iPhone hardware rumors

LONDON (MarketWatch) -- German chipmaker Infineon Technologies AG will likely be supplying the new systems solution to Apple Inc.'s next-generation iPhone, UBS analysts told clients in a note published Thursday. The broker said this is not yet the consensus view and could be a positive catalyst for the stock. It also believes that 3G-enabled iPhones will be released by mid-year and that the current EDGE iPhone platform is being ramped down earlier than expected to "clean" inventories.

Take care,
--Tex.

re next week

The language of the last announcement about the event next week suggests that the thing next week is a talk about what will be coming, not an announcement.

There is a silver lining: if Apple is really working to get this right before releasing it, it may be something other than an embarrassment when it's released.

Apple's got more to worry about than just making it possible to deliver apps. Apple wants to try to protect phones from self-propagating malware, so Apple needs to find a way to make installation, updates, etc. easy (or the market for the software will suffer) while trying to "control" it. I'm not sure Apple really gets the problem it's attacking, but who knows. If Apple is trying to work out a new delivery mechanism, Apple could have some lessons to learn before this pie is baked.

I'm not holding my breath for next week.

Take care,
--Tex.
PS Among Apple's problems is the need to keep the phone responsive with more and more stuff potentially running in the background. I've had my phone get sluggish when I'm in a hurry, and it's not even got extra junk running on it yet (making foreground UI threads responsive to input by making them independent of background download threads might be a good place to start on UI responsiveness, but who knows).

PPS Like Tomm said, the ultimate question is whether it accomplishes the ready-for-enterprise targets one hopes, not the date launch targets, and getting major developers interested in deploying on it is a good place to look. Though I'd put IBM and SAP ahead of MSFT -- will MSFT really develop for an iPhone, anyway? Its not like the SDK will be Carbon

Cook's notes

It's interesting that Cook really addressed here, as he didn't in the earnings cc, that Apple's growth was outpaced both over the general GDP growth and over growth of competitors. He came off as optimistic about Apple's prospects not because of obliviousness to the economy but in light of an observation that Apple's behavior, though impacted by the economy, isn't a mirror of it.

And it's clear Apple is looking at non-US markets. It's also interesting to see Apple spin the unlocked phone story as mostly a solution to lack of availability of phones in unlaunched countries, rather than a solution to not liking Apple's carrier.

Apple discussing its happiness to consider launching phones with different models (carrier relationships or lack thereof) based on local market factors was good, as it exposes Apple as not being especially at-risk for some issue arising out of carrier relationships.

Take care,
--Tex.

re phishing

My question is why one needs phishing protection if the URLs Safari displays are honest, rather than being subject to the exploits IE has been exposed to (e.g., being able to be induced to falsely report the URL being visited). The phishing protections would help people notice the text in the URL bar? would tell people the text in the URL bar is the text psychic powers show users intended?

Maybe I misunderstand the nature of the "security" bolt-ons PayPal seems to want folks to use.

re Cook: I like his point that Shuffle pricing drop reflects Apple view that non-US low-end units will show price elasticity. Apple is apparently interested in non-US unit growth. That is good to know Apple cares about.

Take care,
--Tex.

re what Tex said

I think you might want to re-read what I actually said. I wasn't promising to load up at 165, and I wasn't calling 165 the bottom. I said I was horrible at predicting bottoms but invited you to compare pricing then to pricing in a year.

I'll see you then Hell, it could fall again and at my basis I'll still be in the green. Not that I'm particularly excited about that eventuality, but I can imagine scenarios in which it's possible, even probable. I just don't want to miss the things I se going right, and recognize the most I've lost in Apple has been due to being out at the wrong time.

Later.

Oh -- and congrats on getting at least a short-term trough called

Take care,
--Tex.

re stopgaps

What I meant was, I think the fraction of the market keeping in the know on the new product pipeline may be small enough that those who delay might not be material. This is different from the situation in which "waiting for Intel" or "waiting for a key app to go Universal" is high-profile enough and significant enough that people either know or are warned by salespeople. I think garden-variety "bus speed to bump" or "processor to bump" events are likely to fall below most customers' radar.

I could be wrong, but ... wouldn't DELL, HPQ, and other Intel OEMs face the same thing?

Take care,
--Tex.

means SDK latelatelate em

not?

