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Apple Satisfies the Patriots and the Pros

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In one fell swoop, Apple (NASDAQ: AAPL  ) just made good on two promises. The company's professional desktop offering had gone neglected for so long that many of Apple's pro users had begun to wonder if Apple still cared about them. At the same time, Apple and other tech giants have been under increasing political pressure to bring jobs home, since most of them tap cheap labor in Asia.

The new Mac Pro satisfies both the patriots and the pros.

A twofer
When Apple first started shipping its latest iMacs, some buyers noticed that their new desktops were assembled domestically. In a pair of subsequent interviews, Tim Cook confirmed that he was planning on bringing production of certain Macs back to the U.S. and that Apple was investing over $100 million in order to do so.

Apple will still inevitably source some of its components from abroad, but the Federal Trade Commission's requirement to earn the "Assembled in USA" title is that a product's "principal assembly" takes place stateside. The Mac maker says that it's assembling "the entire product and machining several of its high-precision components" in the U.S., tapping companies in Texas, Florida, Illinois, Kentucky, and other states to build the Pro.

Google (NASDAQ: GOOGL  ) took a shot at earning political goodwill when it said that its Nexus Q would be assembled in the U.S. When the Nexus Q was unveiled last year, The New York Times promptly ran a profile on it, and the immediate timing (same day) gave the impression that Google had traded exclusive coverage for positive press. Big G was tapping a domestic contract manufacturer instead of an Asian one, and most of the components were also made in America.

Sadly, the Nexus Q proved to be a misstep, mostly due to its high price and limited functionality. The search giant discontinued it before launch, but will inevitably need to resurrect it in some form or fashion, as streaming set-top boxes are strategically important to ecosystem viability. Set-top boxes tend to compete at the $99 price point, so Google may need to save on costs by manufacturing abroad to be a contender.

Apple has a strong position with creative professionals, and the outgoing Mac Pro design was starting to age. Tim Cook responded to a customer email last year, saying new models were due out in 2013.

Why does Apple care?
As far as the financial implications of the new Mac Pro go, investors shouldn't get too excited. Starting this fiscal year, Apple no longer discloses its product mix of desktops and laptops within its Mac lineup. In fiscal Q4 (the last quarter with reported desktop data), total desktops were just 3.5% of total sales, a continuation of their declining importance.

Source: SEC filings. Fiscal quarters shown.

Within desktops, the consumer-oriented iMac is the most popular seller, and the Mac Mini remains Apple's most affordable Mac. The Mac Pro starts at $2,499, so the desktop average selling prices of $1,295 make it clear that the Mac Pro hasn't been a big seller in terms of units.

Source: SEC filings. Fiscal quarters shown.

Apple's commitment to innovate in financially insignificant products is one of the ways that it has solved the Innovator's Dilemma -- by prioritizing products over profits. Most traditional business managers wouldn't allocate development resources to unimportant products. Even the father of disruption theory, Clayten Christensen, has acknowledged that there's "just something different" about Apple.

Think different
Apple has a history of cranking out revolutionary products... and then creatively destroying them with something better. Read about the future of Apple in the free report, "Apple Will Destroy Its Greatest Product." Can Apple really disrupt its own iPhones and iPads? Find out by clicking here.

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  • Report this Comment On June 12, 2013, at 5:54 PM, eldetorre wrote:

    This is such a joke! I run a facility full of aging mac Pro's ! No this does not satisfy me, nor does it satisfy most of the PROs I deal with!

    Non standard form factor, poor thermal design means the top mount fan will be running all the time. The Mac Pro is basically going to be a lower velocity blow dryer. Get someone who designs heat sinks or thermal transfer systems to explain in detail!

    Video cards non standard interconnect. Extremely limited upgrade potential both because of form factor and thermal constraints. Only 4 memory slots! Internal Storage expansion is limited. External expansion is too slow. ( Thunder bolt 2 is based on PCIe 2.0, it really should be called 1.1 all it does is combine two existing channels. Its the equivalent of a single 8x PCIe slot at BEST Moving 8GBs peak)

    Compare that to most current computers, even fairly low level ones that have Multilple PCIe 3.0 slots A single 16x slot will Move 32GBs peak.

    Is it good, Sure. But only for semipros with limited external connectivity needs.

  • Report this Comment On June 13, 2013, at 12:04 AM, Shooshie wrote:

    The new Mac Pro is going to be the most incredible desktop Mac ever produced. Many seem to misunderstand the vision behind it. The use of Thunderbolt enables Apple to offload the PCI chassis, internal drives, and a number of connectivity protocols, all of which can be connected through Thunderbolt itself. The result is a CPU that's really just a CPU. You get to add the parts that you need, and not have to put up with the empty space inside a giant enclosure for stuff you don't need.

    Engineers who have actually seen and worked with the prototype say that it is whisper-quiet. No more vacuum-cleaner style fan noises. Of course the unit produces heat; all CPUs do. What matters is how well Apple's designers have handled the heat flow, and all indications are that this is beautifully handled, as in superb thermal engineering.

    The footprint of this Mac Pro is about 6 inches across, and it's just under 10 inches tall. That is wonderful. The offloaded drives (dozens of times faster than Firewire) can be put out of the way, even isolated in a sound-proof closet for audio studios.

    Apple hit this one out of the park. A lot of professionals, including myself, are anxious for this to hit the market. You can bet we'll be snapping up these bad-boys.

  • Report this Comment On June 13, 2013, at 12:19 AM, Shooshie wrote:

    One more thing: When Thunderbolt hits its design peak, it will be much faster than PCIe 3.0. This is basically version 2, already doubled in speed, with much more to go. PCIe 3.0 is very new, itself, and it's important to remember that as PCIe speeds go up, so will those of the Mac Pro. Thunderbolt is merely a connection technology. the new Mac Pro is actually built around PCIe. The two will be working together. The speeds already achieved make previous Mac Pros look like turtles. Industries rarely even move this fast to take advantage of the newfound speed. By the time a significant range of products exist to take advantage of the new speeds, there will be new Mac Pros that take it even further. This is one time, though, that I won't mind being the guinea pig for the version 1 hardware. When a new one comes out, I'll pass this down to someone who needs it and get another. I think Apple is going to see a lot of converts to the Mac Pro based on the specs I've seen in the preview. Oh… and don't forget. That was just a preview. The final product is always significantly better than the preview from 6 months before.

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