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Macworld 2008: MacBook Air, Apple TV, Time Capsule, iPhone, iTunes Movie Rentals

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Every year since 1997, Apple CEO Steve Jobs has given the opening keynote address at the Macworld Conference & Expo in San Francisco. These speeches have come to be known as "Stevenotes," and generally feature Jobs in blue jeans and a black turtleneck reporting on the previous year and announcing new products, promotions, and strategies. Expectations for recent Macworld Stevenotes have ranged from "high" to "frenzied." After all, 2006 featured the debut of Intel-based Macintosh computers, while 2007 saw the introduction of the iPhone!

Apple is notoriously tight-lipped about product announcements, and speculation runs wild in the weeks, days, and hours leading up to the event. This year the speculative focus has been on a subnotebook and electronic movie rentals through iTunes, both of which were delivered. Apple remained silent, only hoisting banners prior to the event with the tagline, "There's something in the air." The secrecy helps build intense interest in the event, but Steve Jobs' rock star persona persists only as long as Apple continues to deliver on what it promises. So what does Macworld 2008 bring?

Time Capsule

Time Machine is Apple's backup software solution, providing transparent backups to an external drive. It leaves MacBook and MacBook Pro users out completely, since the entire basis for Time Machine is complete transparency, but Time Machine requires a physically connected external drive, which laptops don't generally have. Time Capsule combines an Airport Extreme 802.11n wireless base station with a 500GB ($299) or 1TB ($499) hard disk, and Time Machine will use the drive, no physical connection required.

iPhone and iPod touch Software Upgrade

Several weeks before Macworld, iPhone operating system v1.1.3 leaked onto the Internet, so this was no surprise, except to those who doubted its authenticity. With today's upgrade, the iPhone gains a pseudo-GPS using cell tower and Wi-Fi hotspot triangulation, multiple-recipient SMS, a customizable home screen, and more. iPod touch users will gain many of the iPhone features previously missing, such as Mail, Maps, Stocks, Notes, and Weather, but they will pay $20 for the upgrade. I suspect that this is the result of Apple's interpretation of tax laws, the same concern that previously caused them to charge $1.99 for a MacBook 802.11n software upgrade, but we will likely have to wait for the next Apple quarterly conference call to be sure.

iTunes Movie Rentals

iTunes Movie Rentals were also highly-rumored prior to the show, even prompting Netflix to make their rental policy more generous in an effort to steal Apple's thunder. All major studios (20th Century Fox, Disney, Warner Bros, Paramount, Universal Studios, Sony Pictures Entertainment, MGM, Lionsgate, and New Line Cinema) will be making movies available via iTunes 30 days after DVD release, for $2.99 or $3.99 depending on whether a movie is considered a "new release." HD versions with 5.1 surround sound will cost $1 more. Once you start watching a movie, you only have 24 hours to finish it, but you can transfer it to an iPod or iPhone mid-movie.

Apple TV

The new Apple TV allows users to order movie rentals (including HD movie rentals with 5.1 surround sound) or buy TV shows or music directly on the Apple TV. It can also view photos from Flickr or .Mac, play podcasts, and more. It will sync with a computer if one is available, but doesn't need to; it can operate as a completely standalone device. The software upgrade is free, and a new Apple TV is $229.

MacBook Air

MacBook Air, "the world's thinnest notebook" is thinner at its widest end (.76") than the runner-up is at its most narrow end (.80"), and is only .16" at its narrow end, and yet it includes a full-size keyboard and 13.3" display. It is Apple's third notebook computer, and seems in some ways to be both the low-end (80GB hard disk, no optical drive or ethernet) and high-end (multi-touch trackpad, backlit keyboard, 5-hour battery) model, so they've placed it in the middle, at $1799.


Apple has been hurt by major music labels choosing to make unrestricted MP3s available through Amazon but not iTunes, despite — or perhaps due to — Apple's leadership in pushing for unrestricted MP3s. At least publicly, Apple is ignoring the issue and forging ahead with something even more impressive: getting all major movie studios on board. It remains to be seen how less restrictive time limits from Netflix might steal some of Apple's thunder, but Netflix doesn't seem to have more than a small fraction of Apple's mainstream credibility, so I suspect the majority of of people aren't going to know or care about the Netflix offering. The prices are very reasonable, and Apple's willingness to compromise by allowing more than one price for apparently arbitrary reasons (the age of a movie) may signal an interesting future when Apple resumes negotiations with music labels. In the meantime, I think Apple is going to rent a lot of movies.

The Apple TV improvements are what many people expected when it was first released, but delivering too late is better than delivering too little, and Apple appears to have delivered at least what people have been expecting. Movies, HD movies, songs, podcasts, photostreams, and YouTube all with or without a dedicated computer makes for a winning device, and $229 is important more as a symbol — a price cut — than as a target price point. At $229, again, Apple will be selling a lot of these.

The Time Capsule came first because it's the hardest sell. Those of us who have upgraded to Leopard and dismissed Time Machine because we use MacBooks and MacBook Pros know the value of Time Capsule, but that's a relatively small group of us, at least compared to the target audience of Apple TV, which is now everybody with a television in the United States. The only question for us is whether we would rather pay for a Time Capsule or instead rely on free software that tricks Time Machine into using any standard USB drive on a network. I already own an Airport Extreme and several terabytes of external disk, so I have to decide whether I'm willing to pay $300 for the approved Apple solution or download the free utility. I'm not sure how I'll decide.

