No wonder it was a blowout quarter.

After market close Monday, Apple reported a fiscal fourth-quarter profit of $1.67 billion, or $1.82 a share, on revenue of $9.87 billion. That topped the estimates of analysts surveyed by Thomson Reuters, who’d expected the company to earn $1.42 a share on revenue of $9.2 billion.

The company sold 3.05 million Macs during the quarter, a 17 percent increase over last year. It sold 10.2 million iPods, an eight percent decline from the year-ago quarter.

And iPhones? Apple (AAPL) sold 7.4 million of those–seven percent more than during the same period last year. So much for those supply-chain issues that some analysts warned might undermine iPhone sales.

“We are thrilled to have sold more Macs and iPhones than in any previous quarter,” said CEO Jobs. “We’ve got a very strong lineup for the holiday season and some really great new products in the pipeline for 2010.” [Editor's Note: "...really great new products"--is that code for a tablet?]

Apple shares, which closed at $189.86 today, are spiking as I write this. At $203.90, they’re up more than seven percent in extended trading.

Looking ahead to its fiscal first quarter, Apple estimates it will earn between $1.70 and $1.78 a share on revenue in a range of $11.3 billion to $11.6 billion. That’s comically lower than the $1.91 a share on $11.45 billion in sales that analysts are forecasting. But as today’s results clearly demonstrate, Apple subscribes to the underpromise-and-over-deliver school of guidance theory, so there’s likely little cause for concern.

So, to recap: Apple sold more Macs and more iPhones than in any previous quarter in the company’s history. Before the holiday quarter. And in midst of the worst economy we’ve seen in 50 years.

Notes From the Earnings Call:

• Apple COO Tim Cook and CFO Peter Oppenheimer are handling the earnings call. CEO Steve Jobs will not be attending.
• Oppenheimer says this was Apple’s second-highest quarterly revenue ever. Highest-ever operating margin. “We are thrilled with these record-breaking results, particularly given the economic environment around us.” Obviously.
• Macs are showing “fantastic momentum,” says Oppenheimer. Sales have outpaced the market in 19 of the past 20 quarters. Quarterly sales were up 17 percent; portable sales, 35 percent. Interesting: 42 percent growth in Asia.
• Moving on to iPods: Sales were down to 10.2 million from 11 million a year ago. But iPod touch sales doubled. MP3 market share in the U.S. is now more than 70 percent (according to NPD, I think).
• iPhone sales were up seven percent. Apple will begin selling iPhones in China later this month. More than 85,000 apps in App Store. Two billion downloads.
• Apple opened 15 new stores during the quarter. Now has 273. Will soon open first two stores in France, including one at the Louvre.
• Moving on to the Q&A. Asked about those iPhone 3GS supply issues I mentioned earlier, Cook acknowledges that demand did outstrip supply in a number of countries. But the situation improved “markedly” in September. How are things looking for China? Cook: “I would have liked to have had more, honestly, because we were still short in some countries at the end of the quarter.”
• Apple is obviously very excited about the iPhone’s impending debut in China. “There’s a good opportunity, and we’re really excited to get started,” says Cook. “It’s the largest market in the world in terms of total phones.”
• No comment on the broader economy. “We just spend our time projecting our business and leave the economy to the economists.”
• Does Apple worry about iPhone rivals? Android? Not really, says Cook. “We feel very good about suiting up and competing against anyone.” Our competitors are still trying to catch up with the first iPhone, he adds.
• Snow Leopard? Cook says the company’s been “pleasantly surprised” by sales of Apple’s latest OS.
• How does Apple benefit from carrier-exclusivity iPhone deals? Cook says carriers with exclusivity deals are willing to invest more in the platform and that means greater innovation. Visual voicemail is an example of that. That said, he adds, “We’ve found no lack of people wanting to sell iPhones, frankly.”
• International store revenue up more than 20 percent, on average.
• More on iPhone supply issues. Cook insists this is not a component issue, though he notes that silicon can sometimes be hard to get. “We feel good about our position now.”
• And still more on iPhone supply issues: How many iPhones would Apple have sold if it had an adequate supply? Impossible to say, really, Cook says, adding that 3GS units were in short supply virtually everywhere in September.
• Enterprise demand for the iPhone is very strong. It’s either being deployed or already in use at some 50 percent of Fortune 100 companies. Same with Europe and the FT 100. Widely used in higher ed and government as well.
• But perhaps not widely enough. Asked about institutional sales, Cook says Apple isn’t seeing much stimulus funding. The company’s worried about state spending. Says Cook, “We may see more this quarter, but it’s too early to tell.”

