Belgium rumored for 3G iPhone
Belgium may soon join the ranks of countries that will receive a 3G iPhone, according to regional site Astel.be. In a move similar to the one rumored for Italy, the online publication claims handset will be available unlocked.
MacNN notes that while this plan may fall in line with rumored tweaks to Apple's iPhone distribution model -- by which the handset would fetch a higher retail cost but not required lengthy service contacts -- it may also be necessary by Belgian law, as recently the case in France.
Three Belgian carriers -- Proximus, Mobistar and BASE -- are said to be creating special data packages for the iPhone, supporting unlimited transfers and "visual messaging." It's also reported that like TIM in Italy, Mobistar may have a temporary exclusive on the device that would last a few months.
512GB SSDs from Toshiba around 2009
Toshiba hopes to quadruple the capacity of its solid-state drives in the foreseeable future while cutting their production costs, the company's semiconductor chief Shozo Saito has told an audience at an IDEMA seminar in Japan.
The electronics manufacturer isn't set to ship its 128GB drive in computers until June but says process refinements will let it store up to four data bits per memory cell and shrink the chipmaking process to 30 nanometers by the end of 2009, allowing the company to offer a 512GB drive to system manufacturers like Apple around that time.
By fitting more data into a given space, Toshiba will also reduce the cost of making flash memory itself, Saito says. The Japanese company estimates that it can reduce the price of making SSDs by as much as 40 to 50 percent every year, resulting in far less expensive drives at greater storage levels.
While a 1.8-inch SSD costs 2.9 times as much as its rotating hard disk equivalent, a reliable price drop could reduce the cost to a comparatively reasonable 40 percent premium within the near future.
Apple Web traffic up 13 percent
According to new data from Nielsen Online, Web traffic to the Apple-owned web properties collectively grew 13 percent year-over-year in the first quarter of 2008, from a three-month average monthly unique audience of 42.9 million to 48.4 million.
Total minutes spent on the sites grew 12 percent year over year, from 9.4 billion in Q1 2007 to 10.5 billion in Q1 2008, while total purchases at The Apple Store grew 32 percent month over month, from 322,000 purchases in January 2008 to 424,000 purchases in February 2008. iTunes, Apple Store and QuickTime were the top three fastest growing Apple Computer Web channels year-over-year in Q1 2008
Meanwhile, Nielsen Mobile reports iTunes had 2.9 million unique visitors per month over mobile phones in Q4 2007. iTunes users averaged 9.0 visits at 10 minutes per visit in December. Much of that traffic comes from iPhones, which accounted for 0.5 percent of the embedded US handset market in Q4 2007.
UK shoppers flocked to the retail shops of O2 and its retail partner Carphone Warehouse last week after the British wireless carrier announced a 100 pound price drop on the 8GB iPhone, MobileToday is reporting.
O2 stores in Newcastle, Birmingham and London said they each sold out of the touchscreen handset last Wednesday, the same day the price cuts were announced.
"And an employee in Carphone Warehouse�s flagship store on London�s Oxford Street said sales had doubled from 30�per day to 60, while another Carphone staffer commented: �We usually sell one or two a day, but yesterday we sold about 20 � it was like launch day again.�"
O2 was expecting its stock to be replenished ahead of this week, the report says.
Steve Jobs and The Pixar Story
Apple chief executive Steve Jobs, along with Tom Hanks and George Lucas, will be among the interviewees in a vibrant documentary on the history of Pixar animation studios set to air at 10:00 p.m. local time Tuesday (tonight) on the Starz movie channel.
"Here's the problem with this documentary, which charts the birth, near-death, and explosion of the multiple-Oscar-winning animation studio:," reads a description from Entertainment Week. "It will make you realize that your job sucks. Because unless you work for John Lasseter at the MIT-meets-Romper Room HQ, hatching hits like Toy Story and Cars, then you have no idea how rewarding a job can be."
Mac OS X 10.5.3 build 9D23
Just days after privately releasing Mac OS X 10.5.3 build 9D22 to its vast developer community, Apple on Monday evening pushed out yet another build of the impending update to its Leopard operating system carrying build number 9D23.
According to people familiar with the distribution, the latest build lists no known issues and Apple made no changes to the twelve core areas of the software for which developers should reserve their testing efforts.
However, the new build added eight new code corrections to a bug fix list now sprawling nearly 180 items long. Amongst the most recent additions were resolutions to issues with mounted Boot Camp volumes, Safari bookmarks and .Mac Mail accounts, and memory leaks spurred by Finder accessibility windows.
Based on timeframes provided to AppleInsider, the Mac OS X 10.5.3 Update should be released to Leopard users within the next two weeks.
AT&T profits rise 22 percent
AT&T Inc. said Tuesday that first-quarter profits rose 22 percent, fueled largely by the addition of 1.3 million net wireless subscribers -- a sign that the nation's largest wireless carrier has thus far escape the adverse affects of a slumping U.S. economy.
Net income rose to $3.46 billion, or 57 cents a share, up from $2.85 billion, or 45 cents a share. Meanwhile, revenue increased 6.1 percent to $30.74 billion from $28.97 billion.
The exclusive U.S. wireless provider for Apple's iPhone said wireless sales were up 18 percent to $11.8 billion and that it ended the first quarter with a nation-leading 71.4 million mobile customers.
Though the Cupertino-based Mac maker largely beat estimates for its second fiscal quarter on Wednesday, one sore spot appeared to be gross margin, which came in at about 100 to 200 basis points below most analysts' expectations at 32.9 percent.
An ensuing conference call was thus dominated by matter, as Wall Street folk routinely pelted management with questions on the perceived shortcoming as they sought a better understanding for their models going forward.
While management largely attributed the near 2 percent margin decline from the prior quarter to February's iPod shuffle price cut and a routine falloff in sales of Mac OS X Leopard and iWork, Piper Jaffray analyst Gene Munster offered his own explanation.
"We believe the margin outlook may be viewed negatively by investors, who likely wanted to see more of Apple's significant revenue upside trickle down to earnings," he wrote in a note to clients early Thursday morning. "The bottom line, we believe the margin was negativity impacted by a higher mix of Mac Book Air, which we now believe carries a lower margin."
On the bright side, Apple has likely built the potential for margin expansion into its MacBook Air design as adoption swells and component prices fall. What's more, Apple management appeared upbeat in stating that the Air has thus far shown little to no cannibalization effect on the company's other notebook offerings and thus could be considered largely responsible for helping push Mac unit growth to its highest rate in nearly two decades.
"The key takeaway from Apple's March quarter is that the Mac units grew at the highest year-over-year rates (units 51 percent and revenue 54 percent) in 17 years," Munster added in his note to clients. "Macs are the most meaningful category with the most potential and they are performing the best."
Looking ahead, the Piper Jaffray analyst said he's modeling conservatively for Mac growth rates to decline to 12 percent year-over-year for the remainder of calendar year 2008, which leaves "ample room for positive estimate revisions over the next 8 months."
"Mac growth is accelerating despite multiple quarters of strong growth, iPod sales are stabilizing with higher average-selling-prices due to the touch, and the iPhone will be significant in the second half of the year with the release of new hardware and software," he wrote.
AmTech downgrades Apple shares to Neutral on valuation
Published: 10:00 AM EST
Investment firm American Technology Research on Tuesday cut its long-standing Buy rating on shares of Apple Inc. to Neutral, citing near-term concerns with the stock's valuation, high expectations on the part of investors, and a potential product vacuum ahead of the third calendar quarter. Specifically, Wu noted that shares are now trading at 32 times calendar year 2008 earnings and near his previously stated $175 price target. These levels are "not that compelling," he said, and warned of the potential for a 15 to 20 percent correction in the near term that could see the shares fall back to $135 to $140 levels. Apple's PA Semi buyout motivated by assets, not products
Published: 07:30 PM EST Despite speculation that Apple's acquisition of PA Semiconductor was motivated by the chip maker's specific products, a new report reveals that the iPhone designer is interested more in the buyout for its promises of intellectual property and development expertise -- and may be causing a crisis for the US Department of Defense in the process. Instead, the buyer (since identified as Apple) is focusing on more abstract intellectual developments and engineering staff, leaving the door open to the use of Intel's Atom platform for future Apple designs. PA Semiconductor is best-known for developing very high efficiency embedded processors, such as a dual-core, 64-bit PowerPC-based chip that runs at 2GHz but uses only 15 watts of power. While the product itself no longer useful to Apple, which has switched all its computers to Intel's x86 architecture, the achievement itself has drawn attention from since its launch in February of last year by outperforming other rivals in the field while simultaneously running more efficiently. Nonetheless, Apple's takeover may leave many of those customers -- and the US military -- hanging out to dry, according to an unnamed employee of one of the affected firms. Though still considered a startup company, PA Semiconductor has already encountered unprecedented success in selling its products and is heavily invested in military technology. More than 10 defense devices, including some from Lockheed Martin and Raytheon, already use the young electronics firm's PWRficient processor to varying levels across every branch of the US armed forces. This bucks conventional industry wisdom, which hesitates to use brand new technology until well-tested. "I've never seen such fast adoption of a product in the [military aerospace] world," the alleged insider says. Apple, however, is said by PA Semi to be uninterested in continuing development of those chips and may farm out production on end-of-life terms only if it can transfer a third-party technology license. That will leave many of the smaller company's present-day customers without a long-term source of parts and is already seen as problematic for military contractors like Raytheon, which often spend "many" years developing and maintaining combat equipment. The risk of an abrupt processor supply cutoff is also reportedly enough that the US Department of Defense may be compelled to plead its case to Apple. No intervention is currently underway, but one is described as possible should PA Semi's customers, and thus DoD part suppliers, grab the attention of the government branch. "We've had customers saying they are going to the DoD on this one," the source claims. For its part, Apple remained silent on the reasoning and effects of the acquisition during its second-quarter conference call. |
Of the eight analysts for which AppleInsider had data leading into the earnings report, Abramsky's model stood out as the most well-rounded in light of the company's actual results. He had predicted earnings of $1.11 per share on revenues of $7.2 billion and a gross margin of 34 percent, which factored in sales of 2.2 million Macs, 1.8 million iPhones, and 10 million iPods.
