Apple may have cut by 40 percent fourth quarter production of its flagship iPhone handset, a Friedman, Billings, Ramsey analyst said Monday.
The drop in production would be far deeper than the 10 percent cut previously anticipated.
“Our new checks indicate that iPhone production could fall more than 40 percent sequentially in the 4Q,” FBR’s Craig Berger wrote in a note to clients.
The drop in production shouldn’t be interpreted as a dip in iPhone demand. In October, Apple reported shipping 6.9 million iPhones during the third quarter.
However, the lowered production may signal “no market segment will be spared in this global downturn,” wrote Berger.
Over the weekend, however, Fraser Spiers, a teacher in the UK, posted an account of the field trip his class took to an Apple Store across the pond that makes Gruber’s dismissal seem mean and wrong.
According to Spiers’ account, “The teacher in charge considered that the lesson had been very well designed from an educational perspective and was very appropriate for the age and stage the children were at.” Students were provided a half dozen computers in the store and given instruction on making podcasts in GarageBand, including using Photo Booth to add chapter artwork and burning the CD in iTunes. At the end of the trip each student came away with a CD of their finished podcast and a free t-shirt.
While it’s probably a good idea to be skeptical about corporate interests getting too closely involved in education, Apple’s field trip program isn’t exactly egregious on the scale of, say, ChannelOne, the 12-minute television program seen daily by an estimated eight million public school students in the United States. Studies of ChannelOne programming found that 20 percent of its air time is spent on coverage of ”recent political, economic, social and cultural stories,” while the other 80 percent is advertising, sports, weather and natural disasters.
Given Apple’s longstanding relationship with and loyal embrace by the K-12 education market in the US, together with the fact that kids get what Speirs described as “a high quality and low cost afternoon trip that the children thoroughly enjoyed and learned from,” I’d have to come down on the side of giving the company props for offering a unique and valuable service.
Apple has traditionally been viewed as a company limited chiefly to domestic sales. However, a review of sales figures suggests the iPhone 3G could unlock international markets, providing a ‘halo effect’ for other Apple products.
A halo effect has long been described to explain how iPod sales could boost purchases of Macs. Now some experts believe the iPhone 3G could give Apple a foot in the door to countries once alien to the Cupertino brand.
At the heart of the theory are numbers indicating Apple sold as many as half of iPhone 3Gs internationally. Apple shipped between 2.4 and 4.5 million of the 6.9 million iPhone 3Gs during the fourth quarter ended Sept. 30. The exact numbers depend on who’s talking.
Possibly in a fit of friendly rivalry with its competitor Fortune magazine, atop whose list of the 50 Most Admired Companies in the world Apple sits for 2008 at #1, Forbes magazine featured its list of the 10 biggest Apple failures this week, a gallery of which we reproduce for you below.
There are at least a couple of items here that grabbed a few hearts, but what do you think? Are these all Apple strikeouts? Let us know in comments.
It seems unlike Apple, which has scoffed at inexpensive Macs and been viewed as catering to higher-income consumers. However a new study suggests the iPhone is fast becoming a favorite of low-income buyers.
From June through August, iPhone sales grew 48 percent in households earning between $25,000 and $50,000 compared to 21 percent growth overall, according to comScore.
The researchers found low-income consumers see the iPhone as a way to consolidate costs of a phone, broadband connection and music device.
Apple’s iPhone was among one of the few bright spots in a gloomy third quarter for cell phone manufacturers.
Apple now has 2 percent of the global cell phone market during a time when cell phone makers scrambled to adapt to slowing consumer sales. In September, the Cupertino, Calif. company reported selling 6.9 million iPhones during the third quarter, a 516 percent jump over the previous year.
“Apple has become firmly established as a top ten vendor,” Strategy Analytics announced.
Analysts Thursday said global cell phone shipments either shrank or rose a tepid 5 percent to 8.5 percent.
Apple’s gross margin for the first quarter of fiscal 2009 is expected to “well-exceed management’s guidance of 30 percent,” Financial Alchemist blogger Turley Muller commented Wednesday.
Turley, one a few financial bloggers who’s predictions closely mirrored Apple’s fourth quarter results, said the Cupertino, Calif. company is acting wisely, given the economy.
“This cushion should help Apple exceed earnings expectations even if the economy adversely affects its business,” the blogger wrote.
