Apple iPhone

Specs of the 11.6 millimeter device include a 3.5-inch 480 x 320 touchscreen display with multi-touch support and a proximity sensor to turn off the screen when it's close to your face, 2 megapixel cam, 4GB or 8 GB of storage, Bluetooth 2.0 with EDR and A2DP, WiFi that automatically engages when in range, and quad-band GSM radio with EDGE. Runs OS X with support for Widgets, Google Maps, and Safari, and iTunes with CoverFlow. A partnership with Yahoo will allow all iPhone customers to hook up with free push IMAP email. Apple quotes 5 hours of battery life for talk or video, with a full 16 hours in music mode -- no word on standby time yet. The 4GB iPhone will go out the door in the US as a Cingular exclusive for $499 on a two-year contract, 8GB for $599. Ships Stateside in June, Europe in fourth quarter, Asia in 2008.

Hands on Review from David Pogue:

"Today, I had meetings with Steve Jobs and then Phil Schiller, Apple’s director of worldwide marketing. I basically played with the iPhone the entire hour.
Here are some of the things you can’t tell without actually handling and using the iPhone:
* It feels amazing in your hand. Not like an iPod, not like a Treo — but something new. It’s so thin, and the rounded stainless-steel edges are so smooth, you can excuse its larger-than-Treo façade. When you’re on a call, it’s so cool how the screen turns off to save power, thanks to its proximity sensor.
* You operate the iPhone with your fingertips. Apart from buttons that appear on the touch screen, the only physical buttons are volume up/down, ringer on/off, sleep/wake and a Home button.
Apple went through numerous iterations of the glass surface, trying to find one that’s not too slick or too rough, or that shows grease and fingerprints too much. You still get finger streaks, but they’re relatively subtle and a quick wipe on your sleeve takes care of them.
* During my one test call, the sound quality was loud and clear. Of course, your mileage (and your Cingular signal) will vary.
* Typing is difficult. The letter keys are just pictures on the glass screen, so of course there’s no tactile feedback.
Software helps a lot. You can afford to make a lot of typos as you muddle through a word, because the software analyzes which keys you *might* have meant and figures out the word you wanted. Its best guess appears just under what you’ve typed; if it’s correct, you tap the Space bar to accept it and continue. I typed a couple of e-mail messages with lots of typos but eventually 100 percent accuracy, thanks to this auto-correct feature. (My testing didn’t involve proper names, however.)
Bottom line: Heavy BlackBerry addicts may not want to jump ship just yet.
* The phone won’t be available until June, so some of its software isn’t finished yet. As I tapped my way into obscure corners of the phone, Mr. Jobs pointed out a couple of spots where only a placeholder graphic was available.
* Both in the onstage demo and during my hands-on hour, the Web speed was OK—not great, but OK. But all of this used the phone’s built-in Wi-Fi, not Cingular’s notoriously slow Edge network. I couldn’t help wondering how bad the speed will be when you’re connecting over the cellular airwaves. (Here again, though, I was playing with a prototype whose software will undergo a lot of fine-tuning between now and June.)
* I tried out the camera. It was really cool to frame a shot using the HUGE 3.5-inch screen; it’s rare to find that big a screen on any camera. The refresh rate felt typical of a camera-phone to me, but Mr. Jobs said that it would be much smoother by the time the phone is done.
* The Web browsing experience is incredible. You see the entire Web page on the iPhone’s screen. You double-tap any spot to zoom in. Or you use the two-fingered spread-apart gesture to “stretch” the image larger, or pinch your thumb and forefinger on the glass to zoom out again. The manipulation is seamless, smoothly animated—and useful. Using Google Maps to get you driving directions and maps, for example, is just light-years simpler and more powerful than on any other machine, thanks to this “rubber Web page” stretching technology."

iTunes sales down 58%, iTunes sales up 84%, WTF?!

From Slashdot:

Earlier this month we had a report from Forrester, based on a random sampling of 2,000 credit card accounts, that purported to show that iTunes sales were crashing. Now comes another survey from Reston, VA-based ComScore which indicates the exact opposite. ComScore's report which is based on actual iTunes sales shows a 84% increase during the first nine months of this year compared to the same period last year. Meanwhile the author of the Forrester report, Josh Bernoff, noted in his blog yesterday that they shouldn't be pummeled just because everyone took what he wrote and ran with it.

From ArsTechnica:

A couple of days ago, Infinite Loop reported on a research note from Forrester Research which said that Apple's music sales were slowing and that sales of the company's venerable iPod were failing to drive downloads from the iTunes Store. Two days after Forrester's report, investment firm Piper Jaffray has released its own report saying that no, the iTunes Store is doing just fine in terms of growth.

Analyst Gene Munster of Piper Jaffray says that through September, iTunes Store weekly sales are up 78 percent from 2005. Munster's report is based on Apple company data, according to Reuters, and shows that Apple sold 695 million tracks through September, a total of 18.5 million per week.

In contrast, Forrester's figures come from a analysis of credit and debit card purchases from the iTunes Store, made over a 26-month period ending in June 2006. From April 2004 through January 2006, Apple saw a seven-fold increase in transactions, according to Forrester, with the average transaction size growing to $6.69 from $3.55. Since the beginning of the year, the number of transactions has fallen by 58 percent, with the average transaction size dropping to $5.56. Only 3 percent of US Internet-using households made purchases at the iTunes Store during that period.