Wu was a close second, and along with Lehman's Ben Reitzes came the closest to predicting the company's actual gross margin -- an indicator of a company's profitability at the most fundamental level -- with his estimate of 33.5 percent. The remainder of his forecast included per-share earnings of $1.10 on $7 billion in revenues, based on estimated sales of 2.15 million Macs, 1.5 million iPhones, and 10 million iPods.
In a research note release to clients Thursday, Abramsky reiterated his Buy rating on shares of Apple, bumping his price target by $10 to $200 a share. He called on investors to realize that the advent of a 3G iPhone in the near term will enable the Cupertino-based company to tap a global market five times the size of the MP3 player market and ten times the size of the worldwide PC market.
According to the analyst, other pending catalysts for the stock include higher capacity iPod touch players and refreshed MacBooks with aluminum enclosures later in the calendar year, as well as a boost in international Mac sals as consumers in foreign countries see increased exposure to the company's well-received iPhone handset.
"Apple may phase out the 80GB Classic following the launch of a 64GB iPod touch," he said, adding that greater availability of video content on the iTunes Store/Apple TV also creates a need for current generation iPods that are video capable, and thus may drive a replacement cycle for a significant number of consumers.
In his own report Thursday, Wu noted that some investors may be concerned that Apple's revenue upside did not translate into big per-share earnings upside, and cited gross margin as the culprit.
"One may beg the question of whether Apple has lost its unparalleled ability to capitalize on declining component prices," he wrote. "We believe it is too early to declare this, but we believe this could remain a lingering concern."
As such, Wu maintained his Neutral rating and positive longer-term fundamental view on the company, but continued to wave caution at buying into shares at current levels.
"We remain concerned with volatility in shares and a potential vacuum before the launch of 3G iPhones and new Macs," he said.
"Apple buys smaller technology companies from time to time, and we generally do not comment on our purposes and plans," said Apple spokesman Steve Dowling. He declined to go into the specifics of the agreement, but a person familiar with the matter speaking to Forbes said the deal would consist of a $278 million cash transaction.
Both Apple chief executive Steve Jobs and Apple iPod chief Tony Fadell are said to have been instrumental in the deal, which included negotiations that took place at Jobs' home in Palo Alto, Calif.
Forbes speculates that move on Apple's part is a strategic one aimed at assuring it can continue to differentiate its next-generation handheld products amongst a growing fleet of competitors, many of which may choose to base their designs around Intel's widely available offerings.
P.A. Semi was founded in 2003 by Dan Dobberpuhl, who was among the lead designers for the Alpha and StrongARM microprocessors put forth by Digital Equipment in the 1990s, according to the report.
In February 2007 the chip maker released a 64-bit dual core processor which it claimed was 300 percent more efficient than any comparable offerings, consuming only 5 to 13 watts while running at 2 gigahertz.
The efficiency of mobile processors has been of particular concern for Apple, particularly as it embarks in new business directions such as mobile phones where battery life is critical. As such, the power savings offered by P.A. Semi's designs may have been amongst the firm's most compelling assets in Apple's eyes.
iTunes vids failing on 5th gen iPods; GPS in iPhone code? More
Published: 06:55 PM EST
Owners of Apple's early video-capable, fifth-generation iPods have found that some recent iTunes Store videos refuse to play. Also, beta versions of the iPhone's 2.0 software emulator make reference to currently unused GPS features, Apple has released its Aperture SDK, and Sony has acquired the company that provides track titles for iTunes.
5G iPods stalling on newer iTunes videos
Owners of Apple's previous-generation, full-size iPods are reporting on the company's support forums that many videos released through iTunes from April 10th onwards aren't playing properly on their devices.
While no apparent changes have been made to the videos, any attempt to play them stalls out or plays only one component, such as audio. Videos either obtained from different sources or those posted to the Apple-run service before April 10th work properly, even if purchased after the apparent switchover date.
The issue is described as independent of the exact version of iTunes and persists after restoring iPods or reinstalling iTunes.
Apple hasn't offered an official explanation or solution to the problem, but is now known to be "working toward a resolution" and may have at least resolved the issue for videos purchased within the past two days, which some users say are playing properly. Newer players such as the iPod classic and iPod touch haven't encountered playback difficulties.
iPhone 2.0 code mentioning GPS support?
Apple has built in hooks for iPhone GPS features that aren't possible with the current hardware, according to a
Owners of Apple's early video-capable, fifth-generation iPods have found that some recent iTunes Store videos refuse to play. Also, beta versions of the iPhone's 2.0 software emulator make reference to currently unused GPS features, Apple has released its Aperture SDK, and Sony has acquired the company that provides track titles for iTunes.
Owners of Apple's previous-generation, full-size iPods are reporting on the company's support forums that many videos released through iTunes from April 10th onwards aren't playing properly on their devices.
While no apparent changes have been made to the videos, any attempt to play them stalls out or plays only one component, such as audio. Videos either obtained from different sources or those posted to the Apple-run service before April 10th work properly, even if purchased after the apparent switchover date.
The issue is described as independent of the exact version of iTunes and persists after restoring iPods or reinstalling iTunes.
Apple hasn't offered an official explanation or solution to the problem, but is now known to be "working toward a resolution" and may have at least resolved the issue for videos purchased within the past two days, which some users say are playing properly. Newer players such as the iPod classic and iPod touch haven't encountered playback difficulties.
iPhone 2.0 code mentioning GPS support?
Apple has built in hooks for iPhone GPS features that aren't possible with the current hardware, according to a
Apple posts profit of $1.05B, ships nearly 2.3 million Macs
Published: 04:35 PM EST
Apple said Wednesday that second-quarter profits rose over 36 percent to $1.05 billion, or $1.16 per diluted share, on sales of $7.51 billion for the three-month period ended March 29, 2008.
These results compare to revenue of $5.26 billion and net quarterly profit of $770 million, or $.87 per diluted share, in the year-ago quarter. Gross margin was 32.9 percent, down from 35.1 percent in the year-ago quarter, and international sales accounted for 44 percent of the quarter's revenue.
Apple shipped 2,289,000 Macintosh computers during the quarter, representing 51 percent unit growth and 54 percent revenue growth over the year-ago quarter. The company also sold 10,644,000 iPods during the quarter, representing one percent unit growth and eight percent revenue growth over the year-ago quarter.
Quarterly iPhone sales were 1,703,000.
"We're delighted to report 43 percent revenue growth and the strongest March quarter revenue and earnings in Apple's history," said Apple chief executive Steve Jobs. "With over $17 billion in revenue for the first half of our fiscal year, we have strong momentum to launch some terrific new products in the coming quarters."
"We're thrilled to have generated $4 billion in cash flow from operations in the first half of fiscal 2008, yielding an ending cash balance of $19.4 billion," added Apple chief financial officer Peter Oppenheimer. "Looking ahead to the third quarter of fiscal 2008, we expect revenue of about $7.2 billion and earnings per diluted share of about $1.00."
Apple will conduct its Q2 2008 financial results conference call in about 30 minutes -- AppleInsider will provide full coverage.
These results compare to revenue of $5.26 billion and net quarterly profit of $770 million, or $.87 per diluted share, in the year-ago quarter. Gross margin was 32.9 percent, down from 35.1 percent in the year-ago quarter, and international sales accounted for 44 percent of the quarter's revenue.
Apple shipped 2,289,000 Macintosh computers during the quarter, representing 51 percent unit growth and 54 percent revenue growth over the year-ago quarter. The company also sold 10,644,000 iPods during the quarter, representing one percent unit growth and eight percent revenue growth over the year-ago quarter.