Maybe not this Q, but movement toward more capability in less space with a lighter battery will tend to pull folks along for upgrades. I'm not interested in a notebook ATM (note iPhone capitalizing this?) but could get really interested if power dropped 75% and the machines' speed popped ... heck, with this profile, might we see road warriors with quad-core notebooks? My limit on notebooks is space for video work (brought last notebook to its knees), but the right package could make me think of a notebook for more than presenting.

As Apple can build more kinds of things affordably, Apple will be able to sell into entirely new markets. When, as Palm was looking cool in the late '90s, Apple declined to enter the PDA market, Apple would not have been able to offer the iPhone due to lack of computing power (among other things). Apple can now offer more because its OS supports more architectures and there are architectures that really offer scads of power (compared to historic availability).

Whether the knowledge of upcoming Intel hardware Osbournes Apple (or Dell, or HPQ) is another story. I think the upgrades roll out in different parts if Apple's product line ... but knowing Apple is especially sensitive to the quality of the notebook lineup, wouldn't one prefer updates just before August?

Personally I'm looking at desktops. Anyone here got firsthand experience/advice?

Recall some folks pay attention to upcoming hardware rumors, but half Apple's buyers aren't Mac users and presumably aren't plugged into the rumor sites and know nothing about it. Even among Mac users, how many actually follow company news and are aware what's up in this regard?
Take care,
--Tex.

exciting enterprise features

My question: how exciting?

Although, anything helps. Apple taking notice of that market segment at all is a step in the right direction.

If this post has properly-spelled words with a bizarre lack of meaningful context, it's iPhone "correcting" things I type. You can't type the present tense of whinnied, it's immediately corrected into past tense and I can't see a way around it. Ditto some nicknames, abbreviations, etc. Crazy.

But as for the enterprise, it seems there's some buying interest at the top of some organizations, and it's good to see Apple possibly reducing the barriers to adoption.

Take care,
--Tex.

PS Additional non-US Apple store nice to see. Hoping to see more, soon.

on pricing

I think there's an argument to ne made for capitulation, but company-specific failures (real or perceived) will surely retain the power to drive folks to sell, even if they've already accepted a general thesis about a rough economy or the like. One thing to watch might be the difference in performance between HPQ and AAPL; both should be subject to similar economic forces, but AAPL has guided low and HPQ has guided for growth. If AAPL doesn't pull off what HPQ says it can achieve, one might think the problem is AAPL's business rather thm the economy. (yes, AAPL is more exposed to consumers and HPQ to the enterprise and to international markets, but will folks care if AAPL's competitor hits numbers AAPL can't?)

Upshot: more room to go down, just like last year and the year before, except of course if AAPL can't produce numbers it won't recover after the low-news doldrums to which AAPL is disposed. You recall how AAPL has languished post-Macworld in the past, imagine genuine bad company-specific news! We could see horrific drops yet. Short-term markets can offer prices that are downright crazy. Bet on this as we head toward more nuttiness in the financial sector, and will lack housing to raise the economic picture for years as we work off crazy-big inventories.

Question: will the banks whose balance sheets benefit from the Visa IPO have more reason to dump their holdings, or will their cash payments be enough to do what they want with their balance sheets? I'm wondering whether banks will cap Visa's short-term upside by selling to staunch bleeding from subprime injuries. The banks which "demutalized" MA haven't dumped that I've noticed, but Visa is bigger and the banks are desperater I've been happy with MA and I'm wondering whether Visa is a similar opportunity, and I wonder whether it's sufficient to cure some of the banks' remaining ills. Given the size of subprime, I suspect it might be like a chicken soup remedy facing cancer.

Take care,
--Tex.

Lango re changes?

I haven't looked at the APIs in question. There's no question that some APIs, if adequately documented, could allow improvement in the ability of other vendors to coexist peacefully with MSFT products in one infrastructure without tending to have MSFT products overtake all niches -- and as I read more of your postings on the subject, it's clear that's what they're saying they've done. If so, that's a real change.

They also indicate there's some movement toward access or use of newer file formats, which may be of help to folks with file format lock-in. That'd be an improvement, too.

