Apple Unveils New MacBook Air, Lion Operating System

Apple Inc. Chief Executive Officer Steve Jobs unveiled a lighter MacBook Air laptop and a version of the Macintosh operating system called Lion, adding features that make the company’s computers more like its mobile devices.

Macs will soon have an online application store, similar to the one for the iPhone and iPad, Jobs said today at Apple’s headquarters in Cupertino, California. New computers also will take better advantage of multitouch gestures on track pads, mimicking Apple’s mobile iOS software. The app store will open within 90 days, and Lion will be released in the summer of 2011.

“We’ve been inspired by some of the work we’ve done on iOS, and want to bring them back to the Mac,” Jobs said.

Apple is using the popularity of its iPhone and iPad tablet to bolster demand for its oldest product, the Macintosh. Sales of the computers rose 22 percent to $4.87 billion last quarter, making up 24 percent of revenue. More than half of Mac purchases in the company’s retail stores in the most recent period were from first-time buyers.

“I don’t hear enough people talking about the halo effect,” said Colin Gillis, an analyst at BGC Partners LP in New York. He recommends buying the stock. “As more customers are being exposed to Apple products, they are spending more of their computer dollars on Apple.”

Photographer: Justin Sullivan/Getty Images

Steve Jobs, chief executive officer of Apple Inc. announces the new OSX Lion operating system as he speaks during an Apple special event at the company's headquarters. Close

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Photographer: Justin Sullivan/Getty Images

Steve Jobs, chief executive officer of Apple Inc. announces the new OSX Lion operating system as he speaks during an Apple special event at the company's headquarters.

‘Hooking Up’

The new MacBook Air, which is 0.68 of an inch (less than 2 centimeters) at its thickest point, combines features of the iPad with a notebook, Jobs said. The computer’s battery lets users surf the Web wirelessly for seven hours. In standby mode, the battery can last 30 days. Like the iPad, there’s no hard- disk drive or CD-ROM, just flash memory. It weighs 2.3 to 2.9 pounds, depending on the model.

“We asked ourselves, ‘What would happen if a MacBook and an iPad hooked up?’ Well, this is the result,” he said. “We think it’s the future of notebooks.”

The new Air is on sale now in two versions: a 13.3-inch model costs $1,299 to $1,599, depending on the amount of memory, while the 11.6-inch product starts at $999.

“They priced it really aggressively,” said Shaw Wu, a technology analyst with Kaufman Bros. LP in San Francisco. He also advises buying Apple’s shares.

The new products could present problems for PC rivals such as Hewlett-Packard Co. and Dell Inc., since the Air could appeal to laptop owners seeking iPad-like simplicity, said Van Baker, an analyst at Stamford, Connecticut-based Gartner Inc.

No Need to Drive

The new Macintosh app store also could shake up how software is sold. Just as the iPhone version led to an explosion of new product development, the Mac store will make it easier to reach the almost 50 million Mac owners, Jobs said.

“If you want to get Microsoft Word, now you don’t have drive anywhere to pick up a box,” Jobs said. “You can buy on impulse.”

That approach could hurt software distributors, such as Best Buy Co., said Gartner’s Baker. “Suddenly, a lot of their Mac software business will go to Apple.”

Apple sold a record 3.89 million Macs in the fiscal fourth quarter, which ended in September, a 27 percent increase from last year. The gains helped Apple nudge aside Acer Inc. to become the No. 3 U.S. PC seller in the period that ended in September, behind Hewlett-Packard and Dell, according to Framingham, Massachusetts-based IDC. The Mac is Apple’s second- best-selling product, behind the iPhone.

The Mac has gained market share for 18 straight quarters, Chief Operating Officer Tim Cook said at the event.

“It’s incredible momentum,” he said.

Chinese Stores

Apple’s retail stores had 75 million visitors in the past fiscal year, Cook said. Its Chinese stores, which opened in the past two years, are drawing the heaviest traffic, he said.

The company also introduced a new version of its media software, iLife 11. The update adds features for handling video, photos and music, and is more tightly integrated with Facebook. The collection of programs includes iPhoto, which now makes it easier to e-mail photos and turn pictures into books and cards.

Apple rose $1.04 to $310.53 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares, up 47 percent this year, surpassed $300 last week.

The stock fell 2.7 percent yesterday, a day after Apple predicted narrowing gross margins and profit that missed some analysts’ estimates, an indication that it’s making less from each iPhone and iPad it sells.

Corporate Customers

Apple is adding sales staff to court more business customers as the Macintosh gains popularity among corporate clients. Enterprise sales will become a larger piece of the Mac business, Cook said on an Oct. 18 conference call.

Apple typically upgrades its computer line in October. At last year’s Mac event, the company introduced larger-screen versions of its iMac and updated its MacBook notebook. Apple’s last version of its operating system, called Snow Leopard, was unveiled in June 2009 and shipped two months later.

The influence of smartphones and tablet computers on traditional PCs will be lasting, Sarah Rotman Epps, an analyst at Cambridge, Massachusetts-based Forrester Research Inc.

“The next wave of PC design will be inspired by mobile devices,” she said in an e-mail. “New Macs give the devices the nearly instant-on, long battery life that consumers have come to expect in mobile devices.”

To contact the reporters on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net; Peter Burrows in San Francisco at pburrows@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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