Apple Year in Review Part I

For Apple fans 2006 kicked off in the expected way, with the press frenzy that is MacWorld. The general feeling going into MacWorld was that Apple was going to lay some uber coolness down on the adulation filled Apple masses. Predictions ranged from the mundane (color shuffles) to the no-brainer (new iBook with Intel inside) to the outrageous (plasma TV). Confounding the expectations (and an Intel based iBook was considered a lock) Apple came through with…. an Intel powered MacBook Pro.

The name was awful, the look was the same but the machine featured a built in iSight and PowerBook killing performance. While the move left a lot of Apple watchers surprised it made business sense. Why offer the lower end models first when desperate users will by any revamped notebook? Profit speaks louder than predictions after all.

With the joyous anticipation of Macworld followed by the inevitable groans of disappointment Apple fans started to wonder about the next big thing. Rumors of a true video iPod continued to swirl about like an ever present, impossible to dissuade school of gnats but the only news of note for the rest of January was the fourth quarter results.

Every quarter is outstanding when the corporate spin is applied but Apple’s quarter would have been reason to celebrate for Apple stockholders if the announcement had been nothing more than “Sold some stuff, made some dough.” Apple sold an amazing 14 million iPods and a solid 1.25 million Macs. Impressive, but not as welcome as the profits which clocked in a slightly over half a billion.

While the Apple profit machine was running in full gear people began to wonder: Whither the iPod? No shuffles in colors? Not only was the chunky shuffle stuck in a bland white box it seemed as though the shuffle might be heading the way of the iPod mini when Apple revealed a new iPod family member, a 1 GB nano on February 7. Priced at a mere $149 the nano looked like a death knell for the shuffle.

New iPods hadn’t shown up but that didn’t mean music wasn’t playing a big role in Cupertino. Apple cheerily announced that iTunes users had downloaded over a billion songs on February 23. A billion of anything is a lot and the milestone came just under 3 years after the iTunes store opened its digital doors.

Not wanting to let the media machine sleep, Apple sent out invitations to a surprise event scheduled for the last day of February. Sending out cryptic invitations (the invite asked the media to come and see “Fun New Products”) to an event taking place in the same venue that the original iPod debuted is like sending bloggers a bottle of Jack and asking them to make up the craziest story possible. The ploy worked and speculation on just how great the new thing would be (video iPod? finally the video iPod?) was nuclear powered for a few days.

Attendees were treated to…wait for it…an Intel powered mini. Pretty exciting and the move made sense. With very few pro level Apps ready for the Intel based machines the pros wouldn’t be chomping at the bit to upgrade. Mac users who wanted to test out the new Intel tech got their low priced chance with either the core solo or core duo model. But that couldn’t be what all the excitement was about could it?

Apple then dropped the bomb. People refreshed pages, reporters waited to release the news because surely, the world thought, Apple was about to release something incredible. Steve Jobs began to demo the new device and everyone in the greater San Francisco area could hear the collective sigh of disappointment. What was the device? The answer to that question was the same one I gave Mr. Rollins when he asked what the hell I was building in eighth grade shop class: Speaker box. Sure the iPod Hi Fi worked with the iPod and looked slicker than my pine and particleboard speaker box but it was a box full of speakers nonetheless. Coupled with a price many saw as bordering on criminal ($349.00) people felt fairly dejected.

March was a positively boring month. New videos trickled into the iTunes sore, a few software updates were issued an the like but for “the next big thing” people had to wait for April 5. The next big thing turned out to be Boot Camp. A nifty utility released by Apple that allowed users to dual boot their Intel based Macs between OS X and Windows XP. The Mac community probably over reacted to the release, restarting the Mac is so 1998 after all, but the release foreshadowed interesting developments to come. It didn’t foreshadow the events by much because the next day Parallels released a beta of a virtualization software that would allow the Mac to run OS X awhile using virtual machines to run any of a number x86 compatible operating systems. And by x86 compatible they meant Windows XP.

On April 19 Apple released second quarter numbers and the iPod party, many said, was over. The reason being that the second quarter was also the first quarter iPod sales fell. The hand wringing proved to be short lived, savvy folks pointed out that it was the first time Apple hadn’t introduced a new model in the first quarter and had thus removed a lot of the impetus for buying a new iPod. Everything besides the iPod was going, to say the least, very well. Macs were selling above expectations (1.1 million units), iPods were still selling well (8 million units) and profits were solid at 410 million.

All of which made for a very interesting first half of the year for Apple. Unsurprisingly perhaps, the second half would prove to be even more entertaining. Check back next week for part II.