On the other hand, MSFT's new file formats are the default, they are generated by default, their extensions are concealed from the users by default, and users transmit these to innocent bystanders with last year's products and are nudged to upgrade in order not to inconvenience those who send them files. MSFT is thus still using file format incompatibility to manipulate upgrade cycles. Although it's possible within an organization to try to impose policies designed to minimize this, across organizational borders one would expect file format issues that don't need to exist. Web pages have content designed to degrade gracefully, and they work like a charm across multiple browsers with different behavior and compile dates that range back into the dark ages of the Internet, and you can still read html. But MS-Word? Heh, no. MSFT's story is that new features necessarily breaks formats, but that's obviously bogus. It's just an asset to upgrade revenues that the behavior of new apps inconveniences non-upgraders into shelling out additional licensing fees.

One question I have about the APIs opened is "which APIs". APIs that allow you to, in effect, drain and refill the data that is managed by the app makes a plausible migration avenue, and enables diverse clients (or servers) in an environment that contains some MS products. Given MSFT's previous behavior with respect to the client/server interface, I'm interested to see just what MSFT is enabling with the documentation release.

I think the more significant step was the apparent announcement that MSFT won't sue folks for interfacing with MSFT APIs using non-MSFT code. Previously, MSFT's plan to dominate the net seemed to require patented APIs whose ubiquity would require everyone to take a license. Still, the article says something about the royalty rates for some IP licensing. I'm not sure what IP MSFT will license if it's called a truce with those who reverse-engineer its protocols, but I'm certainly interested to see what happens.

I had been imagining MSFT obsoleting itself with its "our way or the highway" attitude as more and more of the building blocks of big business (stable OS, solid databases, etc.) became available without the licensing overhead or opacity one experienced with the MSFT solution. If MSFT makes it possible to play nice with its tools, it may create an environment in which its engineers have to compete on quality and will actually earn a place at the table through merit rather than muscling into the position at the expense of better products -- and this future is one in which I would not begrudge MSFT its success. Historically, I've put most of MSFT's success down to factors other than quality products and good sportsmanship.

I'd be happy if MSFT were to turn a new leaf. But after all this time ... I'm skeptical

Take care,
--Tex.

imagine what they will do when the SDK is available em.

re MSFT's new leaf

sampling of these pages, according to InfoWorld’s Strategic Developer blogger Martin Heller, shows that Microsoft is providing real details valuable to professional Windows developers.

Wow, they published documents helpful to developers on the platform they're selling! Shocker!

The question is, I think, whether the published content is useful to folks who need to make MSFT products play nice in mixed environments, or whether they help folks free from dependency on MSFT back-ends merely because users have MSFT client machines. Do these specs help folks migrate from MSFT's poorly-documented proprietary file formats?

... that is to say, I for one am not yet convinced the "change" has substance. It's just an advertisement for developers. And you know how Steve B looooves dem developers developers developers .....

Take care,
--Tex.

re label

On the de facto label, you're right: they've taken some steps down the road with direct deals, iTS-only content, and so forth, which presumably includes deals in which there's no "label", just Apple. I'm wondering whether some of these indie and artist-owned label deals will turn into something more large-scale, improving Apple's margins.

On killing the king, I think I was a bit careless in typing. I think Apple may be in a position to help spur label-less distribution, though, and allow Apple and the artists to share the pie with fewer guests. The labels are already fighting to find non-Apple distribution, and it's apparently challenging, considering Apple's growth despite clear efforts to move distribution elsewhere. I mean, non-DRM downloads elsewhere for less money is pretty plausible effort to steer traffic, no? With music distribution becoming easier to pull off (e.g., Apple, Best Buy, Wal-Mart, and other big vendors offering potentially significant national rollouts, and in Apple's case, without much capital for discs), perhaps severing distribution expertise from tour financing will become more common. I suspect the Police tour hasn't got a sugar daddy taking half the money, for example. These guys hired folks to line up venues and sell tickets, but the big bucks are stopping with the band members, I'm sure. I wonder what their split is ....

I don't think Apple wants to be in the business of discovering or promoting new talent. I don't think Apple sees itself performing this traditional label job. I think Apple could do well with established acts graduating off their label contracts, though. Maybe I misunderstand how "hard" it is for the Police, Madonna, the Rolling Stones, or Prince to get a new album distributed.