Well, no longer. Because Apple (AAPL) is planning to refresh its iMac desktop computer in the next few weeks, and when it does, it may well offer a Blue-ray drive option.

Sources tell AppleInsider that the new all-in-one, dual-core desktops, which are also said to feature a new, slimmer enclosure, were finalized earlier this month and are already rolling off the assembly lines of Apple’s manufacturing partners.

“The late 2009 iMac line should also debut several features previously unavailable to Mac buyers,” the publication notes. “People familiar with Apple’s thinking have suggested in recent months one of these moves could see the company finally embrace Blu-ray.”

One last point worth noting here: According to the MacRumors Buyer’s Guide, the iMac is due for a refresh. Apple has updated it every 220 days on average since it debuted the machine in 2003. As of today, it has been 204 days since the last update. MacRumors’s recommendation: “Buy only if you need it–Approaching the end of a cycle.”

Sewell joined Intel (INTC) in 1995 as a senior attorney and was named general counsel in 2004. In that capacity, he managed Intel’s antitrust battles in Japan, Korea, the United States and now, the European Union as well. At Apple (AAPL), he succeeds Daniel Cooperman, who will retire at month’s end.

“We are thrilled to have Bruce join our executive team, and wish Dan a very happy retirement,” Apple CEO Steve Jobs said in a statement. “With Bruce’s extensive experience in litigation, securities and intellectual property, we expect this to be a seamless transition.”

It would seem, then, that Sewell’s decision to leave Intel for Apple is more train-hopping than anything else. And while it certainly comes at a lousy time for Intel, it’s not likely indicative of some upset within the company’s legal department.

As Insight 64 analyst Nathan Brookwood told me this morning, “Some personnel changes result from the circumstances of the individuals involved, rather than high level machinations within the organizations to which they belong. Cooperman’s retirement created the opening at Apple, a position Sewell is well qualified to fill. My bottom line: Bruce’s move has more to do with Apple’s need for a top notch lawyer than with Intel’s current legal situation.”

The official announcement, below.

Bruce Sewell to Join Apple as General Counsel & SVP

Daniel Cooperman to Retire

CUPERTINO, Calif., Sept. 15 /PRNewswire-FirstCall/ — Apple today announced that Bruce Sewell, formerly senior vice president and general counsel of Intel Corporation (INTC), will join Apple as the company’s General Counsel and senior vice president, Legal and Government Affairs, reporting to Apple CEO Steve Jobs. Daniel Cooperman, who has served in these roles at Apple for the past two years, will be retiring at the end of September.

“We are thrilled to have Bruce join our executive team, and wish Dan a very happy retirement,” said Steve Jobs, Apple’s CEO. “With Bruce’s extensive experience in litigation, securities and intellectual property, we expect this to be a seamless transition.”

At Intel, Sewell has been responsible for leading all of Intel’s legal, corporate affairs and corporate social responsibility programs, managing attorneys and policy professionals located in over 30 countries around the world. He joined Intel in 1995 as a senior attorney assigned to counsel various business groups in areas such as antitrust compliance, licensing and intellectual property. In 2001, Sewell was promoted to vice president and deputy general counsel, managing Intel’s litigation portfolio, and handled corporate transactions including M&A activities.

