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Analyst: Apple keynote to focus on home entertainment

American Technology Research analyst Shaw Wu believes that Apple’s product announcements at Macworld Expo tomorrow will focus on Macs and home entertainment, but that the company could also unveil a new iPod, cell phone, or even an Apple-branded HDTV.

“There appears to be more uncertainty as to what Apple CEO Steve Jobs will announce this year than in previous years. We believe this is likely because Apple is plugging leaks better as protecting its secrecy remains a top priority for the company,” Wu says in a research note to clients today. “We therefore believe there will likely be more surprises this year. We anticipate announcements to focus on two areas—Macs and home entertainment. Our supply chain sources indicate new vPods with Bluetooth stereo headphones and cell phones near/at manufacturing stage, though we are not certain on near-term timing.”

As do many other Apple watchers, Wu expects Apple to officially release its iTV streaming media device this week. He also expects new iTunes Store movie partners, and hears whispers of an Apple big-screen TV. “We anticipate new movie content partnerships with one or more studios (Fox, Universal, Paramount, and Warner) that extend beyond Disney,” says Wu. “Furthermore, we are not certain on timing but our analysis indicates that Apple is beyond prototype on large-screen technologies (for a larger monitor or possibly Apple-branded HDTV).”

Wu says a new video iPod is definitely in the works, but is unsure of timing. “The very successful vPod has not had a major update since August 2005 when it was first announced. Our analysis in the supply chain indicates that its successor has been under development for some time and recent data indicates shifting component order dynamics,” Wu says. “We do not have high conviction on timing but see improved battery life, widescreen, and Bluetooth 2.0 stereo as the newest features.”

Wu is also unsure if the long-rumored iPod phone will be shown tomorrow. “While our analysis continues to indicate Apple’s first cell phone is technically complete, its ‘go-to-market’ strategy continues to be a mystery and likely a gating factor (MVNO vs. traditional carrier or both),” says the analyst. “Our conviction remains high that Apple’s first cell phone will be released in 2007—potentially 1H07.”

Apple, others sued over online media distribution

Defunct online movie provider Intertainer has filed a lawsuit against Apple, Google and Napster, alleging that the three companies are infringing on a patent that covers the commercial distribution of digital media over the Internet. “Founded in 1996, Intertainer developed technology to distribute movies on demand through cable and phone lines for viewing on televisions and personal computers. It gained investors including Intel, Microsoft, Sony, NBC and Comcast,” according to the New York Times. The company shut down in 2002, filing a suit against the Hollywood studios behind Movielink for anticompetitive actions. The studios settled the lawsuit for an undisclosed sum, and Intertainer is now considered a patent licensing business.

Apple sued over Nike+iPod Sport Kit

In its quarterly report filed with the SEC last week, Apple disclosed that it is facing a lawsuit over the Nike+iPod Sport Kit. Apple said PhatRat Technology filed a lawsuit in October alleging patent infringement. The company claims Apple’s product is infringing on several patents held by PhatRat, including: U.S. Patent number 6,499,000 entitled “System and Method for Determining Loft Time, Speed, Height and Distance,” U.S. Patent number 6,885,971 entitled “Methods and Systems for Assessing Athletics Performance,” U.S. Patent number 6,963,818 entitled “Mobile Speedometer Systems and Associated Methods,” and U.S. Patent number 7,092,846 entitled “Systems and Methods for Determining Performance Data,” as well as allowed U.S. Patent Application number 11/358,508 entitled “Shoes Employing Monitoring Devices, and Associated Methods.”

Apple: ‘The first 30 years were just the beginning’

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Apple has posted an intriguing new welcome message on the home page of Apple.com. The fresh graphic features a backlit Apple logo with the text, “The first 30 years were just the beginning. Welcome to 2007.” While the message could simply be a harmless New Year’s greeting, it will no doubt stir up much anticipation before Apple CEO Steve Jobs’ keynote at next week’s Macworld Expo.

Apple restates past earnings, stands by exec team

  • December 29, 2006
  • Apple

Following an independent investigation into the backdating of past stock option practices, Apple today restated past earnings, but cleared current executives of misconduct. Apple said it will record a non-cash charge of $84 million to compensate for improperly handled stock option grants made between 1997 and 2002. The company said after-tax profits would be lowered by $10 million for 2004, $7 million for 2005 and $4 million for 2006.