My assumption has been that Apple could increase margins by moving to direct deals and cutting out the middle man. If the middle man is offering production assistance, marketing, funding, and other resources that are truly necessary and that Apple won't want to be involved in, then of course this is a complete pipe dream. My assumption has been that labels are mostly leeches who offer little other than disc-pressing, which can now be done as a cottage industry (on the small scale) or as a contract service in large volume. It's not worth the huge cut taken, I assumed. I'm happy to hear if labels are actually earning their keep. My guess is that the news on their fortunes is evidence they aren't. Eventually, will the big labels be back-catalog licensors rather than new act promoters? I mean, is it them or the indies who are getting bands started these days? I just dunno.

I haven't got a dog in the fight on the music ecosystem, I'm just interested in what Apple can do to make more out of its place in music. Apple's position atop 10% of the music distribution is pretty amazing, considering Apple's "not a music company". If Apple keeps up its distribution growth, Apple will be in a position to better manage its margins even without direct-to-artist deals, but the more Apple offers a worldwide gateway to users of electronic players, the better Apple will be able to leverage its position to make good deals.

I suppose it doesn't matter in the short run what Apple does with the store, provided Apple keeps growing the catalog and expanding the global reach. Imagine one day Apple offering mix discs the way it offers iPhoto albums, with worldwide shipping. Strange things might be possible.

When's the last time iTS opened in a new country?
What can a China customer buy on iTS?

I think there's room to grow and improve, I'm just not sure what the future looks like. I definitely think the future looks better if Apple can sell products in China, South America, and India, though, and all those folks listen to music.

Take care,
--Tex.

iTS #2 music reseller

Only Wal-Mart is bigger in the US, apparently:
http://biz.yahoo.com/rb/080226/apple_itunes.html?.v=3

Will Apple leverage this into a label?

Take care,
--Tex.

re your recent loss

so I'm forced to have to go out and order an 8-core

My heart goes out to you

Now I'm running my life with my Macbook Pro driving my 23" Cinema Display, with all sorts of cables hanging off of it (including the hard drive from the G5 in a temporary enclosure [all of the data is OK]). I would have never guessed that a laptop could easily drive the 23" as add-on (not mirror), but it does it with ease.

Glad to hear your stopgap measure is working so well. I'm thinking I need the desktop for video I'd like to play with, and for storage size, but maybe I'm kidding myself; the new notebooks are pretty butch.

Still ... I haven't bought a notebook since my Pizmo, which I note is still running fine, albeit on Tiger (optical drive is entirely dead). I think I'll probably end up with a notebook again, but it'll be a while I think, maybe late in the year.

Congrats on your new unit!

Take care,
--Tex.

AAPL Mac shocker

Supposedly, Apple will grow profits due to *gasp* Macs.
http://www.macnn.com/articles/08/02/25/macs.will.help.aapl/

Funny, that.

Take care,
--Tex.

Leopard in use

My post-update report on Leopard is that it's helping teh snappy on iMac/G5, but I notice some Application Support stuff in ~/Library isn't being noticed. I used to keep a bunch of files in Application Support/Terminal for opening windows with specific colors, fonts, and CLI programs so I could immediately recognize what window had what output in it ... and those all used to show up in Terminal.app's drop-down menu so I could quickly launch them. Now ... they're in the filesystem but ignored by the app. What gives?

Mail.app ignores my old GPGMail bundle, but there's a beta with good reviews for Leopard.

HP isn't showing me the love on my scanner.

It'll be interesting. Anyone with tips is invited to share

Take care,
--Tex.

re Leopard party

Just installed today. The dark front-window is pretty odd, and the fact clicking the desktop no longer gives you the Finder is really odd. How are you supposed to delete selected things in the Desktop if the keyboard commands are all directed at some other app than Finder?

I'm installing the update now, so hopefully I'm going to have some of the weirder UI things fixed soon.

Take care,
--Tex.

on SDK delay

Rumormonger who predicted the DSK a day before its announcement says he's hearing it's gonna be late, for real:
http://apple20.blogs.fortune.cnn.com/2008/02/23/iphone-sdk-whats-holding-it-up/?source=yahoo_quote

Quotes Jobs' October 17 statement why an SDK would take until February.

