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Analyst: iPod, iPhone no longer ‘growth drivers’ for Apple

  • February 26, 2008
  • Apple,

Keith Bachman, analyst with BMO Capital Markets, has cut his price target for Apple’s stock, saying that iPods and iPhones were no longer “growth drivers” for the company. “Apple’s three growth drivers [iPods, iPhones and Macs] has now turned to one,” Bachman said in an analyst note. Bachman went on to say that the Mac will begin to take on more importance because the iPhone is not likely to experience growth on the scale of what the company has projected for this year. He also pointed out that the iPod is starting to show signs of market saturation, leading to slower growth rates for the device. Despite the somewhat gloomy predictions, Bachman maintained his outperform rating on Apple’s stock, noting that “more carriers and lower handset [prices]” could improve the iPhone’s prospects. Bachman reduced his forecast for iPhone sales in fiscal 2008 from 9.3 million to 7.7 million units, and also reduced his iPod sales forecast for the same period, from 54.6 million to 51.1 million units.

Apple issues Cease and Desist to DRM-stripping devs

  • February 25, 2008
  • Apple,

Apple’s legal team has issued a Cease & Desist letter to the developers of the Hymn Project, software that allows users to strip the FairPlay DRM from files purchased from the iTunes Store. A post in the Hymn Project forums says that the letter demanded that all downloads be removed from the site. The post continues: “Until further notice, no links are to be posted anywhere on the site to programs that can strip DRM from any of Apple’s music or videos. Any user who does so will get the link removed and a warning from us. Any further infraction will get you banned permanently. The site will remain open for now and we won’t have a problem as long as we abide by the C&D.” In addition to the C&D sent out to the main developers, at least one individual user has also received a letter from Apple, following the user announcing publicly that he would offer a version of the DRM-stripping software to interested parties via email.

Apple launches mail-in iPod, cell phone recycling

  • February 25, 2008
  • Apple,

Apple today unveiled a new by-mail iPod and cell phone recycling program that enables consumers to safely dispose of their cell phones, regardless of the manufacturer or model. Phones and iPods can be recycled in any quantity, through the mail, a program that appears to be separate from Apple’s in-store iPod recycling initiative, which allows users to bring iPods (not cell phones) directly to a local Apple Store, and receive a 10% discount on any iPod purchased that day. To participate in the new mail-in program, users need to visit a dedicated page on Apple’s site that allows them to enter the quantity of items being recycled, fill out an address form, and choose whether to print out a pre-paid shipping label to affix to their own packaging, or have Apple send them a pre-paid mailer, both free of charge. No discount is offered for items mailed in for recycling.

iSuppli: Apple ‘significantly’ lowered 2008 NAND forecast

  • February 21, 2008
  • Apple,

Apple has lowered its 2008 NAND flash memory order forecast, a new report indicates. According to iSuppli, the company “has slashed its 2008 NAND order forecast significantly and has informed suppliers that its demand growth will slow in 2008 compared to 2007.” The reports states that this is expected to have a large impact on the NAND market overall, as Apple was the world’s third largest OEM buyer of NAND memory in 2007, with purchases of $1.2 billion, which represents 13.1 percent of the global market. Apple currently uses NAND flash memory in most of its portable consumer devices, including the iPod shuffle, iPod nano, iPod touch, and the iPhone. Prior to learning of Apple’s lowered forecast, iSuppli had predicted that the company’s NAND purchases would rise 32.2 percent this year, helping to encourage significant market growth.

Apple television ads driving online searches

  • February 14, 2008
  • Apple,

A new report suggests that Apple’s catchy TV advertisements for the iPod nano, iPod touch, and iPhone are having a ripple effect on online searches. According to the latest numbers from Compete, U.S. consumers made nearly 1 million queries for iPod related commercials or the underlying music from August 2007 to January 2008. 15 of the top 20 searches contained the word “song” or “music,” suggesting that many consumers are searching for the song in the commercial, as very little information is given about the songs and artists featured in Apple’s spots. In particular, research shows that over 425,000 people were actively searching in September for the song used in Apple’s popular spot for the iPod nano, Feist’s “1-2-3-4.” Traffic for the song’s music video on YouTube grew 1200% from the month prior to the commercial’s launch, and over 45 times when views of the actual commercial were included. Similar growth was seen for CSS’ “Music is my hot hot sex,” featured in a user-inspired iPod touch ad, and for Yael Naim’s “New Soul,” which is featured in Apple’s recent commercial for the MacBook Air.

In a separate interview with the BBC, Canadian singer Leslie Feist admitted to being pleasantly surprised with the impact the iPod nano advertisement has had on career. “I felt a definite shift, it seemed to pique a lot of curiosity which luckily led back to an album and video that I believe in. It just shows you the power of that kind of thing, as opposed to some preconceived marketing ploy,” she said. “I was a little naive as to the impact it would have because I really didn’t have any idea it would be like that. But it did me nothing but favours because I’ve continued doing what I do, but with so many new open ears from so many more people than there were before.”

