All Things Digital

Just because Microsoft acquired Danger doesn’t mean the company has its eye on Research in Motion (RIMM), though some observers apparently feel otherwise. Noting the ugly decline in RIM’s share price in recent months and a financial crisis that’s already slowing the corporate IT spending that is its lifeblood, Canaccord Adams analyst Peter Misek speculates that the Blackberry peddler is a good takeover target for Microsoft (MSFT). “RIM is a massive strategic fit [for Microsoft],” Misek told Reuters. “I’m fairly certain they have a standing offer to buy them at $50 (a share).”

Really? Leaving aside for a moment the fact that Microsoft already has a mobile OS in Windows Mobile and the fact that RIM’s client architecture is, you know, based on Linux, wouldn’t a merger between two of the largest players in the smartphone market invite antitrust scrutiny?

iPhone is launching in one carrier in one country. We’re in about 100 countries and 300 carriers. … The momentum we are seeing in terms of product launches, carrier support in terms of product launches of BlackBerries, and subscriber additions is exceptional, and we believe it will continue on into the second half of the year.”

– Research in Motion Co-Chief Executive Officer Jim Balsillie, June 2007

Looks like somebody’s got a case of the Mondays–Research in Motion. Shares in the company slipped more than 6 percent to a new 52-week low today. This after charting a new 52-week low last Friday driven by the 27 percent drop RIM took after it issued a lower-than-expected forecast for the current period. That decline was the company’s steepest in eight years, belying CEO Jim Balsillie’s claims that emerging competition from new handset makers isn’t undermining its competitive position. And though RIM’s product roadmap is relatively strong heading into the fall season, the company still has its work cut out for it scrapping with Apple (AAPL) and its iPhone and now T-Mobile (DT) and the Android-based G1.

“RIM’s business model is starting to show its pressure points. The company has become increasingly dependent on hardware sales. As a result, the timing of new product launches can have a big impact on their results,” wrote Brian Modoff of Deutsche Bank in a report. “We think this trend will only worsen and their numbers are now, more than ever, dependent on a steady stream of hit products.”

Needham and Company analyst Craig Bisagna was even more dubious of prospects for Research in Motion (RIMM), criticizing the company for its foolishly dismissive attitude toward new rivals. Just because Windows Mobile handsets haven’t proven themselves worthy competitors to the Blackberry doesn’t mean the iPhone or the G1 won’t.

“We continue to believe that the company has its head in the sand,” Bisagna said in a note to clients. “It’s delusional to think [Apple and HTC] won’t cut into BlackBerry sales as well, especially in the consumer market.”

If misery loves company, then Apple (AAPL) may have a friend in RIM (RIMM). A Citigroup analyst who has tested the company’s forthcoming BlackBerry Bold claims that the device is troubled by 3G reception woes similar to those plaguing Apple’s new handset. A noteworthy data point, since Bold will initially run on AT&T’s (T) wireless network, just as the iPhone does. “We had a few occasional 3G signal-dropping troubles at some locations especially on high-rise building streets and on our 34th floor (EDGE picked up immediately but at slower Internet speeds),” Citigroup analyst Jim Suva wrote in a recent research note to clients. “[This] may be why AT&T has yet to launch the product.”

Interesting to hear that the Bold shares the iPhone’s erratic 3G connection because the device doesn’t share the same Infineon Technologies (IFX) chip believed to be the source of the iPhone’s troubles. Which means the only real point of commonality between the two phones is AT&T’s 3G network, which may still be a bit too immature for either of them.

You wouldn’t know it from the iPhone lines at Apple (AAPL) stores across the nation, but cellphone sales in the states are slowing. A report Tuesday from The NPD Group reveals that U.S. sales of mobile phone handsets in the second quarter of 2008 declined about 13 percent over 2007. Clearly, Americans are buying fewer cellphones.

