Ed Sutherland - page 95

Analyst David Bailey told investors Monday shipments of iPhones, iPods and Macs are lower than expected as the company copes with a tighter economy.

As a result, Bailey also cut his target price for Apple shares to $115 from $125.

Bailey said the apparent lack of any new product category for the upcoming January MacWorld 2009 removes “a potential catalyst” for shares, causing “Apple to try to generate demand in a tough environment.”

Despite the short-term challenges, the analyst told clients he believes Apple will remain ahead of competitors.

Bailey’s downgrade follows last week’s target price cut by Morgan Stanley’s Kathryn Huberty. Huberty cut her target price to $95 from $100, citing the weak economy. Along with trimming Apple stock, the analyst also lowered projections for iPhone sales during calendar 2009 to 14 million units, down from 19 million handsets.

Palm, the Treo maker that has seen its profits crater and U.S. marketshare dwindle, is promising to stage a comeback at the upcoming Consumer Electronics Show. The company plans to unveil a new operating system and handset, according to BusinessWeek.

Although details are sparse, Palm will “finally unveil an oft-delayed new operating system, as well as the first in a new family of smartphones,” unnamed sources told the magazine.

The tip may refer to Palm’s Linux-based software Nova, which the company had said it would introduce in 2008, then pushed back to sometime next year.

Netbooks outsold iPhones in the third quarter of this year, according to two recent reports. Netbooks, inexpensive laptops with a smaller footprint, sold 5.6 million units versus 4.7 million of Apple’s touchscreen handsets.

The netbook category grew 160 percent in the third quarter compared to 2007, according to DisplaySearch. Experts predict 14 million netbooks will ship by the end of 2008, boosting notebook PCs along the way.

“With the lone exception of Apple, all of the top 10 PC brands have entered the mini-note PC market, John Jacobs, DisplaySearch Director of Notebook Market Research said earlier this week.

The iPhone and BlackBerry have helped erode the market for inexpensive flip phones as Apple and RIM reshape the handset market, a new report said Thursday.

Touchscreen phones now amount to 10 percent of handsets, nearly triple the 3.6 percent of phones in use each month during 2007, according to ComScore m:metrics.

Phone designs including a fixed QWERTY keyboard, such as the BlackBerry Curve, now comprise 22.6 percent of the market, up sharply from 9.5 percent a year ago, the report said.

AT&T, the exclusive carrier for the iPhone 3G, Thursday began offering online sales of the Apple handset with home activation, a move not available through Cupertino.

The new ordering system is open to new AT&T customers or iPhone owners that would like to add a line, according to Apple Insider. iPhones purchased online can then activate the handset through iTunes.

Before today, iPhone purchasers had to trudge to an AT&T or Apple retail outlet.

Hollywood now classifies iTunes as a competitor to television networks. That’s the seeming reason behind Apple yanking a number of movies from its online video rental and sales, according to a recent report.

When Hollywood licenses movies for TV network airing, they provide a “release window” during which the broadcast is exclusive. In other words, if CBS buys rights to a movie, it can be sure NBC won’t air the same show during that timeframe.

But since first-release DVDs are also a lucrative revenue stream for Hollywood, that “release window” restriction has never been applied to brick-and-mortar retailers, such as Blockbuster or BestBuy.

Apple unveiled a number of firmware upgrades aimed at addressing several hardware problems experienced by owners of newly-introduced MacBooks, including the MacBook, MacBook Pro and MacBook Air.

The firmware updates were designed to improve stability of the new laptops introduced in October, Apple explained in a note.

“This update improves the stability of MacBook computers and addresses issues with sleep-wake, USB and device compatibility.”

Morgan Stanley analyst Kathryn Huberty Wednesday cut Apple’s target price to $95, down from $100. Huberty pointed to a survey indicating weaker consumer interest.

Huberty also trimmed her expectations for calendar 2009 iPhone sales to 14 million handsets, down

By contrast, Piper Jaffray’s Gene Munster expects Apple will sell 45 million iPhones next year.

Up to 1 million iPhones may be purchased through Apple gift cards, giving Cupertino a boost during an otherwise expected flat 2009, one analyst said Wednesday.

Use of Apple gift cards to purchase iPhones means many handsets won’t be activated until after Dec. 25. That delay could result in misleading December iPhone sales, Kaufman Bros. analyst Shaw Wu told investors.

“The risk here is that the customer will likely activate post-Christmas; therefore revenue and units won’t likely be recognized until the March quarter,” Wu wrote. March is viewed as usually a weak month for sales.

