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With the New iMac Pro, Apple's Mac Momentum Looks Poised to Continue

By Daniel Sparks - Dec 14, 2017 at 3:03PM

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Here's a look at the beastly new computer -- and why it will likely drive growth at Apple.

When Apple's (AAPL 2.45%) new iMac Pro was unveiled this summer, two things were clear: It was a beast, and it was expensive. With the space-gray iMac Pro finally launching this week, the new computer lives up to both of these expectations. Capable of sporting up to 18 cores and 22 teraflops of graphics performance, the iMac starts at a whopping $4,999.

Here's a look at the most powerful Mac ever launched, and what it means for Apple's Mac business.

iMac Pro

The iMac Pro. Image source: Apple.

Meet the iMac Pro

Maintaining the iMac's all-in-one design, the iMac Pro is the first iMac that comes in Apple's popular space-gray finish. Despite its sleek design, Apple was able to pack the iMac Pro with powerful workstation performance.

For $4,999, customers will get a 3.2 GHz 8-core Intel Xeon W processor with Turbo Boost up to 4.2 GHz, 32 GB of ECC (error-correcting code) memory, a 1 TB solid-state drive, and more. But the greatest technological marvel in the iMac is probably its new thermal architecture, which delivers 80% more cooling capacity in the same quiet and thin design the iMac is known for.

Beyond its complex tech specifications, Apple sums up the new iMac Pro in its press release:

With next-generation processors, a stunning Retina 5K display, the most powerful graphics ever in a Mac, super-fast storage and advanced I/O [input/output], iMac Pro is designed to handle the most demanding pro workflows and is the first all-in-one built from the ground up to deliver true workstation-class performance.

Maxing out the iMac Pro will set customers back more than $13,000.

A catalyst for Mac

While most of investors' attention on Apple gravitates toward iPhones, Apple's Mac business is firing on all cylinders. Indeed, Mac revenue hit an all-time high in fiscal 2017, at $25.8 billion. This makes Mac Apple's third-largest segment, behind iPhone and services, and ahead of iPad and "other products."

Furthermore, iMac revenue growth has accelerated recently, climbing 25% year over year in Apple's fourth quarter of fiscal 2017 -- the segment's highest growth rate in years:

A line chart showing Apple's year-over-year revenue growth for its Mac segment by quarter

Data source: Apple's quarterly SEC filings. Chart by author.

The launch of Apple's iMac Pro should help this momentum continue, for several reasons.

First, Apple's Pro devices, including the iPad Pro and MacBook Pro, have been cited by management as key drivers behind the company's recent growth in Mac and iPad sales. This shows the importance of Apple's pro users to its business, and it highlights their willingness to buy new devices. While iMac Pro users are more likely to skew toward the professional side of the professional/"prosumer" spectrum than buyers of MacBook Pros and iPad Pros, this is still a promising trend. It highlights customer willingness to pay more for the best Apple devices.

Second, Apple has a proven history of pricing power, helping transform the introduction of higher-priced products into positive catalysts for revenue growth. Rising prices for iPhones, for instance, have been a significant driver for growth in the segment -- and this will likely continue to be the case with Apple's higher-priced iPhone X. With the iMac Pro's $4,999 starting price, its sales could move the needle for Apple's Mac business.

Combining these reasons to be bullish on Apple's Mac business with the overall momentum of the segment recently, Apple's iMac Pro looks like it's launching at just the right time.

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