to the Mac operating system moves Apple closer to challenging Microsoft for overall computing dominance, even in the corporate market

by Gary Morgenthaler

The 20-year death grip that Microsoft has held on the core of computing is finally weakening—pried loose with just two fingers. With one finger you press "Control" and with the other you press "right arrow." Instantly you switch from a Macintosh operating system (OS) to a Microsoft Windows OS. Then, with another two-finger press, you switch back again. So as you edit family pictures, you might use Mac's iPhoto. And when you want to access your corporate e-mail, you can switch back instantly to Microsoft Exchange.

This easy toggling on an Apple computer, enabled by a feature called Spaces, was but an interesting side note to last fall's upgrade of the Mac OS. But coupled with other recent developments, the stars are aligning in a very intriguing pattern. Apple's (AAPL) recent release of a tool kit for programmers to write applications for the iPhone will be followed by the June launch of iPhone 2.0, a software upgrade geared toward business users.

Taken together, these seemingly unrelated moves are taking the outline of a full-fledged strategy. Windows users, in the very near future, will be free to switch to Apple computers and mobile devices, drawn by a widening array of Mac software, without suffering the pain of giving up critical Windows-based applications right away. The easy virtualization of two radically different operating systems on a single desktop paves a classic migration path. Business users will be tempted. Apple is positioning itself to challenge Microsoft for overall computing dominance—even in the corporate realm.

Such an idea rarely finds expression in public. Apple today is a "consumer-products company." Each new Apple product unveiled—from iPod to iPhone—comes with the excitement and glamour of Steve Jobs' "reality distortion field." Yet if you look at the larger picture, broader battle lines are forming. It's as if Jobs were a general from the 19th century, quietly massing troops out of view and under cover of trees. Mere "features" like Spaces look increasingly "strategic." On present course, an Apple assault on Microsoft's (MSFT) seemingly impregnable enterprise monopoly now appears quite possible by 2010.

It all started with Mac OS X, the multi-core, multi-processor platform officially released in 2001. Based on "Mach," a university UNIX research prototype, Mac OS X represented a clean break with the computer industry's uniprocessor past. The modular new OS allowed Apple to condense its core task management function into a tiny computing kernel.

That kernel has proved easily adaptable across the entire Apple product line, from highly complex servers all the way down to the relatively simple iPod Touch. Such modularity allows Apple to add whatever functions are necessary for each product environment—all while maintaining cross-product compatibility.

By contrast, Microsoft has held on to an OS tethered to the 1980s, piling additions upon additions with each upgrade to Windows. With last year's arrival of Vista, Windows has swollen to 1 billion bytes (a gigabyte) or more of software code. The "Mach" kernel of the Mac OS X, however, requires less than 1 million bytes (a megabyte) of data in its smallest configuration, expanding modestly with the sophistication of the application.

This bloating has saddled Vista users with increased costs and poor performance on average computers. Bloating has also led Microsoft to fragment its OS product line: one OS for the server, desktop, and laptop; one for cell phones and Zune music players; and a separate OS for its Xbox gaming console. Finally, through sheer complexity, bloating makes every subsequent "enhancement" of Windows buggier than the last. Thus, the current Vista product fiasco (, 1/23/08).

The contrast between Microsoft's and Apple's product development strategies couldn't be starker. Where Microsoft is increasingly hamstrung by OS rigidities, Apple moves flexibly and swiftly. While Microsoft struggles to bring a kernel-based "Windows 7" to market in 2010, Steve Jobs has declared Mac OS X the right platform for the next decade of new products. Engineering improvements in one Apple product quickly find use at low cost in another. While Apple's "multi-touch" screen innovation made its debut with the iPhone, it appeared on the MacBook within 60 days. With this sort of flexibility, Apple is ever-free to target existing markets or invent whole new ones.

Given these advantages, how might an Apple assault on the corporate market play out?

• Despite Apple's relative scarcity on corporate desktops, Mac laptops are already well accepted within the enterprise, with a market share of more than 20% and growing. For business travelers, the new MacBook Air, some three pounds lighter than comparable Windows-based laptops, already offers one huge advantage. And now, with the ability to jump back and forth between Mac and Windows applications, more corporate users are bound to embrace Mac laptops.

• While Mac desktops offer a growing number of superior features over Windows desktops, it's still not enough to persuade corporate IT departments to make a switch. So for now, Apple will merely strive to hold the line on its current share of the business desktop market and apply greater marketing pressure elsewhere.

• Apple's recently introduced Leopard servers compete in a market of unhappy Vista server buyers where Microsoft's market share is only 40%. Leopard has a decent chance to expand from its small beachhead.

• Surprisingly, it's the 4.8-ounce iPhone that will sweep Apple decisively back into the enterprise. Even without any enterprise applications, the iPhone has seduced business users with the prospect of easy listening (iTunes), easy surfing (Safari), and easy compatability with a Mac computer. And with the impending business push, the device will soon provide corporate e-mail access and perform serious computing tasks such as setting calendars, checking inventory, figuring prices, and taking orders on the spot.

As corporations become increasingly mobile, the pressure will build to make them Apple-centric from top to bottom. Rising sales of Apple laptops and iPhones will make the Mac OS only that much more mainstream and acceptable to corporate IT departments. By 2010, the number of iPhones in use could approach 100 million. It's possible that the iPhone's share of the U.S. smartphone market (28% in the fourth quarter) will soon approach the 70% share iPod now holds in the MP3 market.