The South Korean government has put out the ‘welcome’ mat for Apple’s iPhone and other handset makers, dropping a long-standing demand that blocked foreign cell phones from the tech-saavy country.

The Korean Communications Commission said starting April 1 it will no longer require cell phone makers adopt the home-grown Korean Wireless Internet Platform for Interoperability, or WAPI specification.

The rule, in place since 2005, had prevent Apple, RIM and others from competing against local handset makers. Samsung and LG now control 90 percent of the South Korean market.

Psystar, the Florida-based Mac clone maker, now alleges Apple misused its copyright to prevent competition. The new legal theory is part of a modified countersuit the company hopes to file in a California federal court Jan. 15.

The U.S. District Court of Northern California recently dismissed Psystar’s original countersuit, rejecting the company’s claims Apple violated the Clayton Act and Sherman Act antitrust laws.

In a response to the court’s rebuff, Psystar said it “respectfully disagrees” with the ruling by judge William Alsup, who in November granted Apple’s motion to dismiss.

Walmart could sell 4.5 million iPhones in 2009, equally the number of handsets sold by Apple retailers, Piper Jaffray analyst Gene Munster speculated Tuesday.

The analyst called the 4.5 million benchmark “achievable” if each of Walmart’s 3,500 stores sell 1,284 iPhones in 2009. Munster expects Apple’s 208 retail locations will sell 4.5 million iPhones.

“We do not believe that Street numbers accurately reflect the potential impact from Walmart stores on iPhone sales in 2009,” Munster told investors. The Piper Jaffray analyst retained his belief that 45 million iPhones will be sold next year.

Sony Ericsson Tuesday joined the Open Handset Alliance, becoming the latest cell phone maker to voice support for Google’s Android operating system.

Sony Ericsson has said it plans to adopt the Android software for several phones during 2009. The phone maker will drop t he Symbian UIQ phone software in favor of Google’s open-source Android platform, reports said Tuesday.

In a statement, Sony Ericsson announced it hoped to use Andriod to develop successful handsets along the lines of its popular Walkman MP3 players and Cyber-shot digital cameras.

Time Magazine has dropped the iPhone to third place in its annual poll of the top 10 gadgets. Is the luster wearing thin on Apple’s flagship product.

While crediting the iPhone for launching an “era of mobile computing,” when it comes down to performance the handset “doesn’t handle email as well as the cheapest BlackBerry, and as a telephone, it’s no better than most cell phones,” the magazine said.

“As a phone, the iPhone was never better than other handsets, and still isn’t today,” Avi Greengart, Current Analysis’ handset analyst, told Cult of Mac. The iPhone’s reception, microphone and speaker aren’t what makes the device special, Greengart said.

Apple is striving to change how people view the iPhone 3G compared to the first handset. Cupertino is encouraging journalists to describe the iPhone as a mobile computing platform, not as a phone.

In 2007, the first generation iPhone wowed Time’s reviewer, who wrote the Apple handset “changed the way we think about how mobile media devices should look, feel and perform.”

Although the iPhone dropped out of first place, the No. 1 spot in Time’s poll was given to an Apple-related product, the Optoma Pico PK-101 projector – an iPhone and iPod add-on. Second place was won by the first consumer laser TV set, the 65-inch Mitsubishi LaserVue TV.

Just days after opening its first retail store in Germany, Apple is set Dec. 13 to begin moving into its first store in France, located near the Louvre Museum.

Apple will move into a 7,700-square foot two-level store previously occupied by Résonances, a retailer that’s moving elsewhere in the underground shopping mall Carrousel du Louvre.

As part of the makeover, Apple first retail store in France will include a glass staircase that connects the two levels, according to Apple Insider.

The new store should open to the public by Fall 2009. Apple’s retail presence in France comes two years after company CEO Steve Jobs predicted a 2007 ribbon-cutting.

UBS analyst Maynard Um became the latest to douse cold water on talk of a $99 iPhone appearing on Wal-Mart shelves. Um said such a move would disregard Apple’s pricing practices.

“We believe a $99 iPhone would be atypical of Apple’s premium brand strategy,” Um told investors Monday. The analyst believed $149 would be more realistic for a 4GB iPhone.

Although others, such as Kaufman Bros.’ Shaw Wu last week called a $99 iPhone “inevitable,” Um said such a move would “cannibalize” sales of the 8GB and 16GB versions, cutting Apple’s share price by $0.27 in 2009.

Apple eliminated GPS functionality in order to sell the iPhone 3G in Egypt, the New York Times reported Monday. Cupertino’s acquiesense to the Egyptian government comes as the company negotiates entry into China’s 500 million consumers.

