In an interview with Bloomberg, Marshall once again said he believes Apple (AAPL) will bring the iPhone to Verizon (VZ) in the second half of 2010 and forfeit AT&T’s (T) sweetheart carrier subsidy as a result. This is, of course, essentially what he said a month ago, although now we appear to have a firmer date.

“While [Apple] started off with exclusive arrangements in 2007 with the original iPhone launch, the company has since migrated towards multiple carriers per region,” Marshall wrote in an October note to investors. “In our view, diverse carrier support is a key element to driving global penetration of the iPhone. Therefore, we believe the chances are high the iPhone will find its way onto the [Verizon] network in 2H10.”

Odd to learn that Apple (AAPL) was considering such a move. After all, advertising isn’t exactly one of its core businesses, though it might have become one had it managed to buy AdMob, which is one of the largest sellers of advertisements on the iPhone.

“If a lot of traffic goes through my devices, why can’t I become the middleman that serves ads against that inventory?” said IDC analyst Karsten Weide. “AdMob would have allowed them to do that quickly.”

Indeed. If that’s what Apple wanted. And perhaps the company is interested in expanding into online advertising, as this “Advertising in Operating System” patent seems to suggest.

That said, it’s equally conceivable that Apple met with AdMob hoping to temper Google’s (GOOG) fast-expanding footprint in the mobile space and on the iPhone. With the acquisition of AdMob, the search sovereign is now the Internet’s largest mobile advertising company, with a dominant presence on the iPhone and any handset running its Android OS. Perhaps Apple’s intent was simply to make this a more costly endeavor for Google. But perhaps it was something more.

Indeed, Broadpoint AmTech analyst Mark McKechnie estimates Verizon (VZ) sold about 100,000 Droids in its first weekend. McKechnie believes the carrier had about 200,000 units on-hand at launch, and most stores he surveyed had sold at least half of their stock over the weekend.

That’s not nearly the one million iPhones Apple (AAPL) sold during the first weekend of its latest model debut, but it’s impressive nonetheless. Certainly, Motorola (MOT) hasn’t moved that many handsets in so short a period in a very long time–if ever.

“I see the first few days as encouraging,” McKechnie told Bloomberg. “There seems to be pretty good demand–they’ve taken the right steps and picked a good partner with Google on the Android side.”

Citigroup (C) analyst Jim Suva agreed, noting that Droid doesn’t require iPhone-like sales to be successful. Said Suva: “Although the press is stating the Droid launch was not as successful as the iPhone launch, we don’t believe investors expected an iPhone-like launch, but rather a first step in a cadence of products that will help bring Motorola’s handsets out of the death spiral experienced during the past three years.”

Then there was this from RBC’s Mark Sue, who declared that anyone expecting a launch reminiscent of the iPhone’s was expecting too much: “Motorola’s Droid landed at Verizon and while the new device is not the be all and end all for Motorola it’s an important beginning for a company that sorely missed out of a growing market,” he wrote. “There were no around-the-block lines of consumers waiting to get their hands on a Motorola Droid, yet investors shouldn’t expect them either. We’re looking for a steady ramp instead towards our estimate of approximately 1M units in 4Q09.”

Sources tell Bloomberg that Cisco (CSCO) has little intention of meeting the demands of a group of investors who would like it to reach a bit deeper into its wallet before they hand over their 24 percent stake in Tandberg, the world’s second largest manufacturer of videoconferencing kit. Cisco would rather walk away than sweeten a bid that represents a 38.3 percent premium on Tandberg’s closing share price on the day before news of a possible acquisition broke.

Or that’s what Cisco wants them to think, anyway. Because scrapping what is a pretty strategic deal for the company would be silly at this point given Cisco’s huge cash reserves. Rumors that it would “strongly consider walking away” from Tandberg are likely more gamesmanship than anything else.

“I think it’s quite unlikely that they’ll drop their offer, everything points to them buying Tandberg,” Arctic Securities analyst Martin Hoff told Bloomberg. “It’s probably smart of them to send some signals to scare the shareholders into accepting the offer.”

A: Kroes isn’t losing $100 million a month on Sun Microsystems.

Much as Ellison would like to blame the European Commission for yesterday’s bloodletting at Sun, responsibility lies squarely with Oracle (ORCL). For while Ellison complains that every month the $7.4 billion acquisition is delayed amounts to a $100 million loss for Sun (JAVA), he has not yet given the EC good reason to approve it–at least according Competition Commissioner Neelie Kroes, who’s disappointed with Oracle’s cooperation in the commission’s antitrust probe so far.

