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In an open letter, Apple's Steve Jobs urged music companies to eliminate digital rights management software that restricts how downloads can be used, arguing the technology irks consumers and hasn't halted piracy. He said frustration over DRM should be directed at the labels, not Apple, and said that if the music companies would allow Apple to sell files without the restrictions, it would do so "in a heartbeat."
TECHNOLOGY ALERT from The Wall Street Journal.
Feb. 6, 2007
08:31 AAPL Apple and The Beatles' Apple Corps enter into new agreement concerning the use of the name "Apple" (84.75 )
Co and The Beatles' company Apple Corps announce the parties have entered into a new agreement concerning the use of the name "Apple" and apple logos which replaces their 1991 Agreement.
Under this new agreement, AAPL will own all of the trademarks related to "Apple" and will license certain of those trademarks back to Apple Corps for their continued use.
In addition, the ongoing trademark lawsuit between the companies will end, with each party bearing its own legal costs, and AAPL will continue using its name and logos on iTunes(R). The terms of settlement are confidential.
06:50 AAPL Apple discloses they will respond in U.K. on Feb. 21 to Cisco iPhone suit (84.74 )
From today's 10-Q: "Plaintiffs Cisco Systems, Inc., Cisco Technology, Inc. and Cisco-Linksys LLC filed this action on January 10, 2007 in the United States District Court for the Northern District of California alleging that the Company is infringing Cisco's "iPhone" trademark.
The complaint includes causes of action for trademark infringement under the Lanham Act, unfair competition and other related claims. Plaintiffs seek an injunction, damages, and other relief.
The Company's response is not yet due... Plaintiff Cisco Technology, Inc. filed a claim in the High Court of Justice, Chancery Division, in London on January 12, 2007 alleging that the Company is infringing Cisco's "iPhone" trademark. Cisco seeks an injunction, unspecified damages, and other relief. The Company's response to the complaint is due on February 21, 2007."
<Just maybe (rose colored glasses are on), Apple customer service will rub off on Cingular.>
Not rose colored glasses at all. I really don't think Steve is going to suspend his legendary intollerance for incompetence.
"Superb"... yes. For those who can get acceptable service through Cingular. Sigh.
10:02 AAPL Apple: iPhone margins smaller than reported, claims analyst - EE Times (86.27 +0.89) -Update-
EE Times reports analysts are beginning to question earlier reported Bill of Materials costs on Apple's iPhone and are suggesting that the gross margins Apple will achieve may be much lower than predicted, and nearer the mid to high 20% range than the estimated 50%.
In particular, there are debates about the cost of the display and related touch screen technology. For instance, DisplaySearch suggests the cost to Apple of the display approaches $60, almost twice that of other estimates due to the 3.5-in 320 480 display and the nature of the touch screen technology.
John Jacobs, Director of Notebook Mkt Research at the co, notes that Steve Jobs, in his keynote address at MacWorld, said Apple has filed for more than 200 patents for technologies in the iPhone. "Such innovation does not occur without cost.
Although Apple and its key component suppliers may choose to amortize the cost of these advanced technologies over a large number of units, our analysis indicates that Apple's BOM (bill of materials) cost, including integration, is well above $300 for the 4 GB model.
After the costs associated with building, shipping, marketing and selling the iPhone are included, we expect that margins will be closer to Apple's typical mid to high 20% range."
09:42 VZ Verizon rejected Apple iPhone deal - USA Today (37.79 -0.04) -Update-
USA Today reports Verizon Wireless passed on the chance to be the exclusive distributor of the iPhone almost two years ago, balking at Apple's (AAPL) rich financial terms and other demands.
Among other things, Apple wanted a percentage of the monthly cellphone fees, say over how and where iPhones could be sold and control of the relationship with iPhone customers, said Jim Gerace, a Verizon Wireless vice president.
"We said no. We have nothing bad to say about the Apple iPhone. We just couldn't reach a deal that was mutually beneficial." Verizon's decision to pull the plug on talks sent Apple into the waiting arms of Cingular (T), which will be the exclusive U.S. carrier for the iPhone.