The final piece to this puzzle would be the rebirth of the Apple applications development ecosystem. The new Software Development Kit (SDK) for the iPhone not only allows independent developers to create new applications for that device but also brings them back to the Macintosh platform. That means any program written for the iPhone can be easily adapted into a Mac computer version as well. The response has been huge: More than 100,000 developers downloaded the SDK in the first week of its availability. And iPhone's popularity for mobile business applications can only grow. (Put Vista on a cell phone? I don't think so.)

So, the battle ahead seems clear: It's Apple's seamlessly integrated software strategy, minimally sized and maximally efficient, competing against Microsoft's strategy of multiple incompatible, bloated, and fragmented operating systems. It's Apple's growing customer acceptance vs. Microsoft's rising customer pain. By failing to modernize its operating system in a timely way, Microsoft has left its flank wide open for an all-out assault from a once-vanquished rival.

Monday, March 3, 2008

Penryn powers MacBook Pro gains

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New generation of Core 2 Duo chips bolsters performance in Apple’s latest laptops

Just as the hubbub over the MacBook Air has begun to quiet down, Apple has turned the spotlight on the rest of its laptop lineup. Last week the company introduced new MacBook and MacBook Pro models, replacing the Core 2 Duo processors with a new generation of faster chips and increasing the hard drive capacity.

We’ve put the new MacBook Pros through their paces and found that the changes add up to noticeable performance gains over the last-generation of Apple’s high-end laptop. More significant, the revamped MacBook Pro lineup is decidedly faster than the Core Duo-powered models that debuted two years ago.

The new MacBook Pros come with either a 2.4GHz Core 2 Duo processor (in the 15-inch model) or 2.5GHz Core 2 Duo chip (in the 15- and 17-inch configurations. The processors are part of Intel’s next-generation Core 2 Duo chip, code-named Penryn. Unveiled by Intel in January, Penryn chips use a 45-nanometer microprocessor architecture, which improves energy efficiency. The processors can also pack on up to 6MB of shared L2 cache.

Indeed, that’s exactly the amount of L2 cache you’ll find in the new 2.5GHz MacBook Pros—a 50-percent increase over the 4MB found in the previous generation. However, the new 2.4GHz MacBook Pro comes equipped with 3MB—1MB less L2 cache than those models.

The new MacBook Pros still use the same Nvidia GeForce 8600M GT graphics, but now come configured with twice the video RAM, with the new 2.5GHz models outfitted with 512MB and the 2.4GHz shipping with 256MB. All of the MacBook Pros ship with 2GB of DDR2 memory (upgradeable to 4GB). All configuration also get roomier hard drives, with 250GB drives replacing the 160GB hard drives in the previous 17-inch and higher-end 15-inch models, and a 200GB drive taking the place of the 120GB drive found in the last entry-level MacBook Pro.

So how do these internal improvements affect performance? Our Speedmark 5 benchmark suite shows some notable gains over the last generation of MacBook Pros. Aside from screen size, the two 2.5GHz MacBook Pros sport identical internal specifications. Yet, the 15-inch performed a bit faster overall than the 17-inch model, though not by much and not all the time.

Speedmark 5 scores are relative to those of a 1.5GHz Core Solo Mac mini, which is assigned a score of 100. Adobe Photoshop, Cinema 4D XL, iMovie, iTunes, and Finder scores are in minutes:seconds. All systems were running Mac OS X 10.5.2 with 2GB of RAM. The Photoshop Suite test is a set of 14 scripted tasks using a 50MB file. Photoshop’s memory was set to 70 percent and History was set to Minimum. We recorded how long it took to render a scene in Cinema 4D XL. We used Compressor to encode a 6minute:26second DV file using the DVD: Fastest Encode 120 minutes - 4:3 setting. In iMovie, we applied the Aged Film effect from the Video FX menu to a one-minute movie. We converted 45 minutes of AAC audio files to MP3 using iTunes’ High Quality setting. We used Unreal Tournament 2004’s Antalus Botmatch average-frames-per-second score; we tested at a resolution of 1,024 by 768 pixels at the Maximum setting with both audio and graphics enabled.. We created a Zip archive in the Finder from a 2GB folder. For the Professional Application Multitasking suite, we recorded how long it took Photoshop to run our standard test suite while a longer Cinema4D task and our Compressor encode test ran in the background.—MACWORLD LAB TESTING BY JAMES GALBRAITH, JERRY JUNG, AND BRIAN CHEN

The new entry-level 2.4Ghz model bested the last entry-level system—a 2.2GHz MacBook Pro—by 10 percent in our Speedmark tests. In certain tests, like Photoshop, the improvement was even more dramatic, with the new 2.4GHz model finishing our Photoshop suite 23 percent faster than the older 2.2GHz system.

Even with less L2 cache, the new low-end MacBook Pro was able to compete head-to-head with last falls’s more expensive build-to-order MacBook Pro, posting a Speedmark score just one point less than the older system powered by as 2.6GHz Core 2 Duo chip.

The new 15-inch 2.5GHz MacBook Pro was quite a bit faster across the board than that build-to-order 2.6GHz system—more than 8 percent faster, in fact, in Speedmark, and 23 percent faster in Photoshop. Doubling the video memory also helped the new 2.5GHz MacBook Pro best the older build-to-order machine in our Unreal Tournament test by a whopping 34 percent.

While it’s certainly interesting to compare new models to the most recent releases to gauge the progression of Apple’s offerings, most people who bought a new MacBook Pro just last year are probably not looking to upgrade. Rather, it’s owners of even older laptops who have a stake in seeing just how much performance has improved with this latest release.