Prior to joining Intel, he was a partner in the litigation firm of Brown and Bain PC. Sewell was admitted to the California Bar in 1986 and to the Washington D.C. Bar in 1987. He received his J.D. from George Washington University in 1986, and a Bachelor of Science degree from the University of Lancaster, in the United Kingdom, in 1979.

BoomTown was abuzz with Pixis, Plums and power this week as Kara focused on tech that wasn’t Apple, and reminded us that lady geeks hold the power in Silicon Valley.

While Apple was gathering clouds for its Rock and Roll storm, Palm (PALM) released the teeny Pixi, designed, Palm hopes, to steal some of that Apple (AAPL) thunder. The Pixi smart phone, while smaller and thinner, reported Kara, has fewer features and less power than the already available Pre.

Small can be good in the world of tech, and BoomTown reported that a certain Nordic tech behemoth thinks so too. Nokia (NOK) announced that it had acquired “microsocial networking” start-up Plum, whose signature offering allows users to build smaller, more intimate electronic social networks.

Kara did it “like a boss” this week and highlighted the tech sector mavens from Fortune magazine’s annual list of most powerful women. Ursula Burns of Xerox (XRX), IBM-er (IBM) Ginni Rometty and Oracle (ORCL) President Safra Catz were among those at the top. BoomTown will be at the upcoming conference associated with the Fortune list, so look for Kara’s Flip video interviews with these Titanias of tech.

It was nice of Apple to release new iPods just in time for John’s birthday this week, and Digital Daily returned the favor with high-bandwidth, hard-rockin’ coverage of Apple’s music-themed event, complete with live photos and blogging. John liked the video feature of the new iPod nano, but focused on the biggest news of the week–Apple’s upgraded CEO.

Digital Daily’s Apple coverage didn’t stop at The Steve. Ever since announcement of the exclusive Apple-AT&T (T) partnership, current and would-be iPhone freaks have speculated as to what kind of deal will be struck when that contract expires. John reported that iSuppli prognosticators think the agreement may be extended when it runs out in 2010.

John closed out the week with Twitter leaks about the newest incarnation of Microsoft’s (MSFT) Google-toppler (GOOG), Bing. Microsoft showcased Bing 2.0 at the annual company meeting, which some employees took as a green light to tweet away about the unreleased product. Microsoft HQ was more tight-lipped, telling John only that the rollout would happen over the next few months.

MediaMemo followed the money this week–specifically advertising dollars. A year after the Lehman collapse, Peter cited a MediaPost survey that showed some growth in ad spending. In a down market, Peter reminded, sometimes the only place to go, is up. Let’s hope so.

Not to be left out of Apple’s party, MediaMemo covered the release of an iPhone app from RealNetworks (RNWK) that brings all-you-can-eat music for a monthly fee. Wall Street barely blinked at the deal, but changes may come if the service catches on as competitor Spotify has in Europe.

And while the NFL won’t let players tweet from the end zone, it is upping its tech quotient by bringing blacked-out games to your Internet browser. MediaMemo reported that the lower-attendance games would be available to tech-savvy sports nuts–after midnight on game day. Get out the Fritos and espresso, guys, its game time.

True to form as the Lincoln of our very own Mt. Techmore, Walt’s address this week was aimed at helping the wayward get back on track with a bevy of new iPhone navigation apps. This new breed of high dollar apps harnesses the power of the iPhone 3GS to replace those ever present dash top GPS navigation units.

Walt extended his techno-presidential benevolence with another installment of Mossberg’s Mailbox. Networked storage, Quicken for Mac and the ominously impending switch to Windows 7 were all up for discussion.

At the Mossberg Solution, Katie tested Postbox, software designed to bring novel management solutions to your inbox. Developed by some of the guys from Mozilla, Postbox does offer lots of great features, Katie said, even if the switch to the new tools might not be easy for all.

