All Things Digital

Turns out Apple (AAPL) isn’t the only company whose smart phones are in short supply this spring. According to Morgan Keegan analyst Tavis McCourt, Research in Motion (RIMM) and Palm (PALM) are suffering shortages as well.

In a research note, McCourt says RIM’s BlackBerry Pearl is pretty tough to find these days–online and off. And Palm’s Treo 755p has disappeared from Sprint’s shelves entirely. Customers looking for one must either settle for the Palm Centro or wait until the company releases the next iteration of the Treo 755p or the Treo 800w.

As McCourt notes, shortages like these are bad news for RIM and awful news for the downtrodden Palm. “The abrupt disappearance of the Treo 755p at Sprint is somewhat concerning,” observes McCourt. “This product was selling reasonably well and, although we expect its contribution to be marginal following the 800w’s launch this summer, the 755p’s absence at Sprint clearly means Palm is foregoing some near-term sales opportunities.”

It’s worth noting here as well that Apple is still dealing with a pretty lean inventory of iPhones. McCourt says about half of the Apple stores he contacted had the device in stock. Said McCourt, “While we believe this is related to a product transition, current iPhone shortages are almost certainly causing some degree of missed sales opportunities.”

Microsoft isn’t always unrequited in love. This morning the software giant said it had agreed to acquire Danger Inc., maker of T-Mobile’s SideKick smart phone, for an undisclosed sum.

Why?

“It completes the picture for us in terms of making the transition from just being on the business side of things to being on the consumer side of things,” said Robbie Bach, Microsoft’s president of entertainment and devices.

Seems Microsoft really is serious about the consumer cellphone business after all. But what’s it going to do with Danger? Said Jupiter analyst Michael Gartenberg, “The SideKick had strong appeal as the anti-BlackBerry for younger audiences and it will be really interesting to see how MSFT integrates the technology, business model and overall device cachet to a culture more at home selling to enterprise CIOs than it is selling to rock stars.”

Could this be the beginning of a Zune-based cellphone ?

Palm’s employee head count is declining as quickly as its share of the world-wide smart-phone market. The company, which earlier this month warned it would miss quarterly estimates, has begun sacking employees–just in time for the holidays.

“Palm is working to sharpen its focus and better align resources behind core initiatives that will make the greatest impact to our business,” the handset manufacturer said in a statement. “To this end, and to ensure that our expenses are in line with projected revenues, we have made some reassignments and reductions in staff. This will better enable us to compete most effectively and ensure our long-term success.”

Palm hasn’t said how many employees are affected by this latest round of layoffs, but word on the street is that they could number in the hundreds–a significant reduction for a company that employs just 1,200 people or so.

I think it’s probably the most disappointing product I’ve seen in several years. To think that anyone would carry something with a 10-inch display at 2.5 pounds as an adjunct to a phone just doesn’t make any sense to me.”

–Gartner analyst Todd Kort

Maybe the Foleo wasn’t Palm founder Jeff Hawkins’s “best idea ever.” This afternoon Palm said it is scrapping the Clio-esque “mobile companion” that it launched with great fanfare in late May. “In the course of the past several months, it has become clear that the right path for Palm is to offer a single, consistent user experience around this new platform design and a single focus for our platform development efforts,” Palm CEO Ed Colligan wrote in a post to Palm’s blog. “To that end, and after careful deliberation, I have decided to cancel the Foleo mobile companion product in its current configuration and focus all of our energies on delivering our next-generation platform and the first smart phones that will bring this platform to market.”

An astonishing turn of events, really. The $499 device was scheduled to ship in summer 2007. And Palm was insisting it was on track to do so as recently as Aug. 24. Apparently, the company decided it was better off taking a $10 million charge to earnings for canceling the Foleo than launching it in a market that has questioned its viability since the day it was announced. “I think Palm was wise enough to pull back when all the signs were indicating negative,” analyst Kort told IDG. “If they would have poured a lot of resources into this and failed, it could have dragged the company down pretty quickly.”

So much for Microsoft CEO Steve Ballmer’s claim that “there’s no chance the iPhone is going to get any significant market share.” According to market-research outfit iSuppli, Apple’s iPhone outsold all smart phones in the United States during July, outpacing sales of Palm’s Treo and Research in Motion’s BlackBerry, not to mention handsets from Nokia, Motorola and Samsung.

In its research note published this morning, iSuppli said that the iPhone accounted for 1.8% of all mobile handset units sold during the month. Although this could reflect first-month demand for a product people had been waiting to buy since January, it’s nevertheless not bad for a new entrant in a very competitive market. And a remarkable achievement for one partnered up with AT&T. “While iSuppli has not collected historical information on this topic, it’s likely that the speed of the iPhone’s rise to competitive dominance in its segment is unprecedented in the history of the mobile-handset market,” iSuppli wrote. “While the speed of the iPhone’s ascent to the top of the smart-phone and feature-phone charts is remarkable, it’s equally amazing that Apple achieved this in the face of numerous, well-entrenched competitors.”

Seems Apple is well on its way to exceeding its goal of 10 million iPhones shipped during calendar year 2008–roughly 1% of global cellphone shipments.

Performance data always look best when viewed through the lens of a savvy marketing department–especially Apple’s marketing department, whose talents for branding new products are exceeded only by CEO Steve Jobs’s knack for stewarding their creation. Which is the case today with Apple’s announcement of significant upgrades to both the iPhone’s battery life and touch screen. The company said this morning that the iPhone will now feature a more durable optical-quality glass screen and a battery that supports up to eight hours of talk, seven hours of video playback and 24 hours of audio playback. That’s significantly better battery life than Apple claimed back in January when it first announced the device.

“With eight hours of talk time and 24 hours of audio playback, iPhone’s battery life is longer than any other ‘smart phone’ and even longer than most MP3 players,” Jobs (above, demonstrating the battery life of rival handsets in relation to the iPhone’s) said. “We’ve also upgraded iPhone’s entire top surface from plastic to optical-quality glass for superior scratch resistance and clarity. There has never been a phone like iPhone, and we can’t wait to get this truly magical product into the hands of customers starting just 11 days from today.”

Ah yes, better drop what you’re doing and get in line right now; the lines are going to be murder, right? Anyway … it’s worth noting that Apple’s latest iPhone battery claims are “dependent upon network configuration and many other factors” and that “actual results may vary.” And that’s something worth thinking about if you’re a heavy cell user planning to buy an iPhone. Said American Technology Research analyst Shaw Wu, “sources have indicated [the] iPhone’s active-use battery life may be closer to about four to five hours,” for heavy use, which is similar to that of other smart phones.