To provide a point of comparison, we also ran Speedmark tests on a 2GHz MacBook Pro Core Duo, a two-year-old machine that was among the first to ship with an Intel-built processor. The new 15-inch, 2.5GHz MacBook Pro scored around a 50-percent improvement over that older laptop in both Speedmark 5 and our Compressor tests. We also found the newer model to be 36 percent faster than the 2GHz MacBook Pro in both our Photoshop suite and Cinema 4D tests.

Users still holding on to their PowerPC-based PowerBooks have even more impetus to upgrade. Even the low-end 2.4GHz MacBook Pro had a Speedmark score twice as fast as the PowerBook G4. In other tests the 2.4GHz MacBook Pro finished tests in about a third of the time.

We’ll have a full review of the MacBook Pro shortly. Macworld Lab will now turn its attention to testing the new MacBooks that Apple released last week.

Tuesday, February 12, 2008

Apple Releases Aperture 2

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Major Upgrade Features Improved Interface, Faster Browsing & Enhanced Image Processing

CUPERTINO, California—February 12, 2008—Apple® today introduced Aperture™ 2, the next major release of its groundbreaking photo editing and management software with over 100 new features that make it faster, easier to use and more powerful. With a streamlined user interface and entirely new image processing engine, Aperture 2 also introduces new imaging tools for highlight recovery, color vibrancy, local contrast definition, soft-edged retouching, vignetting and RAW fine-tuning, and lets users directly post their portfolios on the .Mac Web Gallery* for viewing on the web, iPhone™, iPod® touch and Apple TV®. At a new low price of $199, anyone can easily organize, edit and publish photos like a pro.

“Many of the most respected photographers on assignment all over the world trust Aperture to organize, edit and deliver their images,” said Rob Schoeben, Apple’s vice president of Applications Product Marketing. “With its simpler interface and lower price, anyone can take full advantage of Aperture’s power.”

“At the end of the day, it’s all about the quality of the image,” said Sports Illustrated contributing photographer David Bergman. “Even before I begin making adjustments, Aperture’s new RAW processing gives me better images with more visible detail and better color rendering than any other program I’ve tested.”

“I used to have so much stress about post-production on a shoot, having to juggle multiple applications to make sure they all worked,” said Bob Davis, PDN Top Knots Wedding Photographer 2007. “With Aperture that’s no longer a factor. I can do everything all in one application.”

Featuring a new, easier user interface designed to be more intuitive and accessible, Aperture 2 now lets users navigate between Viewer and Browser modes with a single key command. Screen real estate is maximized for images with an all-in-one heads up display that allows users to toggle between library, metadata and adjustment controls in a single tabbed inspector. The All Projects view, modeled after iPhoto’s Events view, provides a poster photo for every project and the ability to quickly skim through the photos inside, and the integrated iPhoto® Browser offers direct access to all the events and images in the iPhoto library.

Performance has been enhanced in Aperture 2 so it’s faster to import, browse and search large volumes of images. Embedded previews let photographers caption, keyword and rate images as they are being imported, and with the ability to export images in the background, photographers can continue working while images are processed to JPEG, TIFF, PNG and PSD file formats. Quick Preview allows users to browse RAW images in rapid succession without having to wait for files to load, and the Aperture library database has been re-architected to provide fast project switching and near instantaneous search results, even when working with extremely large libraries of 500,000 images or more.

Aperture 2 delivers powerful new imaging tools for getting the most out of each photograph. Apple’s next-generation RAW image processing is at the core of Aperture 2 offering uncompromising image quality and precision controls that let users fine-tune the image profile for each of their cameras. New tools for improving and enhancing images include Recovery for pulling back “blown” highlights, Vibrancy for selectively boosting saturation without adversely affecting skin tones, Definition, which offers local contrast for adding clarity to images, Vignette & Devignette filters for providing professional visual effects and a true soft-edged Repair and Retouch brush for quickly and easily removing blemishes, cleaning up sensor dust and cloning away problem areas.

Aperture 2 works seamlessly with Mac OS® X, iLife®, iWork™, .Mac and Apple print products, so any image in the Aperture library can be accessed directly from within other applications, such as iMovie®, Keynote® and Pages®, and even from within Leopard™ Mail. Now with .Mac Web Gallery support, Aperture users can publish their photos once to view them on the web, iPhone, iPod touch and Apple TV. Books in Aperture 2 feature new theme designs, layout tools, customized dust jackets (including full-bleed) and foil stamped covers.

Pricing & Availability
Aperture 2 is available immediately for a suggested retail price of $199 (US) through the Apple Store® (, Apple’s retail stores and Apple Authorized Resellers. Owners of previous versions of Aperture can upgrade to Aperture 2 for just $99 (US). Full system requirements and more information on Aperture 2 can be found at

Monday, February 11, 2008

Apple releases Mac OS X 10.5.2 Update

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Apple on Monday afternoon released Mac OS X 10.5.2, the second maintenance and security update to its relatively new Leopard operating system that delivers a plethora of improvements for both PowerPC- and Intel-based Macs.

As of press time, the update was available solely via the Mac OS X Software Update mechanism accessible from under the Apple menu. Once the 10.5.2 Update is applied, Software Update will then offer to download an install a separate graphics driver updated labeled "Leopard Graphics Update."A list of bug fixes and enhancements delivered with the 10.5.2 update are as follows:

Active Directory
Addresses issues which could hinder or prevent binding Mac OS X 10.5.x clients to Active Directory domains.