Food for thought:

From the testimony of Mr. Marc E. Kasowitz before the US Senate Committee on the Judiciary:

One particularly effective illegal strategy involves the
following scenario: the short-selling hedge fund selects a
target company; the hedge fund then colludes with a so-called
independent stock analyst firm to prepare a false and negative
"research report" on the target; the analyst firm agrees not to
release the report to the public until the hedge fund
accumulates a significant short position in the target's stock;
once the hedge fund has accumulated that large short position,
the report is disseminated widely, causing the intended decline
in the price of the target company's stock. The report that is
disseminated contains no disclosure that the analyst was paid to
prepare the report, or that the hedge fund dictated its
contents, or that the hedge fund had a substantial short
position in the target's stock. Once the false and negative
research report -- misrepresented as "independent" -- has had
its intended effect, the hedge fund then closes its position and
makes an enormous profit, at the expense of the proper
functioning of the markets, harming innocent investors who were
unaware that the game was rigged, and damaging the target
company itself and its employees.

http://judiciary.senate.gov/testimony.cfm?id=1972& wit_id=5486 [senate.gov]

Student exercise: Compare and contrast with the movement of AAPL stock shares before and after this report came out.

Enough about the Iphone already!

Macworld is almost here and Apple fan boys are going nuts with this Iphone. Its been talked about for years. Macworld is coming up in a few weeks and it could be a reality. Kevin Rose Spilled the beans on Diggnation:

What everyone has been talking about is an Ipod/cell phone device. I think these people are wrong. I think Apple is finally going to let you download your music independent of a computer. You will be able to download songs directly from Itunes to your Ipod. Of course Apple will need to integrate cell phone technology into the player, but its main purpose will be to play music. Cingular is the first carrier to come to mind that they will be dealing with. They have worked with them in the past.

My reasoning for why Apple would come out with this types of device instead of an Iphone comes from a few places. First, taking the computer out of the equation has always been a goal for the Ipod. If you want new music, you want to get it now. You don't want to go to a computer, hook it up, go online...when you can just download music whenever and where ever. Second, Michael Kanellos points out some good reasons is his article:

Apple opted to adopt the 1.8-inch hard drive, a piece of hardware spurned by other manufacturers. That was the world's mistake. The 1.8-inch drive let Apple put a huge amount of storage--the real problem with MP3 players--into a small form factor. The first iPod sported 5GB of storage, or nearly 40 times as much as the upper crust of flash players. The company even locked up supply of 1.8-inch drives for a while, so no one could copy it.

The iPod also conquered the problem of small screens and cheesy navigation. With its newfound popularity, the company was also able to get music publishers to agree to its terms.

Unfortunately for Apple, problems like that don't exist in the handset business. Cell phones aren't clunky, inadequate devices. Instead, they are pretty good. Really good. Why do you think they call it a Crackberry? Because the lumpy design and confusing interface of the device is causing people to break into cars? No, it's because people are addicted to it.

Samsung has scoured the world's design schools and hired artists on three continents to keep its phones looking good. Motorola has revived its fortunes with design. KDDI, a Japanese carrier, has a design showcase in the teen shopping area of Tokyo just to be close to trends. And Sharp doesn't skimp when it comes to putting LCD TVs on its phones.

Apple, in other words, won't be competing against rather doltish, unstylish companies like the old Compaq. The handset companies move pretty quick and put out new models every few weeks.

So I think this news at Macworld wont be an Iphone, just an Ipod that can let you DL songs directly to the Ipod.

Apple to release two iPhone models, one with WiFi

From Appleinsider:

Apple Computer plans to introduce two iPod-based cell phone models in the first quarter of 2007 that it will initially manufacture in limited quantities, says one analyst.

In a research note released to clients on Monday, Prudential Equity Group analyst Jesse Tortora said his checks indicate that one model will be a smart phone, including integrated keyboard, video and music capability, while the other model will be a slimmer phone with just music functionality.

The analyst, who remained mum on his sources, said at least one of the models will include WiFi wireless capabilities.

"Although these phones represent significant upside earnings potential for the company, there are some concerns regarding market acceptance and battery life, given the number of functions included in the phones," he wrote. "Our checks indicate that Apple will produce these phones in limited quantities initially as a market test vehicle."

For Apple's fourth fiscal quarter ended September, Tortora expects the Cupertino, Calif.-based company to post some upside to street estimates, driven primarily by Mac sales strength and favorable component cost declines. He's modeling revenue of $4.8 billion and earnings-per-share of $0.55, ahead of consensus estimates of $4.7 billion and $0.51.

"While we expect Mac momentum to continue in the [December quarter] (forecasting 1.9 million units), we are more cautious on the outlook for iPod sales and on Apple’s overall margin prospects," the analyst wrote.

While Tortora said checks indicate Apple is preparing its ODM partners for production orders of as many as 21 million iPod units during the December holiday quarter, he said other checks suggest that iPod unit shipments will come in closer to 16 million units for the quarter.

"Moreover, while our checks indicate that production of Apple's new wide screen video iPod will begin in the [December quarter], we do not expect the product to be released until early next year," he continued. "All told, we would not be surprised to see Apple scale down ODM production plans as the quarter moves on, and think that iPod sales could fall short of investor expectations."

Tortora, who maintains a Neutral rating and $74 price target on shares of Apple, recommended that investors remain on the sidelines until he gets "better visibility into the competitive dynamics of the media player space" and its new product ramps.