According to Verizon, Apple CEO Steve Jobs insisted that he have hard control over iPhone distribution. The problem? While Apple and Verizon stores would have it, Wal-Mart, Best Buy and other Verizon distributors could have been left out. "That would have put our own distribution partners at a disadvantage" to Apple and Verizon stores, Gerace said.
Customer care was another hitch: If an iPhone went haywire, Apple wanted sole discretion over whether to replace or repair the phone. "They would have been stepping in between us and our customers to the point where we would have almost had to take a back seat ... on hardware and service support," Gerace says.
08:30 AAPL Apple tgt increase details (85.38 ) -Update-
As mentioned at 8:05, Needham raised their tgt to $135 from $115 based on the iPhone. The firm thinks initial sales of the iPhone are likely to be modest because of its high price, but they think its price is likely to fall at a 20% annual rate in line with the decline in component costs and rising carrier subsidies.
They think the decline in price should accelerate demand as the iPhone invades the sweet spot of the mobile phone market. With carrier subsidies, the iPhone should sell for around $75 in the final year of their forecast. They are forecasting sales of 135 mln iPhones in 2016, equivalent to a 7% market share.
Airmen take class via iPod
Alamogordo Daily News
By Laura London, Staff Writer
Airmen at Holloman Air Force Base are the first people anywhere to have the opportunity to take college courses via iPods thanks to a New Mexico State University pilot program.
Victor Venegas, NMSU spokesperson, said the first class being offered through the pilot program is sociology.
"In fact, the name of the class is RSociology in a Sack,'" Venegas said.
Each iPod has 80 gigabytes of memory and comes preloaded with all of the class lectures, Venegas said.
"They get it in a Ziploc bag," said Dr. Rodger Bates, special assistant to the vice provost for outreach services at NMSU. Bates developed the iPod course.
"In the Ziploc bag comes the iPod, a protective rubber or skin, a battery charging unit, a belt clip and an admonition to take care of it," he said.
Bates said a course syllabus, instructions on how to use the iPod, a letter from Brig. Gen. David Goldfein and a packet of 16 sample quizzes, one for each chapter, so that students can gauge their progress through the course, are also enclosed with the iPod.
"And we stuck in there a little NMSU fact book and my business card, in case anyone wants to e-mail me from Afghanistan or Iraq," Bates joked.
He explained that troops in Iraq and Afghanistan have Internet access, but it is limited. Sometimes only one connection is available, and people use it to e-mail home.
"You can't take a course over the Internet when other people want to use it," Bates said. "And whenever there's a casualty in a region, they shut down the Internet, so that interrupts daily use."
Bates said the iPod class idea was first mentioned in August at a reception by Alamogordo's Committee of 50 for then-Colonel Goldfein when he first came to town. Bates, a member of the Committee of 50, asked Goldfein what the university could do to help support the base, to which Goldfein immediately replied that he would like to see distance education available on an iPod.
"This was Gen. Goldfein's idea," Bates said. "Really, I think he wants to help his troops and help the Air Force. He's very big on taking care of his people, and I think that shows. Plus he has a lot of good ideas.
"I just happened to be at the right place at the right time with the right question, and he had the right request," Bates said.
Bates talked to people he works with at the university and they also thought it was a good idea. Being a professor of sociology, Bates felt he could put something together very quickly. He said he worked with others at the university, including Dr. Paul Gutierrez, vice provost for outreach; Dr. Wendy Hamilton, a special projects director; and Sonja Serna, a technology specialist.
"She's (Serna) the one who showed me how to do all this stuff, and whenever I have a problem I call her," Bates said.
Once they figured out what was needed, Bates said he went to work Nov. 1 recording lectures. By mid-December he had them recorded, and over Christmas break he edited them.
"Sociology in a Sack" has all the requirements needed for accreditation standards, Bates said.
"The reason we did sociology (for the pilot program) is, it's one of the requirements of the Community College of the Air Force and it was something I could do," Bates said.
He explained that NMSU-A has, for years, provided general education core classes for CCAF at Holloman. CCAF requires airmen to have 18 hours of general education credits, and they need to be making progress toward a CCAF degree in order to get promoted. Because of the increased deployments, Bates said, airmen's courses are interrupted and they aren't able to get promotions when the time comes to reenlist, which tends to make them less likely to reenlist.
"So this is not only an education matter, it's a reenlistment matter," Bates said.