Improves connection reliability and stability.
Includes 802.1X improvements.
Resolves certain kernel panics.

Back to my Mac
Adds support for more third-party routers, as detailed in this article.

Improves performance of certain Apple Dashboard widgets (such as Dictionary)
Addresses an issue in which Dashboard widgets may no longer be accessible after switching to or from an account that has Parental Controls enabled.

Updates Stacks with a List view option, a Folder view option, and an updated background for Grid view.

Addresses legibility issues with the menu bar with an option to turn off transparency in Desktop & Screen Saver preferences.
Adjusts menus to be slightly-less translucent overall.

Improves iCal so that it accurately reflects responses to recurring meetings.
Addresses an issue in which a meeting may remain on the calendar after being canceled
Addresses stability issues related to .Mac syncing of iCal calendars.
Resolves an intermittent issue in which editing an event with attendees would cause the event to shrink and not register that the event was updated.

Addresses an issue with simultaneously-logged in accounts in which iChat sounds generated from one account might be heard in another account.
Fixes an issue in which iChat idle time is affected by Time Machine backups.
Improves connectivity when running iChat behind a router that doesn’t preserve ports
Enables logged chats from previous versions of iChat to open faster and more reliably
Addresses an issue with text chats in which users may be unable to receive messages from the sender.
Addresses an issue that may prevent rejoining an AIM chat room without reopening iChat
Addresses video chat compatibility issues with AIM 6 and third-party routers.
Fixes an issue with case-sensitivity of AIM handles.

Adds support for Samsung D600E and D900i phones.

Addresses an issue in which Finder could unexpectedly quit when displaying folder contents in Column view.
Addresses an issue in which Finder could unexpectedly quit when accessing Users and Groups in a Get Info pane.
Resolves an issue that prevented setting permissions on a folder alias.
Resolves an issue in which the Eject command could write to a disc in the optical drive.
Fixes an issue in which the scroll bar might disappear when deleting a file within a folder that includes files that are out of view.
Fixes an issue in the Sharing & Permissions section of Get Info windows, in which the gear icon appears to be gray/disabled after authentication.
Addresses an issue in which the Show Icon Preview preference might not be not saved when turning it off.
Fixes an issue that could occur when trying to print an image from the Finder.

Addresses an issue with Message menu's Mark > As Read choice.
Fixes an issue in which duplicate On My Mac folders may appear in the sidebar after upgrading to Leopard.
Improves the accuracy of the Data Detectors feature.
Resolves an issue with scrolling through a Note that is displayed using the split view in the message window.
Fixes an issue with deleting messages located in the Drafts folder.
Fixes an issue in which dragging the icon in the Safari URL field into a Mail message creates an attachment instead of a link.
Addresses an issue found when opening a item in the Notes folder that is not a Note
Fixes an issue that may prevent RSS feeds from being delivered in Mail.
Resolves an issue in which a selected message could "flash" from blue to gray when in Organize by Thread mode.
Fixes an issue with scrolling between multiple To Dos in an email message.
Fixes an issue in which the body of email messages with certain MIME structures may not be displayed.
Improves performance with America Online (AOL) account-based messages in Mail.
Addresses issues with some ISPs during automatic set-up in Mail.
Addresses an issue in which Mail might not send mail on some networks to some SMTP servers.
Mail now automatically disables the (unsupported) third-party plugin GrowlMail version 1.1.2 or earlier to avoid issues.
Adds an option to view large icons in the Mailbox list.

Addresses a hanging issue that may occur when connecting to an AFP network volume.

Parental Controls
Improves stability when opening the Parental Controls System Preferences pane.
Fixes an issue that may prevent changes to the email address for permission requests.
Addresses an issue with printer administration for a guest account enabled with Parental Controls.
Addresses an issue with setting printer administration privileges from another Mac on the local network.
Fixes an issue that could prevent certain applications from being allowed.
Addresses accuracy issues with the web content filter.

Improves stability when scrolling through a PDF document.
Fixes an issue that prevents tabbing within a PDF document after clicking on the PDF.
Improves the Mail Document feature so that email attachments are more reliably created from Print Preview.

Addresses an issue in which remote printers may be deleted when the computer is put to sleep.
Improves printing performance when using some Microsoft Office applications.
Resolves an issue with some printing options, such as landscape orientation, number of copies, two-sided printing, and so forth that may not have functioned with some printers shared by Microsoft Windows.
Adds support for certain printers connected to the USB port of an AirPort Extreme or AirPort Express base station.
Resolves a stalling issue that could occur when installing certain Canon printing software from a disc.

RAW Image
Adds RAW image support for several cameras, as detailed in this article.

Addresses issues with Safari reliably resolving certain domains.

Login and Setup Assistant
Addresses an issue in which Setup Assistant could unexpectedly appear each time Mac OS X 10.5 starts up.
Improves stability and performance during log in.

Improves the accuracy of the grammar checker.
The computer will now shut down if an automatic disk repair does not succeed during startup.

Time Machine
Adds a menu bar option for accessing Time Machine features (the menu extra can be enabled in Time Machine preferences).
Improves backup reliability when computer name contains slash or non-ASCII characters.
Fixes an issue in which the backup disk displayed in the Finder may be out of sync with the disk chosen for Time Machine.
Addresses issues in which some external drives are not recognized by Time Machine.
The status menu now appears by default.

Improves general stability when running third-party applications.
Addresses an issue in which the incorrect search results may be displayed for certain Automator Find/Filter actions.
Addresses an issue with the Latvian and Russian keyboard layouts.