Apple launches Corporate Gifting and Rewards Program

  • February 13, 2008
  • Apple,

Apple has launched its Corporate Gifting and Rewards Program, which enables large businesses and corporations to easily make bulk orders of iPods, iTunes Gift Cards, iPod accessories, and certain models of Mac computers. The new program page states that the company is offering “special pricing on volume orders.” The minimum for iPod orders is 50 units, with a minimum of 250 units for iPods pre-loaded with content, which may include “training talks, product overviews, CEO speeches, promotional videos, or other custom content.” The program will also include points programs for customers to earn points towards iPods and gift cards. To participate in the offer, interested parties need to either contact Apple by phone, or submit their contact information via online form. [via Ars Technica]

Apple applies for gaming device trademark

  • February 11, 2008
  • Apple,

Apple has filed an application with the U.S. Patent and Trademark Office seeking trademark protection in relation to a variety of gaming products. On the application, Apple requests protection of its “Apple” trademark for products that include “Toys, games and playthings, namely, hand-held units for playing electronic games; hand-held units for playing video games; stand alone video game machines; electronic games other than those adapted for use with television receivers only; LCD game machines; electronic educational game machines; toys, namely battery-powered computer games.” Apple currently sells iPod games through the iTunes Store, several of which were developed internally by the company.

Notes from Q1 2008 Apple Conference Call

  • January 22, 2008
  • Apple,

During Apple’s Financial Results Conference Call, Apple CFO Peter Oppenheimer and Apple COO Tim Cook made several comments concerning its music-related products, which accounted for 50% of the company’s total revenue in the first fiscal quarter. The average sale price of the iPod during the quarter was $181, up 17 percent year-over-year, largely due to the launch of the iPod touch, which the execs enthusiastically described as a success. More specifically, the iPod touch was described as a product that “has the potential to grow the iPod beyond being just a music player, into the first mainstream Wi-Fi mobile platform for all kinds of new mobile applications.” Although iPod unit sales were flat year-over-year in the U.S., the company saw the highest revenue growth for iPod in a year, thanks to the iPod touch, which was also a “big hit” in Japan. iPod market share was roughly flat compared with a year ago according to numbers from NPD, but was up internationally.

The Apple TV and iPhone accounted for $1.44 billion in deferred revenue, and total iPhone revenue booked during the quarter came to $241 million. Apple said that although it saw no evidence of the iPhone cannibalizing iPod sales in the UK, France, or Germany, it did admit that the phone “could have been a factor” in the relatively small year-over-year iPod unit growth in the U.S. Additionally, it said that a “significant” amount of iPhones were sold during the quarter with the intent to unlock, but that it doesn’t have a precise number, and considers it “indicative of very strong interest in iPhone globally.” Finally, the company reiterated its intentions to expand the iPhone to more European markets and to Asia in 2008, and that it remains “very confident” in its ability to hit the goal of 10 million iPhones sold by the end of 2008.

Apple sells more than 22 million iPods during Q1

  • January 22, 2008
  • Apple,

Reporting its first quarter financial results today, Apple said it sold 22.1 million iPods during the holiday quarter — a 5 percent increase compared to the same quarter last year, and a new single-quarter record for iPod sales. It also sold 2.315 million iPhones in the quarter, bringing the total number of units sold up to around 3.7 million. The company posted revenue of $9.6 billion and net quarterly profit of $1.58 billion, or $1.76 per diluted share, compared with revenue of $7.1 billion and net quarterly profit of $1 billion, or $1.14 per diluted share in Q1 2007. These results best analysts’ predictions, which called for revenue of $9.5 billion and earnings of $1.5 billion, or $1.62 per share. Sales of Other Music Related Products + Services were up 27% over the year-ago quarter, and up 34% from Q4 2007, to $808 million total. That category includes iTunes Store sales, iPod services, and revenues from Apple and third-party iPod accessories.

“We’re thrilled to report our best quarter ever, with the highest revenue and earnings in Apple’s history,” said Steve Jobs, Apple’s CEO. “We have an incredibly strong new product pipeline for 2008, starting with MacBook Air, Mac Pro and iTunes Movie Rentals in the first two weeks.”

“Apple’s revenue grew 35 percent year-over-year to $9.6 billion, an increase of almost $2.5 billion over the previous December quarter’s record-breaking results,” said Peter Oppenheimer, Apple’s CFO. “Our strong results produced cash flow from operations of over $2.7 billion during the quarter, yielding an ending cash balance of over $18.4 billion. Looking ahead to the second quarter of fiscal 2008, we expect revenue of about $6.8 billion and earnings per diluted share of about $.94.”

Full transcript of Apple’s ‘08 Keynote Address

  • January 16, 2008
  • Apple,

Continue reading a full play-by-play transcript of Apple CEO Steve Jobs’ keynote address from the 2008 Macworld Conference and Expo. Most of the announcements found in this transcript are explained in further detail in separate news articles; photos from the event can be found here.

