In a Stevenote sent to Apple employees at mid-year, Jobs awkwardly described the company as a chair with the three legs—wouldn't that be a stool?—: the Mac, the iPod, and the iPhone. As 2007 winds down, it's seems only appropriate to consider the year for Apple from that ternary perspective.
Intel CPUs, iPod Halo, Mac OS X, Windows Fatigue, whatever the cause, the effect is that 2007 will be remembered as a Mac Renaissance not seen since the early 90s. In 2006, 5,655,000 Macs were sold. 2007 will see sales between 7.7 million and 8 million—a 36 to 40 percent increase—and two to three times the projected growth of industry average. Since only the iMac saw significant revision this year, this is especially positive news. Of course, that hardware "leg" of Apple—someone find a new metaphor for Jobs—benefited from new software. Besides iLife '08 and iWork '08, including the spreadsheet Numbers, the tri-named Mac OS X 10.5 Leopard was released in October. During its first weekend alone, Leopard sold 2 million copies, something that took the previous iteration of OS X over a month to do. Mac sales in 2007 were great, a trend that will likely continue in 2008.
While new Macs were scarce in 2007, the iPod line launched two new models, as well as repackaging an old one and adding color to the last. While the Shuffle got color cases, the iPod Classic was kept around to keep the Zune in its place: last. The iPod Nano introduced a wide-screen display to the most popular iPod, and the iPod Touch introduced the touch screen display to people who don't want a phone. In 2006, Apple sold 46,366,000 iPods and is expected to sell approximately 55 million in 2007, an increase of somewhere around 17 percent. While the growth rate for sales may be leveling off, that's still a hell of a lot of media players. In contrast, music sales at the iTunes Store continue to accelerate, with Apple passing the two-billion song mark in January, followed by three billion songs in July, with four, or even five billion, likely to be announced at Macworld Expo in January. The iPod, and the iTunes Store, continued their respective market dominance, and will likely continue to do so in 2008.
Finally, that leaves the third leg of Apple, an appendage whose sales continues to elongate. Introduced at Macworld Expo 2007, the iPhone went on sale six months later, selling 270,000 units in its first two days. Seventy-two days after that, Apple sold its millionth iPhone. Now, rumor has it that the iPhone will have sold 5 million units in 2007, putting it on track to meet projections of 10 million sold in 2008. Clearly, Apple has another hit product in the iPhone.
While this has been a great year for Apple, there have been problems. Lackluster sales of the "sort of a new DVD player for the Internet age," as Steve Jobs awkwardly described the Apple TV, has ensured the furniture metaphor will not become a table anytime soon. However, worse than the failure of the Apple TV in 2007, was the inability of Apple to bring video content to the iTunes Store. The impasse with the movies studios andNBC abandoning the iTunes Store means 2007 saw a decrease in the number of video titles available. Still, even this problem is small when considered against the spectacularly successful transition of Apple Computer.
In 1992, market share for the Macintosh peaked at just over 12 percent, an all-time high. By 1997, Apple Computer's percentage of the PC market had plummeted to less than four percent, and that's about where it stands now. It was only fitting then that 2007 began with a symbolic statement of the obvious, and so should we ring out the end of the year in the same way.
Apple Computer is dead, long live Apple, Inc.!