In delayed filings with the Securities and Exchange Commission, the company said a special committee of its board found that while Apple CEO Steve Jobs and other managers recommended or were aware of certain inaccurate grant dates, they did not financially benefit from them. Apple said it has “complete confidence” in the executive team.

“The special committee, its independent counsel and forensic accountants have performed an exhaustive investigation of Apple’s stock option granting practices,” said Al Gore, chair of the special committee, and Jerome York, chair of Apple’s Audit and Finance Committee, in a joint statement. “The board of directors is confident that the company has corrected the problems that led to the restatement, and it has complete confidence in Steve Jobs and the senior management team.”

Report: Apple falsified stock options documents

  • December 27, 2006
  • Apple

Federal prosecutors are investigating stock option documents at Apple that were reportedly falsified by company officials, according to a report by Law.com. The report also says that Apple CEO Steve Jobs has hired his own legal representation to deal with investigators from the SEC and Justice Department. The article does not say which documents were allegedly falsified, but Apple previously stated that “stock option grants made on 15 dates between 1997 and 2002 appear to have grant dates that precede the approval of those grants.”

Jonathan Ive awarded Honorary Doctorate

  • November 17, 2006
  • Apple

UK-based iLounge Forums member “Doc Evils” has shared his experience in attending an award ceremony presenting Apple’s Jonathan Ive with an Honorary Doctorate of the University of the Arts London. The award is in “recognition of the outstanding contribution that an individual has made to his or her chosen field of endeavor.” Ive is the Senior Vice President of Industrial Design at Apple and is behind the company’s most lauded designs, such as the iMac and iPod.

“Doc Evils” was amongst an audience of students selected from various design courses and members of the press. After the presentation of his doctorate, the editor of British GQ magazine and former student of the college, Dylan Jones, chaired a question and answer session with Ive which lasted over two hours. During the cocktail party which followed the presentation and questions,“Doc Evils” was fortunate enough to have a conversation with Ive, which was without doubt the highlight of the event for him.

Update: In related news, Ive collected his CBE from Her Majesty the Queen in London today. The award was announced in December 2005. In a statement at the time, Apple said: “We are as proud as could be that Jonny is receiving such a prestigious commendation.”

Apple shares hit all-time high

  • November 16, 2006
  • Apple

Apple shares hit an all-time high today, helped by an upbeat analyst note about holiday iPod sales. Shares of Apple rose $1.56 to $85.61 on the Nasdaq Stock Market, reaching an all-time closing high. The stock was boosted by a report from Piper Jaffray analyst Gene Munster that said Apple could sell as many as 14 to 15 million iPods this quarter. “While it is way too early to make a call on December quarter iPod results, we have analyzed the first month of NPD data (October) for the quarter and found that it suggests iPod units of 14-15 million,” Munster said in the report.

Report: Hon Hai to manufacture Apple iPhone

  • November 15, 2006
  • Apple

iPod manufacturer Hon Hai Precision has secured contracts from Apple to build 12 million music-playing mobile phones, according to a Commercial Times report. Quoting industry sources, the publication says Apple will launch the long-rumored “iPhone” in the first half of next year. Taiwan’s Hon Hai Precision, which operates electronics factories under the Foxconn name, has been at the center of sweatshop claims because of reported poor working and living conditions at an iPod factory in China.

Apple shares to continue trading on Nasdaq

The Nasdaq stock exchange will not de-list Apple, as long as the company files its overdue 10Q quarterly report within two months, according to a filing with the SEC. “On October 24, 2006, Apple received a written notification from the staff of The Nasdaq Stock Market stating that the Nasdaq Listing Qualifications Panel has granted the Company’s request for continued listing on The Nasdaq Stock Market, subject to the condition that the Company shall file its Form 10-Q for the quarter ended July 1, 2006, and any required restatements, by December 29, 2006,” Apple said in a filing today. “If the company is unable to file the Form 10-Q by that date, it intends to seek an additional extension of time from the Nasdaq Listing Qualifications Panel.” Apple delayed filing its quarterly report as it evaluates how much it will need to restate earnings as a result of stock options dating irregularities.