Lots more shiny new tech talk next week. Stay tuned.

In fact, it could be argued that public confirmation of Jobs’s health since his return to the company was truly the most significant announcement of the day. As Morgan Keegan analyst Tavis McCourt quipped in a research note issued after the event, “Aside from a lack of a camera on the iPod Touch, everything announced was generally in line with expectations, although it all tends to sound much more revolutionary when Steve Jobs is spinning the story. It was clearly a positive to see him back on stage.”

Piper Jaffray analyst Gene Munster felt similarly: “There was some debate over whether Steve Jobs would deliver the presentation at [the] event,” he said in a note to clients. “He did, and we see this as a sign that he has returned to work at near-full capacity following his health-related leave of absence. We continue to believe he is the primary spokesman and active leader of Apple.”

Munster went on to note that the event was otherwise a bit of a disappointment. Certainly, the lack of a new iPod touch with a built-in video camera, which was viewed by many as almost a sure thing, was a bit of a letdown.

“We were expecting a new iPod touch model with a video camera, which Apple did not announce,” Munster said. “The lack of a camera may be due to last-minute quality issues, or it may also be a strategic decision to differentiate the nano from the touch, and the touch from the iPhone. Ultimately we see the lack of a camera in the touch as a move to push users toward the iPhone and drive purchases of multiple devices per customer by segmenting the product lines.”

Or to position the iPod touch as a truly competitive portable gaming device. Certainly, that’s what appeared to be going on yesterday as Apple (AAPL) brought out Ubisoft, Tapulous, Gameloft, and Electronic Arts (ERTS) in quick succession to demo their upcoming new games. And then, there were the data points. Consider these:

• 20 million iPod touches sold to date
• Over 100 million iTunes accounts
• Over 1.8 billion apps downloaded to date. Impressive given that Apple passed one billion apps downloaded just last April
• Over 75,000 apps available
• 21,000 of those 75,000 are games and entertainment apps

So nearly one third of all iPhone OS apps sold to date are games and entertainment apps. Clearly, Jobs was on to something when he told The Wall Street Journal in November 2008, “I think the iPhone and iPod touch may emerge as really viable devices in the mobile games market.”

Apple has sold some 225 million iPods to date, making it one of the most popular electronic devices ever. And it’s sure to sell even more after the updates the company announced at this morning’s event. Among them: Larger, cheaper iPod touches and nanos with cameras and FM radios.

Following introductory remarks by Apple (AAPL) CEO Steve Jobs, Phil Schiller offers details, noting that “the iPod has 73.8 percent market share. The next biggest category is ‘other,’ and after that, SanDisk and then Microsoft pulling up the rear.”

Schiller adds that Apple has sold 20 million iPod touches since the device debuted. He runs through a lengthy sales pitch for the iPod touch, touting it as a killer pocket computer and taking potshots at rivals like Dell (DELL) along the way.

Moving on to games, Schiller notes the discrepancy between the number of games on gaming platforms like the Nintendo DS and the iPod touch. The iPhone OS, he notes, has 21,178 games. The DS has just 3,680. Point taken.

Moving on to some new game demos now. First up: Ubisoft with Assassin’s Creed 2, which, we are told, is “all about visceral combat, brutal hand-to-hand combat and one-shot kills.” Behind the presenter, a warrior is mercilessly beaten into submission.

Schiller returns to the stage, “Boy, that looks like fun.”

Tapulous, the developer of Tap Tap Revenge, and Gameloft, follow, both introducing new games. Gameloft’s Nova–a first-person shooter with multiplayer option–seems a far more compelling effort than Tapulous’s Riddim Ribbon, which appears to be a Black Eyed Peas-heavy variation of Tap-Tap.

Up next, Electronic Arts, which is apparently headlining the games section of today’s event. EA’s Travis Boatman takes the stage to introduce Madden NFL 10. The game boasts both custom-kick and draw-a-play-on-screen features developed specifically for the iPhone OS. Madden NFL 10 is available today.