I wonder if Apple will solve the "how to install debug versions on an iPhone without opening the doors to everyone installing apps however they want" problem by shipping a vm with the SDK so folks can test apps without having Apple bless them for real iPhones. Since Apple (apparently) wants there to be some meaningful barrier to getting apps installed on the phones, Apple can't just make a "click here to make an app you can easily install" button and hope people don't abuse it. Or ... maybe the dev kit can install apps on a phone like Apple's official-from-Apple method, so only folks running the dev kit can install apps themselves? In this way, it'd be hard to install apps by accident (most folks don't actually run the dev kit), but Apple could enable developers to install on hardware they could physically connect to their dev boxes.

Interesting.

I don't think a delay would surprise me, but it would sure impact Apple's public perception of being able to execute.

Take care,
--Tex.

re oversold

Yep. The charts don't know about future product news, sentiment about retail sales, and other such stuff.

As for overbought, the aTV hasn't been. Yet, it's gotten some recent praise:
http://www.thestreet.com/_yahoo/newsanalysis/technology-stories/10404417.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

The downside: my buddy who wants an aTV has held off due to the limited movie catalog. We'll see.

I still think the impending story, if there is one, is Macs. Phones are in the running, but until there's broader geographic distribution I won't hold my breath on crushing the phone market. Yet, Apple isn't doing too bad. Let's see how they do in a non-launch/non-holiday quarter, eh?

Take care,
--Tex.

Linux on Dell -- but not in US!

What gives?

http://www.macnn.com/articles/08/02/21/dell.ubuntu.in.canada/

I asked these turkeys ten years ago about OS/2 or even no-OS for self-installs of alternates, and Dell made clear everyone had to tithe to Redmond. Some things don't change, apparently.

Take care,
--Tex.

Linkin Park plays Apple Store

Not a news event entertainment act, but apparently a recording for iTS:
http://www.ipodnn.com/articles/08/02/21/linkin.park.play.soho/

Query: is Apple getting worldwide distribution licenses for tracks it records like this? Hmm.

Take care,
--Tex.

attractively valued

Your point is right-on. What Apple actually produces in cash is different from what Apple might produce in cash. Valuing things on trailing cash is nice, but ... surveys show most think we're cruising into a recession, so trailing cash may be a poor guide to future cash even if it's a better guide to future "earnings".

For Apple, for the future, I think it's all about the Mac share. It's been a while since Macs were the top story, but I think this is where Apple has leverage, if at all. Macs have a small share of an enormous market, and Apple's in a better place to grow sales there than in the phone market, where it's constrained by its short list of carrier partners.

If iPod and/or iPhone sales (not to mention PC sales) show deceleration and slower growth rates, it's almost inevitable that there will be a p/e compression in the stock. That's pretty much the law of the market jungle.

Yeah, and I'm not sure what Apple's Shuffle price drop says (more units? lower ASP? less profit per unit?). Apple had better figure out how to sell to the markets its apparently ignoring (south of the Rio Grande and some of the Asian markets, I'm thinking). Rolling out a worldwide store for certain music and software titles would be one way to extend iTS worldwide, though I realize music recorded under old contracts were full of geographical limitations. I'm wondering if iTS/Amazon/etc. will cause those limits to be erased from future contracts.

The last time I decided AAPL was too risky and lightened up it jumped from <90 to >120. I'm not particularly keen on trying to time this stock. It does have some serious risks, of course; but so do many of them.

My best idea lately was ACAS under 30. I still consider it a long-term hold (I like the management a lot more than at AAPL, as it thinks like a shareholder in working to raise value). I'm planning to ride the AAPL bull for now, with an eye toward PC share (the market's long-term trend is toward growth, whatever happens short run) and phone market growth (units and sales; I think Apple's in the faster-growing segment of the market, though it needs more geography). I think both are in Apple's favor, though neither is a next-quarter miracle. This isn't a jet, I think, but a train. Let's hope the conductor has the brake ready and a good supply of coal, etc.

I doubt we'll be bored

Any time AAPL bores me, I look at the numbers in the "market value" column and it becomes immediately interesting. I'm still too loaded up on this. I just have no expertise in finding/timing exits. On anything. Pretty much, ever.

Take care,
--Tex.