Quarterly iPhone sales were 1,703,000.
"We're delighted to report 43 percent revenue growth and the strongest March quarter revenue and earnings in Apple's history," said Apple chief executive Steve Jobs. "With over $17 billion in revenue for the first half of our fiscal year, we have strong momentum to launch some terrific new products in the coming quarters."
"We're thrilled to have generated $4 billion in cash flow from operations in the first half of fiscal 2008, yielding an ending cash balance of $19.4 billion," added Apple chief financial officer Peter Oppenheimer. "Looking ahead to the third quarter of fiscal 2008, we expect revenue of about $7.2 billion and earnings per diluted share of about $1.00."
Apple will conduct its Q2 2008 financial results conference call in about 30 minutes -- AppleInsider will provide full coverage.
"Apple buys smaller technology companies from time to time, and we generally do not comment on our purposes and plans," said Apple spokesman Steve Dowling. He declined to go into the specifics of the agreement, but a person familiar with the matter speaking to Forbes said the deal would consist of a $278 million cash transaction.
Both Apple chief executive Steve Jobs and Apple iPod chief Tony Fadell are said to have been instrumental in the deal, which included negotiations that took place at Jobs' home in Palo Alto, Calif.
Forbes speculates that move on Apple's part is a strategic one aimed at assuring it can continue to differentiate its next-generation handheld products amongst a growing fleet of competitors, many of which may choose to base their designs around Intel's widely available offerings.
P.A. Semi was founded in 2003 by Dan Dobberpuhl, who was among the lead designers for the Alpha and StrongARM microprocessors put forth by Digital Equipment in the 1990s, according to the report.
In February 2007 the chip maker released a 64-bit dual core processor which it claimed was 300 percent more efficient than any comparable offerings, consuming only 5 to 13 watts while running at 2 gigahertz.
The efficiency of mobile processors has been of particular concern for Apple, particularly as it embarks in new business directions such as mobile phones where battery life is critical. As such, the power savings offered by P.A. Semi's designs may have been amongst the firm's most compelling assets in Apple's eyes.
Notes of interest from Apple's Q208 quarterly conference call
Published: 06:15 PM EST
Apple on Wednesday announced its most profitable second quarter in company history, and held a financial conference call with analysts and members of the media. Several notes of interest from the now concluded call follow:
Apple said second-quarter profits rose over 36 percent to $1.05 billion, or $1.16 per diluted share, on sales of $7.51 billion for the three-month period ended March 29, 2008.
Apple regional business segments
Apple Americas accounted for 884,000 Mac shipments and $3.268B in revenues. These figures are up 46 percent and 32 percent year-over-year. Sequentially, shipments are up 5 percent with revenue down 24 percent.
Apple Europe accounted for 627,000 Mac shipments and $1.78B in revenues. Both these figures are up 45 percent and 43 percent year-over-year, but down 11 percent and 28 percent sequentially.
Apple Japan accounted for 118,000 Mac shipments and $424M in revenues. These figures have increased by 49 percent each year-over-year, as well as 30 and 6 percent sequentially.
Apple's Asia Pacific (and FileMaker Inc), billed as "Other Segments," accounted for 202,000 Mac shipments and $589M in revenues. These figures are up significantly, by 67 percent and 74 percent year-over-year. Sequentially, unit shipments rose 13 percent in the Asia Pacific regions with revenue decreasing 20 percent.
Apple's "Other Music Related Products and Services" segment accounted for $XXM in revenue. The figure represents a x percent year-over-year increase and a x percent sequential lift to Apple's results.
Apple's "Peripherals and Other Hardware" added $881M in revenue, representing a 35 percent growth year-over-year and 9 percent sequentially.
Apple's "Software, Service and Other Sales" segment accounted for $529M in revenue, an upward climb of 53 percent year-over-year but a 16 percent drop sequentially.
Apple's Mac business
Apple sold 856,000 desktops during the quarter and 1,433,000 notebooks. The figures signal Mac shipment increases of 37 and 61 percent for each category year-over-year. Notebook shipments climbed sequentially by 7 percent, while desktops decreased by 12 percent from quarter to quarter.
Macs accounted for 59 percent of total revenue. At an increase of 51 percent year-over-year, this growth was more than 3.5 times the market growth rate, according to IDC forecasts; this is even higher than the 2.66 times growth Apple has enjoyed in the recent past.
Revenue in the quarter was driven primarily by the Mac.
MacBooks and MacBook Pros both saw strong sales. There was equally strong demand for the iMac, plus an increase in sales of the Mac Pro.
The MacBook Air launched successfully, and customers have responded "very well" to the ultraportable design.
Educational Mac unit growth was 35 percent, the highest of any quarter in the last eight years. The company overtook Dell last year in portable sales.
Apple is worried a little bit about institutional budgets, but with 35 percent growth in the quarter hasn't seen anything to suggest a downward trend.
There are 3 to 4 weeks of Mac channel inventory.
Mac OS X Leopard revenues were just over $40 million. While a drop from the launch quarter's $170 million, this still represents the bestselling Mac OS X release in history, according to Apple.
iLife and iWork are entering their third quarter of sales and are so on the decline.
The MacBook Air was "constrained" most of the quarter, but by the end of March was in a near-ideal supply balance.
Apple repeated its first quarter observations on the demographics of MacBook Air purchasers, saying that it appealed to college professors, students, and frequent travelers.
Cannibalization of other MacBook lines by the Air is said to be low.
Apple's Apple TV and iPhone businesses
Apple sold 1,703,000 million iPhones during the quarter and earned about $378 million.
Total deferred revenue from Apple TV and iPhone was $1.93B.
Over a third of companies in the Fortune 500, and over 400 higher education institutions, have applied for iPhone developer status.
More than 200,000 people have downloaded the SDK.
Apple beat its own internal expectations for iPhone sales during the quarter, which resulted in the ongoing shortage. Inventories in US Apple stores was particularly spotty due to large numbers of iPhones being bought with an intention to unlock and resell. The company expects this to continue and sees it as a signal of strong global demand.
Apple is working very hard to roll out the iPhone to more places in Europe and Asia during the year.
Apple's 10 million-unit iPhone sales goal for 2008 includes unlocked devices.
The iPhone 2.0 software is coming in "late June." This is the first time Apple has offered a more specific timeframe for the update.
All iPhone customers will get the 2.0 software for free, whether they bought before or after the SDK announcement.
However, revenue for all iPhones sold after March 6th (the announcement date) will be deferred until after the software ships. The company reasons that every prospective buyer is aware of the upcoming software and may be influenced in their purchases.
Guidance for shipments has factored the iPhone's supply levels into the balance.
International carriers are free to price iPhones as low as they wish, Apple says. The company however won't give more detail on which companies in the relationship absorb the price drops instituted by European carriers.
American iPhone supply was low both at retail and in the channel. Apple disagrees with assertions that it mismanaged shipments by allowing overstocks in Europe while the US runs low.
Unsurprisingly, Apple won't comment on whether it will keep a 2G iPhone alongside any future 3G model. The company won't comment on "unreleased products."
Apple's Retail business
Apple's retail stores combined to sell 458,000 Mac units and generate $1.451B in revenues during Apple's fourth fiscal quarter, representing yearly growth of 67 percent in units and 74 percent in revenue. Sequentially, the retail segment produced a 9 percent decline in units and a 15 percent decline in revenue.
53 percent of retail computer buyers are new to the Mac.
Retail operating profits doubled to $334 million.
Over 580,000 hour-long personal training sessions were delivered during the quarter.
Australia, China, and Switzerland will be receiving new Apple stores.
Apple has a total of 208 stores open, and still plans to open a total of 45 in fiscal 2008. This is up slightly from earlier forecasts.
With an average 205 stores open over the period, an average store's revenue was $7.1 million, up 48 percent year over year.
There were 33.7 million visitors total to all of Apple's stores, up 57 percent year over year.
The Best Buy project ended with a little under 400 stores hosting Apple products, with a target of 600 by the summer.
Traffic in retail stores was up 12 million people year over year.
Apple's iPod and iTunes businesses
Over 10,644,000 million iPods were shipped this quarter.
iPod channel inventory remains on track at 4-6 weeks of inventory.
According to NPD, the iPod's share of digital media players gained in almost every market for which the researchers have data, resulting in 73 percent of the US market.
The iTunes Store has 50 million customers and over 85 percent marketshare in the US, according to Nielsen.
iPod shuffle sales were down until the price cut, which triggered a resurgence.
iTunes makes up a larger proportion of Apple's business this quarter versus the last.
The financial side of Q2
Operating margins were higher than expected at 17.5 percent, mainly due to higher than anticipated revenues and gross margins.
