It has been an odd couple of months for Apple's (AAPL) Mac business, which still accounts for over 10% of the company's sales.
Apple has refreshed one important Mac product line to decent reviews, and just affirmed its commitment to another part of the business. Yet questions about the Mac line's strategic direction, and which parts of the PC market it plans to target going forward, have grown larger than ever.
In a post on an internal Apple message board that answered a series of employee questions, Tim Cook responded to a question about whether Mac desktops remain "strategic" to his company by insisting it's very much due to the performance/feature advantages desktops can provide relative to notebooks, and promising Apple has "great desktops on our roadmap."
The remarks arrive about two months after Apple overhauled its MacBook Pro high-end notebook line by launching systems sporting faster CPUs, GPUs and flash storage, along with an OLED touch strip (known as the Touch Bar) that provides different controls and input options from one app to the next.
No desktops were revealed at the event, and together with the fact Apple's iMac, Mac Mini and Mac Pro desktop lines haven't respectively been refreshed since 2015, 2014 and 2013, this had stoked fears Apple was putting Mac desktops on the back burner.
But Cook said nothing in his post about refreshing the MacBook Air, Apple's cheapest product line for a notebook market whose size now easily dwarfs that of the desktop market, and from all signs a big part of its consumer Mac business in recent years. The Air line, which starts at $999, was last updated in early 2015.
Since then, Intel (INTC) has twice refreshed its processor lineup -- first with its Skylake architecture in 2015, and then in recent months with its Kaby Lake architecture -- something that has made the Air's internals look outdated relative to rival thin-and-light notebooks. Outside of the Air line, Apple's cheapest notebook is the 12-inch retina MacBook, which starts at $1,299 and was refreshed with Skylake processors this spring.
Meanwhile, a Tuesday Bloomberg report from the well-connected Mark Gurman states "the Mac is getting far less attention [within Apple] than it once did." The Mac team has reportedly "lost clout" with Jony Ive's industrial design team, and workers talk of "a lack of clear direction from senior management, departures of key people working on Mac hardware and technical challenges" that have led to product delays.
Gurman adds Apple has restructured its software engineering division so that there's no longer a dedicated MacOS team -- there's now just a single OS team that tends to prioritize iOS -- and is prepping only "modest updates" to its Mac line for 2017.
New iMacs will reportedly feature high-speed USB-C ports and AMD (AMD) GPUs -- one has to think new Intel CPUs will also arrive -- and the MacBook Pro and 12-inch MacBook will receive "minor bumps in processing power."
And as questions mount about the extent of Apple's Mac commitment, the company has dialed up its efforts to market the iPad Pro -- offered via 9.7-inch and 12.9-inch models that respectively start at $599 and $799 -- as a computer, rather than just a powerful tablet.
Apple has also been steadily adding to iOS' multitasking abilities and baking more enterprise-friendly features into the OS. In addition, new iPad Pro models sporting 12.9-inch and 10.5-inch screens are reportedly due in 2017, and an iPad with a flexible OLED display is rumored to be in the pipeline for 2018.
All the same, convincing MacOS and Windows users to ditch their notebooks in favor of a device lacking USB or mouse support often won't be easy. And while PC sales are certainly slumping, tablet sales (iPad or otherwise) haven't been booming either during the last few years.
Strong iPad Pro sales allowed Apple to register positive annual iPad revenue growth for the first time in years during its June quarter (revenue was flat in the September quarter). But Apple's total iPad revenue only amounted to $4.3 billion last quarter, less than Mac revenue of $5.7 billion in spite of a 17% annual sales drop for the latter ahead of the MacBook Pro refresh.
It should be noted Apple has a history of making controversial technology bets that in time end up looking brilliant or at least ahead of the curve. The company's decision not to support Adobe Flash on iOS fits the bill, as does doing away with DVD drives and removable batteries on MacBooks and aggressively embracing flash storage within iPods.
And of course, there's the iPhone, which in several ways rewrote the rules on what a smartphone should look like and in doing so spawned the world's most profitable consumer electronics business.
Thus, if Apple has decided to steer cost-sensitive notebook buyers towards the iPad Pro, and more broadly pay less attention to its Mac operations relative to its mobile hardware and software, it deserves the benefit of the doubt.
Still, until either Mac or iPad sales pick up meaningfully, concerns about where a 32-year-old business doing over $22 billion in annual sales is headed will understandably remain.