Wednesday, October 12, 2005

Apple and Pixar, a match made in Cyberspace?

With Pixar short films available on the newly released iTunes 6 software and the release of the Video Capable iPod, I am led to predict that we will see additional synergies between Apple and Pixar or an outright purchase of Pixar by Apple Computer.

Think about it, Disney and Pixar's relationship hasn't been the greatest of late and in fact, is on shaky ground. In January of 2004 Pixar announced that it was not going to continue it's relationship with Disney.

A brief history of the Pixar-Disney relationship:
Disney bankrolled Pixar's early days as it provided a majority of the funding to create the hit movie "Toy Story". Disney made a fortune on the film leaving Pixar with a small piece of the profit pie. Disney and Pixar later collaborated on "Monsters, Inc.", "Finding Nemo", and "The Incredibles"

The CEO of Pixar, who happens to be Steve Jobs (the same Steve Jobs of Apple Computer), wanted to negotiate a better deal for Pixar that would allow it greater flexibility and control over sequels to previusly released films. Disney wasn't keen on the idea and rejected Pixar's proposals. The rest is as they say, "History".

I think that Apple would be an ideal company to distribute Pixar's movies and content online. Pixar is already developing their content with Apple's PowerMacs line of professional computers. Apple is the world's leading Digital content provider. Apple's strength in the consumer segment and the popularity of it's iPod and iTunes music store allows the company to distribute content directly to the end user. The video iPod is just the beginning of video delivery to the consumer and is a harbinger of things to come.

The union makes sense. Not only would it save money for both companies but it will also drive the video content and delivery revolution. It's a match made in Cyberspace!

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New Video iPod, stronger iPod Halo Effect, More Switchers

The new video capable iPod is yet another product that should increase Apple's popularity in the market. The iPod has generated what is known as the "iPod Halo Effect", the idea that the popularity and strong sales of iPods to Windows PC owners translated into increased Macintosh computer sales. There has been anecdotal evidence to suggest that the "iPod Halo Effect" does indeed exist. In fact, Apple released metrics on October 11, 2005 that showed the company exceeding market expectations for Macintosh sales (story).

The new iPod should take the "iPod Halo Effect" to the next level. The new features in the iPod along with iTunes 6 should provide additional momentum to halo effect.

Apple will likely experience a new wave of iPod sales during the upcoming holiday shopping season and this will provide addition fuel to drive the "iPod Halo Effect" engine. This in turn will result in more consumers purchasing thier first Macs in the not too distant future. Apple will see increased market share gains as more "Switchers" come to the Mac and OS X platform.

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New Video Capable iPod and iTunes 6

Apple computer announced the new iPod today. It's capable of playing videos and supports MPEG4 and h.264 video formats. The new iPod features a slightly wider color screen (2.5 inches) than previous models for the purposes of video playback. The iPod can can display album artwork, photos, play video, video Podcasts, home movies and television shows.

The iPods can store 15,000 songs, 25,000 photos or over 150 hours of video. Two models are available, 30GB model for $299 and a 60GB model for $399 in your choice of white or black.

Some specs of the new iPods:

- 2.5-inch diagonal color LCD screen with LED backlight
- 320 x 240
- 30 frames per sec
- 260,000 colors
- MPEG4, h.264 Video Support
- Video Out for Television playback
- Holds over 150 hours of video
- Up to 20 hours of battery life
- Apple Click Wheel
- Mac OS X or Windows 2000/XP compatible

Apple also released iTunes 6. The new version includes many new features and content in the iTunes Music Store but the key addition is video content and sales. At launch, Apple has over 2000 music videos, six short films from Pixar Animation Studios, and television shows from ABC for sale at $1.99 each. Past and current episodes are available. New episodes will be available the day after they air on Television.

The new iPod is yet another product that should increase Apple's popularity in the market. Apple should experience a new wave of iPod sales during the upcoming holiday shopping season and this should result in more potential "Switchers" that will purchase thier first Macs in the not too distant future.

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Apple's Earnings

On Tuesday October 11, 2005, Apple Computer announced record revenues and profits profits for its fiscal fourth quarter, which ended September 20th, 2005. Here are the details:

- Revenue: $3.68 billion US (vs. $2.35 billion in the year-ago quarter)
- Profits: $430 million or $.50 per diluted share, $.38 per share after a one-time tax benefit (vs. $106 million or $.13 per diluted share

During the quarter Apple sold and shipped 1.236 million Macintosh computers and 6.451 million iPods. The number of Macs were higher than market expectations but iPod shipment were lower than expected, expectations were for at least 6.7 million iPods to be sold.

The higher than expected Macintosh sales are a key metric as it points to ongoing strengh and the much talked about "iPod Halo Effect". I've been saying for a while that there are more people making the "Switch To A Mac" and the increased Macintosh sales could demonstrate that assertion.

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Monday, October 10, 2005

The Oklahoma Daily Online Edition - Switching from PC to Apple OS X

The Oklahoma Daily Online Edition - Switching from PC to Apple OS X

A nice read from University of Oklahoma. The following is a quote from the article:

"For me, “the switch” has been a truly revolutionary and life-changing experience. Computing is no longer a tedious and boring task plagued with blue screens of death and pop-up windows."

Chalk up another switcher!

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Macsimum News - Safari now number three Web browser

Macsimum News - Safari now number three Web browser

Apple computer's Safari Web browser checks in at number three on the most used browsers. According to the article:

"In September, Safari and Netscape Navigator and Apple’s Safari continued their modest gains for the second straight month, while FireFox lost market share for the second time in 2005."

It goes on to say:

"Safari checked in at 2.39 percent up from 2.20 percent"

If we do the math, that equates to a 8.64% increase. Considering that Safari is only available on Mac OS X, it is a strong data point that can lead us to conclude that the number of Mac users is increasing. It could also indicate that more people are making the Switch To A Mac.

This is a very positive report that demonstrates Apple's increasing market share gains.

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