2005 in review

Posted by Dennis Sellers Dec 30, 2005 at 2:34am

Next month’s Macworld Conference & Expo in San Francisco is expected to be a BIG event. No surprise as the 2005 version was, as well. In fact, so was much of the entire year. Let’s look at the highlights.

In his Jan. 11 keynote Apple CEO Steve Jobs introduced the Mac mini, which he said was “very, very tiny” and was “the most affordable Mac ever,” starting at US$499. “It’s a BYYOKDM bring you own keyboard, display and mouse) system and can hook up to any industry standard display, keyboard and mouse” Jobs said. “Potential switchers no longer have an excuse not to switch to the Mac.”

Jobs also said that 2005 would be the “year of high definition video,” during his Macworld Conference & Expo keynote. He said that Apple’s Final Cut Pro HD was the best product for this, but that the company was adding Final Cut Express HD. He also introduced iLife ‘05 during his keynote. Almost all apps – iPhoto, iMovie, iDVD, GarageBand and iTunes—saw major upgrades.

Jobs also introduced Work ‘05, a sort-of successor to AppleWorks. The bundle included Keynote 2, an update of the presentation software, and a new app called Pages, which Jobs described as “word processing with an incredible sense of style.” Look for iLife ‘06 and iWork ‘06 to roll out at Macworld San Francisco 2006.

And in the “one more thing” part of his Macworld keynote, Jobs debuted the iPod shuffle, a flash iPod that’s smaller than most stacks of gum and weighs under one ounce.” The CEO called it the “most affordable iPod ever.

On Jan. 12, Apple announced its best quarterly revenue and highest net income ever (up to that point). In proclaiming its financial results for its fiscal 2005 first quarter that ended Dec. 25, the company posted a net profit of US$295 million, or $.70 per diluted share. These results compare to a net profit of $63 million, or $.17 per diluted share, in the year-ago quarter. Revenue for the quarter was $3.49 billion, up 74 percent from the year-ago quarter. Gross margin was 28.5 percent, up from 26.7 percent in the year-ago quarter. International sales accounted for 41 percent of the quarter’s revenue.

Apple shipped 1,046,000 Macs and 4,580,000 iPods during the quarter, representing a 26 percent increase in Mac units and a 525 percent increase in iPods over the year-ago quarter. Twelve days later, the company announced that music fans had purchased and downloaded more than 250 million songs from the iTunes Music Store (that figure hit 300 million by March 2 and half a billion by July 18).

On Jan. 31, Apple revamped its PowerBook line. The pro systems got speed boosts and price reductions. Plus, the 17-incher was tweaked to handle the 30-inch Cinema Display. The revamped PB line sported PowerPC G4 processors running up to 1.67 GHz, faster hard drives, a faster 8X SuperDrive. All came standard with 512MB memory, faster graphics, integrated AirPort 802.11g, Bluetooth 2.0 wireless networking and two new Apple patent-pending technologies: the scrolling TrackPad and the Sudden Motion Sensor.

On Feb. 11, Apple announced today that its Board of Directors had approved a two-for-one split of the company’s common stock and a proportional increase in the number of Apple common shares authorized from 900 million to 1.8 billion. Each shareholder of record at the close of business on Feb. 18 received one additional share for every outstanding share held on the record date. Trading began on a split-adjusted basis on Feb. 28.

Apple unveiled its second generation iPod mini line and updated the iPod photo on Feb. 23 (the mini line would later give way to the iPod nano and the “photo” tag would be dropped from the full-size iPod line). The new iPod mini line came with a 4GB model (the size of the original) priced at $199 and a new 6GB model with 50 percent more storage priced at $249 (the cost of the original 4GB model). Both iPod mini models featured increased battery life of up to 18 hours, USB charging and were available in four colors.

Apple announced it was joining the board of directors of the Blu-ray Association on March 10. If you don’t know what Blu-ray is, read our article here.

Announced on April 13 was Apple’s second quarterly results. The company’s profit for its fiscal 2005 second quarter that ended March 26 was $290 million, or $.34 per diluted share. These results compared to a net profit of $46 million, or $.06 per diluted share, in the year-ago quarter.

Revenue for the quarter was $3.24 billion, up 70 percent from the year-ago quarter. Gross margin was 29.8 percent, up from 27.8 percent in the year-ago quarter. International sales accounted for 40 percent of the quarter’s revenue. Apple shipped 1,070,000 Macs and 5,311,000 iPods during the quarter, representing a 43 percent increase in CPU units and a 558 percent increase in iPods over the year-ago quarter.

