Why is Apple letting Macs rot on the tree?

After years of neglect, refresh announcement later this week may be too little, too late

rotten old apple mac
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Apple has been selling Macintosh branded computers for 31 years, but with its emphasis shifting to smartphones, watches, music and who knows what else, the company has neglected its Mac line, leaving the Apple faithful wondering if the company is still committed to it.

The last time the non-Retina edition of the MacBook Pro received an upgrade was four years ago. The Retina MacBook Pro is more than a year into its current cycle, and the MacBook Air has gone nearly 600 days without a refresh. The Mac Mini has gone 700 days since its last update, one that didn't sit well with customers because Apple removed quad-core CPU options and made the product harder to upgrade after purchase. The Mac Pro, the high-end desktop used by creative types, has not been upgraded in nearly three years, and the last upgrade before that was six years ago.

How bad has it gotten? The influential MacRumor's Buyer's Guide does not recommend a single Mac product right now. In fact, all but the MacBook are recommended as "Don't Buy."

MacRumors' forum isn't the only source of anguish for Apple customers. The Verge, Ars Technica, and ExtremeTech have all taken Apple to the woodshed over its neglect of the Mac line, the notebooks in particular, calling out the company for selling laptops with chips from 2012 and lacking new features like USB-C. While Lenovo and Dell lead with new designs and new technologies in their laptops, Apple's latest idea of innovation is to remove the headphone jack from the iPhone.

Notebooks accounted for 78% of total Mac sales in the second quarter of 2016, according to Gartner. Apple sold 774,000 desktops vs. 3.4 million notebooks. Overall unit sales fell 6% from the same period one year earlier. In fairness, Apple can be excused for skipping the Skylake processor generation because Skylake was made for desktops, and the bulk of Apple's PC sales business is its laptops. The brand new Kaby Lake processor was made for mobile with considerably better power efficiency than Skylake.

Finally, last week, Apple sent out press invitations to an announcement on Mac upgrades slated for Thursday. But questions remain as to whether the upgrades will be anything to write home about, and more importantly, whether Apple really has its heart into the Mac line, or whether it’s focusing its innovation muscle elsewhere.

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Apple CEO Tim Cook recently responded to a MacRumors member's email expressing concern about the product line neglect by saying that he "loves the Mac" and that Apple is "very committed" to it. He told the member to "stay tuned." But some analysts aren’t so sure, predicting that Apple is slowly pivoting away from the slow-growth PC and laptop business. And while most end users are happy with their Macs, others are expressing concern.

Apple did not respond to requests for comment for this story.

Big business

According to Apple's most recent 10-K filing with the Securities and Exchange Commission, the computer business accounted for $25 billion of Apple’s $233 billion in total sales, or nearly 11% of total revenue. The iPad line, which sells for far less per unit, accounts for $23 billion, while iPhone revenue is $155 billion.

Still, $25 billion is $25 billion and who would throw that away? PC sales margins are typically not great, but Apple should have better margins than its competitors since its Macs are much pricier than a similarly-equipped Windows laptop. Martin Blythe, research fellow with Gartner, estimates Mac margins to be about 10%, which would mean $2 billion to $3 billion in annual cash flow for Apple.

Blythe said the Mac line is an integral part of Apple’s product line, but it’s no longer the most important part. He said if Macs disappeared it would hurt the company’s bottom line, but they wouldn’t be that upset.

However, analyst Rob Enderle of The Enderle Group does believe Apple wants to end the Mac line and shift computing use to the iPad Pro, if only to improve the bottom line. In an April column he detailed his belief that Cook wants to end the Mac line, complete with quotes from Cook.

"They think [the Mac market] is going to zero. They just want to pivot," said Enderle. "Apple's larger market is iOS and to eliminate it would be silly. Focusing on iOS would save costs tremendously. They are in massive cost reduction mode. From that standpoint, Mac OS is now the redundant platform. It's the one the minority of people are on. It's not the one they want to push into Cisco and IBM."

Enderle believes Cook, the company's long-time Chief Operating Officer, who honed Apple's supply chain to an enviable level of efficiency, is only concerned with cutting costs and not innovating the way Steve Jobs did.

mac refreshes Mac Rumors, Apple Annual Report

"From the beginning, I said Cook is the wrong guy to run the company. Not that he's incompetent, he's an ops guy. It's all focused on lowering costs and margins. That's how an ops guy runs a company. But ops guys don’t drive the top line," said Enderle.