Kroes said as much in a recent meeting with Oracle president Safra Catz, according to Jonathan Todd, the commission’s spokesman for competition.

“Kroes expressed her disappointment that Oracle failed to produce, despite repeated requests, either hard evidence that there were no competition problems or a proposal for a remedy to the competition concerns identified by the commission,” Todd told Bloomberg. “Kroes reiterated to Catz the commission’s willingness to move quickly towards a decision but underlined that a rapid solution lies in Oracle’s hands. Either they have to give us the information to prove that our competition concerns are not well founded or offer remedies to satisfy our concerns.”

So if Oracle is looking for a quick solution to the case, it best provide one–otherwise, it’s looking at $100 million a month in losses at Sun.

“You will see us be reasonably active,” he said. “We have a talented team of people that includes people who have been at Dell a long time and understand the Dell culture in the transactions that we’ve done and know why those have succeeded or not. We are rapidly developing that, and we’ve added some talent to help us do that.”

And what sectors is Dell (DELL) most interested in? Health-care information technology, as the Perot acquisition clearly suggests. “When you look at the health-care space, it’s the one sector of the economy that has the least amount of IT, and we see it as very promising for growth,” Dell said. “There’s usually more technology at the grocery store than there is at your doctor’s office.”

People familiar with the matter tell The Wall Street Journal and Bloomberg that Brocade (BRCD) is seeking a buyer and that both Hewlett-Packard (HPQ) and Oracle (ORCL) are among its potential suitors. No deal is imminent, but rumor that one might be coming was enough to spike Brocade’s shares some 15 percent.

It’s easy to see why Oracle and HP–and IBM (IBM) as well–might be interested in Brocade. The company’s portfolio of data-networking products and services would do much to help HP take on Cisco (CSCO). It would also give Oracle its own line of networking gear, fulfilling CEO Larry Ellison’s dream of offering customers complete systems as T.J. Watson’s IBM once did.

That said, there are issues with both scenarios. As Oppenheimer & Co. analyst Ittai Kidron explained in a research note this morning, an acquisition by Oracle would require the company to really commit to hardware as a long-term growth plan. “If the company truly plans to become a systems company (one-stop shop software/hardware), then Brocade would be a nice fit, especially including Sun Microsystems with no overlap,” Kidron said, adding, “we’re a bit in the dark on strategy here.”

And what of HP? That’s potentially far more problematic, what with equipment overlap and revenue implications. “Brocade would add the missing data center switch architecture as well as a strong presence in the SAN switch market,” Kidron explained. “That said, there would be massive overlap with HP’s ProCurve networking unit, which we believe would be disruptive. Also, IBM and EMC are 10% customers for Brocade and could be lost as customers (along with HP’s 10% business of Brocade).”

So will Brocade be tech’s next big buyout?

Cisco (CSCO) will pay nearly $3 billion in cash for the Norwegian videoconference company, which it hopes will bolster its position in videoconferencing. The offer values Tandberg at 11 percent more than its closing price in Oslo trading yesterday and at about 23 times 2010 earnings. But the company’s lower-end TelePresence systems and specialized software for managing teleconferences will do much to help Cisco dominate the $34 billion collaboration market.

It’s worth noting that earlier this year, Gartner (IT) forecast that video telepresence could replace 2.1 million business travel flights a year by 2012, diverting $3.5 billion annually from the airline industry.

“This fits very well with Cisco,” Robeco NV’s Michiel Plakman told Bloomberg. “They will immediately become the most important player in the market and aren’t paying a ridiculous premium, so this is positive.”

Cisco’s tender offer has the recommendation of the Tandberg board and is expected to close in the first half of next year.

In August 2007, just after former Apple exec Jon Rubinstein joined Palm, Apple CEO Steve Jobs warned Palm CEO Ed Colligan against poaching his company’s employees. “We must do whatever we can to stop this,” he said, according to communications reviewed by Bloomberg. Colligan declined. “Your proposal that we agree that neither company will hire the other’s employees, regardless of the individual’s desires, is not only wrong, it is likely illegal,” he told the Apple CEO, noting–ironically–that Cupertino had hired away some two percent of Palm’s workforce as it began developing the iPhone.

And that’s proven a wise move. Today, the U.S. Department of Justice is investigating just such gentleman’s agreements as a collusive restraint on trade. And Palm (PALM) and Apple (AAPL) are sparring over intellectual property and the Pre handset, which Apple claims “falsely pretends to be an iPod.” How convenient for Palm that these communications should emerge now when its Cupertino rival is giving it such a hard time. And such a distraction for Apple legal….

