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Apple (Nasdaq: AAPL) launched three new products Tuesday just hours after disclosing details on the most successful non-holiday quarter in the company's history.
The new hardware includes new iMac models, a new sub-US$1,000 MacBook and a multitouch mouse that Apple has dubbed the "Magic Mouse."
On Wall Street, the company's revelations sent its stock climbing. It shot up after Monday's earnings call, opening at $200.47 on Tuesday. That's up $10.61 from Monday's closing price to $189.86. By close, shares had backed down slightly to $198.76.
New Products Launched
On Tuesday, Apple introduced new products and revamped existing ones.
One is a $999 MacBook. This new model has a polycarbonate unibody, an LED-backlit display, a glass multi-touch trackpad and a built-in battery that boasts up to seven hours of use.
It has a 2.26 GHz Intel (Nasdaq: INTC) Core 2 Duo processor, 2 GB of RAM, a 250 GB hard drive and an Nvidia GeForce 9400 graphics processor.
Apple also unveiled two new iMacs with larger screens than older models -- 21.5-inches and 27 inches. These are edge-to-edge glass designs and are backlit by LEDs. Their designs are similar to the previous generation of iMacs, only larger.
"They've increased the size of the iMac screens from 20 and 24 inches," Carl Howe, director of anywhere research for the Yankee Group, told MacNewsWorld. "Basically, Apple's saying that people want larger screens."
The new iMacs start at $1,199 and have Intel Core 2 Duo processors starting at 3.06 GHz. More powerful versions use Core i5 and i7 quad-core processors. They are the fastest iMacs ever, according to Cupertino.
The 21.5-inch iMac has a 1,920 by 1,080 pixel display, while the 27-incher has a 2,560 by 1,440 pixel display. They have 4GB of 1,066 MHz DDR3 memory, expandable to 16GB, as well as a built-in iSight video camera, microphone, and stereo speakers. They also have built-in AirPort Extreme 802.11n WiFi networking, Bluetooth 2.1+EDR, Gigabit Ethernet, four USB 2.0 ports, one FireWire 800 port, and a new built-in SD card slot.
Apple has also unveiled a new version of its Mac mini that is faster, offers more storage, and comes standard with twice the memory of older models. Starting at $599, the new entry-level Mac mini has a 2.26 GHz Intel Core 2 Duo processor and 2GB of DDR3 1,066 MHz memory, a 160GB hard drive, five USB 2.0 ports, FireWire 800, an Nvidia GeForce 9400M graphics chip, and a SuperDrive.
The new iMacs work with Apple's wireless Magic Mouse, which was also unveiled on Tuesday. This lets customers use finger gestures to navigate a computer screen. There are no buttons, scroll wheels or scroll balls -- the entire top of the device is a seamless multi-touch surface. Magic Mouse comes standard with the new iMacs. It is available as a Mac accessory for $69.
Magic Mouse works for left- or right-handed users. Multi-button or gesture commands can be configured from within System Preferences. The device will be available at the end of October. It requires Mac OS X Leopard 10.5.8 or later.
These new items represent relatively minor tweaks and boosts, Yankee Group's Howe said. "They weren't introduced at an event because Apple understands there's only so many major events it can have in a year and a product line update isn't one of those."
Still, the newly refreshed lines incidate Apple may have more innovative products in the pipeline. If that's true, look for its stock prices to remain high.
Taking Care of Business
At its Q4, 2009 earnings call on Monday, Apple stunned the market with news of its second-best quarter ever, despite the ongoing recession.
Cupertino racked up $9.87 billion in revenues and $1.67 billion in profits for the quarter.
The quarter's strong results were led by demand for Macs and iPhones. "We sold more Macs and iPhones than in any quarter ever," Oppenheimer said.
Historically, Apple's Q4 revenues were second only to the $10.17 billion in revenue it disclosed for its first fiscal quarter of 2009, which it reported last December. However, its profits were higher this time -- $1.67 billion -- than they were last December, when they stood at $1.61 billion.