Airmen taking iPod classes are able to progress at their own pace, Venegas said. When they are able to, such as when they return from deployment, they can take their final exam to complete the course.
"The real unique thing about this is NMSU has been able to respond quickly, and we've operated pretty much directly to meet his (Goldfein's) needs," Bates said. "That's important because it's a land grant university, and one of the charges of being a land grant university is supporting the military. And we take that mission very seriously."
The pilot program started with 20 iPods and became available to Holloman personnel last week, Bates said.
He said Goldfein has expressed an interest in promoting the iPod class idea throughout the Air Force and other military branches.
"Holloman is a vital part of our community," Venegas said. "Our mission is to serve all of New Mexico, and this is a great way to get it done. We have troops putting their lives on the line, and this is a small thing we can do for them an extremely small sacrifice that we can do for them."
Bates said the general has asked him to develop a proposal for a number of courses. And Bates said the only two courses he's not recommending are English, because of the writing involved, and public speaking.
"It's a little hard to do that on an iPod," he said.
09:11MSFT Microsoft: Rivals attack Vista as illegal under EU rules - Reuters.com (30.45 ) -Update-
Reuters.com reports a coalition of rivals charged on Friday that Microsoft's new Vista operating system coming out next week will perpetuate practices found illegal in the EU nearly three years ago.
The group, which includes IBM (IBM), Nokia (NOK), Sun Microsystems (SUNW), Adobe (ADBE), Oracle (ORCL) and Red Hat (RHT), said its complaints made last year are yet to be addressed just days before Vista is due for release.
The European Commission found in 2004 that Microsoft used its dominance to muscle out RealNetworks and other makers of audio and video streaming software and that it made its desktop Windows deliberately incompatible with rivals' server software.
"Microsoft has clearly chosen to ignore the fundamental principles of the Commission's March 2004 decision," said Simon Awde, chairman of the European Committee for Interoperable Systems.
07:55 AAPL Apple: More Euro countries enter battle over iTunes DRM - AppleInsider (86.25 )
AppleInsider reports France, Germany, and the Netherlands are all teaming up with Norway to pressure Apple into opening its iTunes music format for the sake of compatibility, according to news reports.
Compounding Apple's existing troubles, three of the most influential European nations have now said that they too supported Norway's pursuit of the iPod maker over concerns that its proprietary FairPlay protection scheme was violating antitrust laws.
12:09 AAPL Apple: Samsung claims primary seat in Apple iPhone - AppleInsider (86.80 +1.10) -Update-
AppleInsider reports Samsung Electronics has added iPhone to a rapidly expanding list of consumer electronics devices from Apple for which it supplies the primary SoC.
People familiar with the new Apple handset say the Korean electronics giant will cater to Apple's request for a unified central processing unit, which will serve a dual role in handling the device's application processing and digital media capabilities.
Meanwhile, those same people say wireless IC maker Infineon (IFX) has also captured a significant piece of iPhone, asserting itself as the primary supplier of both baseband and RF chips. Specific chip models were not identified.
07:08 AAPL N.Y. Pension Fund to lead lawsuit over Apple options - Washington Post (85.70 )
Washington Post reports a New York pension system will be the lead plaintiff in a shareholders lawsuit accusing Apple of illegally backdating stock options. The New York City Employees' Retirement System was named the primary plaintiff in the lawsuit Friday by U.S. District Judge Jeremy Fogel, according to Grant & Eisenhofer, the law firm representing the group.
The system owns about 1 mln shares of Apple stock. The plaintiffs are seeking class-action status for their case and want damages in connection with what they allege were illegally backdated stock options. Fogel is also hearing a separate but similar securities case that consolidates a number of civil complaints about Apple's stock-options accounting. Apple has not yet responded to either case.
07:33 AAPL Apple: Adobe's upcoming release of CS3 will have positive impact on AAPL's professional Mac sales - Piper (85.70 ) -Update-
Piper Jaffray notes that on Dec 14 ADBE announced a beta version of the Intel-optimized Photoshop CS3, expected in ADBE's May qtr, likely late in the month of April.
Firm believes that the CS3 contribution from current Adobe creative pro customers points to 9% upside to their FY07 EPS est for AAPL, and says this analysis is conservative given that it excludes any customers outside Adobe's current user base.
