Is Apple Abandoning Creative Professionals?
For years, creative professionals have relied on Apple (NAS: AAPL) desktops as their go-to tool. However, the company hasn't updated the Mac Pro -- the company's top-of-the-line workstation -- in more than a year, and rumors are beginning to surface that the content-creation industry may soon lose its favorite computer.
The pros need the Macs
Although the iMac and Mac Mini could work for some graphic designers, they simply won't work for resource-hungry applications like professional video production and scientific computing. According to ars technica, power users need features like dual multi-core processors, room for reality-bending quantities of RAM, space for PCI express cards, and the ability to swap out components with relative ease. If Apple kills the Mac Pro, then those users would have to seek out rigs that offer these features, even if that means switching over to Microsoft (NAS: MSFT) Windows-based systems.
But Apple doesn't need the pros
Unfortunately, the Mac Pro represents an increasingly small portion of Apple's total sales. The iPhone accounts for nearly half of Apple's total, and combined, iOS devices make up 70% of sales. Although fourth-quarter Mac sales grew 26% year over year, the make up only 22% of total revenue. What's more, desktop sales -- which were led by the iMac -- brought in only 6% of revenue.
In short, Apple, in a loose sense, has become a consumer-products company that happens to sell computers. Now that the company has found mainstream success, it's gearing more of its products toward the consumer market. Earlier this year, it angered video editors when it stripped important features from Final Cut Pro -- its professional editing suite -- to bring the price down to more consumer-friendly levels.
You can probably see the most evidence of Apple's focus on the consumer market in its latest OS, Lion. Launchpad is designed to look and feel like iOS, and the default scroll settings mimic scrolling on an iPhone.
The potential winners
If Apple does decide to focus solely on the consumer market, it would create opportunities for PC manufacturers such as Hewlett-Packard (NYS: HPQ) or Dell (NAS: DELL) . Either one could step up to fill the high-end workstation space once the last round of Mac Pros starts to die. On the software side, Adobe (NAS: ADBE) -- which already saw a boost in sales of its video-editing software after the Final Cut Pro debacle -- and Avid Technology (NAS: AVID) could capture Final Cut's market share.
If you'd like to follow this story as it evolves, I'd recommend keeping an eye on Apple, but paying closer attention to its competitors. It seems pretty likely that Apple will continue to sell iOS devices by the boatload and can survive without the professional market. However, the competition's mad scramble to snag the customers Apple leaves behind could create interesting investment opportunities. Add these companies to your watchlist and stay up to date on all the latest news:
- Add Apple to your watchlist.
- Add Microsoft to your watchlist.
- Add Dell to your watchlist.
- Add Hewlett-Packard to your watchlist.
- Add Adobe to your watchlist.
- Add Avid Technology to your watchlist.
At the time this article was published The Motley Fool owns shares of Apple and Microsoft.Motley Fool newsletter serviceshave recommended buying shares of Microsoft, Dell, Apple, and Adobe Systems, creating a diagonal call position in Adobe Systems, and creating bull call spread positions in Apple and Microsoft. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors.Fool contributor Patrick Martin owns no shares of any of the companies mentioned here. You can follow him on Twitter, where he goes by @TMFpcmart03. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.