Schiller again returns to the stage. “The iPod touch is the most affordable gateway to the App Store,” he says, adding that $199 is a “magic price point” in the iPod market.

With that, he announces the iPod touch price cuts we heard about earlier this morning: An 8GB model for $199, 32GB for $299, and 64GB for $399. All three devices are significantly faster, says Schiller. Interestingly, none seem to feature that rumored camera.

Price drops as well for the nano, but we knew about these. Apple has dropped the price of the iPod shuffle as well: $59 and $79. And the company is offering them in a new selection of colors. Plus, there’s a special edition of the shuffle crafted from stainless steel.

Steve Jobs returns to the stage. So those are the iPods, but there is one more thing: A video camera. He talks about the exploding video market, mentions the Flip, etc. “We want to get in on this market as well and we’re doing it for free….Boy, this really is the new Apple,” he quips.

Yes, the iPod nano does indeed now feature a video camera. The video quality looks impressive. Whoa: Apple has also added FM radio, a voice recorder and a pedometer to the nano. New polished anodized aluminum colors. 8GB model for $149, 16GB model for $179.

After a few concluding remarks about the new iPod lineup, Jobs announces what has become an annual tradition at these events: A live performance. Today’s artist: Norah Jones.

The end of her set concludes today’s event. No iPlatform. No Beatles on iTunes. But lots of product refreshes, software intros, and price cuts. Plus: Steve Jobs is definitely back.

Live from Apple’s “Let’s Rock” Event

• iPod Updates, Games, Nano Video Cameras
• iTunes 9, iTunes LP, Home Sharing, Genius Mixes
• Steve Jobs: “I’m Vertical, Back at Apple and Loving Every Day of It”
• Event Photos by Adam Tow

Speaking at Apple’s music event, CEO Steve Jobs, in his first public appearance since his medical leave of absence, introduces iTunes 9. After noting that iTunes is the largest music store in the world, boasting some 100 million accounts, Jobs rattles off some of the software’s new features. Among them: Genius Mixes and improved synching. The latter enables more specific synching and supports a new way of managing applications for the iPhone and iPod touch with a nice drag-and-drop feature. Very easy to organize and reorganize applications. The crowd really likes this one.

Also included in this update: Home Sharing, which allows songs, movies and TV shows to be shared and copied to up to five home computers. Another very slick feature that allows users to simply drag and drop songs between computers to copy them.

iTunes 9 also features a new store with redesigned music, movie, TV pages and a handy new navigation bar. Beyond this, there’s also support for Twitter and Facebook.

“You know, some of us here are old enough that we actually bought LPs,” says Jobs. “You used to get liner notes, essays and photos, but that stuff left us when we moved to digital music.”

With that, Jobs announces iTunes LP–the official name of the company’s rumored “Cocktail” album bundle. As expected, these iTunes LP bundles will feature additional art, photos and whatnot. Apple is working directly with artists and labels to develop them.

A Doors “LP” is offered up as an example and it includes some videos exclusively recorded for iTunes–Ray Manzarek talking about how Jim Morrison named the Doors (“Not a door-door, man. Like the door in your MIND.”). Surprisingly nice little video, actually. Certainly, it’s likely to appeal to die-hard fans.

Apple (AAPL) is doing something similar with movies–iTunes extras. Movies bundled with additional photos, etc.

Live from Apple’s “Let’s Rock” Event

• iPod Updates, Games, Nano Video Cameras
• iTunes 9, iTunes LP, Home Sharing, Genius Mixes
• Steve Jobs: “I’m Vertical, Back at Apple and Loving Every Day of It”
• Event Photos by Adam Tow

Leave it to Steve Jobs to upstage his own products.