Apple held $19.4B in cash as of quarter's end, and generated $4B in cash during the last two quarters. The company has "no comment" on what it plans to do with the cash.
Much of the gross margin decline in the quarter was due to Leopard sales falling off from a historically strong first quarter on the market, as well as a drop-off in other software sales. This was also accounted for by the iPod shuffle's price cut, and international price cuts that reflect changes in currency value.
Apple's next (Q208) fiscal quarter
Apple is targeting $7.2B in revenue, gross margins of 33 percent, and earnings per share of exactly $1.
Commodity prices on flash and DRAM hit historical lows, and should remain that way for the current quarter. The LCD market is in a supply-and-demand balance, as are most other commodities such as hard drives. These should all follow historical pricing trends, and this is all factored into management's guidance.
Apple sees a sequential increase in Mac shipments for the June quarter as the educational buying season begins. The quarter typically skews towards K-12, which often buys at lower average sales prices, while the September quarter is weighted towards higher education and higher prices.
The company declines to comment on its plans for recently acquired PA Semiconductor.
Apple on Wednesday announced its most profitable second quarter in company history, and held a financial conference call with analysts and members of the media. Several notes of interest from the now concluded call follow:
Apple regional business segments
Apple Americas accounted for 884,000 Mac shipments and $3.268B in revenues. These figures are up 46 percent and 32 percent year-over-year. Sequentially, shipments are up 5 percent with revenue down 24 percent.
Apple Europe accounted for 627,000 Mac shipments and $1.78B in revenues. Both these figures are up 45 percent and 43 percent year-over-year, but down 11 percent and 28 percent sequentially.
Apple Japan accounted for 118,000 Mac shipments and $424M in revenues. These figures have increased by 49 percent each year-over-year, as well as 30 and 6 percent sequentially.
Apple's Asia Pacific (and FileMaker Inc), billed as "Other Segments," accounted for 202,000 Mac shipments and $589M in revenues. These figures are up significantly, by 67 percent and 74 percent year-over-year. Sequentially, unit shipments rose 13 percent in the Asia Pacific regions with revenue decreasing 20 percent.
Apple's "Other Music Related Products and Services" segment accounted for $XXM in revenue. The figure represents a x percent year-over-year increase and a x percent sequential lift to Apple's results.
Apple's "Peripherals and Other Hardware" added $881M in revenue, representing a 35 percent growth year-over-year and 9 percent sequentially.
Apple's "Software, Service and Other Sales" segment accounted for $529M in revenue, an upward climb of 53 percent year-over-year but a 16 percent drop sequentially.
Apple's Mac business
Apple sold 856,000 desktops during the quarter and 1,433,000 notebooks. The figures signal Mac shipment increases of 37 and 61 percent for each category year-over-year. Notebook shipments climbed sequentially by 7 percent, while desktops decreased by 12 percent from quarter to quarter.
Macs accounted for 59 percent of total revenue. At an increase of 51 percent year-over-year, this growth was more than 3.5 times the market growth rate, according to IDC forecasts; this is even higher than the 2.66 times growth Apple has enjoyed in the recent past.
Revenue in the quarter was driven primarily by the Mac.
MacBooks and MacBook Pros both saw strong sales. There was equally strong demand for the iMac, plus an increase in sales of the Mac Pro.
The MacBook Air launched successfully, and customers have responded "very well" to the ultraportable design.
Educational Mac unit growth was 35 percent, the highest of any quarter in the last eight years. The company overtook Dell last year in portable sales.
Apple is worried a little bit about institutional budgets, but with 35 percent growth in the quarter hasn't seen anything to suggest a downward trend.
There are 3 to 4 weeks of Mac channel inventory.
Mac OS X Leopard revenues were just over $40 million. While a drop from the launch quarter's $170 million, this still represents the bestselling Mac OS X release in history, according to Apple.
iLife and iWork are entering their third quarter of sales and are so on the decline.
The MacBook Air was "constrained" most of the quarter, but by the end of March was in a near-ideal supply balance.
Apple repeated its first quarter observations on the demographics of MacBook Air purchasers, saying that it appealed to college professors, students, and frequent travelers.
Cannibalization of other MacBook lines by the Air is said to be low.
Apple's Apple TV and iPhone businesses
Apple sold 1,703,000 million iPhones during the quarter and earned about $378 million.
Total deferred revenue from Apple TV and iPhone was $1.93B.
Over a third of companies in the Fortune 500, and over 400 higher education institutions, have applied for iPhone developer status.
More than 200,000 people have downloaded the SDK.
Apple beat its own internal expectations for iPhone sales during the quarter, which resulted in the ongoing shortage. Inventories in US Apple stores was particularly spotty due to large numbers of iPhones being bought with an intention to unlock and resell. The company expects this to continue and sees it as a signal of strong global demand.
Apple is working very hard to roll out the iPhone to more places in Europe and Asia during the year.
Apple's 10 million-unit iPhone sales goal for 2008 includes unlocked devices.
The iPhone 2.0 software is coming in "late June." This is the first time Apple has offered a more specific timeframe for the update.
All iPhone customers will get the 2.0 software for free, whether they bought before or after the SDK announcement.
However, revenue for all iPhones sold after March 6th (the announcement date) will be deferred until after the software ships. The company reasons that every prospective buyer is aware of the upcoming software and may be influenced in their purchases.
Guidance for shipments has factored the iPhone's supply levels into the balance.
International carriers are free to price iPhones as low as they wish, Apple says. The company however won't give more detail on which companies in the relationship absorb the price drops instituted by European carriers.
American iPhone supply was low both at retail and in the channel. Apple disagrees with assertions that it mismanaged shipments by allowing overstocks in Europe while the US runs low.
Unsurprisingly, Apple won't comment on whether it will keep a 2G iPhone alongside any future 3G model. The company won't comment on "unreleased products."
Apple's Retail business
Apple's retail stores combined to sell 458,000 Mac units and generate $1.451B in revenues during Apple's fourth fiscal quarter, representing yearly growth of 67 percent in units and 74 percent in revenue. Sequentially, the retail segment produced a 9 percent decline in units and a 15 percent decline in revenue.
53 percent of retail computer buyers are new to the Mac.
Retail operating profits doubled to $334 million.
Over 580,000 hour-long personal training sessions were delivered during the quarter.
Australia, China, and Switzerland will be receiving new Apple stores.
Apple has a total of 208 stores open, and still plans to open a total of 45 in fiscal 2008. This is up slightly from earlier forecasts.
With an average 205 stores open over the period, an average store's revenue was $7.1 million, up 48 percent year over year.
There were 33.7 million visitors total to all of Apple's stores, up 57 percent year over year.
The Best Buy project ended with a little under 400 stores hosting Apple products, with a target of 600 by the summer.
Traffic in retail stores was up 12 million people year over year.
Apple's iPod and iTunes businesses
Over 10,644,000 million iPods were shipped this quarter.
iPod channel inventory remains on track at 4-6 weeks of inventory.
According to NPD, the iPod's share of digital media players gained in almost every market for which the researchers have data, resulting in 73 percent of the US market.
The iTunes Store has 50 million customers and over 85 percent marketshare in the US, according to Nielsen.
iPod shuffle sales were down until the price cut, which triggered a resurgence.
iTunes makes up a larger proportion of Apple's business this quarter versus the last.
The financial side of Q2
Operating margins were higher than expected at 17.5 percent, mainly due to higher than anticipated revenues and gross margins.
Apple held $19.4B in cash as of quarter's end, and generated $4B in cash during the last two quarters. The company has "no comment" on what it plans to do with the cash.
Much of the gross margin decline in the quarter was due to Leopard sales falling off from a historically strong first quarter on the market, as well as a drop-off in other software sales. This was also accounted for by the iPod shuffle's price cut, and international price cuts that reflect changes in currency value.
Apple's next (Q208) fiscal quarter
Apple is targeting $7.2B in revenue, gross margins of 33 percent, and earnings per share of exactly $1.
Commodity prices on flash and DRAM hit historical lows, and should remain that way for the current quarter. The LCD market is in a supply-and-demand balance, as are most other commodities such as hard drives. These should all follow historical pricing trends, and this is all factored into management's guidance.
Apple sees a sequential increase in Mac shipments for the June quarter as the educational buying season begins. The quarter typically skews towards K-12, which often buys at lower average sales prices, while the September quarter is weighted towards higher education and higher prices.
The company declines to comment on its plans for recently acquired PA Semiconductor.
| |
The wait for refreshed iMacs could be over before the end of April, according to a rumor circulated Thursday by Geeksugar.
The female technology site refers to "Apple tipsters" who say the update is due next week and will most likely appear on Tuesday, as with most Apple updates. While short on details, the news outlet adds that the sources correctly identified this year's MacBook revision a day before it appeared and also says that processor speeds and hard drive upgrades are the primary candidates for improvement.