Handset maker Motorola has reportedly decided to focus on the open-source Android platform, dropping most of its other cell phone designs – as well as more employees.
“They were like a drunk asking for another drink in the software area,” Gartner analyst Ken Dulaney explained to Cult of Mac.
After laying-off 10,000 employees and unsuccessfully attempting to regain its past glory, the Schaumburg, Ill.-based company will cut at least four handset platforms, choosing to concentrate on Android and two other handsets, the Wall Street Journal reported, citing unnamed sources Wednesday.
Giant discount retailer Walmart has slashed its price for MP3 music to 74 cents, challenging both leader Apple and Amazon. The Bentonville, Ark. chain also announced Tuesday it’s MP3 store will offer a free download with each music CD purchased.
The new pricing is limited to what Walmart calls its “Top 25,” songs from such artists as Coldplay, Nickelback and Carrie Underwood.
For some time, you could hardly read about Apple without “iPod-maker” following closely behind in press and analyst comments. However, that symbiotic description is dated, according to one of the rising stars among unpaid Apple watchers, Andy Zaky.
Zaky, who watches Apple sales figures from his post at Bullish Cross, wrote Monday iPod sales contributed just 14.2 percent to the fourth quarter revenue of the Cupertino, Calif. company.
By this time in 2009, the iPhone will replace the iPod as the second-greatest revenue generator for Apple, next to Mac sales, the blogger wrote. Last week, Apple reported selling 6 million iPhones for the quarter.
The blogger is among a new breed of Apple analysts not employed by financial houses to provide estimates and insight. Fortune recently gave bloggers the nod over pros in predictions on Apple’s recent Q4 report.
Few things rankle a Mac user more than seeing new and interesting products and services rolled out that only work on PC. In my household, Netflix’s “Watch Instantly” is at the top of this maddening list. Basically, anyone with a Netflix account and sufficiently fast PC can watch any of 12,000 movies direct from Netflix servers at no extra charge. It hasn’t come to Macs because the service relies on PC-only DRM. And this drives my wife nuts. As she sees it, she’s already paying Netflix for service, and since that subscription now includes streaming she can’t use, she’s getting charged for a phantom service.
I can’t say I disagree.
At any rate, Netflix today proclaimed that this sad state of affairs won’t continue for long. Starting tomorrow, a limited number of Mac subscribers will be able to use Watch Instantly via a new version of the software rooted in Microsoft’s Silverlight technology (it’s a lot like Flash). Since Silverlight bakes in the PC DRM, it runs fine on a Mac and takes no additional tweaking to function.
Unfortunately, the new platform will be rolled out slowly, with Netflix only promising support for all Intel Mac users by the end of the year. So it might be awhile before Netflix stops getting the stinkeye from my apartment.
Apple’s giant stash of cash is a constant source of speculation in the tech world. Now standing north of $25 Billion, Apple has the money to acquire all but a few hundred companies in the world, and it makes people nervous that the Cupertino Kings won’t snatch up someone big.
Our friend Brian over at Epicenter has an interesting piece of speculation, rating the most likely and least likely acquisition targets Apple could go after during the current downturn. It’s a thought-provoking read, and it’s accompanied by a really fun poll in which readers suggest who Apple should take on. The Dell entry is priceless.
For my part, I always think that the big questions about Apple’s cash and who the company will acquire tend to be misguided. Over its entire history, Apple has shown again and again that it will buy small organizations that possess a specific technology or capability that Apple lacks. That’s the story with NeXT, it’s the story with Logic, and it’s the store with PA Semi. Other than that, Apple invests in its own ideas and its own new efforts, because Steve Jobs believes the solutions Apple needs to triumph don’t exist yet. Apple spends way more time doing its own thing than it does snapping up outsiders.
And a portion of that $25 billion is going straight back into Apple’s future – the company still needs to build that brand new campus in Cupertino, right? Not to mention, new aluminum milling processes aren’t cheap to implement, either…
The T-Mobile G1 has only been out for a couple of days, but new problems with the first generation of Google’s entry into the phone business continue to materialize just about every hour on the hour. Still the most shocking is the lack of corporate e-mail and calendaring support, with Google assuming that a third-party developer will just magically figure out how to do Exchange ActiveSync and Lotus integration.