Also, firm believes that the success of the Intel-optimized CS3 will drive sales of AAPL's pro-level computers, as Adobe creative pros (~15% of the Mac user base) are waiting to buy INTC machines until CS3 is released.
09:44 AAPL Apple to battle Nintendo, Sony? - Red Herring (85.93 -0.86) -Update-
Red Herring reports one group drooling over the iPhone are game cos that see it as a killer platform for their newest mobile titles. Mr. Jobs has not said a word about games. But given Apple's recent decision to offer downloadable games for the iPod music player, some game industry officials think popular titles will hit the iPhone before too long.
Asked to comment on iPhone games, officials from Electronic Arts (ERTS) provide a predictable response. "It's fair to say we're looking at it," says spokesperson Tammy Schachter.
But despite the enthusiasm among developers, analysts aren't entirely sold on the iPhone's potential as a game machine. "It's already a multifunction device," says Brian O'Rourke of research firm In-Stat. "Adding another capability and trying to market it... might be too much."
Another potential hitch: the iPhone will run on Apple's OSX operating system, a platform third-party developers haven't rushed to embrace.
My view is that we have had the potential for a "constitutional crisis" for several years. In using those words I distinguish between normal (and healthy) partisan politics, and clear violations of the constitution, in particular the "signing statements" in which the Administration identifies parts of a law they will disregard.
This is a clear violation of the President's obligation under Aricle II that "he shall take care that the laws be faithfully executed," as well as his oath of office. However, there is no sign the Pelosi and company have the stomach for anything other than a two-year circus of hearings and headlines.
I couldn't find that particular column by Krugman, but in general I read him very carefully. He has the capacity to be very insightful but also so vitriolic that his underlying arguments and observations are obscured.
08:41 Shakeup in U.S. Attorney's office may delay options probes - MercuryNews.com
MercuryNews.com reports the recent shakeup in the U.S. Attorney's Office in San Francisco could lead to delays in the office's wide-ranging backdating investigation, legal experts say. The turnover -- which includes the departure of U.S. Attorney Kevin Ryan -- comes as the govt's scrutiny of options backdating at Apple appears to be heating up.
Federal prosecutors and SEC officials interviewed Apple (AAPL) CEO Steve Jobs last week as part of that investigation, according to a person close to the probe (See 6:36 comment). But the departure of Ryan and the lead prosecutor in the office's case against former top execs at Brocade Communications (BRCD) will likely lead to delays in some cases and ongoing investigations, potentially including that of Apple, say defense attorneys and former prosecutors. More crucially, the change may well influence which cases the office decides to pursue and how it goes about investigating them, they say.
06:36 AAPL Apple's Jobs questioned in options probe, lawyers say - Bloomberg.com (86.79 )
Bloomberg.com reports Apple Chief Executive Officer Steve Jobs was questioned by govt investigators leading the U.S. probe into backdated stock options grants at the co, lawyers familiar with the matter said. Jobs met with officials from the SEC and the Justice Department last week in San Francisco, said the people, who asked not to be identified because the interviews are confidential.
Apple said last month an internal review found "no misconduct'' by Jobs or current mgmt. The meeting shows the U.S. govt is still seeking information about Jobs's role in the backdating even after the co's report clearing him and others, said Nell Minow, editor at the Corporate Library, a corporate governance research firm. "It is after all the SEC's view on his culpability that matters, not the internal investigation at Apple,'' Minow said. The people wouldn't disclose specifics about what Jobs was asked, what he told investigators and whether there would be additional meetings.
performance
I bought my first computer, an Apple II+, based on the quality of the software, and will buy my next phone based on the quality of the carrier.
Each time we've subscribed or extended we've reviewed performance as thoroughly as publicly available information permits. And each time Verizon has been a clear winner and Cingular a clear loser.
I have a Treo 600. I am willing to pay $500-600 for a phone with reliable service and plug-and-play synchroniation with Address Book and iCal. For me, everything else is just, well, nice.
If the iPhone included Verizon as an option, I'd look at it. Cingular? No deal.