Clint Evans, CEO for brand development specialist Stand Out Authority, said the lack of innovation seems to be the case across the company. "IPhone [only] has a better camera. iPad sales are down. That seems to be a larger problem across the whole of Apple. There are no huge leaps in innovation with their products and [no] reasons to get the latest and greatest device, even more so as they focus on the core profit maker and still have trouble innovating there," he said.

Is performance an issue?

So Apple is selling MacBooks with processors a few years old. Does it matter to end users? The answer is mixed.

18 macbook pro

"We work with many cutting edge firms, especially the venture-backed start up space using the most cutting edge developers. We see MacBook Pros and MacBook Airs. We haven’t seen a Mac Pro in years. Tells me it's a niche product. However, Mac laptops are very healthy in the workforce," said Noam Birnbaum, founder and president of MacCentric Solutions, which offers IT level support for Macs.

Mac is exceptionally popular with Web developers who write in Java, Ruby, Python and PHP, and Birnbaum said he sees it all the time in the companies he supports. But he hears no complaining about speed.

"I haven’t heard an Apple laptop user complain that their processor is too slow in years," he said. "They are developing either in languages that don’t need to be compiled like Ruby and Python or they code on laptops and compile on cloud services like AWS. They don’t need cutting edge processing power."

However, Sean Worrall, marketing director for Synextra, a managed communications and cloud services provider in England, has stopped Mac purchases due to the hardware falling behind. "The sales team all use Windows PCs, whereas the dev teams use Macs. The neglect to the Mac Pro line has stopped us from investing in one. It isn't cheap. The neglect to the MacBook Pro line has stopped us from upgrading. The MacBook is too underpowered," he said.

Synextra has ceased all Mac purchases until there is a serious update, according to Worrall. "Our current lineups can handle our current workloads. However, we have ideas of expanding and increasing our workloads with video production. And will need more horsepower to achieve these workloads," he said. He adds that he expects those new machines to come this year and it will spur a big burst of buying because they will represent a big leap forward for the Mac.

Birnbaum thinks end users don't have terribly high performance requirements for their laptops. "What are they doing for productivity? Surfing the Web, using Office, using Google Docs. They don’t need the latest and greatest processor. So I am not concerned about processing power in Apple laptops," he said.

Evans said the neglect of the line worries him. "It is a concern about the system because in my business, we use the iMacs, not laptops. Is Apple moving to handheld devices only? I don’t think they are but it is a concern and you look at the evidence of not seeing an update for a lengthy amount of time. They are forcing me to adapt and migrate back over the Windows system, which would be a hassle," he said.

But for now, he said the current Macs get the job done. "If we were a video production company where we had to use the latest Final Cut Pro, we might have more issues. [But the Mac] still exceeds our needs without slowing us down or causing us to lose productivity," he said.

Can iPad Pro replace MacBook?

Even with an old x86 processor, the MacBook is still much more powerful than the ARM-based iPad Pro. For business apps, Enderle argues that Cisco and IBM will do much of their processing in the cloud, so the relative performance of the end point doesn't matter.

But Blythe thinks the product more in trouble is the iPad. "Most people do on an iPad what you can do on a phone. What you can do on a Mac you can't do on an iPad. Is that going to change? If the Mac goes away, how do you dev for the iPad? The iPad doesn't have a developer environment," he said.

Enderle believes Apple will phase the Mac line down but won't flip the switch immediately. "Right now they only have iPad Pro. They will milk the cash cow that is the Mac until they have a better idea to pivot," he said. The most likely victim of the cost cutting ax would be the Mac Pro, a very niche product. It might go the way of the Xserve line, Apple's old line of servers that were phased out in 2011.

[ ALSO: Six of the rarest Macs ]

Birnbaum says, "It is possible the Mac has done everything that can be done with it at this point. Steve Jobs said a long time ago the PC wars are over, Microsoft has won, and he moved on and started developing innovative new products with his company."

But he adds, "As long as the market share keeps growing, I can't see why they would end that. MacOS and iOS are gateway drugs for each other. People will try one, be so impressed they try the other. Mac is a good feeding ground for iOS platform, I don’t see why Apple would phase it out."

Stand Out Authority isn't moving, either. "Our systems still work great. If Apple comes out and says we're going to stop doing updates in six months or a year, then I would adapt and start the transition. But as long as our systems run fine and they keep supporting it, then there's not enough benefit versus cost to go back to Windows systems," he said.

Andy Patrizio is a freelance technology writer based in Orange County, California.

Copyright © 2016 IDG Communications, Inc.

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