April 17 saw Apple unveil its Final Cut Studio bundle, as well as Shake 4 and Soundtrack Pro, at the NAB conference in Las Vegas. Ten days later the company revamped its Power Mac line and cut the prices on its Cinema Displays. The revved line-up boasted Macs with dual 64-bit PowerPC G5 processors running up to 2.7 GHz and shipping with Mac OS X 10.4 (“Tiger”).

The new Power Mac G5s also boasted graphics options with more memory and built-in support for Apple’s 30-inch Cinema HD Display on the 2.7 GHz model. The new line also included larger hard drives, a faster 16X SuperDrive with double-layer support and 512MB of memory across the line. And Apple cut the price of two of its Cinema Displays. The 20-incher was reduced to $799 (down from $999) and the 23-incher to $1,499 (down from $1,799).

One of the biggest days of the year: April 29. That was the day Apple unleashed Mac OS X 10.4 (“Tiger”) and Tiger Server.

On May 3, Apple revved its iMac G5 line with faster 2.0 GHz PowerPC G5 processors, built-in AirPort Extreme and Bluetooth wireless connectivity and Tiger. The new iMac G5s also included faster graphics, a new 8X SuperDrive with double-layer support, built-in Gigabit Ethernet for faster networking, and 512MB of memory across the line.

A week later iTunes Music Stores opened in Denmark, Norway, Sweden and Switzerland. Ten days after this was less-than-pleasant news. The U.S. Consumer Product Safety Commission and Apple announced the recall of certain iBook and PowerBook batteries.

June 6 was the day EVERYTHING STARTED TO CHANGE. At the Apple Worldwide Developers Conference, Jobs said that the rumors were true: Apple was transitioning its entire Mac line to Intel processors starting in 2006. He also announced the availability of a Developer Transition Kit, consisting of an Intel-based Mac development system along with preview versions of Apple’s software, which will allow developers to prepare versions of their applications which will run on both PowerPC and Intel-based Macs.

“Our goal is to provide our customers with the best personal computers in the world, and looking ahead Intel has the strongest processor roadmap by far,” Jobs said. “It’s been 10 years since our transition to the PowerPC, and we think Intel’s technology will help us create the best personal computers for the next 10 years.”

The move from PowerPC chips to Intel processors will involve Rosetta, a dynamic binary translater, Jobs said. It’s designed to ease the transition as software moves from Mac OS X on the PowerPC platform to Mac OS X on Intel.
Oh yes: Jobs also pointed out at the WWDC Conference that Apple has shipped approximately two million copies of Tiger.

As of June 23, the European iTMS has topped 50 million songs (that’s in its first year). And on June 25, Apple announced it was taking podcasting mainstream by building everything users need to discover, subscribe, manage and listen to Podcasts right into iTunes 4.9.

On July 26 Apple tweaked its iBook and Mac mini lines. The iBook G4 line received faster Power PC G4 processors running up to 1.42 GHz, 512MB memory across the line, higher performance graphics and built-in AirPort Extreme and Bluetooth wireless connectivity. The new iBooks added the scrolling TrackPad and the Sudden Motion Sensor features introduced previously with the PowerBook rev. Regarding the Mac mini, Apple began providing 512MB of memory standard in every model. The Mac mini also featured built-in wireless networking with AirPort® Extreme and Bluetooth starting at $599, and the ability to burn DVDs with a SuperDrive for just $699.

Aug. 2 was another milestone day in Apple history: the company introduced the Mighty Mouse, a mouse with not one, not two, not three, but four programmable buttons. It also had a Scroll Ball that lets users scroll in any direction—vertically, horizontally and even diagonally.

The Japanese version of the iTunes Music Store finally debuted on Aug. 4. It had sold one million songs four days later.

In a special Sept. 7 event in San Francisco, Jobs bid adieu to the iPod mini and announced its replacement: the iPod nano, which holds 1,000 songs (or 25,000 photos) in a former factor thinner than a standard #2 pencil. It weighs 1.5 ounces, but features a color screen, click wheel and 14 hours of battery life. The iPod nano comes in a 4GB model that costs $249 and a 2GB model priced at $199. Both are available in white or black designs. The latter holds up to 500 songs or 12,500 pics. At the same time Apple announced iTunes 5, which adds a new Search Bar, a streamlined look, Parental Controls and Smart Shuffle.