Today, the big news is that Google plans to send out a software update at some point with a touchscreen keyboard so that it becomes possible to enter text while using the phone in vertical portrait orientation. Yes, in case you missed it earlier, it’s impossible to even type in a URL while browsing the web in the preferred one-handed iPhone style orientation. Granted, the G1 has a physical QWERTY and a pretty decent one at that, but it’s incredible that any company could ship a phone this intricate without realizing this could be a deal-breaker in actual human use. It’s like they didn’t even test their ideas out before sending them to final production.
I bring all of this up, because it’s another piece of evidence that even though an open-source model works incredibly well when working on technical feasibility and optimization, it’s pretty poor at making a consumer-facing complex system work well together. It’s the same reason that Linux has incredibly low-level networking and multithreading code, and it’s still impossible to expect a decent graphical user interface.
Apple’s focus on freakishly detailed design and engineering can have its own failings, of course (most specifically in leaving out any features that Steve Jobs can’t understand the value of), but it also tends to lead to solutions that were considered as full experiences instead of a collection of features. It all works together well, instead of working well in spite of contradictory features. The holistic approach Apple takes to product design is the reason we love it. Android’s haphazard approach of fixing things as they become crises. Google will mostly catch up eventually, but I have to pity T-Mobile for being forced to fight back with such an unfinished product. The G1 is so far behind that it’s hard to imagine anyone who isn’t a hobbyist being pleased with the first kludgy Android phone.
Eleven years ago, Michael Dell, CEO of Austin, TX-based Dell Computers was asked what he would do if he were CEO of Apple Computers. His answer: “I’d shut it down and give the money back to the shareholders.”
It’s hard to know what Steve Jobs would say if he were asked the same question today, because he rarely speaks to the press. But if he wanted to, he could do the very same thing for Dell, Inc. shareholders tomorrow and still have about $10 billion left in the bank.
Apple reported nearly $25 billion cash-on-hand at the end of FY2008 Tuesday and Dell had a market cap of about $24 billion with $9 billion cash of its own at the close of trading on Thursday, graphic indications of the changed fortunes of the two companies over the past decade or so.
Mr. Dell retains a considerable advantage over Mr. Jobs in personal wealth, however, with a Texas-sized net worth of $17.3 billion compared to Jobs’ mere $5.7 billion.
Looking at the chart above comparing the price movements in the stock of the two companies in the past ten years, you have to wonder what they’ve been up to down there in Austin, don’t you?
Partially hidden by the fantastic iPhone sales numbers Tuesday was the fact that Apple outsold RIM’s BlackBerry during the third quarter. Analysts say the information may serve as a roadmap for Apple.
Tuesday, Apple CEO Steve Jobs said 6.9 million iPhones during the quarter. RIM sold 6.1 million BlackBerries during the same period, according to reports.
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“Apple sells to a much wider audience than RIM,” Gartner analyst Ken Dulaney told Cult of Mac. Apple’s iPhone 3G is sold in 51 nations.
Cool your jets. That’s the advice from analysts on a flurry of conjecture about whether Apple is stealthily testing online some mix of iPhone and MacBook.
What sparked the talk was a brief mention in the New York Times that an unnamed search engine found in its logs an unannounced Apple device with a display size between an iPhone and a MacBook.
Lending further weight to the suggestion were comments by CEO Steve Jobs that the Cupertino, Calif. company “had some pretty interesting” ideas for the netbook or mini-notebook market.
An unannounced Apple product with a display somewhere between an iPhone and a MacBook is lurking out there somewhere, according to an anonymous source at an unnamed search engine company.
Buried in an update to his post about Steve Jobs’ participation on yesterday’s Apple 4Q earnings call, New York Times technology writer John Markoff says a source to whom he promised anonymity confirmed the search engine company has spotted visits from an Apple product with a display that is neither iPhone nor MacBook.
Should we be looking for iPhone 3.0 or NetMac 1.0?
Citi Wednesday cut its target price for Apple to $153 from $170, joining several other analyst firms reducing Apple share price while advising investors the Cupertino company remains a good buy.
“We believe this is an attractive opportunity to buy a leading technology innovator on sale,” analyst Richard Gardner told clients Wednesday.
Although the financial firm reduced estimates for fiscal 2009 through fiscal 2010, Citi maintained a “Buy” rating for Apple shares.