Apple is known to be developing a Penryn-based refresh of both the iMac and its Mac mini cousin for the spring, delivering the cooler-running and faster processors to systems that haven't been updated since August of 2007.
iPhone SDK update adds OpenGL ES emulation
Apple this week issued its fourth beta edition of the iPhone SDK for third-party developers.
The update is described by Apple as enabling OpenGL ES graphics to run directly from the iPhone Simulator software, saving developers the trouble of attaching a live iPhone or iPod touch to test software using the mobile 3D graphics standard.
No other major additions are reported as accompanying the release, which is free for registered iPhone developers.
Boot Camp Update 2.1
Apple on Thursday released three updates to Boot Camp, each of them targeted at improving support for different Microsoft operating systems.
Version 2.1 is available for users running Windows XP (215MB), Vista 32-bit (228MB), and Vista 64-bit (236MB). The update is required before Windows XP users can install Microsoft's Service Pack 3 update.
Users must run the update from their Boot Camp partitions.
Common Criteria Tools for 10.5
Also released this week are Apple's Common Criteria Tools for 10.5 (103KB).
The utility lets IT managers and other security-focused users assess whether a Mac OS X Leopard system meets minimum security requirements for use in certain data-sensitive conditions, such as US Federal Government offices or information security firms.
The BlackBerry maker in particular faces the greatest impact. Although it remains the definitive leader in business with the largest amount of US marketshare and close competition with Windows Mobile worldwide, the Canadian company could see its growth "slow materially" from the June quarter onwards. Once quality third-party apps are available for the iPhone, there will be less incentive to use BlackBerries for their software.
In light of the Apple development kit, RIM's development environment is "comparatively primitive" and will likely result in nothing more than essential "meat and potatoes" apps for the BlackBerry, Wolf says.
And while Exchange support for the iPhone will give it secure "push" email similar to the BlackBerry, making it an option for businesses that have previously had to rule out Apple's handset, the real danger in the long term is for the BlackBerry's early steps into the consumer marketplace. The analyst contends that RIM has a competent platform in its OS and phones like the Pearl, but also that its breakneck growth is more a virtue of providing a capable offering versus incompetent alternatives.
"BlackBerry is currently the front-runner in the consumer smartphone market in part because it met the criteria for success in this market and in part because its competitors until quite recently were simply inept," the Needham researcher elaborates. "Their failure stemmed less from their ability to design sleek phones than in their choice of an operating system on which to run them."
Wolf singles out Windows Mobile as possibly driving many customers into RIM's arms with a "difficult" OS that may satisfy the enterprise but often pushes consumers towards the BlackBerry and other alternatives. Apple is and will be stealing some of RIM's success because it's the first competitor to offer a genuine alternative for consumers who want a smartphone.
The other major American smartphone maker, Palm, is already placed in a poor position by the analyst. Most of the damage done to Palm is said to be self-inflicted through complacency -- neither the OS nor the phones have changed significantly for years, Wolf adds -- but the addition of Exchange and third-party apps to Apple's phone will add another competitor to a market that has already downplayed Palm's efforts.
Palm's new Centro smartphone is also characterized as a stopgap measure to tide users over until a real, Linux-based Treo replacement is available near the end of 2008. It sells for as little as $99 but isn't seen as capable of holding its own against either the iPhone or other rivals for the next few quarters. Most customers are attracted to the Centro for its price rather than its feature set, a situation the Needham researcher says is likely to change once prices drop.
"It�s little more than a down sized Treo," he comments.
Long absent in the Asian country, Apple may be ready with a more official Russian presence with an iTunes Store, according to new claims made by the regional IT site CNews.
The publication notes that two websites, iMacintosh.ru and iTunes-store.ru, both refer to apple.com and apple.ru e-mail addresses for support in their Internet registries. Both also proclaim "iTunes Store Russia" and list April 21st as the launch date for the store.
Billboards around Moscow also refer to the same timeframe. However, all the sites are also connected to Apple IMC, Russia's primary Apple reseller, rather than the Cupertino, Calif.-based Mac maker.
Apple hasn't commented on the report and typically doesn't pre-announce specific dates for iTunes Store openings, casting some doubt on the apparent introduction.
China Mobile refutes claims of iPhone talks
China's chief wireless carrier, China Mobile, isn't in any discussions to carry the iPhone, company chairman Wang Jianzhou has said this weekend.
The executive explains that Apple's business approach still prevents any discussion. Although not mentioned in the report, China Mobile has repeatedly said it couldn't accept revenue sharing as a matter of Chinese policy.
Still, Wang reiterates that the "door will remain open" if the demand exists.
Apple stores expected in New Orleans, western UK
At least two of Apple's future retail stores will target very wide gaps in otherwise well-served countries, ifo Apple Store reports.
The highest-profile among these will be the firm's first New Orleans area store. An outlet is now planned for the Lakeside Shopping Center in the Metairie area just north of the main city and is understood to be in the works now that the city's population is recovering from the effects of Hurricane Katrina.
Such a store, which doesn't yet have an opening date, will be just the second after the Baton Rouge location.
Simultaneously, a Bristol store in western Great Britain is reportedly planned for before the end of this year that will fill a large void between existing shops.
The retail location is most likely to surface near (but not inside) the Broadmead shopping area, according to ifo sources.
Apple buries hatchet over battery lawsuit
Rather than face a trial, Apple has agreed to settle a lawsuit regarding a battery fire in Japan.
An Osaka couple accused Apple in July 2007 of manufacturing a defective battery that caught fire and scorched both the husband and the carpet. Apple Japan has been willing to come to an agreement but has insisted that a court decide the amount: the two million Yen (roughly $20,000) originally sought is excessive, the Mac designer says.
The final terms remain private, though Sony is also implicated in the settlement and is known to have produced more than 9 million vulnerable batteries that required a global recall by Apple and other computer vendors.
Apple TV 2.0.2
Apple tonight has quietly launched firmware version 2.0.2 for its Apple TV media hub.
The update, available through the device's built-in update utility, isn't accompanied by release documentation but is currently believed to offer bug fixes that may address network reliability using 802.11n wireless.
The 39MB release, available for both Macs and Windows PCs, is recommended for all Safari users and includes improvements to stability, compatibility and security.
Specifically, Apple said the update patches four security issues, including a heap buffer overflow that existed within the browser's WebKit framework for handling JavaScript regular expressions.
The issue was reported by Charlie Miller, who discovered and exploited the vulnerability on a MacBook Air to win a $10,000 prize at last month's CanSecWest security conference.
The Safari 3.1.1 update also addressed a second issue within WebKit's handling of URLs containing a colon character in the host name. By exploiting that vulnerability, a hacker could use a maliciously crafted URL to lead a cross-site scripting attack, Apple said.
Two other issues with the Safari application itself were also addressed, though they concerned only the PC version of the browser. One of those issues made it possible for a maliciously crafted website to control the contents of a user's address bar, while the other made it possible for maliciously crafted website to cause arbitrary code execution or the Safari application to unexpectedly quit.
In addition, BD Touch could also serve to funnel movie extras from the PS3 to the iPhone, build an iPhone-based database of a user's movie collection, and beam iTunes Digital Copy versions of movies from Blu-ray discs to the Apple handhelds.
"It's a technology that is built into our professional Blu-Ray authoring tool that will allow studios, independent movie companies to enable BD Touch features," Denny Breitenfeld, the CTO of NetBlender, told Gizmodo. "These features send data in two directions from the Disc to the iPhone and vice versa. Video, Audio, text, and player commands can be sent."
Breitenfeld added that while the idea for remote control functionality has been well received, it should be noted that the BD Touch technology will also allow Blu-ray players to control the iPhone and iPod touch.
"One idea is to automatically pull up IMBD of the movie you are watching right on your iPhone or send the movie information a movie database on your phone," he explained. "The ideas are only limited to what people want and will use."
NetBlender plans on making its SDK available to all of the 100,000+ registered iPhone developers so they can begin work on "applications that easily work with all kinds of [Blu-ray] titles."
A formal announcement is expected on Thursday.
Early adopters of Apple's latest MacBook Pro EFI update are finding themselves without a usable screen, according to a growing discussion in the company's support forums.
Some users applying the update, particularly those with an external display attached, find that their computer screen refuses to display an image even if the system itself is completely responsive.
"From as best I can tell, the MBP is booting up with no problem, I just have a black screen," says one report. "I let the computer start up, and run for several minutes. I then sent the keyboard command to log off, and I could hear the computer activity increase."
Most common solutions fail to resolve the problem, including resetting the PRAM. A small number have successfully recovered by finding workarounds to restore firmware and deleting display sleep preferences, though some also report trying the same without success.
Apple hasn't commented on the matter, which so far has affected mostly mid-2007 MacBook Pro systems.
Apple hiring for Maine retail stores
Covering one of the few vacancies left in its retail strategy, Apple is hiring for its first retail store in Maine, Portland's Press Herald reports.