Of course, Jobs was right to worry. Within a year of his warning to Colligan, Palm hired away Mike Bell and Lynn Fox, Apple VP of CPU software in the Macintosh hardware division and head of Mac PR respectively, among others hired later. And within two years, Palm debuted a new handset that some consider a worthy rival to the Apple iPhone.

That’s the word from agency Chairman Julius Genachowski, who says he’s concerned not just with the competitive ramifications of carrier-exclusivity deals, but with their tendency to limit customer access to top smartphones. “There are markets in the country where if you wanted an iPhone, if you wanted a Pre, you just couldn’t get it–from anyone,” Genachowski told Bloomberg. “So one question is, is that consistent with broad consumer interests?”

Vermont residents and those living in the rural areas of other states who can’t use the iPhone because AT&T (T) offers only roaming coverage there would likely say the answer to that question is no. But AT&T, Verizon (VZ) and other Tier 1 wireless carriers disagree. They claim exclusive handset deals are beneficial.

“The popularity of the iPhone and its innovative features and applications…has provoked an unprecedented competitive reaction,” James Cicconi, AT&T’s senior vice president of external and legislative affairs, wrote in a letter to the Senate Judiciary antitrust subcommittee. “Exclusive handsets have provided U.S. consumers the most advanced devices in the world at distinctly affordable rates. By allowing a carrier and a manufacturer to share the enormous risks and costs of bringing an inventive but unproven new device to market, exclusive arrangements both quicken the pace of technological advancement and incentivize the carrier to offer even greater handset subsidies to its customers.”

Verizon argued that point as well in a recent letter to Congress’s Telecommunications Subcommittee. “Exclusivity arrangements promote competition and innovation in device development and design,” the company said. “We work closely with our vendors to develop new and exciting devices that will attract customers. When we procure exclusive handsets from our vendors we typically buy hundreds of thousands or even millions of each device. Otherwise manufacturers may be reluctant to make the investments of time, money and production capacity to support a particular device.”

In some cases, perhaps. Though I doubt Apple (AAPL) and Research in Motion (RIMM), maker of the BlackBerry, feel that way these days. If there’s reluctance anywhere, it’s reluctance on the part of carriers like AT&T, which can’t bear the thought of losing its exclusive on the iPhone, without which it will face defections and slowing growth.

People familiar with the matter tell Bloomberg that Apple’s handling of the matter remains under scrutiny and that company directors Art Levinson and Bill Campbell had been briefed by Jobs’s doctors on his medical condition at the time of the January disclosures, but little else.

Now, the path from “Steve is suffering from a common bug” to “a hormone imbalance has been robbing Steve of the proteins his body needs to be healthy” to “Steve has undergone a liver transplant” is obviously something of an eyebrow-raiser. But whether it was material to Apple’s business and therefore required disclosure isn’t clear. After all, Apple (AAPL) did just fine while Jobs was on sabbatical; the debut of new Macs, iPods and iPhones is testament to that. Beyond that, there’s this: Apple’s stock posted a 59 percent gain while he was away.

“The issue is not going to be whether they needed to disclose the medical records,” James Cox, a securities law professor at Duke University, told Bloomberg. “It’s going to be whether they monitored the disclosures about his health, in relation to investor expectations that Apple would continue to be led by Steven Jobs….[Apple] did fine. Do you need to say more than, ‘Our CEO has health problems and he’s out on leave?’ The question I think the SEC is looking at is whether it’s material.”

Well, the ambushes to which Smith referred appear to have finally paid off: Intel (INTC) has landed a deal to develop chips with Nokia (NOK).

During a conference call this morning, Intel senior mobility VP Anand Chandrasekher announced a deal that will see the two companies developing something they ambiguously describe as a “new mobile platform beyond today’s smartphones, notebooks and netbooks.” Under its terms, they will work together on several open-source mobile Linux software projects and Intel will license Nokia’s high speed packet access technology.

“This Intel and Nokia collaboration unites and focuses many of the brightest computing and communications minds in the world, and will ultimately deliver open and standards-based technologies, which history shows drive rapid innovation, adoption and consumer choice,” Chandrasekher said in a statement. “With the convergence of the Internet and mobility as the team’s only barrier, I can only imagine the innovation that will come out of our unique relationship with Nokia. The possibilities are endless.”

