All Things Digital

The Apple rumor mill has such a hair trigger, that even passing mention of an unreleased product can set it into yammering motion. As happened today after Digg founder Kevin Rose offered up some purported insider information about the focus of Apple’s “Let’s Rock” media event in San Francisco next Tuesday. If Rose is correct–and his record on handicapping Apple (AAPL) announcements is decidedly mixed–Apple will announce updates to its entire iPod line, including the rumored “tall” iPod Nano. Not exactly a tough call considering that XSKN is already selling cases for them and purported photos of the device — like the one below — are showing up on Alibaba.

More interestingly though, Rose says that Apple will uncrate iTunes 8, the first major overhaul of the software since iTunes 7 launched two years ago. Rose claims that iTunes 8 will boast some significant enhancements, among them HD-quality TV show downloads, a new “grid view” browsing feature and a playlist recommendation engine called Genius. “iTunes 8 includes Genius, which makes playlists from songs in your library that go great together,” Rose writes. “Genius also includes Genius sidebar, which recommends music from the iTunes Store that you don’t already have.”

Notably absent from Rose’s list of new features: iTunes Unlimited–the $129-a-year all-you-can-eat subscription service that Apple has been rumored to be considering for some time now.

Like all such reports, Rose’s should be taken with a grain of salt, if not an entire salt lick. Rose was, after all, the guy who erroneously claimed Apple’s first iPhone would feature a slide-out keyboard, dual batteries and CDMA, and GSM support.

To some, Sprint’s longstanding reputation for lousy customer service, poor network coverage, high churn and Keystone Kops-style management disorganization might be a bit–how can I put this delicately–off-putting. The beleaguered company’s subscriber numbers are dropping like failed calls, as are its shares. Sprint’s stock price has fallen nearly 60% over the past 12 months. It posted a $29.6 billion loss for 2007 and has had its debt rating cut to junk by Standard & Poor’s.

Not the most attractive of acquisition targets. But beauty is in the eye of the beholder, in this case T-Mobile parent Deutsche Telekom (DT) which is reportedly considering a bid for the wireless outfit, whose worsening losses have left it ripe for a buyout. By swallowing Sprint (S), DT could gain some spectrum in the States and stave off a price war between the mobile carriers, or so the “thinking” goes.

Thing is, an acquisition of Sprint entails an acquisition of Sprint’s problems–and there are many. It would also require DT, which operates a GSM/EDGE network, to manage Sprint’s 3G CDMA network and Nextel’s legacy iDEN system. That’s three different network standards. And then there’s Sprint’s WiMax operation, XHOM, to deal with. That’s the makings of a real Greek tragedy of a business story right there. Said Avian Securities analyst Matthew Thornton, “While the differing network technology standard does not necessarily eliminate the possibility of a deal, it does significantly raise the costs and complexity of the combination.”

Michael Nelson, an analyst at Stanford Group, agreed. “You really cannot underestimate the level of complexity that that entails,” he told Bloomberg. “There is a significant amount of integration risk.”

If Digg founder Kevin Rose is right, Apple’s next generation iPhone will include not one, but two cameras–the second a front-mounted video camera designed for iChat AV.

During a recent episode of his weekly Diggnation vidcast (see above), Rose claimed that the new iPhone reportedly being prepped by Apple (AAPL) for a summer release will enable video conferencing over AT&T’s (T) high-speed 3G wireless network.

Like most such predictions, Rose’s should be taken with a grain or two of salt. His last iPhone premonition, which had the device featuring slide-out keyboards, dual batteries and CDMA and GSM support, was laughably inaccurate. That said, he did accurately predict the debut of iPod nano ahead of its 2005 debut. So there may be something to his latest claim. Certainly, it sounds plausible.