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ATPM 16.03
March 2010


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by Robert Paul Leitao,

Welcome to the March issue of About This Particular Macintosh! We move into the month of March following record-setting winter storms in February. This month we say goodbye to winter and look forward with optimism to the annual renewal of spring.

No matter February’s series of harsh winter storms and the dark economic clouds moving across the horizon, 2010 will be a year of record-setting revenue and earnings for the maker of Macs, iPhones, and the soon-to-be-released iPad. We begin this month’s issue with a quick look at all things Apple.

The iPad

Even before its debut later this month, the iPad is already a factor in the fast-growing e-book market., with its Kindle e-book reader, was the undisputed leader in e-book sales. To support sales of the Kindle, Amazon insisted publishers provide content in e-books for under the wholesale model. Amazon would take a 50% cut of the predominant $9.99 price for e-books, insisting on this price point as a means to push sales of the Kindle.

In preparing for the release of the iPad, Apple has been offering e-book publishers an agency model similar to the terms Apple offers as a distributor of music and apps. Apple’s take of the retail price is 30%, and publishers are allowed influence in determining the price at which e-books would be offered to customers.

The iPad starts at $499 versus $489 for the more expensive version of the Kindle, known as the Kindle DX. Both the iPad and the Kindle DX have 9.7-inch displays. The iPad, however, comes with an LED-backlit color display and multi-touch functionality for moving between pages. The more than 150,000 iPhone OS apps available for the Apple iPad are also a sales draw for e-book reader customers.

To-date Amazon has shipped a bit over 3 million Kindles. Apple may sell at least that many iPads in the final six months of the company’s fiscal year, which ends in September 2010. Watch for the iPad to offer real competition in the e-book sales market in the same way the iPod touch has transformed the way consumers purchase and enjoy games for handheld devices.

Tim Cook in the Spotlight

At this year’s Goldman Sachs Technology & Internet Conference, Apple Chief Operating Officer represented the company and offered insights into Apple’s product strategies. Tim Cook stood at the helm of the company during the leave of absence taken by CEO and co-founder Steve Jobs last year.

According to Tim Cook, Macintosh market growth doesn’t depend on PC industry growth. It depends on people switching to the Mac from Windows PCs. Over the past five years and over 20 of the last 21 calendar quarters, Mac unit sales growth has outpaced the growth of the PC market as a whole. Mr. Cook also stated that growing the developer base for the iPhone OS has a direct and positive impact on the rate of growth in iPhone OS–equipped device sales.

During 2010, Apple intends to open as many as 50 new retail stores. After slowing the pace of new store openings during 2008 and 2009 due to the slowing economy, the company is returning to a faster pace of new store openings due in part to the attractive leasing properties available because of the recession.

Perhaps the most insightful comment concerned the number of products Apple currently ships. He noted that in the company’s most recent fiscal year Apple reported revenue in its retrospective financial reports of over $42 billion. Although the company’s revenue has more than tripled over the past four fiscal years, the number of hardware products the company sells could fit on the table used by those conducting the day’s interview. In his view, Apple’s goal isn’t to make the most products. Apple’s goal is to make the best products.

$40 Billion and Counting…

At Apple’s annual meeting for shareholders held in late February, much attention was paid to Apple’s substantial holdings of cash and marketable investments now reaching $40 billion. To manage the company’s cash assets, Apple incorporated a wholly-owned subsidiary named Braeburn Capital that oversees and invests the dollars.

The company’s large cash position could be used for a number of purposes including acquisitions, share repurchases, or even the establishment of a regular cash dividend to shareholders. For now, the company is holding tight, allowing the cash position to build by the quarter for possible use at later dates. Over the past few years, Apple has used cash in small amounts relative to the size of its holdings for the purchase of companies such as PA Semi and more recently the purchases of Quattro Wireless and LaLa Media.

At the annual meeting, Apple CEO Steve Jobs stated that the cash holdings would most likely not be used at this time for shareholders dividends or share repurchases, but he did not rule out the use of cash for large acquisitions should opportunities arise.

Our March Issue

Each month, the editors of ATPM endeavor to provide our readers with informative and thought provoking content designed to enhance understanding of today’s world of digital devices. As the calendar moves from winter to spring, we look forward to continuing our monthly chronicle of the personal computing experience.

Our March issue includes:

Bloggable: Burn Down the Mission

Wes Meltzer returns to share what the blogosphere has to say about the iPad.

MacMuser: iPad mini

Mark Tennent believes size is everything when it comes to the iPad.

MacMuser: He, the Usurper, Must Choose

Mark Tennent hits a snag about choosing Mac.

How To: Making Your Mac as Smart as Its Owner

Your Mac is already pretty smart but mastering these features might make it smarter.

Desktop Pictures: New England

Christopher Turner shares another batch of photos of a trip to New England in May 2006.

Out at Five

Matt Johnson’s new series, Out at Five, looks at the workplace and its boundaries from all angles, revolving around many of the same characters from his former series, Cortland.

Review: BusyCal 1.2

Frank Wu is impressed with BusyCal—colloquially referred to as “iCal Pro.”

Review: Flickit Pro 2.0

This new iPhone application for mobile access to a Flickr account had ambitious aspirations, but is in need of some polishing from having missed the bullseye on many included features.

Review: P-Flip

A functional external battery-pack-slash-desk-stand—as long as you don’t use a case—that’s twice as expensive as it ought to be.

Review: U-Pouch

As if in answer to Chris Lawson’s P-Flip review, the U-Pouch is a case that’s twice as expensive as it ought to be and hardly as useful as any case should be.

Also in This Series

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