Apple's New Lineup Ready To Face Back-To-School Season

| About: Apple Inc. (AAPL)

By Carl Howe

As expected, Apple (NASDAQ:AAPL) refreshed its iMac line Tuesday, and with it, its consumer applications software suites, iLife, .Mac, and iWorks. For anyone not reading the news feeds, here are the highlights.

All of the products mentioned here are available for shipment today.

  1. New aluminum and glass 20-inch and 24-inch iMacs. Apple redesigned these consumer desktops with design elements from both its Cinema display line and from its MacBook portables. The new iMacs will sell for $1,199 and $1,799.
  2. iLife '08 applications are now slicker and more capable. Apple has completely redesigned iMovie to allow consumers to build great vacation movies quickly, while iPhoto now can organize photos by events as well as by more traditional criteria. Garageband and iDVD got big updates, while iWeb gained more capabilities to integrate new custom elements like Google (NASDAQ:GOOG) Maps, Google Adsense, and Web widgets like YouTube movies with Apple's .Mac service below. iLife '08 sells for $79.
  3. .Mac has gone Web 2.0. Apple's .Mac hosting service boosts storage to 10 GBytes per user. That will come in very handy for iLife users, since iPhoto, iMovie, and iWeb now all boast one-click publishing to .Mac areas called galleries, which implement Web-powered versions of those same desktop applications. Further, .Mac now allows users to use their own domain names to point to .Mac content. .Mac content is also fully compatible with iPhone viewing for all media types.
  4. Apple's iWorks adds Numbers to presentation and word processing. Apple's consumer and small business office suite finally added a spreadsheet to the set, while existing tools Keynote and Pages added new templates and transitions. iWorks costs $79 just like iLife.

Our take? Despite the fact that Apple stock sold off right after Steve Jobs finished talking, we think this event actually did quite a bit to assure Apple of good financial results the rest of the year. Why? Because:
  • Apple's new consumer computer lineup is now in the market. Only the Christmas selling season exceeds the financial effect of back-to-school sales in the Apple fiscal year. With this announcement, Apple now has its consumer computer line set for both those selling seasons with quite attractive machines and software.
  • iLife now has no parallel offering in the Windows world. By integrating iPhoto, iMovie, and iWeb with its .Mac Web service in deep and easy-to-use ways, Apple has raised the bar again for consumer creating Web content. While consumers could piece solutions together from the likes of Flickr and YouTube, many won't want to bother. And these easy to use software-service bundles will become a big selling point for iMacs and MacBooks this holiday season when Microsoft (NASDAQ:MSFT) is making no comparable consumer products for Windows Vista.
  • iWorks shows off Microsoft Office's old age. The latest version of Microsoft Office for the Mac is now three years old, and it won't be updated until 2008. With Apple's iWorks happy to read and write Microsoft Office file formats and offering better looking documents and output to boot, many consumers ask why they should pay $329 for an old and tired product when they can pay $79 for a brand new and better looking one.
The bottom line: this wasn't the glitz of the iPhone launch that set up Apple profits for 2009. Tuesday's iMac and software launch was about Apple ensuring it had products in the market consumers can buy to take to school and put on home desktops this fall and winter. And with these core products, it looks to me like Apple's record earnings will just keep on coming.

Full disclosure: the author owns Apple stock.