PS Isn't accounting fun? Apple's new accounting may give more ammo to folks investing with their guts rather than their heads: as earnings and recent sales diverge due to subscription accounting, folks will be able to pick whether they hear good news or bad news in every conference call. Is earnings the story? Units? Cash flow? Last time, of course, they heard the bad news. Compare HPQ, which said yes, we heard about the recession, but we control so many levers of our growth that we will succeed even in the teeth of the recession and was celebrated for it. I mean, both just had rocking holiday quarters and are guiding into the same Spring, right? One would suspect both should get similar treatment, both showing good success in (largely) the same industry.

I personally think Apple flubbed it by behaving as though it was oblivious to the economy (rather than expecting success despite it) and might be subject not only to results at the poor guidance given, but to underperforming that guidance due to failure to consider macroeconomic issues. The conf. call was just terrible on this issue, instilling no confidence at all these guys had given consideration to the market into which they expected to be selling. Hurd on HPQ by contrast was apparently on fire and selling his story successfully. Interesting stuff.

Maybe Apple needs some of that enterprise consulting business Hmm, Google partnerships on business apps? Ahh, I'm dreaming again.

giddy optimism for those who want it

Lippert of Baron iOpportunity explains why his battered tech holdings rock at current prices:
http://www.thestreet.com/video/10404248/apple-google-rimm-ready-to-rebound.html#10404248

Upshot: he thinks that Apple's growing deferred revenue business (which apparently takes full cost of phones up front) makes earnings less important than cash flow, on which basis he sees AAPL oversold.

My take: show me the Mac share increases and that units sell well into a market comprised of folks increasingly convinced of a recession next year (well, that's how the surveys are going; one can draw for one's self what's up of course), then ask me how oversold it is.

Lippert also thinks GOOG benefits from a MSFT/YHOO tie-up, on the theory it'll be distracted by regulatory approvals. I happen to think the more important issue is brain drain, but I don't own YHOO or MSFT, I own GOOG.

Take care,
--Tex.

Thanks. Cloudy here too. em.

re quarterly reports

CAAH's history has been to file a quarterly report on the 14th of every third month. I recognize that this quarter may be more complex than used to be the case due to accounting for integration with ramping Chinese operations, but I was surprised that CAAH didn't file a report on the 14th of this month.

Anyone have thoughts on the timing of CAAH's filings? When would CAAH be delinquent if it continues not to file?

Take care,
--Tex.

international business a big plus in analyst evaluation, apparently:
http://money.cnn.com/2008/02/19/technology/hp_earns/index.htm

Let's hope Apple develops more substantial non-US business -- international phone rollouts, etc.

Take care,
--Tex.

mystified

According to WSJ, even though the price is down, the money is flowing in. Get that?
http://online.wsj.com/mdc/public/page/2_3022-mfgppl-moneyflow.html?mod=mdc_leader

Anyone care whether the trades are on upticks or downticks? Does this really amount to a hill of beans?

Any thoughts?

I'm just baffled at the conclusions and interested to know if anyone thinks there's something to watching metrics like that.

Take care,
--Tex.

re Promise

I didn't know where they fit into the ecosystem, but my take was that having someone really focused on the RAID would make it a better deal for customers (incentive to advance features, reliability, etc.). Are they a quality operation?

As for the software: how many people are actually shelling out for XSAN and the like? Or is it likely Apple's selling Promise the software in its controllers?

I definitely am not a fan of buying Apple RAM. I'm miffed that Apple seems not to want to sell RAM configurations that play directly into the customer's plan to buy 3rd party RAM, either. Usually Apple makes you buy multiple small pieces instead of taking the low-RAM configuration in a small number of larger pieces that will play nice with your upgrade plans ... and you end up with loose RAM in case Apple wants to test the machine out later with Apple-supplied RAM in it. Ugh.

Take care,
--Tex.

on Apple's RAID

It looks like Apple found a partner for RAID:
http://www.apple.com/server/storage/
forwards to
http://www.promise.com/apple/

It seems to be a 16-drive array with lots of redundancy and third-party tech and warranty support from the manufacturer.

Interesting. Anyone know anything about this company?

Take care,
--Tex.

re SDK

I was happy to hear the DSK was making its rounds; the story isn't new, it's been brewing a little while. My question is what Apple thinks it needs before releasing the apparently-usable SDK to the public. I suppose we should be happy Apple is actually conducting some beta testing to ensure the rough edges are sanded adequately before sticking a fork in it.