On Sept. 30, at the Apple Expo in Paris, France, Apple announced a significant update to .Mac, the $99 annual, membership-based online service. New features include: .Mac Groups, a service that helps members communicate, coordinate schedules and stay in sync with private groups of friends or colleagues; an updated version of .Mac Backup software; a four-fold increase in combined iDisk and email storage to 1GB for individuals and 2GB for families; and full French and German localization.

Apple’s financial results for its fiscal 2005 fourth quarter that ended Sept. 24 saw the company reporting on Oct. 11 the highest revenue and earnings in its history. Apple posted revenue of $3.68 billion and a net quarterly profit of $430 million, or $.50 per diluted share.

These results compared to revenue of $2.35 billion and a net profit of $106 million, or $.13 per diluted share, in the year-ago quarter. Gross margin was 28.1 percent, up from 27.0 percent in the year-ago quarter. International sales accounted for 40 percent of the quarter’s revenue. Apple shipped 1,236,000 Macs and 6,451,000 iPods during the quarter, representing 48 percent growth in Macs and 220 percent growth in iPods over the year-ago quarter.

At a highly touted “One More Thing…” event on Oct. 12, Apple unveiled a new iMac G5 that’s basically a media center. It sports a built-in iSight video camera for out-of-the-box video conferencing and the debut of new Front Row technology that lets you play music, view photo slideshows, and watch DVDs and iMovies from up to 30 feet away. The new iMac G5 is sleeker than its predecessors with pricing starting at US$1,299. Plus, new Photo Booth software comes with it.

The same day the company unveiled the 5G (video) iPod and iTunes 6 (yep, version 6 arrived less than six weeks after version 5). The new iPod sports a 2.5-inch color screen that can display album artwork and photos, and play video including music videos, video podcasts, home movies and television shows. The new iPod holds up to 15,000 songs, 25,000 photos or over 150 hours of video and is available in a 30GB model for $299 and a 60GB model for $399, with both models available in white or black designs. iTunes 6 lets you purchase and download over 2,000 music videos and six short films from Pixar Animation Studios (Apple CEO Steve Jobs’ “other” company) for $1.99 each. Over a million videos were sold within 20 days.

Tim Cook, Apple’s executive vice president of Worldwide Sales and Operations since 2002, was named the company’s chief operating officer on Oct. 14 Cook, who has been Apple’s executive vice president of, will continue to report to Jobs. Apple also announced at the time that Jon Rubinstein, Apple’s senior vice president of the iPod Division will retire on March 31 and be succeeded by Tony Fadell. Fadell will report to Jobs and take over all aspects of iPod engineering.

On Oct. 19, Apple rolled out its new Aperture software and revised its PowerBook and Power Mac lines (perhaps for the last time until Mactel revisions). Aperture is a post production tool that the company says “provides everything photographers need after the shoot.” Think of it as iPhoto pro. The $499 pro software offers compare and select tools, nondestructive image processing, color managed printing and custom Web and book publishing.

The revved PB laptops got higher-resolution displays and up to one hour more battery life on the 15- and 17-inch models. Plus, every new pro laptop began including a DVD burning SuperDrive—but there are no PowerBook G5s. The revamped 17-inch PowerBook touted a 1680-by-1050 pixel resolution—36 percent more than the previous generation—and the 15-inch PowerBook with a 1440-by-960 pixel resolution—26 percent more than the previous generation. What’s more, Apple says the displays are up to 46 percent brighter on the 17-inch model.

Apple’s pro desktop lines got a substantial shot in the arm with the Power Mac G5 Quad, a monster of a machine that serves up quad-core processing with two 2.5GHz dual-core PowerPC G5 processors. And all Power Mac G5 models began featuring dual-core processors, a new PCI Express architecture and higher performance graphics options including NVIDIA’s Quadro FX 4500.

Also, on Oct. 19, the iTunes Music Store finally opened in Australia.

On Nov. 21, Apple announced that it had reached long-term supply agreements with Hynix, Intel, Micron, Samsung Electronics and Toshiba to secure the supply of NAND flash memory through 2010. As part of these agreements, Apple intends to prepay a total of $1.25 billion for flash memory components during the next three months. “We want to be able to produce as many of our wildly popular iPods as the market demands,” Jobs said.

Oh yes, and there were lawsuits. Lots of lawsuits, ranging from iPod nano scratches to digital rights management to battles with rumors sites.

And that was 2005. Look for 2006 to be just as interesting, if not more so.

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