It's just embarrassing at this point. For a company that famously demarcated the consumer and professional markets decades ago and worked hard to cater to each of those markets, Apple (NASDAQ:AAPL) has rightfully received an incredible amount of criticism that it is seemingly neglecting the professional market (at least when it comes to desktop users). The Mac Pro, redesigned and launched in 2013, has continued to gather dust over the years with no updates whatsoever -- until now.
The big news today is that Apple invited a handful of journalists to its campus to deliver the message that a newly redesigned Mac Pro is coming. Not this year, but hopefully next. In the meantime, Apple will be bumping the specs of the Mac Pro for the first time in nearly four years.
Apple doesn't apologize often. The most recent and prominent apology was the Apple Maps fiasco from five years ago that contributed to Scott Forstall's ouster, in part because he reportedly refused to apologize; CEO Tim Cook had to apologize on Apple's behalf instead.
For the Mac Pro, Apple is implicitly admitting that its design -- the sleek black jet engine -- was flawed. Apple designed the system with dual GPUs, while creative professionals have been shifting toward a single, larger and more powerful GPU. The problem was that the current design had thermal limitations that couldn't accommodate a more powerful GPU. According to John Gruber, Marketing Chief Phil Schiller then uttered the S-word:
The current Mac Pro, as we've said a few times, was constrained thermally and it restricted our ability to upgrade it. And for that, we're sorry to disappoint customers who wanted that, and we've asked the team to go and rearchitect and design something great for the future that those Mac Pro customers who want more expandability, more upgradability in the future. It'll meet more of those needs.
Schiller's famous line from the 2013 unveiling, "Can't innovate anymore, my [butt]," is now coming back to bite him in precisely that spot.
Meanwhile, the iMac is starting to serve a meaningful chunk of Apple's professional customers, considering the "consumer" desktop's current capabilities. The iMac is also due for an upgrade, although it's in less dire need than the Mac Pro; Schiller says an iMac spec bump is slated for "this year." Interestingly, Apple executives said a new professional display is also in the works, despite prior comments that Apple was exiting the stand-alone display market and instead partnering with other companies.
Apple noted that about 20% of Mac sales are still desktops, which is a higher proportion than most would think. The company has sold $23.3 billion worth of Macs over the past year.
Why Apple had to speak out
Apple pre-announcing a product is almost unheard of, as it's often aiming to avoid the infamous Osborne effect that led to Osborne Computer's failure in the 1980s. I can only think of two notable examples: The iPhone was pre-announced six months prior to launch in 2007, and the Apple Watch was pre-announced by a comparable amount of time in fall 2014 ahead of the spring 2015 launch. The common thread there is that those were both entries into then-new product categories, so pre-announcing had greater potential to hurt competitors than Apple itself.
That's why the announcement of an upcoming Mac Pro that won't be launched until next year (or later) is unique. It will be a rather long wait for a new product in a mature category. Apple probably feels like it has no choice, though, as it's been backed into a corner with criticisms from professional customers that feel like they're being abandoned. Remaining silent for another year or more would be untenable, as it would risk that those users would defect to another platform. Apple had to say something, but pros will still have to wait a little longer for a redesign.
Evan Niu, CFA owns shares of Apple. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2018 $90 calls on Apple and short January 2018 $95 calls on Apple. The Motley Fool has a disclosure policy.