Ed Sutherland - page 92

Despite Wall Street urgings to introduce an inexpensive product to spur new customers, Apple leaders suggested the Cupertino, Calif. firm is not about to go there.

“It’s a category we watch, we’ve got some ideas here, but for now we think the products there are inferior and will not provide an experience that customers are happy with,” Apple operations chief Tim Cook said in answer to a question Wednesday.

Earlier this week, Berstein Research analyst Toni Sacconaghi told clients an $800 MacBook could increase demand for Apple products during the weak economy.

Apple announced its retail locations brought in $1.74 billion during the December quarter, selling more than a half billion Macs for the fiscal first quarter.

At a time when retailers search for ways to attract customers and announce the shuttering of poorly-performing shops, Apple said it raked in $7 million for each of its 251 stores.

Large discounts and bundling iPods with other Mac items accounted for much of the upturn in retail income.

Apple’s report for the December quarter beat Wall Street expectations, Wednesday. Bucking others in the technology sector hurt by the ailing economy, the Cupertino, Calif.-based company announced quarterly sales of $10.17 billion, surpassing investor predictions of $9.74 billion.

“Even as the consumer disappeared, Apple managed to report record quarterly revenues,” ThinkEquity analyst Vijay Rakesh told clients Thursday morning.

Apple reported selling 2.5 million Macs for December, a nine percent increase over the same period in 2007. Much of that came from new MacBooks launched in October. Although 2007 saw desktop sales climb with the introduction of refreshed iMacs, in 2008 Apple unveiled new unibody aluminum MacBooks, as well as a price reduction for its entry-level white plastic MacBook.

Apple’s iPhone now comprises 2.2 percent of cell phones sold in Taiwan, reports said Wednesday. More than 12,000 of 546,000 phones sold in December were iPhones.

The December sales put the iPhone in sixth place among handsets sold on the Asian island nation, according to a report in Digitimes.

Although its unclear what impact the iPhone’s appearance had on rivals, a number of handset makers saw losses in market share last month.

The next version of Google’s Android-based cell phone sold by T-Mobile opts to drop the keyboard in favor of a virtual version to better chase after iPhone fans, a report suggested Wednesday.

The G2, built by Taiwan’s HTC for U.S. carrier T-Mobile, will appear this Spring without a physical keyboard, according to gadget blog Gizmodo. Removing the keyboard in favor of a touch-screen version will better align the Android phone with handsets such as Apple’s iPhone.

The new phone, alleged pictures of which Gizmodo published, provides a “slimmer, rounded design,” wrote Macnn.

Apple’s white plastic MacBook now has the same graphics horsepower of more expensive aluminum MacBooks, reports said Wednesday.

The upgrade, made without any official fanfare, provides buyers of the low-end notebook NVIDIA’s 9400 graphics engine, the same system already available to owners of pricier aluminum MacBooks.

Cupertino also added some oomph to the white plastic notebook’s main processor, upgrading the MacBook to a 2 GHz Intel Core 2 Duo and doubling memory to 2GB.

However, the white plastic MacBook’s beefier DD2 memory has a clock speed of 667 MHz rather than the speedier 1.06MHz available with DD3 memory for aluminum MacBooks.

Likewise, Apple still limits white plastic MacBooks to a 20-inch Cinema Display upgrade and retains a Mini DVI graphics output rather than a Mini DisplayPort.

In October, Apple lowered the price of its entry-level white plastic MacBook to $999 from $1,099.

The U.S. Securities and Exchange Commission is probing whether Apple sufficiently informed investors of CEO Steve Jobs’ health status, Bloomberg reported Wednesday.

An unnamed source told the news organization the review does not mean Apple committed any wrongdoing, according to the report.

Last week, Apple announced Jobs was taking a six-month medical leave of absence after being informed his health troubles were “more complex” the previously announced. Prior to the announcement, Jobs had assured the Mac community an ailment that had prompted speculation was due to a “hormonal imbalance” the Apple co-founder described as “easily treatable.”

Ahead of Wednesday’s report for the first quarter of fiscal 2009, a prominent Apple analyst projects Mac sales rose between six percent and 10 percent in December.

Piper Jaffray analyst Gene Munster told investors Monday Apple likely sold 2.45 million to 2.55 million Macs during the quarter, recovering from November when Mac sales suffered a double-digit decline.

