Apple Remains Locked in Transition
Few software developers outside Apple have rewritten their programs to run natively on the Intel-based Macs, presumably in some cases because they expected to have until June before the new machines came to market.
Although Apple is including software on the Intel-based machines that will allow them to run software designed for machines based on PowerPC, those non-native programs will likely run more slowly than they do on the old machines, analysts warn.
Business users, in particular, who depend on applications such as Adobe (ADBE) Photoshop or Microsoft (MSFT) Word may be unwilling to move to the new Intel-based systems until those and other programs run natively on the Intel-based machines, they say.
"There's kind of a wait-and-see going on [by consumers] to try the new platforms and see how the software runs" on them, says Van Baker, an analyst with Gartner.Beyond the risk of slow sales, by focusing its attention and resources on the Intel transition the company could be missing out on potential new markets, analysts say. Some expect this year to be a huge one for "digital living room" devices that allow users to play digital content stored on their PCs over their entertainment systems, for instance. Thus far, Apple offers little for that market and could ostensibly fall behind its rivals there, analysts say. Still, don't look for bulls to dump Apple's stock en masse. Many discount the soft computer shipment numbers as simply Apple clearing the way for the new Intel-based machines -- not as an indication that demand for the company's computers is slumping. Many analysts also chalk up the company's disappointing guidance for the current quarter as company officials being overly conservative. Worries that the company's computer sales may be faltering are overblown, says Noah Blackstein, a portfolio manager with Dynamic Mutual Funds, which is long Apple. "It's Jan. 25. I'm not going to get concerned about a quarter that ends in March," he says. And some analysts say that a focus on PC sales -- or even lost potential sales of new products -- misses the big picture. Apple's resurgence has been a result of the iPod, and that remains the most important story for the company. "They'll get through [the transition] relatively fine, but I don't think it will have a big impact either way," says Darren Chervitz, research director at Jacob Asset Management, which is long Apple. "Anything they do on the computer side is secondary to the iPod business."
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