Apple blew past analyst expectations, reporting Tuesday it sold 6.9 million iPhones for the quarter ended Sept. 30. Despite outselling RIM, the stock target price was cut Wednesday by one financial expert.
In a long-awaited pronouncement of Apple’s financial health, the company announced a 35 percent jump in revenue, posting $7.9 billion for the quarter, up from $6.2 billion for the same quarter in 2007.
Last Friday we issued the call for our designer savvy readers to create Sheppard Fairey-style posters of your favorite Apple luminaries.
unravel stepped up. A graphic designer from the San Fernando Valley, unravel told us, “I admire [Ive’s] work. Besides, I figured people would be doing Jobs first, so why not create one for somebody who deserves recognition too.”
On the eve of the release of Apple’s fourth quarter results, one analyst firm suggests the number to watch is how many Macs were sold during the period ended Sept. 30.
Piper Jaffray offered clients predictions that were slightly more optimistic than the Wall Street consensus. Mac sales are “key” to Cupertino’s financial picture, according to the analysts.
In a note to investors, the financial firm predicted 2.8 million Macs were sold during the fourth quarter. The estimate expands on a 2.7 million Wall Street projection.
Will Motorola’s Android handset pose a greater threat to the iPhone, improving on the G1, the first Google phone from HTC and T-Mobile? That’s the question on many minds as details of Moto’s open-source phone appeared Monday.
Motorola’s Android unit, not expected until late 2009, reportedly sports many features missing from the G1, offering improved specs, according to Monday’s BusinessWeek.
Citing information distributed to carriers, the financial news source said the Motorola device appears to be “a higher-end version” of the G1, produced by Taiwan’s HTC.
Steve Jobs' health is a topic of concern for the Apple community -- and for Wall Street. Photo: Apple
In the Cold War era, a cottage industry was created around determining the geopolitical significance of Khrushchev or Brezhnev not appearing at the May Day reviewing stand. For silicon valley, it is Apple CEO Steve Jobs and Tuesday’s new product announcement.
Was Tuesday’s announcement of new MacBooks a cryptic message to investors worried about Jobs’ health? We all remember the dive Apple’s stock took when a rumor (which turned out to be false) spread that the Apple leader had been rushed to the hospital for heart trouble.
So, when Jobs shared the stage with Chief Operating Officer Tim Cook and Senior Vice-President of Industrial Design Jonathan Ive, speculation began that Apple was sending a message to Wall Street: don’t worry, we have a plan.
To mark the one-month anniversary of launching HD sales at its iTunes Store, Apple announced it will offer more than 70 episodes of Fall prime-time hits from ABC, CBS, NBC, Fox and cable.
Among the HD episodes are ABC’s “Desperate Housewives,” “Lost,” “Grey’s Anatomy” and “Eli Stone.” CBS shows include “CSI,” CSI: New York, “CSI” Miami” and “Numb3rs.” NBC show in HD on iTunes include “30 Rock,” Heroes,” “The Office” and “Law and Order: SUV.”
Apple said it has also sold 200 million television episodes and 1 million HD episodes. The HD episodes from ABC, CBS, NBC and Fox cost $2.99 a piece while each regular episode from the iTunes Store carry a $1.99 price tag.
In September, Apple kicked-off HD sales, offering 12 high-definition NBC episodes for free. The announcement coincided with the release of iTunes 8 and the return of NBC, which left the iTunes Store in August 2007, following a dispute over pricing of its television shows.
Now we’ve seen them, now we know. The new MacBooks and MacBook Pros are quite nice in some respects, and quite frustrating in others.
What amuses me about the whole thing, though, is how astoundingly far-out some of the pre-event speculation was. It’s always part of the fun, exploring the gamut of people’s expectations and imaginations as they dream up the kind of product they’d like Apple to create for them.
My favorite this year was the iMac-as-docking-station concept, which showed an iMac-like monitor with a huge hole in one side, into which a folded MacBook could be slotted. A nice fantasy indeed, but still a fantasy. And Apple’s not in the business of fulfilling every fanboy’s fantasy.
No, Apple’s in business to make profit, like every other computer manufacturer. As such, it’s product development decisions are, and will be, driven by the profit they can be reasonably expected to generate.
Friedman, Billings, Ramsey analyst said Monday.
Now we’ve seen them, now we know. The new MacBooks and MacBook Pros are quite nice in some respects, and quite frustrating in others.