Using consumer sales data from research firm NPD, Munster said Mac sales in December rose 4 percent, a jump over -1 year-over-year growth reported for November.

As analysts attempt to predict Wednesday’s first quarter revenue report from Apple, one expert trimmed his expectation for both the December quarter and full fiscal year.

Bernstein Research analyst Toni Sacconaghi told clients Monday he predicts Apple will report $9.3 billion for the December quarter, off slightly from the $9.76 billion Wall Street consensus.

He said data “may not be encouraging, given the lack of new products at MacWorld and Apple’s refusal to cut prices” along with CEO Steve Jobs’ recent health status downgrade.

China’s Apple fans can now order refurbished iPods and iMacs for discounts up to 22 percent retail, the Cupertino, Calif. company announced Tuesday.

An iPod shuffle returned and inspected by Apple sells in China for $44, according to Reuters.

The move echos similar refurbished Macs Apple sells in the U.S. and elsewhere. Best Buy began selling returned iPhones for a $50 discount.

Apple refused to say how many refurbished products have been sold to China.

Microsoft may unveil two mobile services February designed to counter Apple’s iPhone App Store and MobileMe, a blog claimed Monday.

Citing unnamed “sources close to Microsoft,” Neowin claims the software giant will unveil SkyMarket and SkyBox at next month’s Mobile World Congress.

SkyMarket, like Apple’s App Market, will offer a site for Windows Mobile users to download applications. In September, Microsoft began advertising for a Product Manager for SkyMarket. The service would be tied to Redmond’s Windows Mobile 7.

Apple announced Monday it will reveal sales for the first quarter of 2009, covering between Sept. 28th through Dec. 27th of 2008.

The results will be released at 4 p.m. Eastern and 1 p.m. Pacific, the Cupertino, Calif.-based company said. The figures will also be available through a Quicktime rebroadcast.

The numbers are highly anticipated as analyst attempt to predict how successful Apple was during the important holiday shopping period. Wall Street consensus is for a $9.75 billion quarter, pushing the upper limits of Apple’s guidance range of between $9 billion and $10 billion.

Apple was named along with 12 other PC makers in a patent-infringement lawsuit two companies filed last week, according to a report Monday.

The lawsuit claims Apple and others infringed on two patents covering a so-called “safety box” limiting an application’s access to computer resources.

The lawsuit is asking for a court injunction plus unspecified damages.

Steve Jobs, who last week took a six-month medical leave of absence as CEO of Apple, reportedly wants to remain on Disney’s board of directors.

Jobs, Disney’s largest shareholder, has been on the Walt Disney board since 2006.

The decision became public Friday, when Disney released a proxy statement, according to the Wall Street Journal.

Questions about Jobs’ ability to serve are already be raised, according to the Financial Times. A board member must serve 250 hours a year, according to the newspaper.

As Wall Street looks forward to Apple next week reporting revenue for the holiday period, Goldman Sachs analyst David Bailey thinks Cupertino may encounter problems with the March quarter.

Apple’s double-digit growth rates may well sputter as the company “will undoubtedly be affected by softer consumer demand” for its pricier products, Bailey told investors Friday.

The analyst told clients Apple’s revenue for the March quarter will be between $7 billion and $8 billion. Wall Street is forecasting $8.24 billion in revenue for the period.

Apple is preparing to open its first store in Philadelphia, designed by the same firm responsible for its Fifth Avenue retail location in New York City, according to a Friday report.

The Cupertino, Calif.-based company has signed a lease to move into a former restaurant situated to attract upscale shoppers and diners, reported the Macnn Website.

Although few details were provided, Apple would remake the Brasserie Perrier restaurant, using the Bohlin Cywinski Jackson architectural firm. The architects lead construction of many key Apple Stores in the U.S. and Great Britain.

Apple CEO Steve Jobs, who underwent pancreatic cancer surgery in 2004, may be headed back to the operating room to remove his pancreas, a doctor Thursday told financial publication Bloomberg.

Wednesday’s announcement that Jobs would leave for a six-month medical absence could indicate complications from the earlier surgery that removed portions of the pancreas, bile duct and small intestine, said Robert Thomas, head of surgery at Melbourne’s Peter MacCallum Cancer Centre.