Position listings both at Apple's official jobs site as well as
Apple acknowledges graphics glitch with latest notebooks
Published: 10:00 AM EST
Apple is investigating problems with its new Penryn-based Intel notebooks that cause flickering and graphics corruption during media playback and web browsing.
The two issues have been widely reported by users of the company's latest 13-inch MacBooks and 15-inch MacBook Pros, both of which began shipping in February.
In particular, users on the Apple discussion forums say (1, 2, 3, 4) that QuickTime playback of video files is routinely marred by flickering or the appearance of "washed out" graphics on their new machines.
"When I am watching the Video Tutorials for any of Apple products my QT flickers dark and light, not to the point where I can't see the video, but to the point where it is annoying," one user wrote.
"Exact same problem here," replied several others.
Meanwhile, the same batch of users are also reporting instances of graphics corruption on their machines when scrolling through Safari webpages or Mail messages -- both of which rely on Apple's Webkit framework.
"My wife has got a current gen Macbook Pro that is exhibiting a very strange behavior," one user wrote in an AppleInsider forum thread on the subject. "When she's on battery power she gets graphical glitches/tearing when scrolling in a browser."
"I have a current generation [MacBook Pro] and I have the same problem," said another. "Also when loading web pages, often with pictures, the content in the active window flickers a lot."
Thus far, it appears the anomalies are the result of a software glitch rather than a flaw within hardware. Several users attempting to diagnose the problem on their own report that the issues became noticeable only after installing the Leopard Graphics update that was released alongside the recent Mac OS X 10.5.2 Update.
One user even went as far as to install a build of the still unreleased Mac OS X 10.5.3 Update -- which is said to include fixes for graphics corruption -- on his system to see if it remedied the issue. Although he claimed the upcoming update fixes the problem, another user performing the same kind of check reported that while 10.5.3 does indeed alleviate some symptoms, it "doesn't completely correct the issue."
Graphics corruption experienced on Apple's new notebook systems.
For its part, Apple over the weekend formally acknowledged the issues for the first time in an email response to one customer.
"Apple has received reports similar to the behavior you are describing and we are investigating those reports," the company said. "Further information will come in the form of a Knowledge Base article, Software Update, or Software Release."
Apple is investigating problems with its new Penryn-based Intel notebooks that cause flickering and graphics corruption during media playback and web browsing.
| |
In particular, users on the Apple discussion forums say (1, 2, 3, 4) that QuickTime playback of video files is routinely marred by flickering or the appearance of "washed out" graphics on their new machines.
"When I am watching the Video Tutorials for any of Apple products my QT flickers dark and light, not to the point where I can't see the video, but to the point where it is annoying," one user wrote.
"Exact same problem here," replied several others.
Meanwhile, the same batch of users are also reporting instances of graphics corruption on their machines when scrolling through Safari webpages or Mail messages -- both of which rely on Apple's Webkit framework.
"My wife has got a current gen Macbook Pro that is exhibiting a very strange behavior," one user wrote in an AppleInsider forum thread on the subject. "When she's on battery power she gets graphical glitches/tearing when scrolling in a browser."
"I have a current generation [MacBook Pro] and I have the same problem," said another. "Also when loading web pages, often with pictures, the content in the active window flickers a lot."
Thus far, it appears the anomalies are the result of a software glitch rather than a flaw within hardware. Several users attempting to diagnose the problem on their own report that the issues became noticeable only after installing the Leopard Graphics update that was released alongside the recent Mac OS X 10.5.2 Update.
One user even went as far as to install a build of the still unreleased Mac OS X 10.5.3 Update -- which is said to include fixes for graphics corruption -- on his system to see if it remedied the issue. Although he claimed the upcoming update fixes the problem, another user performing the same kind of check reported that while 10.5.3 does indeed alleviate some symptoms, it "doesn't completely correct the issue."
Graphics corruption experienced on Apple's new notebook systems.
For its part, Apple over the weekend formally acknowledged the issues for the first time in an email response to one customer.
"Apple has received reports similar to the behavior you are describing and we are investigating those reports," the company said. "Further information will come in the form of a Knowledge Base article, Software Update, or Software Release."
Blockbuster said the combination of the two companies would result in an $18 billion global retail enterprise uniquely positioned to capitalize on the growing convergence of media content and electronic devices, which has thus far been dominated by the efforts of Cupertino-based Apple through its tightly-knit ecosystem of hardware, software, and online services.
Word of the offer comes a week after reports suggested that Blockbuster was also evaluating a plan to enter the electronics hardware business with a set-top-box that, like Apple TV, would allow customers of its Movielink service to stream movie rentals to their high-definition TV sets.
"Our proposal offers Circuit City a significant premium to its existing stock price and creates a game-changing retail concept with a sustainable competitive advantage," said Blockbuster chief executive Jim Keyes. "We believe the combination will result in a compelling consumer proposition that will drive significant revenue and margin enhancements as well as cost synergies."
Circuit City, which operates nearly 700 stores across the US, had yet to respond to Blockbuster's offer as of Monday, compelling the movie rental chain to make its proposal public because "it believes the shareholders of Circuit City should have the opportunity to participate in determining the destiny of the company."
Should the deal ultimately receive approval, it will form a combined retail chain of over 9,500 stores, including nearly 6,000 in the US. By comparison, Apple along with electronics retail partner Best Buy currently operate around 800 US-based retail points for the former's electronic device offerings.
Blockbuster isn't the only technology player looking to replicate the success of Apple's retail business. Last week it was reported the Microsoft is also mulling the prospect of opening a self-branded chain of retail stores to promote its Windows franchise.
The images, which were passed on to MacRumors by an eagle-eyed viewer, largely match descriptions of new MacBook and MacBook Pro designs recently detailed by AppleInsider in a report on notebook makeovers due out from the Cupertino-based company a little later this year.
Specifically, the renderings show a 13-inch multi-touch MacBook clad completely in aluminum with the exception of the keyboard, which is black to match that of the one that recently began shipping on the MacBook Air.
Meanwhile, a new MacBook Pro depicted in the images appears to share the same kind of display bezel as Apple's current iMacs, completely with black trim that frames the notebook's LCD display.
Earlier this month, AppleInsider reported that the existing MacBook and MacBook Pro would be the last of their breed, as both product families were destined for major design changes upon their next refresh.
It was reported that the 13-inch MacBooks would undergo the most significant metamorphosis, shedding their plastic enclosures for ones constructed from more eco-friendly materials such as aircraft-grade aluminum and stainless steel.
Meanwhile, the 15- and 17-inch MacBook Pro were also reported to see aesthetic revisions, which like their upcoming MacBook counterparts were described by those familiar with the products as borrowing several design cues from the August 2007 aluminum iMacs and all-new MacBook Air.
Amazon expanding digital music sales without eating at iTunes
Published: 10:00 AM EST
Much of Amazon's early success in digital music sales has come by way of customers who have never tried Apple Inc.'s iTunes Store, a sign of broader growth potential within the music download business.
NPD, one of the leading market research firms, said in a report Tuesday that just 10 percent of Amazon MP3 customers surveyed in February indicated that they had previously purchased music through iTunes.
"The fact that Amazon's early growth does not appear to be at the expense of Apple iTunes is a healthy indication that the digital music customer pool can expand into new consumer groups who have not yet joined the iTunes community," remarked analyst Russ Crupnick.
Though having launched just six months ago, Amazon MP3 recently leapfrogged Wal-mart to become the number two purveyor of a-la-carte music tracks downloads in the US, behind iTunes.
Among the service's selling points are DRM-free tracks from all the major recording labels, a higher bit rate for digital files, and a price-per-download that is often lower than iTunes.
Still, Amazon has quite a ways to go before catching iTunes. The Apple download service does approximately 10 times more business on a unit basis than Amazon MP3, but it's the differences in the consumer demographic profiles of the two stores that's signaling a broader landscape for digital music downloads, according to NPD.
The research firm's initial consumer surveys found that 64 percent of the Amazon MP3 unit sales were traced to males compared to 44 percent for iTunes. Amazon MP3 showed the most strength among young adults aged 18 to 25, but only 3 percent of its customers were teens aged 13 to 17.
In contrast, the iTunes Music store sold nearly a fifth (18 percent) of its music to teens and also sports a healthy franchise in gift cards among that same demographic, while Amazon has a relatively small base of teen CD buyers.
"While it's still very early in the game, there's no evidence that Apple customers are deserting iTunes for a new alternative, either because of price or DRM restrictions," Crupnick said. "Amazon may simply be opening new markets from their existing consumer base and introductory promotions."
NPD says its monthly consumer tracking measures unit sales of a-la-carte downloads from services like iTunes and Amazon MP3, but does not track subscription music downloads or revenue from eMusic and other subscription music services.
