Appliance buzz
SAN FRANCISCO (CBS.MW) -- Depending on whom you ask, it's either a wireless tablet computer, a portable musical hard drive, or a digital multimedia hub. One theory depicts an integrated keyboard with a removable PDA. Some people even speculate that it's the fabled "Ginger."
What is it?
It's Apple's soon to be unveiled "IAppliance." The company, in a tantalizingly brief announcement, invited Wall Street and the press to see the "breakthrough digital device" when it's unveiled on Tuesday.
Teasing its loyal fans, the invitation merely noted, "Hint: it's not a Macintosh." That small goad was all it took to start a wave of speculation as to what Steve Jobs & Co. are about to unveil.
Just as intriguing is the unusually high level of security. Although Apple (AAPL: news, chart, profile) typically keeps its prototypes undisclosed, the secrecy surrounding the IAppliance has been described as "unprecedented."
"Component suppliers are really tight lipped on this one," said Charlie Wolf, PC analyst at Needham & Co. "They learned their lesson from the ATI debacle." Several years ago, graphics card supplier ATI released advanced information about a forthcoming Mac system. CEO Steve Jobs was said to be livid; Apple subsequently dumped ATI, using NVIDIA components in their place.
Much of the technology press either doesn't know or won't say. Walter Mossberg, who writes the personal technology column for the Wall Street Journal, refused to even speculate ("I'll pass," was all he said). His counterpart at the New York Times, David Pogue, e-mailed that he doesn't know "anything more than what's been published on the Web."
Wall Street is similarly circumspect. Dan Niles, who covers computer hardware and semiconductors for Lehman Brothers, said he had "no sense on it." Andrew Neff, PC analyst at Bear Sterns, thinks a PDA is unlikely, and a digital music device of some sort is "possible."
In 1998, a similar wave of speculation surrounded Apple's never-released multi-media device, code named Columbus. Early prototypes were believed capable of playing DVD movies as well as audio CDs, and were widely suspected to include Internet access. At the time, commentators believed that Apple was "staking its future" on the device. In the wake of the wildly successful IMac, however, the project was shelved.
Since then, peer-to-peer media exchanges -- like Napster and KaZaa - have helped load up hard drives with music and video. A new Columbus-like device would be more timely now, shifting that multimedia entertainment from the home PC into the home theater or living room.
A few brave souls were willing to venture out on a speculative limb. Don Young, of UBS Warburg, wrote a "Think Different" research note. "This product launch signals an important shift by Apple to broaden the brand name into non-PC devices," Young observed.
The device is a possible "home gateway product which provides both broadband attachment, and video distribution via wireless home network," Young surmised. Such a device would be "very complementary to Apple's PC leadership in audio/video editing."
The UBS analyst also speculated that the IAppliance could represent "a shift away from the company's Macintosh/PC roots." A successful, non-PC product launch could signal a "series of Apple 'Appliances' that would address growth opportunities in the 'PC Plus' era." This strategy shift could potentially "reposition Apple from being a low market share player in a low growth PC industry into a leading brand in the emerging digital entertainment era."
That would "improve the growth outlook for the company," Young theorized.
Apple was late in incorporating recordable CD drives into their Macs, compared with other PC makers. There's speculation that this device may atone for that. Joe Wilcox, a staff writer for technology news site CNet, believes the new offering will be "more sophisticated than an MP3 player."
Wilcox expects a component with "massive storage capacity that attaches to Macs and is not solely a stand-alone digital music player." He also expects wireless connectivity to multiple Macs. But, he notes, "there has been no indication from the scant leaks the device will have this capability." He wouldn't be surprised if an updated version of ITunes was simultaneously released.
Charlie Wolf pointed out that whatever the device is, its likely appeal will be to not just Mac fans, but all consumers. "I suspect that this product may be targeted to 100 percent of the consumer market, and not just the 5 percent of the market that the Mac OS owns." He cautioned that "this is really a tough environment to be introducing anything new; If you are going to introduce a breakthrough product now, it's going to have to be platform-agnostic."
Wolf also noted that after a multi-year slow down, the consumer market will likely turn around over the next few quarters. "Apple has a stockpile of over $4.3 billion in cash, so they are well positioned to take some risks and wait for the consumer market to come to them."
Macintosh aficionados have kept the rumor sites busy, unconstrained as they are by the same circumspection as Wall Street or the media. ThinkSecret, a site devoted to uncovering future products from Apple, surmised that Tuesday's announcement will be the first of "what could be many digital hub devices with the debut of a 'music-type' recorder/player."
My own deductive guesswork can be found contributing to the din. I'm theorizing that it's a moderately priced DVD/CD player, a multimedia MP3 jukebox, with DVR (digital video recording) onto a hard drive, CD burning capabilities, and a form of limited Web access to preselected home entertainment related sites, including Apple's ITools.
Wireless networking abilities would allow the transfer of data between the IAppliance and any 802.11-enabled Mac or Windows PC. This would also give the IAppliance broadband access via the PC's faster DSL or cable modem.
Only one site claimed to have unequivocally discovered the secret. Music industry Web site hitsdailydouble.com claims "the mysterious new digital product to be unveiled by Apple next week is the IPod," a portable hard drive for music. Apple's ITunes will "synch" it to their computer collections, in much the way a Palm Pilot allows synchronous data transfer, via an extra-fast firewire data transfer. "The unleashing of the IPod," the site added, "is slated to coincide with version 2.0 of ITunes.
The speculation will end Tuesday, when Apple unveils the new device. We'll just have to wait until then to see who came close to guessing right.
So long,
Calexa