Gross margins for Q4 stood at 36.6 percent, up from the 34.7 percent reported in December.
What that means is that Apple was generally moving the more profitable items. For example, customers are buying the iPod touch instead of the lower-margin iPod shuffle. The improved margins also meant Apple managed to keep costs down.
Controlling costs is likely one reason why Apple shelled out $500 million to Toshiba for a massive quantity of NAND flash memory chips in July, for instance. Apple makes heavy use of the NAND flash chip in the iPhone.
Love That Mac
Half the buyers of Macs in the last quarter were new owners, according to Peter Oppenheimer, Apple's chief financial officer. Sales of Macs have grown in 19 out of the past 20 quarters, and the educational sector remains a major component of Apple's market.
Although Macs are generally pricier than most Windows PCs, demand for them remains strong for various reasons. Hardware and software quality is a factor, Broadpoint AmTech analyst Brian Marshall told MacNewsWorld.
That value could be style, performance or just plain status, but it doesn't matter as long as people are willing to pay for it.
Yet another reason is that Macs are much less effected by the weak enterprise market than Windows PCs, Gartner (NYSE: IT) analyst Mikako Kitagawa said. "Apple's overall market growth was good because it has a strong presence in the consumer market," she told MacNewsWorld.
Can't Get Over That iPhone
In this past quarter, Apple sold 7.4 million iPhones. The demand for the device stunned even Apple's own executives. "For much of the quarter, demand outstripped supply in many countries for the iPhone 3GS," Oppenheimer said at Monday's earnings call.
Apple has redressed the situation and has 2.4 million iPhone 3GS devices in the channel. That's still not enough for Oppenheimer. "I would've liked to have more because we're still short in some countries given the launch in China," he said. The iPhone goes on sale in China at the end of the month.
Apple is also opening up the South Korean market. The iPhone is selling in 64 countries, and Cupertino wants to expand that to more than 80 countries by the end of December. "The international market will be a huge component for Apple's growth in the future," Broadpoint AmTech's Marshall said.
International sales 
constituted 46 percent of this quarter's sales, the same percentage as last year. Look for Apple to work hard to push that figure higher.
The iPhone is very profitable for Apple, with an average selling price globally of about $600, Julien Blin, CEO and principal analyst at JBB Research, told MacNewsWorld. In markets like the United States, however, that price is greatly subsidized by the wireless carrier in exchange for a long-term user commitment. Apple has likely gained market share from Nokia (NYSE: NOK), Blin said.
A slew of smartphones on the Android operating system is expected to hit the global market this year, but Apple remains unfazed by the competition. The iPhone has significant momentum, Tim Cook, Apple's chief operating officer, pointed out at the earnings call. Combine that with iTunes, the App Store and Apple's "very strong" product pipeline, and Cupertino can be confident in taking on anyone, he said.
A Misty Crystal Ball?
Apple was less than exuberant in its guidance for the next quarter. Oppenheimer expects gross margins to decline to 34 percent. Revenues would be between $11.3 billion and $11.6 billion, and earnings per share would be between $1.70 and $1.78, he added.
"Guidance remains below expectations, but remember, Apple tends to be conservative," said Blin. "Wall Street was looking for fiscal fourth-quarter earnings of $1.91 on $11.45 billion in sales."
In general, analysts were disappointed at Apple's conservative guidance. However, investors must remember that Apple uses guidance as one of its tools of war -- its usual practice is to set expectations low and then exceed them. Keeping a low profile keeps it from shocking investors if demand falls off, and it also lets Apple beat street forecasts regularly, which is good for its image.
Apple has an opportunity to work the enterprise market, Gartner's Kitagawa said. "There is demand from users for the Mac even though IT departments don't want to support them," she pointed out. "But Apple seems to be careless about this market."
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