Tuesday, February 5, 2008

Apple launches 16GB iPhone, 32GB iPod touch

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Apple today doubled the capacity of its touchscreen media devices, releasing both a 16GB iPhone as well as a 32GB variant of the iPod touch. The new capacities allow fewer sacrifices for owners who want to carry as much media as possible. "For some users, there's never enough memory," Apple Worldwide iPod and iPhone Product Marketing VP Greg Joswiak says. On the iPod touch, the new storage level allows as many as 7,000 songs or 40 hours of nonstop video; the iPhone now holds half as much in exchange for its cellular functions, which remain unchanged from the original 8GB model.
Both capacities act as supersets of the existing capacities, which remain available; both the 16GB iPhone and the 32GB iPod touch sell for $499 and are ready to order immediately from the online Apple Store.

Monday, January 14, 2008

Wired claims last-minute "MacBook Air" details

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An alleged insider at a third-party vendor is said by Wired to have fresh details on the rumored 'MacBook Air' sub-notebook just hours before its unveiling at Macworld San Francisco.

In its description, the magazine's Gadget Lab blog describes the lightweight notebook as teardrop-shaped when shut, thickening towards the hinge of the system but thinning near the edges -- and remaining "unbelievably" thin overall, according to the source.

The system, according to the source, shares the same aluminum and glass construction of the iMac with black accents on a silver frame.

The tip also suggests that the MacBook Air name refers not just to the computer's slender design but also an apparent dependence on wireless: it may drop Ethernet altogether in favor of Wi-Fi or "other wireless technology," the purported source said, though it's unknown whether this would involve AT&T's 3G (third-generation) service, Sprint's Intel-derived WiMAX network, or any service at all.

In recent days, AppleInsider has received similar descriptions, though it has been unable to confirm the authenticity of those reports.

According to one submission, the notebook sports "very thin edges" with a slightly thicker body that "curves to the sides at the edges," producing a slimming effect akin to the rear design of the new aluminum iMacs.

The submission went on to say that the front of the notebook appears to be no more than 3/16th of an inch thick when closed and that the right side of the unit is void of any ports with the exception of an unknown slot.

Both the keyboard and trackpad are said to closely mirror those of Apple's existing MacBook, and the "Air" in the bezel logo is said to use a lighter font than the preceding "MacBook."

Again, AppleInsider has so far been unable to authenticate these latest claims, though numerous details -- such as first word of the subnotebook format's return, its use of a 13-inch display, and its Macworld Expo debut -- have all been published in a series of reports dating as far back as February of last year.
Multi-touch is also suggested for the display, though this too remains a mystery.

Thursday, January 10, 2008

The Untold Story: How the iPhone Blew Up the Wireless Industry

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It was a late morning in the fall of 2006. Almost a year earlier, Steve Jobs had tasked about 200 of Apple's top engineers with creating the iPhone. Yet here, in Apple's boardroom, it was clear that the prototype was still a disaster. It wasn't just buggy, it flat-out didn't work. The phone dropped calls constantly, the battery stopped charging before it was full, data and applications routinely became corrupted and unusable. The list of problems seemed endless. At the end of the demo, Jobs fixed the dozen or so people in the room with a level stare and said, "We don't have a product yet."
The effect was even more terrifying than one of Jobs' trademark tantrums. When the Apple chief screamed at his staff, it was scary but familiar. This time, his relative calm was unnerving. "It was one of the few times at Apple when I got a chill," says someone who was in the meeting.
The ramifications were serious. The iPhone was to be the centerpiece of Apple's annual Macworld convention, set to take place in just a few months. Since his return to Apple in 1997, Jobs had used the event as a showcase to launch his biggest products, and Apple-watchers were expecting another dramatic announcement. Jobs had already admitted that Leopard — the new version of Apple's operating system — would be delayed. If the iPhone wasn't ready in time, Macworld would be a dud, Jobs' critics would pounce, and Apple's stock price could suffer.

Click the link for the entire story.....

Tuesday, January 8, 2008

Apple Introduces New Mac Pro

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Fastest Mac Ever—Eight Processor Cores Standard

CUPERTINO, California—January 8, 2008—Apple® today introduced the new Mac® Pro with eight processor cores and a new system architecture that delivers up to twice the performance of its predecessor*. The new Mac Pro combines two of Intel’s new 45 nanometer Quad-Core Xeon processors running up to 3.2 GHz, powerful new graphics and up to 4TB of internal storage to offer the ideal system for creative professionals, 3D digital content creators and scientists. The standard 8-core configuration starts at just $2,799.

“The new Mac Pro is the fastest Mac we’ve ever made,” said Philip Schiller, Apple’s senior vice president of Worldwide Product Marketing. “With 3.2 GHz 8-core Xeon processing, a 1600 MHz front side bus and 800 MHz memory, the new Mac Pro uses the fastest Intel Xeon architecture on the market.”

The new Mac Pro features the latest Quad-Core Intel Xeon 5400 series processors based on state-of-the-art 45nm Intel Core microarchitecture running up to 3.2 GHz, each with 12MB of L2 cache per processor for breakthrough performance and power efficiency. With a new high-bandwidth hardware architecture, dual-independent 1600 MHz front side buses and up to 32GB of 800 MHz DDR2 ECC FB-DIMM memory, the new Mac Pro achieves a 61 percent increase in memory throughput**.