Apple silently modified the iPhone in the face of Egyptian concerns that GPS could be a military security risk, according to the newspaper. However, the changes come as governments attempt to put a lid on technology used by pro-democracy movements.

On the Egyptian iPhone Web page, Apple mentions 3G, Wi-Fiand Microsoft Exchange compatibility, but not GPS.

We all known Apple moves in mysterious ways, making changes that disrupt the lives of users with few warnings. Users Monday reported some movies are vanishing from the shelves of the iTunes Store.

Like in the Eagles’ “Hotel California,” a variety of movies can be bookmarked on iTunes but can’t check out. An error window appears when such flicks as Michael Clayton, Atonement and Charlie Wilson’s War are selected, according to Macworld.

The mystery may be some rights-management issue, although the movies involved span several studios, Ars Technica points out.

This isn’t the first time iTunes users have scratched their heads over movies available through iTunes. A recent uproar occurred after iTunes customers discovered new MacBooks included hardware-based copyright protection features which prevented some movies from playing on third-party displays.

Device maker Belkin said Monday it would pull-out of the upcoming Macworld Expo in order to concentrate on partners hurt by the crumbling economy.

The news confirms speculation from last week that Belkin would join Adobe and a growing list of Apple companies either bypassing or curtailing their involvement in the premiere Mac product showcase.

“We are not exhibiting at Macworld, but we will be holding meetings with our channel partners,” Belkin spokeswoman Melody Chalaban confirmed to Macworld. Belkin has also withdrawn from the Consumer Electronics Show.

Wal-Mart employees have confirmed the retailer will begin selling the iPhone before the end of December, however talk of a $99 Apple handset remain mostly in the rumor stage.

Although neither the giant discount retail nor the exclusive carrier AT&T have officially disclosed their plans, both Bloomberg and the Mercury News quote retailers confirming the iPhone is set to be sold by Wal-Mart after Christmas.

Citing unnamed employees at five California Wal-Marts, Bloomberg Monday reported workers are being trained to sell the 8GB and 16GB iPhones. Friday, the Mercury News reported other California Wal-Mart managers were being trained to offer the iPhones.

Internet giant Google is among several technology companies reducing their presence at the upcoming Macworld Expo, a report said Friday.

According to AppleInsider, event organizer IDG is “frantically negotiating” to keep Google and other unnamed high-profile exhibitors from bypassing the annual gathering of Mac companies.

A 20 percent drop in companies planning to attend has forced IDG to extend a sign-up discount through Dec. 8, according to the Web site.

An Australian video electronics maker will enter the cell phone business January, offering the “Agora,” the second handset to use Google’s Android operating system.

The cell phone by Kogan Technologies, will start at $193 and offers a 2.5-inch touch screen, QWERT keyboard, 256MB of memory (expandable with a microSD card) and Bluetooth, Wi-Fi and 3G support. The handset allows 400 minutes of talk time and 300 hours of standby, according to CNET.

The Agora can be only be ordered from Kogan’s Web site begins shipping Jan. 29, 2009.

Apple faces yet another lawsuit over the performance of its iPhone 3G. The latest court challenge charges hardware defects cause calls to be dropped when using 3G.

James Pittman made the claims to a Northern District of California federal court in San Jose on Nov. 26.

In his lawsuit, Pittman alleges Apple of misrepresentation, violating California’s Song-Beverly Consumer Warranty Act, unjust enrichment and unfair competition of business and professions code.

Apple’s meteoric rise amid a crumbling economy is about to be doused with a cold shot of reality, a financial analyst warned investors Thursday. Mac sales will grow 10 percent in 2009, far below the earlier projected 43 percent increase, Piper Jaffray’s Gene Munster said.

Munster cut his price target for Apple stock to $235 per share, down from $250.

“The economic and consumer spending outlook has deteriorated significantly over the last month, which we expect to continue through 2009,” Munster told clients.

The analyst expects Apple to earn $41.22 billion in 2009.

More smartphones are using Apple’s OS X operating system than Windows Mobile, a researcher said Thursday. Apple’s software now has 12.9 percent of the global smartphone market, pushing Microsoft out of No. 3 behind RIM and handset giant Nokia.

OS X-based smartphones – fueled by Apple’s popular iPhone – saw a 327 percent year-over-year increase, rising from 3.4 percent of the market in the third quarter of 2007. The increase far outstripped the 11.5 percent annual increase in the overall smartphone market, according to Gartner.

By contrast, Microsoft’s marketshare fell 3 percent to 11.1 percent.