Finding a way to ratchet up performance for graphic designers and other professionals who use Macs is clearly a priority for Apple. Power Mac sales are among the most profitable products that the company sells, with one analyst pegging the profit margin at about 30 percent, compared with 20 percent margins on the iMac family. At the same time, sales have plummeted in recent quarters. Last quarter, Apple sold just 156,000 Power Macs, down from a peak of more than 400,000 a quarter in early 1999 and down from 211,000 units sold a year earlier. Apple itself has warned in regulatory filings that it may be unable to boost its profitability without a pickup in Power Mac sales. "If future unit sales of Power Macintosh systems fail to partially or fully recover, it will be difficult for the company to improve its overall profitability," Apple said in a December filing with the US Securities and Exchange Commission. Yet, as important as Power Mac sales are, Apple has made little progress in improving the machines' performance in recent years, largely because of an inability to get faster chips from Motorola. "Apple's Power Mac lineup targeting the graphics professional market has received scant attention in recent years," Needham analyst Charles Wolf said in a research report this week. Projecting that Apple will introduce new Power Macs, Wolf on Wednesday upped his rating on Apple shares to "buy" from "hold." If Apple can offer a significant performance boost, the company has a large base of graphics and design customers that may be willing to upgrade their machines, Wolf reasoned. Plus, Apple got another boost earlier this month when Quark announced it was ready to ship a new, Mac OS X-native version of its Quark XPress layout program. Bear Stearns analyst Andy Neff said a move to IBM 970-based Power Macs is expected. "The prevailing view is that Apple will also use (the developer conference) to unveil new hardware -- in particular that it will pre-announce G5-based desktops" running "IBM's new 64-bit, PowerPC 970 chip," Neff said in a research note on Thursday. An Apple representative declined to comment. However, Neff noted that it's not certain when Apple will ship the machines. Some machines could be ready immediately, analysts said. On the other hand, the company could announce machines but not ship them for several weeks. Supplies of the existing Power Macs, particularly the high-end machines, have dwindled in recent weeks, according to sources. Apple traditionally makes its biggest announcements during Jobs' keynote speeches at the twice-yearly Macworld Expo. However, Jobs is taking a pass on this year's scaled-back Macworld CreativePro event in New York. That has fuelled speculation that the developer conference will be the launching point for the new Mac architecture.
What will Apple come up with next? For full Mac OS coverage, see ZDNet UK's Mac News Section.
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