More specifically, they’re buying fewer Motorola (MOT) phones. The company saw its share of the handset market fall to 21 percent from 32 percent a year ago. And that 11 percent loss was the competition’s gain. “Quarterly unit-sales of handsets fell to their lowest level since NPD begin tracking the category in 2005,” Ross Rubin, director of industry analysis for NPD, said in a statement. “Even so, most major manufacturers picked up market share that was lost by Motorola.” And that’s left the market in a bit of a three-way tie. Samsung and LG each have 20 percent share to Motorola’s 21 percent. Bringing up the rear: Nokia (NOK) and RIM (RIM) with 9 percent and 7 percent respectively.

A few other data points worth noting: Consumers who actually bought handsets in the quarter paid an average of $84 for them. Of those handsets, 81 percent were Bluetooth-enabled, compared with 69 percent last year. And 65 percent were music-enabled, compared with only 45 percent last year. Finally, sales of handsets with a QWERTY keyboard rose to 28 percent from 12 percent. So while Americans may be purchasing few cellphones, the ones they are buying are more feature-rich and more expensive.

Apple’s much lauded iPhone captured 28% of the smart-phone market in the States by the fourth quarter of 2007–just six months into its launch. Today it holds something less than that–about 19.2%. But to look at the headlines, you’d think it controlled the market in its entirety. A quick search on Google returns 19,035 results for “iPhone”– from Jun. 2, 2008 to today. Why? Because in a few hours, Apple CEO Steve Jobs will address the company’s Worldwide Developers Conference in San Francisco, at which he is expected to unveil the next version of the company’s iPhone.

And for Apple’s (AAPL) sake, I hope he does. Because with expectations running this high, I’d hate to see what happens if he doesn’t. Although the new Apple Store housed in a life-size replica of the Golden Gate Bridge pictured in the invite would certainly take some of the heat off …

Anyway, I’ll be live-blogging from inside Moscone West in San Francisco starting at 10 a.m. PDT. Here’s something to read while you wait …

• From Moscone West: This is crazy. They just opened a single door to let cameras in and the media rushed the gate. Its like that 1979 Who concert in Cincinnati.



• The hall in Moscone West is filling quickly to the sounds of Jerry Lee Lewis. From the looks of it media and developers are here in equal numbers.
• Jobs takes the stage. I’m sitting about 20 rows back, but even I can see he’s looking pretty thin from here. He gets right into it, pulls up a slide of a stool and describes Apple as a three-legged company. Macs, music and the iPhone.
• Jobs will spend the morning talking about the iPhone. This afternoon Apple will discuss OS X “Snow Leopard.”

Read more »

With its curvier edges, stylish silver trim, half-VGA 480-by-320 pixel screen and improved iTunes compatibility, Research in Motion’s (RIMM) new BlackBerry Bold should be a big hit with IT operations professionals convinced the iPhone isn’t an enterprise-class mobile device but driven to near-aneurysm by discontented employees demanding them.

The device is largely as expected–an iPhonish-looking thing with both GPS and Wi-Fi, 1GB of permanent flash memory, a 2-megapixel camera, full HTML browsing, 3G support on GSM networks with HSDPA access and, of course, the BlackBerry’s one-trick killer app: instant, secure email. That’s a compelling combination for business users and casual ones not easily swayed by the iPhone’s hype juggernaut as well. Indeed, Citigroup analyst Jim Suva says it could boost RIM’s quarterly shipments by 200,000 to 400,000.

But perhaps not without a bit of struggle. The BlackBerry Bold won’t ship until as late as August, which means Apple (AAPL) could beat it to market with the enterprise-friendly 3G iPhone it’s rumored to be uncrating at its Worldwide Developer’s Conference in June. Which has got to worry RIM. After all, the first-generation iPhone had claimed a 28% market share by the fourth quarter of 2007. That’s still less than the BlackBerry, which holds about a 41% market share, but the iPhone hasn’t even been on the market a year.

Canada’s long national nightmare has ended. The iPhone’s coming to the Great White North. Apple (AAPL) and Canadian wireless provider Rogers Communications (RCI) have finalized a deal that will soon bring the iPhone to the RIM BlackBerry’s backyard.