Rumored by some analysts to be a nonevent, Apple’s invitation-only music gathering today is already proving quite eventful. Audience members expecting Apple (AAPL) exec Phil Schiller to quarterback today’s proceedings were given a welcome surprise when CEO Steve Jobs took the stage in his first public appearance since his liver transplant surgery.

He was given a standing ovation.

So how does he look? Obviously, he’s still quite thin, but from where I sit–which is admittedly near the back of the hall–he appears healthy…but gaunt. And that Willy Wonka charisma of his is back in full force. Certainly, he looks reasonably good for someone who just underwent a liver transplant. And how long does it take to regain 60 pounds anyway? Job’s isn’t De Niro in Raging Bull….

Anyway, it’s great to see Jobs onstage again. He speaks quietly and it’s hard to tell if his voice is scratchy or if he’s just humbled by what he’s about to say: “As some of you know, five months ago I had a liver transplant. I now have the liver of a mid-20s person who died in a car crash and was generous enough to donate their organs. I wouldn’t be here without such generosity, so I hope all of us can be as generous and elect to be organ donors. ..I’d like to take this moment to thank everyone in the Apple community for their support. Thanks as well to Tim Cook and everyone at Apple. They really ran the company very ably during that time. … So I’m vertical, back at Apple and loving every day of it….”

Jobs quickly moves on to the announcements of the day. First up: iPhone 3.1, which now offers a Bluetooth Voice control and Genius feature and supports ringtones sold via the iTunes Store for $1.29. 3.1 is available today as a free download.

Live from Apple’s “Let’s Rock” Event

• iPod Updates, Games, Nano Video Cameras
• iTunes 9, iTunes LP, Home Sharing, Genius Mixes
• Steve Jobs: “I’m Vertical, Back at Apple and Loving Every Day of It”
• Event Photos by Adam Tow

]]> http://digitaldaily.allthingsd.com/20090909/live-from-apples-lets-rock-event-10-am-pdt/feed/ 0 http://digitaldaily.allthingsd.com/20090908/hummer-of-cellphones-a-best-seller-at-att/ http://digitaldaily.allthingsd.com/20090908/hummer-of-cellphones-a-best-seller-at-att/#comments Tue, 08 Sep 2009 15:15:13 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=24199 Apple’s iPhone continues to be AT&T’s marquee handset, though the data-guzzling “Hummer of cellphones,” as the New York Times has dubbed it, has inspired widespread customer dissatisfaction with the carrier’s network. Indeed, according to Piper Jaffray, the iPhone 3G and 3GS are AT&T’s (T) top-selling phones.

“Based on our channel checks, the iPhone remains the best selling device at AT&T with both the new $200/$300 iPhone 3GS and $100 legacy iPhone selling very well,” Piper Jaffary analyst Gene Munster said in a research note today.

“In July, our checks had indicated store managers were strongly recommending the legacy iPhone,” Munster notes, “as we believe this was partially driven by store representatives hoping to make the sale with the 3GS stocked out combined with efforts to reduce existing inventory levels of the legacy iPhone. However, in August, our checks indicate store managers are increasingly recommending the 3GS, and we believe this is driven by improved availability of the 3GS at most AT&T stores.”

Munster summarizes: “Overall, the iPhone remains the best selling device and our August checks indicate the iPhone took share from BlackBerry, the Nokia E71x, and most other competitor products. Finally, in our checks at Best Buy, store managers indicated the iPhone was their best selling device with stores selling out of stock as soon as they received the Apple smartphones.”

A bullish assessment, with an even more bullish conclusion: Munster says he expects Apple (AAPL) to ship seven million iPhones in the quarter. If that’s truly the case, Apple should have no trouble beating Wall Street’s expectations for its current quarter despite the gloomy economy.

One last point worth noting here: Munster is not bullish on Apple’s event tomorrow. He describes it as a “non-event,” though he seems convinced Steve Jobs will host it. “We expect Steve Jobs to introduce a new iPod lineup with a new iPod touch, new nanos, and a new classic, with cameras in the new models,” he notes. “We expect the stock to trade off on a lack of surprising announcements.”