Every Mac Pro comes standard with the ATI Radeon HD 2600 XT graphics card with 256MB of video memory. The Mac Pro includes a new PCI Express 2.0 graphics slot that delivers up to double the bandwidth compared to the previous generation, and supports the latest generation of graphics cards from NVIDIA, such as the NVIDIA GeForce 8800 GT with 512MB of video memory, or NVIDIA Quadro FX 5600 with 1.5GB of video memory and a 3-D stereo port for stereo-in-a-window applications. With support for up to four graphics cards, the new Mac Pro can drive up to eight 30-inch displays at once for advanced visualization and large display walls.

The Mac Pro is the most expandable Mac ever, featuring four internal hard drive bays with direct-attach, cable-free installation of four 1TB Serial ATA hard drives, totaling 4TB of internal storage and support for two SuperDrives. With optional 15000 rpm SAS drives that can deliver up to 250MB/s of RAID 5 disk I/O performance, the Mac Pro is ideal for film and video editors. Combined with SATA or SAS drives, using an optional Mac Pro RAID card offers the ultimate data protection and disk I/O performance on the Mac Pro. The Mac Pro is easily and conveniently accessible in front and back so users can connect external devices with five USB 2.0, two FireWire® 400, two FireWire 800, optical and analog audio in and out, dual Gigabit Ethernet ports and a headphone jack.

Every Mac Pro includes Leopard™, the sixth major release of the world’s most advanced operating system. Leopard is packed with more than 300 new features and introduces a brand new desktop with Stacks, a new way to easily access files from the Dock; a redesigned Finder that lets users quickly browse and share files between multiple Macs; Quick Look, a new way to instantly see files without opening an application; Spaces, an intuitive new feature used to create groups of applications and instantly switch between them; and Time Machine™, an effortless way to automatically back up everything on a Mac. Featuring an improved scheduler and other multi-core technology, Leopard is a perfect companion to the Mac Pro, making applications faster and helping application developers take advantage of multi-core systems.

The new ultra-thin aluminum Apple Keyboard now ships with every Mac Pro and built-in Bluetooth 2.0 makes it easy to reduce cable clutter with the optional Apple Wireless Keyboard and Apple Wireless Mouse.

Pricing & Availability
The new Mac Pro is shipping today and will be available through the Apple Store® (, Apple’s retail stores and Apple Authorized Resellers.

The standard 8-core Mac Pro, with a suggested retail price of $2,799 (US), includes:

* two 2.8 GHz Quad-Core Intel Xeon processors with dual-independent 1600 MHz front side buses;
* 2GB of 800 MHz DDR2 ECC fully-buffered DIMM memory, expandable up to 32GB;
* ATI Radeon HD 2600 XT with 256MB of GDDR3 memory;
* 320GB Serial ATA 3Gb/s hard drive running at 7200 rpm;
* 16x SuperDrive™ with double-layer support (DVD±R DL/DVD±RW/CD-RW);
* two PCI Express 2.0 slots and two PCI Express slots;
* Bluetooth 2.0+EDR; and
* ships with Apple Keyboard and Mighty Mouse.

In addition to the standard configuration, the Mac Pro offers numerous build-to-order options including: one 2.8 GHz, two 3.0 GHz, or two 3.2 GHz Quad-Core Intel Xeon processors; up to 32GB of 800 MHz DDR2 fully-buffered ECC memory; up to four 1TB Serial ATA hard drives running at 7200 rpm or up to four 300GB SAS drives running at 15000 rpm; Mac Pro RAID card; up to two 16x SuperDrives with double-layer support; NVIDIA GeForce 8800 GT or NVIDIA Quadro FX 5600 graphics cards; AirPort Extreme 802.11n; Apple USB Modem; Apple wireless Aluminum Keyboard; Apple wireless Mighty Mouse; and Mac OS X Server Leopard. Complete build-to-order options and pricing are available at

*Based on estimated results comparing a preproduction 2.8 GHz 8-core Mac Pro with a 2.66 GHz Quad-Core Mac Pro running professional applications like Maya, modo and Logic® Pro.

**Testing conducted by Apple in December 2007 using a preproduction 2.8 GHz 8-core Mac Pro with a 2.66 GHz quad-core Mac Pro. All systems were configured with 4GB of RAM. Results are based on the STREAM v. 5.6 benchmark ( using OMP support for multiprocessor-compiled builds. All systems were configured with 8GB of RAM. Performance tests are conducted using specific computer systems and reflect the approximate performance of Mac Pro.

Apple Introduces New Xserve

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CUPERTINO, California—January 8, 2008—Apple® today introduced the new Xserve®, a 1U rack-optimized server that is up to twice as fast as its predecessor* and includes an unlimited client license for Mac OS® X Server Leopard™. Starting at just $2,999, the new Xserve has up to two Quad-Core 3.0 GHz Intel Xeon processors for 8-core performance, a new server architecture, faster front side buses, faster memory, up to 3TB of internal storage and two PCI Express 2.0 expansion slots for greater performance and flexibility.

“With the latest Intel processors and no client access licenses, Xserve offers unbeatable server performance and value for under $3,000,” said Philip Schiller, Apple’s senior vice president of Worldwide Product Marketing. “Xserve’s power, storage and Leopard Server make it ideal for supporting Mac clients and mixed platform workgroups.”

