Apple's Brick: A Radical New Laptop?

When they're not hand-wringing over the recent drop in Apple's share price, Mac enthusiasts have been transfixed lately by the mystery product, code-named "brick," that's due for release later this month.

Some bloggers and pundits have suggested it might be a new iteration of Apple TV or an updated Mac Mini. But according to a report on 9to5Mac.com, "brick" refers not to what it is, but how it's made. The Web site, which cites an anonymous source, says the code name has to do with a manufacturing process for Apple's MacBook and MacBook Pro lines of laptops. Apple (AAPL) will build the notebook out of a single piece of carved-out aluminum—a brick.

Whatever it signifies, the new computer may be precisely what Apple Chief Financial Officer Peter Oppenheimer meant when he referred to a "new product transition that I can't talk about yet" during Apple's most recent earnings conference call in July. The transition is among the reasons Apple said it expects to make lower gross profit margins (BusinessWeek.com, 7/22/08) during the next several quarters.

But if the new product does prove to be a notebook made from a block of aluminum, how much pressure are Apple's margins likely to undergo? More to the point, would Apple's brick be a brick?

Savings on Materials and Labor

A radically different production method might well boost costs, at least at the outset. But there could also be savings from the change, says Kevin Keller, an analyst at market research firm iSuppli. "If you're working with one single unit of metal, you're reducing a lot of the materials costs and also a lot of labor time on assembly," he says.

Using a single piece of metal would also provide the opportunity for the kind of design flourishes that distinguish Apple and its chief executive, Steve Jobs. Screws might be minimized or eliminated entirely. Seams joining different pieces of metal would disappear. In short, these notebooks would be unlike anything else on the market in appearance and design.

Apple has been known to push the envelope on notebook design over the years. Its metallic MacBook Pros have inherited a distinctive look and feel that dates to 2001 when Apple launched its PowerBook G4 product line. Since then, there has always been a metal notebook, sometimes boasting a titanium shell, sometimes one of aluminum.

But coring out a block of aluminum, while fairly common in some products, such as types of wireless telecom gear, is a slow process, Keller says. "The issue for Apple, which would presumably be doing it millions of times, would be speed," he says. "It's very time-intensive." Presumably, Apple could bring innovation aimed at streamlining the manufacturing process, he adds.

Patent Filings

Apple declined to comment on its plans, but the company has made patent filings related to the design of notebook enclosures. In May 2007, it filed for a patent on a design for "enclosure parts that are structurally bonded together to form a singular composite structure.… That is particularly useful in portable computing devices such as laptop computers."

Another important factor in the success of these new laptops is where they would be made. 9to5Mac's informant suggests that Apple might bring final assembly of the product in-house. In a world where notebook PCs are made almost exclusively by third-party manufacturers because of labor costs, the thought of Apple getting back into the business of manufacturing notebooks would send shivers up the spine of any shareholder. "I'd be shocked if they started doing any of their own assembly," says Andy Hargreaves of Pacific Crest Securities in Portland, Ore. "That's the kind of drastic step that would hurt profits. I'm just not sure what the advantages would be."

Then there's the expense of setting up a factory, purchasing the equipment, securing the real estate, and hiring the labor. None of this could be done on the cheap, though Apple at last count had nearly $21 billion in cash and could easily absorb the expenditure. Apple owns a 305,000-square-foot manufacturing space in Cork, Ireland, that also houses a customer-support call center. It also owns an 805,000-square-foot warehouse and distribution center in Sacramento. Building and ramping up a factory is an enormous project that takes a lot of time and a considerable effort around logistics. Parts have to be shipped in, and finished products have to be shipped out.

Buying Real Estate

There's no evidence Apple has undertaken the construction of a new facility, though in recent years it has been purchasing real estate near its headquarters in Cupertino, Calif., for a second corporate campus. On the off chance Apple wants to do some of its own manufacturing, the company would most likely be considering a site in China. "If they're doing this at all, there is no doubt in my mind that it would have to happen in Asia," Keller says.

Apple stock rose 1.07, to 98.14, on Oct. 6, though it has been hammered in recent months on concerns that the economic slowdown and financial market crisis gripping Wall Street will crimp demand for its products. Whatever form its brick takes, Apple will want to ensure that it can be manufactured as efficiently as possible—and hold plenty of appeal for consumers.

 

Business Week

Le Sony VAIO TT dévoilé

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Android: Google's Dream, Apple's Nightmare?

One photo circulating on the web that is reported to be of the HTC Dream. T-Mobile will unveil the first Android handset on Sept. 23

A new smartphone is debuting on Sept. 23, and, no, it's not just another iPhone clone. The HTC Dream from T-Mobile will be the first handset to run Google's new mobile operating system, Android. And while it won't look as sleek as the iPhone, it promises to give mobile-phone users a lot more freedom and flexibility.

Many of the Dream's features are under wraps until launch, but based on leaked photos and videos along with screenshots released by Google, we already have a pretty good idea of what to expect. The biggest departure from the iPhone design is the inclusion of a physical keyboard, which apparently slides out from underneath the Dream's touchscreen. The Dream will also allow users to run multiple applications at once and more easily share contacts and data between them. And if reports from developers TIME interviewed prove true, mobile-phone users will finally be able to cut and paste text in emails — a function that's frustratingly absent on the iPhone. The Dream, which is expected to go on sale in late October, will also reportedly cost the same as the 3G: $199.

The sweetest part of the Dream is the Android Market — Google's answer to the Apple App Store. Whereas many Apple apps cost money (typically anywhere from $.99 to $9.99), at launch all Android Market apps will be free. That includes BreadCrumbz, a picture-based navigation program that doesn't just give you a drawing of your route, but also includes real-world photos to keep you on track. Another interesting app,TuneWiki, is a tricked-out music player that encourages mobile karaoke, by synchronizing written lyrics onscreen to the song's YouTube video. It also shows you what songs other TuneWiki users near you are listening to in real time. Since Android is better than the iPhone at running multiple programs at once, you won't have to choose between apps: As BreadCrumbz helps you find your way to a party, TuneWiki can play your favorite Rihanna video and get you in a groovy mood. When it's time to make a right turn, BreadCrumbz will cut in and alert you.

Android has several other key advantages over the iPhone operating system. While Apple takes a top-down approach to app development — the company must approve every app that makes it into its App Store — Google will allow creators to upload any application to the Android Market without its review. Sure that means some duds will make it in, but it will also allow for a much more open and democratic way for favorites to evolve. Perhaps more significantly, users will not be limited to a single phone or carrier for long. While T-Mobile's HTC Dream will be the first phone to run Android, Google is inviting all carriers to develop handsets for the platform. Expect to see other compatible devices early next year.

Most of the Dream's other features are expected to go toe-to-toe with the iPhone, including built-in GPS, a tilt sensor for gaming, and a camera. What's more, T-Mobile recently expanded coverage for its 3G data network to 27 major cities. The faster bandwidth promises to make watching videos and downloading websites go smoothly, but if the spotty 3G coverage offered by AT&T for the iPhone is any indication, buyers should treat this promise with deep skepticism.

On the downside, don't expect the Dream to be anywhere near as slick and shiny as the iPhone. T-Mobile may be much loved among teens for its colorful, flip-screen Sidekick, but the HTC Dream will likely have a more staid look that lacks the iPhone's panache. Plus, no one can turn on the hype machine quite as well as Steve Jobs. But whatever the Dream may lack in flair, it's no less of a breakthrough when it comes to giving mobile-phone buyers more ways to connect on the go.

See photos of the iPhone 3G hitting stores here
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