Preemptive Strike? Apple Upgrades Mac Computers

The Mac laptop and desktop lineups receive a significant upgrade from Apple as Microsoft prepares to introduce Windows 7

By Arik Hesseldahl

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Days before archrival Microsoft is set to release the next major version of its flagship computer operating system Windows, Apple unveiled a significant upgrade to its consumer personal computer lines, including a redesigned entry-level laptop and a desktop machine sporting a huge display. The product announcement comes a day after Apple's (AAPL) earnings report.

Chief among the new releases Oct. 20 is the MacBook, Apple's $999 entry-level laptop usually aimed at students and first-time Mac buyers. The new machine still sports a polycarbonate shell but now it's cut from a single piece of material and has rounded edges. And like the higher-end MacBook Pro, the new MacBook also boasts a long-life battery that lasts seven hours and a light-emitting-diode (LED) display.

Apple also updated its consumer desktop lines, including the iMac and the Mac Mini, and added an entry-level server built into a body similar to that of the Mac Mini. The server, for running computer networks and corporate Web sites, is aimed at small businesses and certain high-end consumers.

Apple also fundamentally redesigned the desktop mouse, dubbed Magic Mouse, which will ship with the new iMac, making it similar in many respects to the multitouch glass touch panels found on its laptops.

New Products vs. Microsoft's Windows 7

Microsoft's (MSFT) release of an upgraded operating system presents an opportunity for Apple to try to attract users who may be willing to switch to a Mac. Apple is expected to target would-be converts with advertising in the coming weeks that plays up the Mac's security and better suitability for its popular iPods and iPhones. At the same time, Apple Vice-President Phil Schiller dismissed any suggestion that the new products were timed to attract attention away from the launch of Windows 7, set for Oct. 22. "We plan our releases based on our own product cycles," he says in an interview. "We really did not give any thought whatsoever to their schedule."

Timing aside, Apple does want to make the case that its products represent good value, an apparent response to Microsoft efforts to portray the Mac as too expensive. "If Microsoft wants to stand for cheap, that's fine," Schiller says. "We'll stand for quality and support and reliability. Cheap is not everything." He also promised a new round of TV ads and in-store marketing efforts to support the new machines. Microsoft's "laptop hunter" TV ads, which portray consumers shopping for a computer but spurning Macs as too pricey, have stung Apple. And while Apple did trim its prices on most of its systems over the summer, it has left its price structure in place for this round of upgrades.

Absent from the Apple announcements is a netbook or mini-notebook PC, the popular stripped-down, low-priced laptop so many PC makers such as Dell (DELL), Hewlett-Packard (HPQ), and Acer have embraced to boost sales volume. "Apple continues to ignore the advice from analysts and pundits who say it needs to be riding the price curve downward," says analyst Michael Gartenberg, vice-president at Interpret, a New York-based consultancy. "This release just screams to the world that Apple is going to keep its own counsel. It continues to resist the race to the bottom."

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