07:09 AAPL Apple gets a bruise by blaming a $1.99 fee on accounting rules - WSJ (88.50 )
WSJ reports Apple recently told some customers they would have to pay $1.99 to download a software enhancement that enables a wireless-networking technology already included on some of its computers. Apple's reason: Accounting rules forced it to make customers foot the bill for the enhancement.
That's an excuse, counter accounting experts and officials at the body that sets accounting rules, known as generally accepted accounting principles, or GAAP, for public and private cos. Rather, Apple is choosing to make customers pay so that it receives a particular accounting treatment it considers most favorable to it, they say.
08:19 AAPL Apple: Additional commentary on iPhone (88.50 ) -Update-
Morgan Keegan says that although they have yet to demo an AAPL iPhone, their initial impression based on the specs and the price point is that the iPhone is likely to have a limited effect on RIMM and that is will compete more directly with more fashion-focused multimedia handsets.
Firm says the iPhone's slow network capability (it will run EDGE, not 3G) will hamper high-speed web-browsing in places without WiFi access, which will make PALM's Treo 750 look like a very capable web browsing device in comparison.
Also, the $500 price point is likely to turn off a large portion of the consumer/prosumer mkt, and with an additional $40/mo in data plan fees, they believe consumers will be more hesitant with the iPhone.
Lastly, firm says the iPhone is a long way away from being a highly usable email device, as the touch screen input is likely to be less than ideal for typing emails.
More detail here. Says its a done deal
http://dev.siliconinvestor.com/readmsg.aspx?msgid=23206435
Let's hope SUN reads the APPL playbook.
TECHNOLOGY ALERT
from The Wall Street Journal.
Sunday, Jan. 21, 2007
Sun and Intel have been negotiating an agreement under which Sun would buy Intel chips for use in server systems. Such a deal would be a blow to AMD, currently Sun's exclusive supplier for chips based on the popular x86 design used in most PCs and servers, and signal renewed competitiveness for Intel's chips.
08:43 AAPL Apple: See in-line to slight upside to December quarter estimates; AppleTV to help March quarter (94.62 )
Amtech notes that AAPL is due to report its Dec qtr this Wednesday after the close, and they believe the co is on track to report results in-line to slightly above consensus, but well above AAPL's guidance (consensus ests have moved up considerably over the past month).
Firm sees continued strength in the Mac business (38% of rev), and with iPods they see a continued rebound. For the March qtr, for the first time in over a year, firm says consensus out-qtr rev ests appear reasonable, and they believe AAPL will guide conservatively, but in-line, to $5.1-5.3 bln in rev.
Are we missing LJK yet?
Sorry. Couldn't resist.
09:16 AAPL Apple Computer: Soleil comments on 10-K filing (80.87 ) -Update-
Soleil notes that AAPL restated its results to reflect proper options accounting. Firm thinks the relatively small size of the restatement ($84 mln after-tax for 1998 through 2006), and the board's strong support for current management will be viewed positively. Net net, the firm believes this filing will allow investors to focus on Apple's strong business fundamentals.
07:10 AAPL Apple Computer: Holiday season checks suggest strong iPod and notebook demand; shares appear fairly valued - TWP (81.52 )
Thomas Weisel notes that they just completed a round of about 20 channel checks with Apple specialist resellers and Apple retail stores across the US and their checks suggest strong "holiday season" demand for Intel-based Macs and iPods. There is no change to their estimates.
They are already estimating 41.5% y/y growth for Mac units, and they remain comfortable with their current estimates. They say iPod demand checks suggested strong enthusiasm for the iPods overall, and they are modeling a 68% sequential increase in units (14.7 mln) for December.
Based on their checks, they remain comfortable with their current iPod estimates, although they believe that some upside to their estimates is possible. They believe the growth opportunities continue to be strong for Apple, but that those opportunities appear to be well understood by the investment community and, thus, reflected in the current stock price.
Hubris. Power does corrupt. In the political world and in the corporate world.
I'm back in Washington and visiting with close friends who have seen first hand the Republicans self-destruct. People I know to have been hard-working and honest 20 years ago have somehow come to believe that basic rules of behavior no longer apply to them.
I can easily believe that it could happen to someone in the corporate world with the wealth and power that Steve has.