NPD, one of the leading market research firms, said in a report Tuesday that just 10 percent of Amazon MP3 customers surveyed in February indicated that they had previously purchased music through iTunes.
"The fact that Amazon's early growth does not appear to be at the expense of Apple iTunes is a healthy indication that the digital music customer pool can expand into new consumer groups who have not yet joined the iTunes community," remarked analyst Russ Crupnick.
Though having launched just six months ago, Amazon MP3 recently leapfrogged Wal-mart to become the number two purveyor of a-la-carte music tracks downloads in the US, behind iTunes.
Among the service's selling points are DRM-free tracks from all the major recording labels, a higher bit rate for digital files, and a price-per-download that is often lower than iTunes.
Still, Amazon has quite a ways to go before catching iTunes. The Apple download service does approximately 10 times more business on a unit basis than Amazon MP3, but it's the differences in the consumer demographic profiles of the two stores that's signaling a broader landscape for digital music downloads, according to NPD.
The research firm's initial consumer surveys found that 64 percent of the Amazon MP3 unit sales were traced to males compared to 44 percent for iTunes. Amazon MP3 showed the most strength among young adults aged 18 to 25, but only 3 percent of its customers were teens aged 13 to 17.
In contrast, the iTunes Music store sold nearly a fifth (18 percent) of its music to teens and also sports a healthy franchise in gift cards among that same demographic, while Amazon has a relatively small base of teen CD buyers.
"While it's still very early in the game, there's no evidence that Apple customers are deserting iTunes for a new alternative, either because of price or DRM restrictions," Crupnick said. "Amazon may simply be opening new markets from their existing consumer base and introductory promotions."
NPD says its monthly consumer tracking measures unit sales of a-la-carte downloads from services like iTunes and Amazon MP3, but does not track subscription music downloads or revenue from eMusic and other subscription music services.
Given the company's claims of a $400 Mac system and a vow to battle Apple over its Mac OS X licensing terms, the Guardian's Charles Arthur decided to do some digging on the integrity of the much talked about Miami-based solutions reseller.
The results? Not promising. Although the Psystar.com website was registered back in 2000, Google and other search engines turn up absolutely no references to the company prior to this week's news that it would offer an unauthorized Mac system.
"I called the Miami Chamber of Commerces and its Better Business Bureau," Arthur wrote. "They've never heard of it."
What's more, Psystar appears to have hastily relocated on Tuesday to an industrial park within Miami's north-west side, according to an address change posted to its website. On Monday, the company's address was listed as 10645 SW 112 Street -- a three bedroom home built in 1957 along a row of suburban houses (below).
As part of his investigation, Arthur also put in calls to phone numbers listed on Psystar's website. After a dead end at "Human Resources," he was able to get an unnamed individual on the phone by selecting the option for "Customer Support."
That individual, however, referred all of the reporter's questions to Psystar's press email, from which replies have not been forthcoming. When asked if there were many individuals like himself working in the company's support division, the individual then claimed that he was not a support representative and was instead "just answering the phones."
An address listed on Psystar's website Monday points to this suburban Miami home.
"But you know what's most interesting?," Arthur added. "Apple's complete silence on this. It hasn't said a word. I suspect that it's waiting to see if anything emerges from this."
Update: The most recent industrial park address for Psystar belongs to a packing supply firm called USA KOEN PACK whose manager has never heard of Psystar.
A new address listed on Psystar's website Tuesday points to this shipping company.
Update 2: AppleInsider reader Shane writes in to let us know that quick glance of the source code for Psystar.com reveals the company's webpages was slapped together with help from this web template.
Time Capsule vs Airport Extreme
Over the last several weeks, Time Capsule held a temporary advantage over last years' AirPort Extreme in its being able to work with Mac OS X 10.5 Leopard's Time Machine feature to deliver wireless automated backups. However, Apple's recent firmware upgrade has brought the existing AirPort Extreme units up to speed with Time Machine as well. So what's the difference, and is there still any need to upgrade?
Mac shipments suspended from NYC Schools over WiFi flaw
Published: 03:00 PM EST
Scheduled delivery of Apple computers to schools run by the New York City Department of Education have been temporarily suspended due to problems related to connecting to the DOE's wireless network infrastructure.
Apple is scrambling to address the WiFi connectivity issue within its Leopard operating system. The fix appears set to be included in the bug fixes of the upcoming Mac OS X 10.5.3 release, as noted in the report Successive Mac OS X 10.5.3 builds continue.
Until the software fix ships, all Macs on order with wireless features are being held at Dell's merge center in Austin, Texas. The DOE contracted with Dell Managed Services to handle all of the school system's tech related ordering, including the procurement of Apple desktops, laptops, and servers. Because of the WiFi compatibility problem, ordered units have been on hold for as much as two months waiting for a fix.
Apple apologized for the delay both in an email to faculty obtained by AppleInsider, and in a notice on the Apple product catalog on the Dell Managed Systems website. The company said it was working to resolve the issue as soon as possible so that the pending orders could be delivered.
Schools managed by the DOE can still order new Apple computers and servers through Dell Managed Services, and systems that do not rely on wireless connectivity can be approved for shipping despite the order suspension.
In an apologetic email, an Apple sales representative offered to help compile a list of any orders "for desktops or laptops that you DO NOT plan on using your wireless networks but rather want to have installed using standard wired ethernet hook-up" and to "work with Dell Managed Services to identify these orders and release them for installation now versus waiting for the wireless issue to be resolved."
Apple is scrambling to address the WiFi connectivity issue within its Leopard operating system. The fix appears set to be included in the bug fixes of the upcoming Mac OS X 10.5.3 release, as noted in the report Successive Mac OS X 10.5.3 builds continue.
Until the software fix ships, all Macs on order with wireless features are being held at Dell's merge center in Austin, Texas. The DOE contracted with Dell Managed Services to handle all of the school system's tech related ordering, including the procurement of Apple desktops, laptops, and servers. Because of the WiFi compatibility problem, ordered units have been on hold for as much as two months waiting for a fix.
Apple apologized for the delay both in an email to faculty obtained by AppleInsider, and in a notice on the Apple product catalog on the Dell Managed Systems website. The company said it was working to resolve the issue as soon as possible so that the pending orders could be delivered.
Schools managed by the DOE can still order new Apple computers and servers through Dell Managed Services, and systems that do not rely on wireless connectivity can be approved for shipping despite the order suspension.
In an apologetic email, an Apple sales representative offered to help compile a list of any orders "for desktops or laptops that you DO NOT plan on using your wireless networks but rather want to have installed using standard wired ethernet hook-up" and to "work with Dell Managed Services to identify these orders and release them for installation now versus waiting for the wireless issue to be resolved."
The most recent example comes by way of Gizmodo, which recently discovered that the mobile version of Safari due to ship as part of the update will allow users to save web images to their handset's photo album.
"We tried and it works: just hold your finger against an image for a longer time than usual and the popup dialog will appear," the gadget site reported. Once saved, the images can be used as background images, mailed to friends, or used as custom contact icons.
UK iPhone price cut boosts confidence in June 3G launch
Published: 09:00 AM EST
A 100 pound price cut on Apple's 8GB iPhone in the UK, confirmed by wireless carrier O2 on Wednesday, is the latest bit of anecdotal evidence to hint towards near-term release of a redesigned 3G model, according to one Wall Street analyst.
The 37 percent cut arrives on the heels of a 75 percent reduction of the same model in Germany, suggesting that Apple's European wireless partners are draining inventory of the 2.5G mobile handsets, which have been met with lackluster demand in the region, Piper Jaffray analyst Gene Munster told clients in a research note.
The price cuts, both of which end in June, "set the stage for the release of a new iPhone" that same month, he said.
In recent weeks, the analyst has polled over 60 stateside Apple retail stores on their supply of both the 8GB and 16GB iPhone models to compare inventories with those in Europe. Initially, his first two rounds of 20-store checks (1, 2) found close to no iPhones within the company's retail channel. However, a most recent 22-store check found that over 80 percent maintained limited supply of 8GB models and 50 percent had 16GB models on hand.
"We conclude that Apple is likely pacing its remaining supply of phones by trickling units into its retail channel until the new model is released," Munster said. "While limited availability of iPhones would put downward pressure on iPhone units in the June quarter, we believe it would be more than offset by the price cuts in Europe and the launch of a new model in [the month of] June."
Come June, the analyst sees a 3G model with a "redesigned exterior" fetching between $349 and $399. He believes the widely anticipate update will be the first and only significant change to Apple's handset offerings before the company begins a model expansion coupled with aggressive price reductions early next year.
"We believe Apple will follow the release of the 3G iPhone in June with the addition of one or two more models by early 2009. The most likely timing of these lower priced, third-generation iPhones is Macworld 09," Munster wrote.