Apple ships 8.7 million iPods during Q4

Along with its quarterly financial results, Apple today announced that it shipped over 8.7 million iPods during the company’s fiscal fourth quarter of 2006. Specifically, Apple said it shipped 8,729,000 iPods during the quarter, a 35 percent growth over last year’s results.

Apple’s net profit for the quarter was $546 million, or 62 cents per share, on $4.84 billion in revenue. These results compare to revenue of $3.68 billion and a net profit of $430 million, or 50 cents per share, in the year-ago quarter. Apple said that its fourth quarter earnings were “preliminary” because they may need to be restated due to the company’s stock option troubles. “These preliminary results may be subject to significant adjustment as a result of a likely restatement of historical results,” the Apple said in a statement.

“This strong quarter caps an extraordinary year for Apple. Selling more than 39 million iPods and 5.3 million Macs while performing an incredibly complex architecture transition is something we are all very proud of,” said Steve Jobs, Apple’s CEO. “Looking forward, 2007 is likely to be one of the most exciting new product years in Apple’s history.”

Analyst sees Steve Jobs remaining Apple chief

Even though there are currently 150 companies undergoing stock option investigations—which have resulted in the resignations of 9 CEOs and at least 27 executives or directors—Piper Jaffray’s Gene Munster believes Steve Jobs will remain Apple’s CEO. Munster said today that Jobs should be in the clear, given that he was aware of these grant dates but was not aware of the accounting treatment and did not benefit from them. “We believe the options backdating issue is in Apple’s rearview mirror and Steve Jobs will remain Apple’s CEO,” Munster said. “Although these issues tarnish Apple’s squeaky clean image, they do not impact the company’s underlying fundamentals. As a result, we expect investors to shift their focus to CPU market share gains and strong iPod sales through the upcoming holiday season.”

Apple finds, fights PC virus on limited number of 5G iPods

In an interview with iLounge this morning, Apple Vice President of Hardware Product Marketing Greg Joswiak disclosed that the company has discovered and taken steps to fight a Windows virus found on a small number of enhanced, fifth-generation iPods sold since September 12, 2006. The virus, RavMonE.exe, affects only Windows computers, and anti-virus software included with most Windows computers should detect and remove it. According to Joswiak, “it appears that this Windows virus or worm does not directly cause any data damage, but it can lower the security of the machine.”

“We recently discovered that a small number, less than 1% of video iPods, left our contract manufacturer carrying a virus that affects only Windows computers,” explained Joswiak, who says the company has had “less than 25 reports concerning this problem.” “The iPod nano, iPod shuffle and Mac OS X are not affected, and all Video iPods now shipping are virus free. We’re upset at Windows for not being more hardy against such viruses, and even more upset at ourselves for not catching it.”

Apple’s official Support page for the virus provides links and applications to detect and remove the virus, if a Windows-installed PC lacks the ability to do so on its own, and recommends that you scan other mass-storage devices for the virus if it is detected. Though the company did not specify whether the virus’s presence was attributable to Apple’s decision to ship recent fifth-generation iPods pre-formatted for Windows PCs rather than Macintosh computers, Joswiak noted that Apple has taken steps to prevent this from happening in the future.

Analyst: Apple readying two iPhone models

Apple plans to introduce two cell phone models which the company could launch at Macworld Expo in January, according to a report by Prudential Equity Group analyst Jesse Tortora. The analyst said “recent checks” indicate that Apple will begin selling a slim, iPod-based phone and a more advanced smartphone model with added features. Tortora said at least one of the phones will include wireless connectivity, but that both will be manufactured first in small numbers. Tortora is the second analyst that recently said that Apple is readying a cell phone. In releated news, Apple has reportedly filed for a trademark on the term “iPhone.” The filing, made last month with a Far Eastern trademark office, describes the iPhone as “handheld and mobile digital electronic devices for the sending and receiving of telephone calls, faxes, electronic mail, and other digital data; MP3 and other digital format audio players.”