]]> http://digitaldaily.allthingsd.com/20090908/hummer-of-cellphones-a-best-seller-at-att/feed/ 1 http://digitaldaily.allthingsd.com/20090824/youve-got-to-approve-the-app-steve-dont-be-pigheaded-ow-hey-stop-hitting-me/ http://digitaldaily.allthingsd.com/20090824/youve-got-to-approve-the-app-steve-dont-be-pigheaded-ow-hey-stop-hitting-me/#comments Mon, 24 Aug 2009 22:47:52 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=23568 RealNetworks has submitted to Apple a free application that will bring its $15-a-month Rhapsody subscription music service to anyone with an iPhone or iPod touch and an EDGE, 3G, or Wi-Fi connection–assuming it’s approved by Apple, which is anything but a sure thing at this point.

Historically, Apple (AAPL) has shunned subscription music services, and fearing they might compete for dollars best spent on iTunes, made it impossible for them to interoperate with the iPod. A few months back, Apple would have likely done the same with Rhapsody, if only to tweak Real Networks (RNWK) CEO Rob Glaser, who infamously disparaged CEO Steve Jobs for his “pigheadedness” at the Digital Living Conference in 2005.

But things are a bit different today. With the Federal Communications Commission’s inquiry into Apple’s rejection continuing consideration of Google Voice for iPhone still fresh in its mind and the outcome of that inquiry still undetermined, Apple might be a bit more inclined to allow Rhapsody into the App Store. It certainly can’t withhold it by claiming it replaces core iPhone functions, as it did with the Google (GOOG) app.

And so we find Apple in a uniquely uncomfortable spot: Accept into the App Store an on-demand streaming music application that will compete for the attention of iTunes users or reject it and suffer further unwanted scrutiny by the FCC, not to mention a nasty public relations nightmare.

]]> http://digitaldaily.allthingsd.com/20090824/youve-got-to-approve-the-app-steve-dont-be-pigheaded-ow-hey-stop-hitting-me/feed/ 3 http://digitaldaily.allthingsd.com/20090820/apple-triple-play-itunes-app-tv-and-apple-television/ http://digitaldaily.allthingsd.com/20090820/apple-triple-play-itunes-app-tv-and-apple-television/#comments Thu, 20 Aug 2009 18:47:58 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=23394

“I think the whole category is still a hobby right now. I don’t think anybody has succeeded at it. And actually the experimentation has slowed down. A lot of the early companies that were trying things have faded away. So I would have to say that given the economic conditions, given the venture capital outlooks and stuff, I continue to believe it will be a hobby in 2009.”

– Apple CEO Steve Jobs, October 2008

“We still consider this a hobby. It is clear that the movie rental business has really helped Apple TV and there are more and more customers that want to try it. And we’re going to continue to invest in it, because we fundamentally believe there is something there for us in the future.”

– Apple COO Tim Cook, January 2009

There’s not much of a business yet in Apple TV, as Apple’s leadership often notes. But there may be soon, with the market for connected TVs evolving as it has been.

In a research note issued this morning, Piper Jaffray analyst Gene Munster says the time is right for Apple to release the next iteration of Apple TV–one that offers DVR capabilities and supports iTunes TV show subscriptions.

“Apple could leverage its deep library of content with many network and cable channel content owners to provide unlimited access to a sub-library of its TV shows for a standard monthly fee ($30 or $40 per month),” Munster writes. “Such a product would effectively replace a consumer’s monthly cable bill (~$85/month) and offer access to current and older episodes of select shows on select channels.”

Further, Munster notes, “The selection would dictate the value, and several tiers could be offered, but we see this as one way for Apple to leverage its large iTunes content library as well as its unique Apple TV hardware in order to get digital video to the TV for a price significantly less than the average cable or satellite TV bill.”