The big news, unquestionably, is the MacBook Air. Everything about the MBA will be debated in the weeks to come: the name, the price, and the lack of optical drive are just starting points. For some, this will be the notebook computer of their dreams, and the two weeks before it is scheduled to ship will be agony. For others, the idea that someone would pay more to get less will always be a mystery. I think that Apple has raised the bar when it comes to notebook computers, and I'm impressed that the company that first shipped desktop computers without a floppy disk drive will soon be shipping laptop computers without even a CD-ROM drive. It has been done before, but never like this.

During the Stevenote, Jobs outlined four points, though I've split iTunes Movie Rentals and Apple TV into two separate points here. I think he's delivered five solid wins, though some with less pizazz than others. There will be squabbles over the $20 upgrade charge for the iPod touch, and Greenpeace is unlikely to let Apple off the hook even after a lengthy description of how the MacBook Air is the greenest computer yet, and the future relationship of iTunes and the major music labels is cloudy, but overall it looks like 2008 is going to be another good year for Apple.

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  • Left out of the article is my surprise at how much of this speech was known ahead of time. Apple has tended to be very good at keeping things mum, with the occasional betrayal by a major publication on deadline (like Time).

    In this case, only Time Capsule and Apple TV weren’t discussed ad nauseum prior to the event, which is interesting.

  • Those damn bloggers are getting better at digging, aren’t they? I’m still waiting for that G5 laptop, though. I kid, I kid.

    I might be the only happy person that the iPhone didn’t get a major upgrade. I’m planning to buy one next week and I didn’t want an upgrade to ratchet up the price or screw with the supply. Next Thursday may be the greatest day of my year.

  • Josh, I didn’t expect a phone upgrade at all. It’s only been 200 days! Look for a phone hardware upgrade closer to the one-year mark, or even later.

    I’m waiting for Ken Edwards to show up and complain about something, I bet I even know what he’ll complain about, but he could surprise me. 🙂

  • ae

    Dear Mr. Jobs,

    Over the last 10 years I have been a avid consumer of Apple products. I have been especially happy since you came back and have really brought the type of vision that was required to bring a new level of integrity to the hardware and software produced by Apple. In this time I have purchased over $20,000 of Apple products for myself and my family and have never had to look back. I have always been happy and my family has been too. I have even convinced my employers to switch some of the mission critical activities of our organization to rely on Macs!

    But now I feel more than disappointed and betrayed. The idea of thinking different was more than how an OS should look or feel it was about not compromising quality and creating truly innovative products. These two qualities brought the integrity of Mac one notch higher than the rest of the products in the industry and in many ways Apple has maintained that integrity in its products. This integrity was also found in the way customers were treated and assisted to purchase the right product.

    However, integrity has been loosing ground in Apple’s business model. Greed seems to have crept in. I understand yours to be a business and it to have a model which requires sales to be maintained through the Christmas season. After all, stock holders would not be happy to hear that sales of the Airport Extreme went down for 4 or 5 months because consumers were waiting for a product you had promised them (and there lief the genius of Apple’s marketing strategies). They would rather hear that we bought many Airport Extremes and then bough many Time Capsules.

    The issue here is that we received messages that would lead us to believe that a new back up system was in development that would favour wireless routers, the Airport Express to be specific, and so we bought it. The new OS would also help in this area and so we bought it too (and as per the numbers of your keynote at MacWorld, we seem to have done in in large numbers) but then we were told, we would not be able to use the Airport Express with Time Machine. We asked why and no one could give us a clear answer. Then came Time Capsule, which is a superb product and is exactly what I wanted to buy two moths ago, came out. I felt stupid. I am sure you know the feeling. Its like when you just bought a fancy trinket at a bazaar and when you got home it did not work. The difference being that Apple is not supposed to be a bazaar and that it was not under $5.

    So let me summarise the situation from my perspective. Worse case scenario: we were lied to – we were told that with an Airport Express and Leopard we would be able to use Time Machine. Best case scenario: information was withheld from us that caused us to invest in the wrong product which means that we hare out $179 CND and have a two month old product that is obsolete and mostly useless.

    Don’t forget that we, the consumers, are also investors in your company and that although we don’t participate in the board meetings we are the people that paid your salary last year, the people who made Apple sales soar over the last few years – we are the consumer.

    What is the old saying: “Bite me once, shame on you, bite me twice, shame on me!” Well, lets just say that I have now been bitten and seen how you have bitten a few of my friends. My frustration had grown watching some of the actions of Apple such as the price drop of the iPhone, but having been ably persuaded to purchase something that would only make your sales charts look better and that would have little to no use for me is indescribable.

    You have spoken of technology being a bumpy road, and it can be, but it seems that this bump is more greed then need. I don’t believe Apple executives naive enough not to have been able to foresee this situation. I just wonder why it was not an obvious choice to have a free firmware upgrade that would allow those of us (Apple’s early adopters) who had, in anticipation of your products, purchased the Airport Extreme to have the full potential of your products? This greed is also exemplified by have a $20 imaginary tax for all iTouch owner who al wonder why Mail and Maps were not there in the first place.

    I am disappointed to say the least because to have integrity in a product and then to loose it in one’s business practice for a profit only signal the beginning of the end of an organisation (Sony should be a good example of this).

    I sure hope that I am wrong. I sure hope that this is not the end. Just remember if I can’t trust your business practices, I can’t trust your products, I’ll look elsewhere – even if there are compromises.

    With hope for a brighter future and greater insight and foresight from the Apple executive than in the last six months, I hope that the firmware update will be pushed out in the next couple of weeks.