Apple to report Q4 earnings this week

Apple will report its fourth-quarter financial results on Wednesday after the markets close. Analysts surveyed by Thomson First Call are expecting earnings, on average, of 50 cents a share, up from 38 cents a share a year ago. Revenue for the quarter is expected to be $4.4 billion, up from $3.69 billion last year, on strong iPod and MacBook demand. Marketwatch notes that it will be the first Apple financial report since the company said that it will restate some past earnings because an internal probe found evidence of employee stock option grant irregularities.

Apple details stock grant irregularities, consequences

Following an independent investigation into the company’s past stock option granting practices, Apple Computer today confirmed that grants made on 15 dates appeared to have been improperly pre-dated, skirting proper accounting principles and potentially violating Securities and Exchange Commission (SEC) regulations. During periods of stock value appreciation, pre-dated grants enable recipients to collect compensation greater than what they were actually entitled to receive. According to the company, the grants in question were made between 1997 and January 2002, with no findings of misconduct by any member of Apple’s current management team. In “a few instances,” Apple CEO Steve Jobs was said to have been aware of the dates, but was neither aware of the accounting implications of the pre-dating nor the recipient of any benefits from the grants.

In a statement, Jobs apologized for the problems, calling them “completely out of character for Apple,” and promised “to ensure that this never happens again.” The company simultaneously announced that former Apple Chief Financial Officer Fred Anderson has resigned from the company’s Board of Directors, and noted that it was providing “all details” regarding the actions of “two former officers” to the SEC regarding their actions in connection with the grant problems.

DVD Jon reverse-engineers FairPlay DRM

Famous for creating DeCSS software to remove encryption on Macrovision protected DVDs, Jon Lech Johansen (aka DVD Jon) has reportedly reverse-engineered Apple’s FairPlay DRM (Digital Rights Management) software, and is licensing it to any company that wants it. Using the reverse-engineered code, a company can purchase a license and make their content (music or videos) play on Apple’s iTunes and iPod products. According to the report, Johansen set up a meeting with Apple’s CEO Steve Jobs, who, not knowing that Jon would later decide offer the FairPlay license to companies, warned that while Apple was not a litigious company, other tech firms might not take kindly to whatever he might be up to. [via GigaOM]

iPhone interest is high if price is right

  • September 22, 2006
  • Apple

Piper Jaffray analyst Gene Munster believes that Apple’s long-rumored iPhone needs to be priced around $300 to gain significant traction. In his latest research report, Munster estimates the average price of music enabled phones currently available in the U.S. to be $317, and notes that now is the time for Apple to release such a product. The analyst also offers survey data from Apple Expo in Paris, which finds that 74% of European Apple customers would be highly likely to buy an iPhone that holds 1,000 songs. “Price is clearly a consideration, however, and many customers indicated that they feel that an iPhone has the same value as Apple’s high capacity iPods,” Munster said. Specifically, the consumers said, on average, they would pay $285 for such a product. Munster expects Apple will announce an iPhone sometime in the next 3-6 months.

Analysts: New iPods priced for profits, not market share

  • September 18, 2006
  • Apple

Apple’s pricing of the new iPod models shows the company is looking for better profit margins and not market share gains, according to analysts at market researcher Gartner. The analysts said the second-generation iPod shuffle could have been priced closer to $49, since the cost of materials amounts to around $30. Similarly, Apple could have also priced its new iPod nano models cheaper, according to the analysts. They claim the 8GB model has $130 in materials, the 4GB has $90 worth of materials, and the 2GB version has only $70 in materials. “Apple is in a secure position atop the portable media player market and has decided to strategically focus on its margin this time,” the analysts said.

Apple’s special event by the numbers

  • September 13, 2006
  • Apple

During his feature presentation at Apple’s special “Showtime” event yesterday, Apple CEO Steve Jobs provided various sales figures, market share data, and other numerical information:

- 450,000 Nike+iPod Sport Kits sold in less than 90 days
- 70% of 2007 model year automobiles to offer iPod connectivity
- 10 million iPod shuffles sold since its introduction in Jan. 2005
- iTunes Store now accounts for 88% of all legal US downloads
- Over 1.5 billion songs have been sold from the iTunes Store
- iTunes Store No. 1 in all 21 countries with iTunes Store
- 45 million TV shows purchased from iTunes Store in less than a year
- Over 220 TV Shows from over 40 networks now available

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