Makes great sense. And if Apple (AAPL) were to launch these services in concert with App Store support, as Munster has suggested in the past, it would be a pretty compelling proposition. And it would set the stage for the next evolution of the platform, the Apple Television, an Internet-connected TV with onboard DVR and media center functionality.

Says Munster:

“Beyond new hardware with DVR or iTunes video subscription features, we believe the 2-5 year roadmap for the Apple TV product lineup is robust. To begin with, Internet-connected TVs with interactive features will likely gain popularity in the next several years. Apple could differentiate itself in this market as a seasoned software developer competing largely with television hardware manufacturers that do not excel in the software arena. The device could also bring iPhone games, a relatively new segment for Apple, to the television.

“While this is unlikely in the near term,” Munster continues, “we believe the iPhone will succeed as a portable gaming platform and Apple may consider bringing higher quality games developed on a similar platform to the TV. The iPhone app developer community is already robust, and Apple could leverage those developers to enter the gaming arena on the TV. In fact, the iPhone or iPod touch could itself operate as a touchscreen gaming control for a game-centric Apple TV.”

Again, this makes great sense, though TV hardware is not an easy business–just ask Sony (SNE). But, as Munster aptly notes, it might be quite a bit less difficult if Apple were to “change the rules of the game,” something it’s done in a number of markets already.

That said, as Media Memo’s Peter Kafka just reminded me, the cable companies are working very closely with Hollywood to make sure it’s difficult for people to replace their cable service. They’d almost certainly attempt to sack an initiative like one Munster describes above.

]]> http://digitaldaily.allthingsd.com/20090820/apple-triple-play-itunes-app-tv-and-apple-television/feed/ 5 http://digitaldaily.allthingsd.com/20090820/apple-ceo-to-palm-quit-sniffing-my-org-chart/ http://digitaldaily.allthingsd.com/20090820/apple-ceo-to-palm-quit-sniffing-my-org-chart/#comments Thu, 20 Aug 2009 11:28:20 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=23347 Apple appears to have a particular affinity for the unwritten no-poaching agreements said to be so popular among the nation’s biggest tech companies. Earlier this summer, the New York Times reported that Apple may have quietly negotiated an agreement with Google (GOOG) not to hire away each other’s top talent. Now, Bloomberg claims that the company attempted to win a similar commitment from Palm, but was rebuffed.

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.

]]> http://digitaldaily.allthingsd.com/20090820/apple-ceo-to-palm-quit-sniffing-my-org-chart/feed/ 0 http://digitaldaily.allthingsd.com/20090817/apple-event-scheduled-for-wednesday-sept-9-music-only-no-tablet/ http://digitaldaily.allthingsd.com/20090817/apple-event-scheduled-for-wednesday-sept-9-music-only-no-tablet/#comments Mon, 17 Aug 2009 23:01:26 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=23165 It has happened every September since 2005, and in a few short weeks it will happen once again. Apple (AAPL) is indeed planning a keynote event for the week of Sept. 7, as reported by my colleague, Peter Kafka. And according to sources close to the company, the date is Wednesday, Sept. 9.

The event will be held in San Francisco–most likely at Yerba Buena Center for the Arts, where it has occurred in years past–and is expected to showcase upgrades to the iPod line and an update to iTunes that may involve some sort of social element. Our sources insist it will not involve any discussion whatsoever of the tablet Apple is reportedly developing.

Too bad. It’s looking more and more like we’ll have to wait until 2010 for that.

No word yet on who’s to preside over the event. There’s been speculation that it will mark the first public appearance by CEO Steve Jobs since returning from medical leave earlier this year. Our sources have no information on whether or not that will prove true.

PREVIOUSLY:

• Apple Tablet to Recreate “Heyday of the Album (With One Good Song)”
• $800 Apple Tablet Coming in October?
• New From Piper Jaffray Analyst Gene Munster: The Apple iPad
• Rumored Apple Netbook Actually an E-book?

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