Xserve is configurable with up to two Quad-Core Intel Xeon 5400 series processors running up to 3.0 GHz with 12MB of L2 cache per processor and features a new high-bandwidth hardware architecture, dual-independent 1600 MHz front side buses and up to 32GB of 800 MHz DDR2 ECC FB-DIMM memory for a 64 percent increase in memory throughput**. Two PCI Express 2.0 expansion slots provide up to four times the I/O bandwidth of the previous Xserve to support the latest high-bandwidth expansion cards including multi-channel 4Gb Fibre channel and 10Gb Ethernet cards.

Xserve now includes built-in accelerated graphics to drive up to a 23-inch Apple Cinema Display® and a new front-facing USB 2.0 port. Using Apple’s Server Monitor, an administrator can remotely turn Xserve on or off and manage server software from anywhere on the network. Each of Xserve’s three drive bays can be configured with 73GB or 300GB SAS drives or 80GB and 1TB SATA drives, providing a mix of high performance and vast storage capabilities for a wide range of server applications. Apple offers a hardware RAID card option that delivers hardware RAID levels 0, 1 and 5 with 256MB of cache and an included backup battery for up to 72 hours of cached data protection. The Xserve RAID card delivers up to 251MB/s RAID 5 performance*** for the most demanding server workloads, without using a valuable PCI Express expansion slot.

The new Xserve improves energy efficiency with Intel’s 45 nanometer core microarchitecture technology. The processors draw a maximum consumption of 80W, and drop as low as 4W when idle. Power supplies exceed Energy Star recommendations from the US Department of Energy and Apple’s thermal management technology cools the systems efficiently in a wide variety of environments while reducing power consumption.

Every Xserve ships with a preinstalled, unlimited client edition of Leopard Server software, offering true 64-bit support, easy-to-use management tools and support for Mac®, Linux and Windows clients. Leopard Server is fully UNIX compliant and extends Apple’s legendary ease of use by introducing over 250 new features, including Podcast Producer, the ideal way to automatically publish podcasts to iTunes® or the web; Wiki Server, allowing people to collaboratively create and modify their shared web sites with just a few clicks; and iCal® Server, the world’s first commercial CalDAV standard-based calendar server.

Pricing & Availability
The new Xserve is shipping today and will be available through the Apple Store® ( and Apple Authorized Resellers.

The Xserve standard configuration, with a suggested retail price of $2,999 (US), includes:

* a single 64-bit 2.8 GHz Quad-Core Xeon processor with 12MB of L2 cache and a 1600 Mhz front side bus;
* 2GB of 800 MHz DDR2 ECC FB-DIMM RAM, expandable up to 32GB;
* a single 80GB SATA Apple Drive Module;
* dual Gigabit Ethernet on-board;
* internal graphics;
* two FireWire® 800 and three USB 2.0 ports; and
* an unlimited client license for Mac OS X Server version 10.5 Leopard.

In addition to the standard configuration, Xserve offers numerous build-to-order options and accessories including: dual 2.8 or 3.0 GHz Quad-Core Intel Xeon processors; 80GB and 1TB 7200 rpm SATA or 73GB or 300GB 15,000rpm SAS Apple Drive Modules; internal Xserve RAID card; Gigabit Ethernet, 4Gb Fibre Channel and U320 SCSI expansion card options, and a 750W redundant power supply.

*Based on industry-standard SPEC jbb 2005 benchmark tests conducted by Apple in December 2007 using preproduction 3.0 GHz 8-Core Xserve units and shipping 3.0 GHz Quad-Core Xserve units. SPEC is a registered trademark of the Standard Performance Evaluation Corporation (SPEC); see for more information. Performance tests are conducted using specific computer systems and reflect the approximate performance of Xserve.

**Testing conducted by Apple in December 2007 using preproduction 3.0 GHz 8-Core Xeon-based Xserve units and shipping 3.0 GHz Quad-Core Xserve units. All systems were configured with 8GB of RAM. Results are based on the STREAM v. 5.6 benchmark ( using OMP support for multiprocessor-compiled builds. Performance tests are conducted using specific computer systems and reflect the approximate performance of Xserve.

***Testing by Apple in December 2007 using preproduction 3.0 GHz 8-core Xeon-based Xserve units configured with Xserve RAID card. Testing conducted using Iometer 2006.07.27 with a 30-sec ramp-up, 5-min run, 512KB request size, and 4 outstanding IOs. System configured with the OS and test volume on a single RAID volume. Performance tests are conducted using specific computer systems and reflect the approximate performance of Xserve RAID Card.

Monday, January 7, 2008

Apple: More Than a Pretty Face

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Consumer electronics companies need to do more than pare product lines and make cool stuff. What Apple offers is a complete ecosystem.

Gadget lovers take note: Consumer electronics (CE) companies are cutting back their product lines. Gone are the days when manufacturers created a dozen in-line products to cover every price point. Rather than spreading chips across the table, CE brands like Sony (SNE) and Samsung are following Apple's (AAPL) lead by stacking more chips on a few well-placed bets. Sony, for example, now offers just three models of ultra-slim point-and-shoot cameras in its CyberShot line. But will such paring enable Sony and others to succeed the way Apple has? Will this mean more products we love or more dross on the shelves?