20:06 AAPL Apple Computer CEO stk options not authorized by Bd - FT (81.52 +0.01) -Update-
Chief Executive Steve Jobs was given 7.5 mln stock options in 2001 without the required authorization of the board of directors, The Financial Times reports on its Web site, citing people familiar with the matter. The FT reported that records that purported to show a full board meeting had taken place to approve Jobs' remuneration, as required by AAPL's procedures, were later falsified.
The sources said that those records are among the pieces of evidence being weighed by the U.S. Securities and Exchange Commission as it decides wither to pursue a case against the co or any individual over the affair. According to a 2002 filing by AAPL, the options under review were handed to Jobs in October 2001, at an exercise price of $18.30 a share.
However, the FT said, the purported board authorization was dated near the end of the year, suggesting the benefits were both not properly authorized and were backdated. Jobs later surrendered his options before they were exercised, implying that he didn't gain any direct benefit from them. he was later given a grant of restricted stock by AAPL instead.
14:22 AAPL Apple Computer: iTunes visits skyrocket on Christmas Day - AppleInsider (81.17 -0.34) -Update-
AppleInsider reports traffic to Apple Computers iTunes website on Christmas Day was up 413% when compared to last Christmas as new iPod owners flocked to the web to download iTunes, according to data released Wednesday by Hitwise.
The data also showed a 110% increase in visits to the co's online store. Overall, the iTunes website increased by 1,222% in the same period, and outnumbered visits to Zune.net by 30 to 1.
Bill Tancer, general manager of global research at Hitwise said "Competitive offerings have not yet succeeded in capturing the attention of music listeners, and the surge in visits to the Apple Store shows that iPod owners are also engaged in filling and accessorizing their new devices."
08:23 RIMM Research In Motion tgt raised to $138 from $97 at BofA (133.70 ) -Update-
BofA raises their tgt on RIMM to $138 from $97 noting F3Q rev and BlackBerry net adds beat on Pearl strength, but GAAP EPS of $0.93 missed their est by two cents (& consensus by a penny) and rev/EPS guidance was in-line with their prior ests. The firm says while they were encouraged by the better net adds the lack of EPS upside is concerning at this valuation.
The firm says the Pearl is driving big net adds and mgmt says RIMM has multiple new devices that will impress within six months. They firm expects to see 3G multimedia devices, but think the lower ASP Pearl will remain the big unit driver near term.
The firm expected new and existing product traction would lead to a better EPS outlook, but RIMM's EPS upside bull story is currently on hold. They like RIMM's accelerating top-line and net adds, but believe their ests are relatively full and see shares as fairly valued.
07:14 AAPL WSJ's Heard on the Street: Waiting on the Apple cellphone call (82.90 )
WSJ reports in the past six months, talk about an Apple device that combines the entertainment functions of the co's hit iPod digital music player with a cellphone has reached new heights. Wall Street analysts and investors believe a device will likely debut next month at MacWorld, the San Francisco conference where Apple Chief Executive Officer Steve Jobs typically unveils a grab bag of new products.
That the hyper-secretive Apple has stayed silent on its phone plans has only amplified speculation about a device. This has helped to propel the co's stock to near-record territory, though the stock has pulled back recently after Apple delayed filing its annual report due to its continuing investigation into stock-option grants. Entering the cellphone business likely would give Apple a huge rev boost, which would be good for current shareholders over the long term.
For the moment, however, the stock is trading at lofty prices, so now might not be the right time to jump in, especially if Apple disappoints Wall Street by not unveiling the phone next month or stumbles in rolling it out.
11:16 AAPL Apple Computer passes on Samsung's hybrid flash technology for Macs - AppleInsider (84.54 -0.22)
AppleInsider reports Apple Computer has reportedly turned down an offer to incorporated new flash-enhanced hybrid hard drives from Samsung into its Mac computer line, likely proceeding with plans to use technology from Intel (INTC) instead.
Like several other PC manufacturers, the Mac maker has been working on a next-generation notebook design that will incorporate NAND flash memory to enhance the speed of some operations while simultaneously delivering longer battery life.
09:21 AAPL Apple Computer: iPhone will begin shipping on time next quarter, regardless of when the co plans to unveil the device to the media - AppleInsider (87.72 )
AppleInsider reports contrary to sentiments recently expressed by some analysts, Apple Computer's much-rumored iPhone device is very real and will not fall victim to further delay.