"While Apple may try to debut a cheaper iPhone ahead of the 2008 holiday shopping season, we do not believe this scenario is likely. It is more likely that Apple will simply increase the capacities of the 3G models to 16GB and 32GB ahead of the holidays, simultaneous with new iPods and release the third-gen iPhones after the holidays in early 2009."
The end result, according to the analyst and his supply chain contacts in the Far East, is that come January, the Cupertino-based company will showcase "an entire family" of handsets. The move would mirror the slow diversification of the iPod family, which over its years entered new price points with each new model that was brought to the table.
As such, Munster continues to believe the inflection point in iPhone sales won't come until 2009 when cheaper iPhones are widely available.
"Specifically, we believe Apple will also introduce an iPhone between $200 and $300 in early 2009," he told clients. "We are modeling for iPhone average selling price to drop from $489 in 2007 to $365 in 2008 to $314 in 2009. This price drop, along with the continued international expansion of the iPhone, is critical to our iPhone unit estimate of 45 million [unit sales] in 2009."
Munster maintained his Buy rating and $250 price target on shares of Apple.
A 100 pound price cut on Apple's 8GB iPhone in the UK, confirmed by wireless carrier O2 on Wednesday, is the latest bit of anecdotal evidence to hint towards near-term release of a redesigned 3G model, according to one Wall Street analyst.
The price cuts, both of which end in June, "set the stage for the release of a new iPhone" that same month, he said.
In recent weeks, the analyst has polled over 60 stateside Apple retail stores on their supply of both the 8GB and 16GB iPhone models to compare inventories with those in Europe. Initially, his first two rounds of 20-store checks (1, 2) found close to no iPhones within the company's retail channel. However, a most recent 22-store check found that over 80 percent maintained limited supply of 8GB models and 50 percent had 16GB models on hand.
"We conclude that Apple is likely pacing its remaining supply of phones by trickling units into its retail channel until the new model is released," Munster said. "While limited availability of iPhones would put downward pressure on iPhone units in the June quarter, we believe it would be more than offset by the price cuts in Europe and the launch of a new model in [the month of] June."
Come June, the analyst sees a 3G model with a "redesigned exterior" fetching between $349 and $399. He believes the widely anticipate update will be the first and only significant change to Apple's handset offerings before the company begins a model expansion coupled with aggressive price reductions early next year.
"We believe Apple will follow the release of the 3G iPhone in June with the addition of one or two more models by early 2009. The most likely timing of these lower priced, third-generation iPhones is Macworld 09," Munster wrote.
"While Apple may try to debut a cheaper iPhone ahead of the 2008 holiday shopping season, we do not believe this scenario is likely. It is more likely that Apple will simply increase the capacities of the 3G models to 16GB and 32GB ahead of the holidays, simultaneous with new iPods and release the third-gen iPhones after the holidays in early 2009."
The end result, according to the analyst and his supply chain contacts in the Far East, is that come January, the Cupertino-based company will showcase "an entire family" of handsets. The move would mirror the slow diversification of the iPod family, which over its years entered new price points with each new model that was brought to the table.
As such, Munster continues to believe the inflection point in iPhone sales won't come until 2009 when cheaper iPhones are widely available.
"Specifically, we believe Apple will also introduce an iPhone between $200 and $300 in early 2009," he told clients. "We are modeling for iPhone average selling price to drop from $489 in 2007 to $365 in 2008 to $314 in 2009. This price drop, along with the continued international expansion of the iPhone, is critical to our iPhone unit estimate of 45 million [unit sales] in 2009."
Munster maintained his Buy rating and $250 price target on shares of Apple.
"The groundbreaking innovations of Mac OS X Leopard and iPhone OS offer two revolutionary development platforms for developers and IT professionals," the company wrote on its WWDC 2008 website. "Immerse yourself with information-rich sessions where Apple engineers go in-depth on the innovative technologies that power the features of these sophisticated platforms."
With the release of the official iPhone SDK, the conference will now have three distinct tracks. A new iPhone track covers the production of both native and web apps, including optimizing 3D graphics as well as network use.
An IT track is aimed at professionals integrating Apple hardware into business, including the iPhone as well as Macs.
A conventional Mac development track is also present.
In recent years, Apple chief Steve Jobs has also used his frequent keynote speeches at the event to introduce either new software or professional hardware. In 2006, the company co-founder introduced the original Mac Pro as well as Mac OS X Leopard's early features. In 2007, however, the presentation primarily saw an expanded preview of Leopard as well as a discussion of new gaming initiatives.
Still, Apple is setting the bar high for 2008 through its invite image for the event -- sent to Gizmodo -- which features two Golden Gate bridges coming together as well as a telltale byline: WWDC will be "a landmark event. In more ways than one."
WWDC 2008 invite sent to the media, courtesy of Gizmodo
Although Orange's parent firm France Telecom reportedly denied that it would cut pricing, Apple's two other European wireless partners were recently compelled to instate significant cuts on their own iPhone offerings.
In a move allegedly aimed at clearing inventory of the current generation handsets ahead of 3G models, O2 this month dropped the price of the 8GB iPhone in the UK to 169 pounds from 269 pounds, while Germany's T-Mobile slashed the same model by 300 euros to 99 euros.
Apple, O2 to slash 8GB iPhone price in the UK - report
Published: 09:00 AM EST
Apple and wireless partner O2 this week will slash the price of its iPhone handset in the UK to 169 pounds from 269 pounds as part of a limited promotion, according to a new report.
The move will see the localized version of the 8GB iPhone sell for just $333, or considerably less than the current US$399 fetching price within the United States, according to Mobile Today.
The overseas trade publication, which did not name sources, said an announcement is expected Wednesday and that the 16GB model would not see a similar reduction, remaining at �329.
Apple recently instated a similar price cut in conjunction with T-Mobile Germany that saw the local version of the 8GB iPhone fall from �399 to �99.
As was the case following the reductions in Germany, speculation is that the UK promotion is the latest precursor to a new model that will operate on third-generation (3G) wireless networks.
In a report issued earlier this month, Piper Jaffray analyst Gene Munster said steep price cuts on the touch-screen handset are a sign Apple is looking to drain existing inventories ahead of 3G iPhone launch no later than June.
The analyst noted that the electronics maker has been able to maintain tight control of iPhone inventory at its own stores, which have been running extremely lean of stock in recent weeks.
"This type of channel control is typical of Apple ahead of new products," Munster wrote. "In Europe, the opposite story seems to point to the same conclusion. Apple's carrier partners are a completely separate channel from its own retail stores, and the carrier partners appear to be overstocked with iPhones."
"Therefore," he added, "it seems as if this has led to Apple trickling iPhones into its U.S. retails stores, while T-Mobile and other carrier partners seek to drain their stock of iPhones ahead of a new model."
The move will see the localized version of the 8GB iPhone sell for just $333, or considerably less than the current US$399 fetching price within the United States, according to Mobile Today.
The overseas trade publication, which did not name sources, said an announcement is expected Wednesday and that the 16GB model would not see a similar reduction, remaining at �329.
Apple recently instated a similar price cut in conjunction with T-Mobile Germany that saw the local version of the 8GB iPhone fall from �399 to �99.
As was the case following the reductions in Germany, speculation is that the UK promotion is the latest precursor to a new model that will operate on third-generation (3G) wireless networks.
In a report issued earlier this month, Piper Jaffray analyst Gene Munster said steep price cuts on the touch-screen handset are a sign Apple is looking to drain existing inventories ahead of 3G iPhone launch no later than June.
The analyst noted that the electronics maker has been able to maintain tight control of iPhone inventory at its own stores, which have been running extremely lean of stock in recent weeks.
"This type of channel control is typical of Apple ahead of new products," Munster wrote. "In Europe, the opposite story seems to point to the same conclusion. Apple's carrier partners are a completely separate channel from its own retail stores, and the carrier partners appear to be overstocked with iPhones."
"Therefore," he added, "it seems as if this has led to Apple trickling iPhones into its U.S. retails stores, while T-Mobile and other carrier partners seek to drain their stock of iPhones ahead of a new model."
| |
Builds 9D19 and 9D20 of Mac OS X 10.5.3 arrived on Friday and Tuesday, respectively, according to people familiar with the ongoing evaluation process.
Both builds delivered a handful of new fixes, brining the total number of code corrections expected as part of the operating system update to approximately 150.
With Build 9D20, Apple is also reported to have relaxed the number of core focus areas from about two dozen to just 17.
Among them, and new to the latest builds, is a request that developers test the performance of Adobe Flash media play within the Safari web browser.
Mac OS X 10.5.3 is also rumored to include a fix for graphics issues that have plagued a number of Intel-based Macs, particularly the latest versions of the MacBook and MacBook Pro.
People familiar with the impending Leopard update say the latest build includes just two known issues. One has to do with the need to possibly reset VPN settings following installation, while the other simply notes that localization support of Mac OS X 10.5.3 has not yet been completed.