Interestingly, Fortune's blog mentions that analysts comparing Apple's quarterly numbers to those of last year are neglecting the fact that Apple's new product segment is being accounted for in a way that makes apples-to-apples comparisons a poor choice: due to subscription accounting, iPhones have a backlog of actually-received but not-yet-booked revenues; moreover, iPhones cause some forward revenues, too, due to revenue sharing agreements. However, I think the blog misses the important point: folks were modeling Apple revenue on the basis of certain sales targets, and reacted to unit sales news and apparent forecasts (and to the changes in the company metrics those would imply). So the disappointment may not be nearly as crazy as the blog folks think. The real question is how Apple will execute in an environment that supports retail pessimism. In a year we'll know the answer -- what Apple has sold, what its share has become, etc. -- but at the moment, the overhanging uncertainty explains very reasonably a huge haircut off the price people thought workable briefly before the extent of the financial explosion was understood to be significant.

I'll be interested in reading about the Mac share numbers. I read recently that CTOs and so on have been spotted with Macs in record numbers -- meaning that there's an actual, on-the-ground change in both attitude at the top and activity to migrate off (or explore migrating off) prior platforms. Assuming these observations are an indicator of both where things have been (folks bought) and where things will go (these folks make decisions for their organizations), I have optimism that the share number will remain good and this, in turn, will help Apple (the PC market is big and growing, so growing share in it is a double-bonus). Then there are the iPhone numbers, but Apple needs to roll out more geographies to reap the benefits folks expect Apple to get (a cracked phone on a strange network doesn't yield the profit Apple was projected to achieve for each unit, so Apple needs to reach those markets in order to achieve the expected revenues), and to be able to better reach customers for the smartphone market. The share Apple's reportedly taken will be interesting to see over time: if Apple's products were bought for fashion and then bought as holiday gifts, then Apple's share could drop in quarters in which sales are driven by business use. The SDK should help Apple work against that, though, by enabling business uses.

Will Apple's installation mechanism work against intra-company distribution of proprietary enterprise apps?

Interesting times.

Take care,
--Tex.

new >5% acquisition
Sansar Capital Management, LLC filed that it acquired 4,144,185 shares, or 8.8% of the common stock.
Take care,
--Tex.

Ahh, those were the days. Em.

re iPhone app distribution

I can't imagine anyone seriously thinks Apple's mechanism for ensuring apps have controlled installation and are trackable back to their developers (per Apple's security spiel on iPhone development and the need for a specialty SDK) will by anything but iTunes-managed app installation. The only question I have is whether app updates will also be iTunes-modulated.

Assuming demand for third-party apps is significant -- which could be enhanced if Apple eventually offers games that leverage its interesting UI -- Apple could make some good money reselling them.

I wonder if China Mobile's disinterest in revenue splits is related to its knowledge that it's already got lots of phones on its network ....

Take care,
--Tex.

re MSFT/AAPL


One difference between MSFT releasing tools for small businesses and Apple doing it is that when MSFT does it, we see MSFT attempting to continue with existing lock-in and to leverage current market segment domination into domination in other markets. Were Apple to do it, we'd see Apple moving into a new market and offering solutions that broadened the appeal of its products.

One of the reasons I was irritated at the performance of Pages is that it is unusable for serious work. A fifty page document is impossible to tolerate working with on a G5 iMac, and those were thought to be pretty snappy only a few years ago. When the specs came out, folks thought it was a hoax. Apple has managed to release apps that make it behave like a hog.

There's no question that Apple needs to produce solutions that would address some business markets more successfully than it now does. Apple basically says "we'll sell you a machine, if you make us." MSFT knows that repeat business by upgrading enterprises is the mother's milk of the software developer. Apple thinks it's artists and students, apparently. Apple may be able to sell some high-end kit to video editors and sound editors and so forth, but given that Apple sells machines that compete on specs with office-class desktops, Apple should have a strategy to start taking those desktops, too. It's a waste.

MSFT's entertaining nonsupport of Safari might be Apple's one hope of being left with breathing room until it wakes up from its hundred years of sleep. On the other hand, there's Google, which is working to build apps for business ....

Lord only knows what this will bring.

Personal good news: I landed a long-time non-paying client funding that will lead to my getting paid. Woohoo. Note to self: contingent fee work and agreements to be paid waaaaaay down the road are only for really, really big payoffs. This multi-year fight was teh suck. Can't wait for the deal to be inked.