People familiar with the matter tell AppleInsider the first of the iPod maker's music-enabled cell phones will begin shipping on time next quarter, regardless of when the co plans to first unveil the device to the media. Those same people say that, thus far, delays have stemmed from the co's self-imposed challenge of perfecting a scaled down variant of the Mac OS operating system that will run on the embedded device.
While AppleInsider awaits confirmation of a specific launch date, recent rumblings coupled with a lack of other significant Apple product developments suggest that industry watchers may be in store for an iPhone-tinged Macworld Expo early next month. An introduction during the conference or shortly thereafter would allow chief executive Steve Jobs to preempt the garden variety of necessary public disclosures -- such as FCC filings -- that would be required of the device and threaten to spoil some of its pizzazz.
13:01 AAPL Apple Computer: comScore issues press release discussing iTunes sales (89.42 +0.37) -Update-
comScore Networks reported that revenue from Apple Computer's iTunes digital media download service rose by 84% during the first three quarters of 2006 versus the same period one year ago as a result of a 67% increase in the number of iTunes buying transactions and a 10%increase in the dollars spent per transaction. The iTunes application attracted 20.8 mln unique visitors in November 2006, up 85% from November 2005.
08:49 AAPL Apple Computer: iTunes store concerns overdone - Amtech (89.05 )
Amtech notes that recently there has been concern about declining iTunes store sales and the negative impact on AAPL. Firm believes that these concerns are overdone and would take advantage of these misplaced fears to add to AAPL positions.
Firm's analysis of AAPL's iTunes downloads shows strong growth through 2005 and 2006, and they have a hard time reconciling a third-party industry firm's conclusion of a decline of 65% Y/Y.
Also, firm believes that it might not even matter how iTunes sales do, meaning tracking iTunes sales might not be that conclusive in predicting iPod sales (which are what really matters). Reits Buy.
10:11 AAPL Apple Computer: Piper Jaffray disputes report of weak iTunes sales - Reuters.com (87.59 +1.45) -Update-
Reuters.com reports digital music sales surged at Apple Computer's iTunes service over the first nine months of 2006, Piper Jaffray said on Wednesday, contradicting a report that sales collapsed in the first half.
Apple shares fell 3% on Tuesday after Forrester Research reported a 65% drop in monthly iTunes rev in the first six months of the year, based on a survey of North American consumers. But Piper Jaffray analyst Gene Munster wrote in a research report that the number of songs sold per week on iTunes had risen 78% in the first nine months of 2006 compared with the same period in 2005.
"Contrary to recent reports suggesting sales on iTunes are declining rapidly, our analysis of Apple company data ... shows strong growth (year over year)," Munster wrote. Piper Jaffray said songs sold by iTunes totaled 695 mln from January through September, amounting to about 18.5 mln per week.
08:41 AAPL Apple Computer: Near-term caution on AAPL due to challenges in beating near-term expectations - BofA (86.14 ) -Update-
Banc of America notes near-term caution on AAPL due to challenges in beating near-term expectations. For CPUs (computers), they expect NPD data to come out soon. Firm says all comments they have heard from the food chain are that sales are fairly strong, but they have noticed some inconsistency on the degree of strength.
The firm is projecting 1.73 mln units in the Dec Q, up 7.5%, which they believe is in-line with Street forecast. They say Apple is building to a higher number, but they do not think they will have sell-out equal to the build plans, based on their end market read. Firm thinks CPU forecasts are reasonable.
08:52 AAPL Apple Computer: A closer look at the potential iPhone ecosystem - UBS (86.14 ) -Update-
UBS continues to believe that AAPL will launch its cell phone initiative in the March/April timeframe with initial phone shipments possible as early as the end of the next quarter. Firm's research points toward AAPL becoming its own carrier, or MNVO, likely using Cingular's GSM network.
While there are a number of challenges associated with MNVO, AAPL may be the best positioned of any player yet to make it work given its distribution, brand, installed base of iPods and software/iTunes integration.
Firm notes they currently do not have cell phones or related services in their model, but long-term they est potential incremental annual rev contribution of about $1.5 bln, assuming a $300 ASP and 5 mln units sold, and annual EPS contribution of about $0.09 for the hardware alone.