Although Thomas isn’t intimately familiar with the health condition of the Apple founder, the medical expert told Bloomberg that a “pancreatic leak” could require the pancreas to be removed and insulin to keep the Silicon Valley icon alive.

Apple has dropped “Mac” from the name of its operating system, filing new trademark applications referring to just “OS X.” The move could be just the latest effort to rebrand the overall company.

The new trademark applications were filed in Trinidad and Tobago following the June 2008 Worldwide Developers Conference where Apple banners announced “OS X Leopard.”

The move may have been made to distinguish the company’s OS X Leopard computer operating system and the OS X used by Apple’s iPhone, according to Apple Insider.

Apple CEO Steve Jobs was forced to take a six-month medical leave following an ailment “preventing his body from absorbing food,” the New York Times reported online Wednesday.

The report, citing medical experts with knowledge of Jobs’ health, told the newspaper the founder of the Cupertino, Calif.-based company was not leaving due to a reappearance of pancreatic cancer which sidelined the Jobs in 2004.

Medical experts also told the executive to reduce stress, a factor that could inflame the illness, according to the Times.

Despite concern over what the six-month absence of Steve Jobs will mean for Apple, “sales will be unaffected,” Piper Jaffray analyst Gene Munster said Wednesday.

Munster, known for his bullish outlook on Apple, told clients interim CEO Tim Cook will lead the company without a hiccup in product development.

Although Cook took temporary reins of Apple in 2004 when Jobs underwent cancer surgery, that episode lasted only one month, a fraction of the six-month absence Jobs’ announced Wednesday.

RBC Capital Markets Thursday downgraded Apple to ‘underperform,’ also slashing the stock’s target price to $70 from $125.

The analyst firm also told clients the percent of people who say they expect to buy a Mac or iPhone over the next three months slipped in January.

Just 28 percent of people responding to a January RBC/Changewave survey reported they would buy a Mac laptop, down from 33 percent in Nov. Likewise, 30 percent of people said they intend to purchase an iPhone, when asked in December, slipping from 34 percent in September.

A handful of Web browsers for the iPhone have silently appeared at the App Store, a seeming reversal of Apple’s policy to block sales of applications that competed with the cell phone’s built-in Safari.

The four applications — Edge Browser, Webmate, Incognito and Shaking Web — employ Apple’s Webkit framework, the software used to build Safari.

Apple’s apparent thaw in its refusal to add some applications to the App Store doesn’t seem to extend to heavy-weight Safari rivals Firefox and Opera. Cupertino maintains projects relying on non-Apple software development techniques,cannot be sold via the App Store.

An analyst Wednesday told clients he expects a new 4GB iPhone during the first quarter, pushing sales of the popular handset to 7 million units beyond the 6.9 million iPhone 3Gs sold in 2008.

“Checks indicate a new 4GB iPhone which may be helping to increase build rates,” UBS analyst Maynard Um advised. Taiwan-based chipmakers may be preparing parts for a new iPhone, a newspaper reported Tuesday.

Unconfirmed speculation of an iPhone nano priced below the $199 8GB iPhone has swirled for some time.

JPMorgan analyst Mark Moskowitz became the latest on Wall Street to trim expectations for Apple during the fiscal year. Moskowitz Wednesday lowered slightly his guidance for Apple shares to $102 from $104.

Earlier this week, Citi’s Richard Gardner reduced his target price for Apple stock to $132 from $153, citing the need to “reflect a more conservative view of consumer spending.”

Moskowitz, however, told clients Apple’s value is “holding up better than feared” despite lower demand for PCs and other high tech gadgets.

Apple could control up to 40 percent of the smartphone market by 2013, UK-based Generator Research announced Tuesday. The company predicted the iPhone would grab marketshare at a time when Nokia and other cell phone players are battered by poor economic conditions.

Nokia, the current cell phone leader, could shrink to just 20 percent of the market, contends the research firm. The prediction is counter to Nokia’s own outlook. Earlier this month, Nokia CEO Olli-Pekka Kallasvuo told the Financial Times the economic mess could hurt rivals and help the Finnish company known for low-cost phones.

Not to be deterred, the British researchers said Apple could parlay the combination iPhone and App Store into another iPod-iTunes success.