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According to the Q3 financial results conference call, Apple’s next fiscal quarter (Q04) will experience a secret “product transition” that will drop the company’s overall margins from just under 35% to just over 30%. It would seem that Apple is concerned that their high margins make it easy for competitors to release similar but cheaper products…

According to Apple’s CFO, Peter Oppenheimer “these state-of-the-art products will have technologies and features that others can’t match”, but he refused to reveal anything beyond that.

So what could he be talking about?

The MacBook Pro is due a refresh and there have been plenty of spy shots of the new casing. But they’ve never cared about competitors coming in and under cutting those so that can’t be the cause for concern for their margins. The AppleTV hasn’t changed really since it was introduced but I don’t believe they’re talking about that as it seems to be a back burner type product.

I see only 3 possibilities

1. A new much cheaper very low margin Mac Mini to kill off clone makers? They did say they were concerned with competitors undercutting them and there isn’t a really cheap Mac at the moment.
2. The iPod could be due a refresh and maybe they’ll lower the price of the replacement in light of the iPhone cannibalising sales.
3. An all-new product such as a multi-touch tablet Mac. Personally I don’t see tablets being a success beyond a few specific tech minded customers, so perhaps they have a product in mind that the rumour mill hasn’t got a whiff of yet…

Based on the fact that this “product transition” will have quite an effect on the companys overall margins, it needs to be a product that has a big impact on their revenue/profit so while the tablet Mac would indeed offer features that others couldn’t match due to its patented multi-touch interface, I’m going to suggest option 2, a new, much cheaper iPod with unique features…

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