The deal is a big win for Intel, whose last dalliance with the cellphone market ended in ignominy. The computing landscape is shifting from PCs to mobile devices and Intel must shift along with it in order to grow its business. And right now, 90 percent of its sales are PC-related. With the global market for cellphones at 1.2 billion units per year and growing, according to ABI Research, the chipmaker must figure out a way to dominate cellphones the way it has PCs. Allying with Nokia is one way of achieving that. But when will we see the first Intel-powered Nokia device? Intel and Nokia won’t say. “This is about technology collaboration and a licensing agreement,” Chandrasekher said in reply to repeated questions on the matter. “We are not commenting on specific products today, I’ll leave it at that. When we are ready to talk about products, we will.”

Incidentally, Nokia CEO Olli-Pekka Kallasvuo was a speaker at our D7 conference. A video highlights reel of his appearance, below.

]]> http://digitaldaily.allthingsd.com/20090623/intel-inside-nokia/feed/ 0 http://digitaldaily.allthingsd.com/20090618/iphone-3g-s-sales-forecast-half-a-million-sold-this-weekend/ http://digitaldaily.allthingsd.com/20090618/iphone-3g-s-sales-forecast-half-a-million-sold-this-weekend/#comments Thu, 18 Jun 2009 16:51:57 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=19808 How many iPhone 3G S handsets will Apple sell this weekend? The answer: 500,000, according to Piper Jaffray’s Gene Munster, who says early sales will be slower than those of the 3G thanks to a dramatic change in value proposition and a launch limited to eight countries.

“In 2008, Apple introduced the iPhone 3G at $199, a 50 percent reduction from the previous model, which drove demand up significantly,” Munster said in a research note today. “Most customers will be able to purchase the new iPhone 3G S for $199 (the same price as the previous model). As such, the change in value proposition for the iPhone 3G S is not as meaningful as it was for the iPhone 3G, leading to less of a surge in units at launch. Moreover, the iPhone 3G was available in 21 countries at launch vs. the iPhone 3G S which will sell into 8 countries at launch (then over 70 more throughout the summer). These factors lead us to expect about half as many iPhone 3G S units at launch (500k) as Apple sold in the first weekend of iPhone 3G availability in 2008 (1m).”

So expect a big launch weekend for Apple, just not as big as as the one for the iPhone 3G. That said, 500,000 is a lot of iPhones–roughly five times the 100,000 Pres that Palm (PALM) was reportedly able to move in that device’s first week at market. Interestingly, Apple (AAPL) stopped taking U.S. preorders for the new iPhone 3G S for pickup at its stores tomorrow. The company told Bloomberg that it stopped accepting reservations “to make sure we have the new iPhone in stock at every Apple retail store.”

]]> http://digitaldaily.allthingsd.com/20090618/iphone-3g-s-sales-forecast-half-a-million-sold-this-weekend/feed/ 0 http://digitaldaily.allthingsd.com/20090407/investors-to-sun-weve-got-another-place-for-you-to-put-the-dot-you-put-in-dot-com/ http://digitaldaily.allthingsd.com/20090407/investors-to-sun-weve-got-another-place-for-you-to-put-the-dot-you-put-in-dot-com/#comments Tue, 07 Apr 2009 17:28:19 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=16222 The market today continues to have its say on Sun’s rejection of IBM’s acquisition offer. The consensus: IBM threw Sun a rope and the company used it to make a noose. Shares of Sun–which fell nearly 27 percent Monday following the collapse this weekend of merger talks with IBM–are slipping again today on fears that the company has bollixed up what may have been its only chance at salvation.

And that may well be the case. IBM (IBM) was reportedly offering $9.40 a share for Sun (JAVA), nearly double Sun’s share price before investors caught wind of talks between the two companies. Seems a good price for Sun given its current situation. Certainly, there are no other offers on the horizon. Nor are there likely to be. “Others have already passed over Sun–given that, we’re unsure who would step up to the plate,” Edward Jones analyst Bill Kreher told Bloomberg. “We are unsure if the company can execute a successful turnaround on its own. Their future is very uncertain.” Toni Sacconaghi, an analyst with Sanford C. Bernstein, agreed. “A collapse in the talks has considerably weakened Sun’s hand, as we see no other likely suitors,” he said in a research note.

If that’s the case and discussions with IBM are truly finished–and there’s a chance that they might not be–Sun could be left facing some unpleasant options. “Sun will have to take alternatives by either splitting up or downsizing,” said George Weiss, a Sun analyst at Gartner. “Sun still has several options, since there are parts of the company that could bring value to one or several companies on the market. But those companies probably won’t want to acquire Sun as an entire entity.”

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