Maybe you're thinking, "Not more Apple hype." But it's hard not to think of Apple as the innovator in the CE space. Apple is driving digital lifestyle on a global scale, and it's doing so in the face of economic adversity. The National Retail Federation reported that consumer spending on Black Friday dropped 3.5% compared with 2006. According to a MasterCard (MA) Spending Pulse report, sales of electronics rose just 2.7% from Thanksgiving to Dec. 24, 2007, over the same period a year earlier. Meanwhile, Apple anticipates holiday-quarter sales of $9.2 billion, a 29% increase over 2006, while the Mac operating system hit a record 8% market share in the closing days of the year. With the annual Consumer Electronics Show fast approaching, Apple is once again sure to be the talk of a trade show it doesn't even attend.
Design Alone Isn't Enough

To succeed like Apple, CE brands need to do more than create cool-looking products that are rich in features and intriguing behaviors. A cool object may be at the center of the experience, but as others have noted, surrounding a successful product like the iPod is a complete ecosystem that includes content and services, software and interfaces, retail experience, Web site experience, and an army of accessories. Imagine competing with NASA by designing a better space shuttle—but ignoring the launch pad, ground control in Houston, or the facilities at Cape Canaveral. Apple is successful because all of the elements of its ecosystem are in place—and are consistently meaningful and relevant to its target consumers.

According to the latest NPD report, Apple has secured over 70% market share for MP3 players. What's less well known, and more impressive, is the ratio of Apple's investment in the iPod platform relative to its return. Since 2004, Apple has added just one item to the iPod range, the iPod touch, making four pieces of hardware in all. In the same period, the catalog of available content (songs, TV shows, films) has increased 600%, to 4.1 million items. And—here's the pièce de résistance—the number of iPod accessories has increased tenfold, to 3,000. Apple collects fees for most, if not all, of those accessories, with third-party vendors and manufacturers paying to add the "Made for iPod" logo to a package or, in the case of connected accessories like speaker docks, a fee to use the proprietary Apple connector.

Many companies have tried to replicate Apple's success by imitating at the product level and focusing on the design of the object itself. Creative Technology has designed media players with simple geometric shapes, high-end details, and a polished look. Speaker docks from Altec, Logitech, JBL and Bose have tried to match (and keep pace with) the Apple color palette.

The makers of other music players have also used smart design to try to stand out—case in point is Microsoft's (MSFT) latest Zune media player, an inspired object with intriguing design, cool behavioral features, beautiful details, splendid packaging, and a compelling interface. A number of accessory providers have mimicked the look of Apple's fresh, uncluttered packaging. But none of this is enough.
Mind Share

Take Sony. It's an amazing company with a powerful brand. Innovative product platforms like the portable transistor radio and the Walkman set the stage for the digital lifestyle era. Yet it has struggled to transpose that success to the 21st century. In 2005 it outlined a strategy to reduce its SKU count by 20% by 2007, detailing a desire to focus on "champion" products and avoid having to battle competition on many fronts. So while four years ago, Sony offered a dizzying array of digital cameras that recorded on all kinds of media (floppies, MemorySticks, DVDs), now it has just three lines (ultra-slim, compact, SLR). That's better for consumers, most of whom don't care that Model 1 has a 2MB cache while Model 25 has 4MB. In December, 2007, CEO Howard Stringer announced that Sony's efforts were beginning to pay off. It is close to achieving a 5% net margin for 2007.

Apple ended its fiscal year on Sept. 30, 2007, with a net margin of nearly 15%. To succeed like Apple, companies need to understand more deeply the consumer they are targeting. Apple recognizes that it can't have everyone as its customer. It is willing to alienate some segments by appealing to a strong core of people that sociologists refer to as the Cultural Creatives. These are the people who wait in line overnight for the latest iPod or MacBook. Focusing on the Cultural Creatives in turn attracts followers who might not otherwise trust the brand.

Observe the next 10 people you see on the street with an iPod and ask yourself how many of them represent the Cultural Creatives featured in Apple's advertising. One, maybe two? Address your core audience. The rest will follow. That's how you sell 10 million iPods in one quarter.

In the hands of an artful company like Apple, design is the vehicle for driving meaningful, relevant experiences that are authentic to the brand. It's not about paring product lines or making cool stuff. Done right, design can add value to the bottom line and the brand. Design done right goes beyond the appearance and behavior of the object itself. It takes the entire product ecosystem into consideration. Design done right sees technology as an enabler, not the solution.

Apple creates holistic experiences that inspire strategic partners like accessory manufacturers and content providers to build up the platform. Apple understands: It's not about market share. It's about mind share.

Saturday, January 5, 2008

Apple Files for OLED Keyboard Patent

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Art Lebedev's Optimus keyboard (now the Optimus Maximus) has been around in various incarnations for a few years now, with the full-size version having been released on March 15 of last year (2007, in case you're still getting used to the 2008 thing). But just two days before its official (re-) release, Apple filed a patent application for a dynamically controlled keyboard, the contents of which were published yesterday.

At first glance, the invention described in Apple's patent looks quite a bit like the Optimus Maximus. The patent describes a method for changing what is displayed on a keyboard's keys by putting OLEDs (organic LEDs) and circuitry in each key. The various OLEDs could be turned on and off, leading to different images being displayed on the keys. Applications would then tell the keyboard what to display on each key, depending on what the user was doing at the time. Imagine a "play" button being displayed on the spacebar while in iTunes, which would change to a "pause" symbol after pressing play, and you've got the basic idea.

This type of keyboard would really shine for media work, since applications like Photoshop, Logic, and Final Cut could be significantly simplified by displaying more information about (and on) each key. And while the Optimus Maximus is a bit expensive, Apple could certainly mass-produce something similar for less money, perhaps bringing the price into reality for most users. Lebedev has, however, apparently applied for several patents for the Optimus, so it's unclear just what Apple is up to, or what would happen if the company were ever to release such a product. I wouldn't count on seeing this anytime soon, but a guy can dream, right?