“We’re thrilled to announce that we have a deal with Apple to bring the iPhone to Canada later this year,” Rogers chief executive Ted Rogers said in a statement just full of details. “We can’t tell you any more about it right now, but stay tuned.”

Good news for Rogers, which had suggested prior to the iPhone’s launch it would offer the phone in Canada, but was later forced to admit it hadn’t yet inked a deal with Apple.

Good news, too, for Canadian cellphone users. Particularly if Apple was able to wring a substantial reduction in wireless plan charges from Rogers–which, like all Canadian carriers, is notorious for its exorbitantly priced data rates. In the U.S., AT&T’s (T) combined iPhone service and data plans start at $59.99 for 450 anytime minutes, 5,000 additional night and weekend minutes, and unlimited data. A comparable plan from Rogers Wireless runs about $295 per month. And while the company recently began offering an “Unlimited On-Device Mobile Browsing Plan,” it doesn’t apply to BlackBerries, Windows Mobile devices or other smart-phones.

What we saw today was the spark. The explosion will continue for 20 years. We will all feel the warmth. What we saw today was the beginning of two decades of mobile domination by Apple. What Microsoft and Windows was to the desktop, Apple and Touch will be to mobile.”

–Jason Fried, 37 Signals

Apple’s iPhone hasn’t supplanted RIM’s BlackBerry as the gold standard of mobile business tools, but give it another year or so and it just might.

At Apple’s town hall event this morning, CEO Steve Jobs revealed that the iPhone had claimed 28% market share by the 4th quarter of 2007. That’s still less than the BlackBerry, which holds 41% market share, but the iPhone hasn’t even been on the market a year. What’s more, the iPhone accounted for 71% of U.S. mobile browser usage.

Should RIM be worried? A reporter put that question to Apple CEO Steve Jobs this morning and here’s the answer he was given:

You should ask them … we’re not sending them a message, we’re sending customers and developers a message that we’re trying to serve their needs. Remember, the iPhone’s been out less than a year, this stuff will be shipping right around the one-year anniversary to every iPhone customer.”

Translation: Yes. Because without a push email advantage, what’s special about the BlackBerry? NOTHING.

We’re telling IT executives to not support it because Apple has no intentions of supporting (iPhone use in) the enterprise. This is basically a cellular iPod with some other capabilities and it’s important that it be recognized as such.”

–Gartner analyst Ken Dulaney, July 2, 2007

Today’s an important one for Apple (AAPL). The company is hosting a “town hall” meeting to discuss an iPhone software roadmap. Presumably, this event will see the release of more details about the eagerly anticipated iPhone SDK, but perhaps not the debut of the SDK itself. Certainly, that’s the impression given by the invitation to the event–”Please join us to learn about the iPhone software roadmap, including the iPhone SDK and some exciting new enterprise features.” Enterprise features? Ready to eat your words, Dulaney?

But whether the SDK is released to developers today or not, this event promises to be a watershed one. Because it heralds a vast new addressable software market for developers. After all, the iPhone and iPod touch run OS X, and presumably most future iPod models will as well. Which likely means that applications written for Mac in Xcode–Apple’s development toolset–will be deployable on any OS X device. They’ll be “write once, run anywhere”–anywhere there’s OS X, that is. And word on the street has it that we may see a few of them as early as today.

The event begins at 10 a.m. PT (1 p.m. ET). Updates to follow …

UPDATES:

• The event’s begun. You’ll find streaming video of the event here.
• The next iPhone software update will include support for Push Email, Push Calendar, Push Contacts, Global Address List, Cisco VPM, Certificates and WPA2/802.1x, Security Policies, Device Config, and Remote Wipe. Wow.
• Responding to customer demand for Microsoft Exchange on the iPhone, Apple has gone ahead and licensed ActiveSync for the device.
• Exchange will be native to the iPhone. Jobs must be muttering multiple “BOOMS” from backstage.
• Nike and Disney have been testing Exchange for iPhone and are pretty happy with it.
• Scott Forstall is now taking the stage to talk about the iPhone SDK. Apple giving developers the same tools and APIs it uses to develop iPhone apps.
• Apple took Cocoa and created Cocoa Touch, a new framework for building apps.
• The OS X kernel is the same for desktop and iPhone.
• Xcode has been expanded to support iPhone. It will code complete APIs for the iPhone SDK. (See? What’d I tell you: write once, run anywhere there’s OS X.)
• SDK includes Interface Builder and iPhone Simulator that allow developers to run their apps on their desktops. “It runs on a Mac and simulates the entire API stack on your computer,” Forstall says.
• Forstall builds a quick “Hello World” app, drops it on the iPhone and runs it. Quick and easy.
• “This is an app I just built in two minutes. But we wanted to see what we could build in two days. So we built Touch FX,” Forstall says. It’s an image editor that allows you to warp photos by pinching them.
• Forstall then demos Touch Fighter, a point-and-shoot game.
• Did I mention the SDK is available today? Good luck downloading it …
• Whoa. Travis Boatman from Electronic Arts takes the stage and demos an iPhone version of Spore. They’ve already ported 18 levels. (Hope SDK includes tool for building spare batteries.)
  

• Apple really pulling out all the stops on this one. Chuck Dietrich from Salesforce.com onstage now.
• Salesforce ported one of its automation tools to the iPhone, one that graphically displays how salespeople are performing against their goals.
• Next up: AOL. AIM for iPhone. Took five days to build.
• Larry Ellison takes the stage to announce Oracle Database 11g for iPhone.
• Kidding.
• Epocrates demo. Clinical reference app for doctors.
• Ethan Einhorn from Sega up next.
• Ha! Super MonkeyBall for iPhone. “This is not a cellphone game. This is a full console game. … We had to fly in a developer to upscale the art for the iPhone,” Einhorn says.
• Jobs back onstage. Announces the iTunes App Store. “You’re a developer who just spent two weeks or a bit longer writing an application. What’s your dream?” Jobs asks. “To get it in front of every iPhone user.”
• Apps can be downloaded wirelessly or sideloaded via iTunes. “This is the exclusive way to distribute iPhone applications,” Jobs says, adding: “We are controlling distribution.” (We will control the horizontal. We will control the vertical. You are about to participate in a great adventure. You are about to experience the awe and mystery which reaches from the inner mind to… The iTunes App Store.)
• Developers price their own apps and they get 70% of the revenues they generate. Apple takes 30% for running the App Store. ” … To be clear, we don’t intend to make money off the App Store. We’re basically giving all the money to the developers, and the 30% that pays for running the store, that’ll be great.”
• Apple plans to release an iPhone 2.0 software update in June that will include enterprise capabilities, App Store, etc.
• One more thing …
• Oh, look: It’s KPCB’s John Doerr. Must be here to demo i’MRich for iPhone.
• Doerr announces the iFund for iPhone developers.
• $100 million to start. Boom.BOOM. BOOM! “That should be enough to start about a dozen Amazons, or even four Googles! … If you want to invent the future, the iFund wants to help you build it,” Doerr says.
• END

(Spore photo courtesy Gizmodo)

Could this be the real reason for Research in Motion’s (RIM) widespread BlackBerry outage last week: the company’s engineers were so busy developing this virtual BlackBerry software that everyone’s chattering about today that they forgot they were supposed to keep an eye on the company’s wireless infrastructure? This morning RIM announced new software that will allow smart phones from rival handset makers to effectively emulate the entire look and feel of RIM’s popular BlackBerry wireless email device. It’s an interesting move for the company, which has for years been offering rivals only very limited access to its services via its BlackBerry Connect program. Looks like RIM has finally realized that if it wants to dominate the market for U.S. wireless email, it must expand its reach to more customers, including those who want the service but don’t want to switch devices. “We never created BlackBerry to lock in the devices,”

Posted at 7:21 AM PT