Take care,
--Tex.

re macroeconomic issues

Are reports by the Bureau of Economic Analysis, such as one can find at bea.gov, mostly straight-up or are they mostly political projects? I don't know whether this bureau has a reputation for independence and objectivity or for being led on puppet strings by someone with an agenda other than reporting apparent economic data.

Thoughts?

Take care,
--Tex.

re revenue on iPhone users

The fact AT&T is crowing about how much extra money it's making from iPhone customers should be of value in Apple's quest to sign on carriers with rich kickback schemes. The fact Google was surprised at iPhone's search volume suggests Apple's partnering with other companies should turn into some useful outcomes. I was surprised that there was so much ad-free content from third parties on the phone (weather, YouTube, delayed quotes, etc.), and it's interesting to see there may actually be a ray of hope for net revenue to be painlessly gleaned.

Last night I actually clicked a paid link on Google via my iPhone, in fact

Take care,
--Tex.

PS Yesterday was an interesting trading day for me. I got put some AAPL on an option with months left in it, in the early part of the trading day while Apple seemed down. I traded a paper loss on the put for a paper loss on the shares, but I got a "free pass" on the time premium left in the exercised option, and as the shares went up over the day it turned into a pretty good net "trade" for me. I'm looking for some tool to enable me to pick the lots I want to sell so I don't end up doing something silly to myself come tax time next year. The broker has some tools for this, ostensibly, but I have no idea how to access them .... Since the few-month-out options seemed susceptible to exercise and I'm not keen on it at the moment, I rolled out the other put position I have far enough into the future that exercise would be a gift in terms of time premium. Last year, naked puts was good cash from expiration This year, it's down to rolling out for net cash, which is less exciting. I'm still working on more sophisticated options positions; my current broker hasn't got (but plans) online access to 4-legged spreads, just 2-legged spreads, so some of what I'm reading about is tricky to put into practice (calling live brokers to get quotes and place orders, and paying extra for it, is suuuch a drag).

re mobile access

That means to have any realistic chance of this theoretical goal of displacing Flash as the future default standard on mobile devices, Apple would need to have an active plan and be pursuing it right now. I see zero evidence of that.

I think that's largely true. On the other hand, if Apple is successful in getting lots of users who buy things to complain that their sites are "broken" because they don't behave on iPhone, and buying where there's support for their devices, Apple could get some pressure. But let's face it: iPhone as a runaway success is a tiny fraction of the web use. Even if it's a fraction that disproportionately has disposable income and makes online purchases, these complaints may not get anywhere.

I called TD Ameritrade about its compatibility with iPhone and they gave me a mobile-designed cut-down site's URL, which is (a) pathetic and (b) laid out so that devices with stripped-down and formatless display can see them fine, but so that devices that preserve formatting leave one fishing about the page, lost, looking for the center and right height for the unadorned blue text links that are situated in the very center of a page that spans many screen-widths. The site might be great for a Palm device but is awful on real browser. More time is spent looking for the page-centered links (why not left-justify so it shows up the first place the page is viewed with the eye?) than in actually reviewing content. Just ghastly. They'll hear from me again. Their site isn't Flash, it's Javascript, and it works just fine on Safari/desktop. It should be able to be made to work, no?

When the mobile processors get beefier, the processing some of the sites expect browsers to support will be a lot less painless. The timeout iPhone imposes on calculations is intended to prevent web sites from DOSsing the phone, but it has the effect of making some client-intense sites a pain to visit. This kind of thing may improve. As Apple gets more folks using WebKit browsers, Apple will be in a position to leverage the numbers ... but honestly, without a near-monopoly Apple won't really be in a position, as you say, to use mere market presence to drag people onto its APIs (even though in this case they are web standards).

I don't like Flash sites mostly because their UIs tend to be bizarre custom jobs that make finding content a difficult chore, and the content you want is hard to bookmark. The fact that it's not a web standard is kinda secondary, no?

I'm guessing the good flash jobs often go without notice, because they are small, don't force a long wait to download, and have normal-looking, obvious-to-use interfaces. And I probably don't roll my eyes at them, either

Take care,
--Tex.

re reread

I saw you make this clear in your later post, but by then my edit window had ended

Take care,
--Tex.