Cubism

In a surprise announcement at Macworld, Apple CEO Steve Jobs introduced a new high-performance personal computer. Incorporating the G4 processor running at 450 MHz, the Cube is a high-powered, lower cost PC for the consumer market. Measuring a fraction of the size of the Mac mini-tower and equipped with its own stylish translucent stand, the Cube is designed to bring the performance of the G4 to home users who are looking for more power than what’s available in the iMac—at a price below that of Apple’s professional line of computers.

Color Me Brand New

Apple’s iMac now comes in four new and distinctive colors: indigo, ruby, sage, and snow. Gone are the candy colors that premiered in January 1999. The top-of-the-line graphite iMac, featuring 128 MB of RAM and a 500 MHz G3 processor, now shares the stage with a translucent snow-colored sibling. For consumers and schools looking for a less expensive offering, a $799 iMac sporting the 350 MHz G3 processor will be available in September.

Two Brains, One Body

Apple’s new pro-level mini-towers now come with dual G4 processors. Priced the same as the single processor computers they replace, the dual-processor Macs provide an important performance punch to the product line as Apple strives to regain its leadership in the content creation market.

Other Macworld Expo announcements include:

• The release of the beta version of Mac OS X is still on schedule for “late summer.”
• Apple’s much maligned “hockey puck” mouse is history. It has been replaced by an optical mouse better suited to the contours of the human hand, and it works without a roller ball.
• Microsoft Office 2001 for the Mac will be released in October, but it will not be “Carbonized” at that time.

We have Macworld coverage throughout this issue, and Eric Blair even brought back some photographs for your perusal.

Don’t Ask, Don’t Tell

The announcement of the Macintosh Cube reopens the debate about the posting of rumored information on Mac affinity Web sites. Rumors that the Cube (or a product like it) would be released at Macworld became the center of controversy when Apple’s legal staff demanded that the rumored information be removed from various sites. Even the Macintouch site, one of the most informative and respected Mac-related sites on the Web, received notice from Apple to remove its report, even though it contained no original information on the prospective product but did offer hyperlinks so that readers could find originally posted information.

Except for the reports about the Cube’s size, the products described on the rumor sites bore little resemblance to the product that Apple has now officially announced. Undoubtedly Web publishers do have 1st Amendment rights protecting free speech. But is it fair to post information about a new product that is not only unauthorized, but most likely contains incomplete or erroneous information?

In the case of Macintouch, in which the Web site merely reported on a report, we believe Apple’s legal team may have gone too far. But what should be the rules about posting rumored information about unannounced products? Rumors about the Cube and Apple’s response to the rumors became the subject of their own reports. We think this all a bit crazy.

Based on the time proven truth that rumors often have little resemblance to the forthcoming reality (the existence of a 17" monitor iMac still remains a myth), we think it’s best not to ask people for unauthorized and often incomplete information, and it’s better for people who think they might be in the know not to tell. Discretion is often the better part of valor.

Margin Mania

The day before the start of Macworld Expo, Apple released its financial statements for the third fiscal quarter. Although sales were below already reduced expectations, the company was able to slightly exceed Wall Street’s consensus estimate by reporting net earnings from operations of $0.45 per diluted share. Including the gain from the sale of some of its investment in Arm Holdings, Apple earned a net profit of $200 million, or $0.55 per diluted share.

How did Apple report slightly better than expected earnings on lower than expected sales? The company earned an average gross margin of 29.8% on the products it sold. By comparison most PC manufacturers struggle to get gross margins somewhere near 25%. The fact that the iMac had gone nine months without a major upgrade accounted for the slower sales. Higher proportional sales of G4s and PowerBooks contributed to the increase in margins.

The quarter’s financial highlights are as follows:

• Revenues for the quarter were about $1.825 billion.
• Net profit from operations were $163 million, an increase of 43% from a year ago.
• During the quarter Apple sold over a million Macs in their various sizes, shapes, and configurations.
• Apple currently has $3.8 billion in cash and short-term investments.

See You At Seybold?

At the end of the month Steve Jobs will give a keynote address to attendees at the Seybold convention. At last year’s convention Mr. Jobs announced the introduction of the G4. A month later the company announced there would be a delay in meeting demand. We’ll cover the Seybold show in our September issue.

Please enjoy our latest issue!