Sunday, January 4, 2009

Macworld 2009 Preview

On December 16 Apple announced that Macworld 2009 would be the last Macworld that Apple would be participating in and that Phil Schiller would give the keynote address instead of Steve Jobs. Apple said that they would not be continuing to participate in Macworld because they can reach people in other ways beyond trade shows. Apple has been able to successfully put on their own events for a while now and is large enough that they don't need to rely on trade shows to reach customers. An Apple spokesperson said that Phil would be giving the keynote instead of Steve because this was Apple's last Macworld and it wouldn't make sense for Steve to give the keynote if this Macworld was going to be Apple's last. I don't totally buy it. It definitely makes sense that Apple would be moving away from trade shows because they do in fact reach customers in other better ways, like their website, and in terms of events, Apple can put on their own events whenever they want where Apple has total control over it. Apple is big enough that they can put on their own events and get all the attention they need for whatever announcement they make. Macworld comes at an inopportune time for them, right after the holiday buying season. It completely makes sense that Apple would not continue to be a part of Macworld. However, the reasoning behind why Phil would be giving the keynote seems shaky. Why wouldn't Steve get up on stage at Macworld, do the keynote and say, by the way, this will be the last Macworld, for the reasons in the press release? Why would Apple feel compelled to announce in advance (at a late date like December 16) that this would be the last year they participate in Macworld and further specify who would be giving the keynote? It brings up questions about whether Steve Jobs is up to doing the keynote or not, following the controversy surrounding Steve Jobs' health and the way that Apple handled the questions about his health in the summer. It is also entirely possible that Apple could be trying to give other people inside Apple more exposure (like they did at the notebook event) because it's inevitable that at some point someone else will have to take over the reins-and Apple has no shortage of talent. It is extremely hard to speculate on someone's health from just about no real information from a few public appearances during the year (investors especially will do their best to though) and I don't want to be another speculator or come to any conclusions on Steve's health. If something did happen and investors and regulators found out that Steve and/or the board knew of a significant risk to his health after the fact, it could usher in a tricky new era of disclosure. It is really a sticky situation where you need to either trust Apple or not. For investors, it would be a good idea to manage your risk with a put to offset a long position (as it is with any large long position).

Now as for the actual keynote itself, it is unclear whether it will be a low-key event with few earth-shattering announcements and Apple will quietly duck out of Macworld or whether there will be big announcements to give Phil even more exposure and give the impression that he/other people at Apple can handle big things and big announcements. Apple might announce the number of iPhones or Macs that they sold in the holiday quarter. The possibility of an iPhone nano or an iPod touch-like device with a larger touchscreen/tablet have been ongoing for some time now, but seem unlikely at this point-it is possible that either of these devices aren't ready yet (or don't exist) and might be announced as the year goes on at an event that Apple puts on themselves. Both devices make a certain amount of sense but it is unclear whether either one would be released or is ready for release. I think that it is very likely that Apple will show off Snow Leopard (although Apple has said that Snow Leopard will be more of an evolutionary release of Mac OS X and won't have as many new features as Leopard-that the end-user sees at least) which would limit the amount of the keynote that it could take up. It also seems likely that iWork and iLife could be updated. There have been recent reports that some of the applications or both or either of these suites could be moving totally online. It is clear that "cloud computing" will be a huge deal in the future and MobileMe might have been Apple's first step towards that and this could be their second step. Apple is likely to have learned a lot from the release of MobileMe which could help this release go more smoothly. If the iWork suite was released as a web application, this would bring Apple into competition with Google's Docs, like Apple's iPhone is in competition with Google's Android platform, which is interesting considering the fact that Eric Schmidt is on Apple's board and the close relationship between Apple and Google- Eric Schmidt got on stage during the announcement of the iPhone at Macworld 2007 and said how in this environment companies can "merge without merging." I'll have more about "the cloud" and other web-based services and applications and their implementation on Macs and also the iPod and iPhone in a later post. It's also almost a sure bet on a release of an updated Mac mini and iMac which would both be updated to have their innards more closely resemble the recently released MacBook and MacBook Pros and the Mac mini updated to match the black and silver/aluminum and glass aesthetic of the other Macs in Apple's lineup. Apple is likely to be pricing their machines as aggressively as they see fit to continue to attract as many customers as possible in the face of an economic slowdown. It also seems likely that Apple will update the 17-inch version of the MacBook Pro to match the 15-inch version.

An interesting note is that at this time last year, prior to Macworld 2008, Apple shares had come off their all-time high of $200 and were trading between $170 and $180. This year they are trading between $80 and $90. The keynote takes place at 9:00am Pacific at Moscone West in San Francisco on Tuesday January 6.

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