Apple, Inc. Is Ready for the Holidays

Tim Cook speaking at the October event. Source: Apple.

Apple has just wrapped up its October media event, just a month after its September iPhone event. As usual, everything came in as expected. At this point, Apple has completed all of its 2014 product unveilings, finalizing its overall product lineup as we head into the fourth quarter.

The Mac maker is ready for the holidays.

Apple Pay launches on Monday
Tim Cook started things off with various business updates, which was welcome because he skipped them at the September event. The iPhone 6 and 6 Plus launch has garnered the "most first month orders ever," according to Cook. Sadly, he did not disclose specific figures.

He also confirmed that preorders in China have hit a new record, again declining to give any solid data. Solid data would be useful, as some headlines have suggested as many as 20 million preorders.

Apple Pay was unveiled last month for an October launch, and Cook confirmed it would launch on Monday alongside iOS 8.1. Even in the month since Apple Pay was announced, Apple has added even more banks and merchants to its list of partners.

The company also demonstrated the new features of OS X Yosemite -- which is being released today as a free download. Apple also took the usual jabs at Android, highlighting version fragmentation, while noting iOS 8 adoption is already at 48%.

That's actually low relative to Apple's historical standards. Apple had a rare botch of the iOS 8.0.1 update last month that neutered cellular service and Touch ID, and some users complained about the hefty storage requirements to update over the air. These factors could have held back adoption rates.

Apple is also releasing its WatchKit SDK in November, so developers will have time to create apps ahead of the early 2015 launch. Having app availability will be critical to the Apple Watch's success or failure at launch.

The iPad family gets bigger
Cook pointed out that Apple has sold more iPads in the first four years than any other product in the company's history. With Apple just closing out its fiscal fourth quarter, all of the figures he gave were as of the fiscal third quarter, as to not give anything away ahead of earnings (which will also be released on Monday). Through the fiscal third quarter, Apple has sold 225 million iPads, including 70 million in the past year.

The iPad Air 2 follows Apple's never-ending pursuit of thinness, with this model coming in 18% thinner, at 6.1 mm. The display is now optically bonded and laminated, eliminating a small air gap and reducing internal reflection. There's also a new anti-reflective coating on top.

iPad Air 2's laminated display. Source: Apple.

The new flagship tablet is powered by an A8X chip, offering 2.5 times faster graphics performance. Last year's model had an A7, without the extra GPU power found in "X" chip variants. Apple is also upgrading the camera, and adding various new photography modes like panoramas, burst mode, time lapse, and slo-mo. Touch ID is also included on the new model, as is faster Wi-Fi and cellular connectivity, including LTE carrier aggregation.

Marketing chief Phil Schiller hardly spent any time at all discussing the iPad Mini 3 -- at most, 30 seconds. The smaller tablet's upgrades are easily the most inconsequential of the announcements today. The only new addition to the third-generation model is Touch ID -- if you don't consider the new gold option an "upgrade." That means the $100 price difference between the iPad Mini 2 and iPad Mini 3 only gets Touch ID, which is a pretty steep premium for a single feature.

Apple is expanding the iPad lineup in a big way overall. The new models adopt the same storage configuration pricing that Apple implemented with the iPhone last month. Entry-level models will come with 16 GB, and the next $100 bump boosts that to 64 GB. The same positive implications to average selling prices will apply here, too. Last year's models drop by $100, and Apple is even keeping around the first iPad Mini at an even lower price point. This is the new lineup.


Entry-level price (16 GB)

iPad Air 2


iPad Air


iPad Mini 3


iPad Mini 2


iPad Mini


Source: Apple.

You can't help but wonder why Apple isn't being even more aggressive with the iPad Mini. The device debuted in 2012, and could sell well at $199 while putting pressure on rivals -- and the margin dilution would likely be minimal.

Back to the Mac
The transition to Retina displays has now made its way to the iMac, with a new 27-inch model that sports a 5,120 x 2,880 display. That puts it into 5K territory, and Apple is jumping on that branding as such. The new iMac with Retina 5K display has the same overall design, with most of the improvements on the inside.

Apple says it needed to custom design a new timing controller, while using a process called organic passivation and adopting an oxide TFT panel. Apple continues its dance with graphics vendors, switching back to Advanced Micro Devices for this round. The new high-resolution desktops will cost quite a bit though, starting at $2,499. That's a whole $700 more than the non-Retina version.

When Apple first brought Retina displays to the MacBook Pro family, it started with a $400 premium, and dropped prices within a matter of months. A $700 premium may be a bit much, but at the same time, Apple knows that this computer will appeal to video and photo professionals who are more willing to pay up to get the job done. That's likely truer for a 27-inch desktop than a 13-inch or 15-inch laptop.

The Mac Mini also received some long overdue spec bumps, mostly in the form of faster Intel processors with significantly improved iris integrated graphics performance. Apple is dropping the entry-level price of the Mac Mini by $100 -- it now starts at $499.

With nearly its entire product lineup upgraded heading into the fourth quarter, investors can expect the Mac maker to set even more records.


The article Apple, Inc. Is Ready for the Holidays originally appeared on

Evan Niu, CFA owns shares of Apple. The Motley Fool recommends Apple and Intel. The Motley Fool owns shares of Apple and Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.

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