Complete Macworld Expo iPod/iPhone exhibitor guide posted

  • January 15, 2008
  • Apple,

You asked, we delivered. Our massive guide to what’s new at Macworld Expo, and what was shown at CES now covers announcements from over 75 different vendors, after 10 major updates. Be sure to check out the article to see what’s coming soon for the iPod, iPhone, and iTunes; we’ll be updating it throughout the show.

Massive MWSF08 Flickr photoset posted, more coming

  • January 15, 2008
  • Apple,

We’ve spent the entire morning and afternoon adding a massive collection of Macworld Expo show photos to our Flickr account for your enjoyment. You can currently see pictures from all across the show floor, including new hardware and software from major iPod, iPhone, Mac, and iTunes vendors; new pictures are constantly being added, so keep checking.

Apple TV 2.0, iPod touch, iPhone 1.1.3 videos posted, details

  • January 15, 2008
  • Apple,

We’ve just posted videos of the Apple TV 2.0 software, iPod touch, and iPhone 1.1.3 software to our YouTube account. They’re now available for viewing. Enjoy!

Apple TV: The biggest changes of the day were reserved for the Apple TV, which saw a comprehensive interface overhaul with movie rentals, movie and music purchasing, Flickr photo browsing, and new iTunes Store search features for all forms of media, including podcasting. The software is officially labelled version 2.0, and will be available in two weeks. In our quick tests on the show floor, everything worked as expected, though the new dual-pane menu interface requires a bit more thought to navigate than the prior Apple TV 1.0 menu system. Apple has also streamlined the device’s settings into multiple contextual menus, and added a few little settings that can be seen in our video, such as new photo transitions, expanded parental controls, and new HDMI output modes.

iPhone: All of the new iPhone 1.1.3 features described in our news story, and previously leaked, work as expected. Location finder on Google Maps pinpoints your current location within a roughly one block or so radius—at least in our quick show floor test—and hybrid view overlaps satellite and drawn road maps on top of each other. Webclip enables extremely easy web page bookmark addition to the iPhone’s main page, and the icon rearrangement feature works exactly as expected—hitting the Home button stops the icons from wiggling and being dragged.

iPod touch: Apple representatives on the show floor have confirmed that pre-MWSF08 iPod touch owners who are looking to add the iPhone applications Mail, Stocks, Weather, Notes, and Maps will be paying the $20 fee regardless of whether they recently purchased the touch, or bought it on day one. Those who have purchased in the past 14 days have the option to return and repurchase the touch from a retail Apple Store, however, the 10% restocking fee will apply, costing a minimum of $29.90 for the touch. Our attempt at testing the location finder feature of Maps did not work on the iPod touch, though it worked properly on the iPhone. Otherwise, the new features worked the same on the iPhone as they did on the touch. These applications are not part of the iPod touch 1.1.3 update currently available through iTunes.

Live from MWSF08, starting 9AM PT today [updated x2]

  • January 14, 2008
  • Apple,

Updated! iLounge’s editors have arrived in San Francisco, California to provide live coverage of the 2008 Macworld Expo, which kicks off Tuesday morning at 9:00AM Pacific Time with a keynote speech from Apple CEO Steve Jobs. The Expo, which traditionally sees the introduction of new Apple and third-party hardware and software, is expected to include substantial upgrades to iTunes, the iPhone, and Apple TV, and other Apple wireless products, as well as a number of new third-party accessory announcements.

image

Visit the iLounge.com homepage for our live coverage starting at 9AM; we will have a special page set up to handle live keynote coverage, and will be updating very frequently throughout the Expo.

New: Follow the keynote on our Flickr pages. Pictures are already being posted!

Apple ‘something in the air’ banners spotted

  • January 11, 2008
  • Apple,

Work crews have begun preparing the Moscone Center for next week’s Macworld Conference and Expo, and as is traditionally the case, pictures of the banners hung inside the complex have made their way online. A number of the banners read, “2008. There’s something in the air.” This text is printed on a black background, and in a lighter font weight than Apple traditionally uses for its marketing materials, adding an “airy” quality to the signage. Although no product image or name appears on the banners, the phrase does suggest that Apple will make wireless technology a major theme of the show, and will introduce new wireless products and/or software next week.

Apple sued over lack of WMA support

A new antitrust lawsuit filed against Apple on Dec. 31 claims the company has an illegal monopoly on the digital music market. The plaintiff, Stacie Somers, and her representation claim that Apple is dominating the market for online video and music sales, as well as the digital music player market, and that its position is a violation of the Sherman Antitrust Act. “Apple has engaged in tying and monopolizing behavior, placing unneeded and unjustifiable technological restrictions on its most popular products in an effort to restrict consumer choice, and to restrain what little remains of its competition in the digital music markets,” the complaint states. More specifically, the complaint takes issue with Apple’s refusal to support Microsoft’s proprietary Windows Media Audio format. “Apple’s iPod is alone among mass-market Digital Music Players in not supporting the WMA format,” the complaint says, while listing several competing music services that support protected WMA files. This specific complaint is based on the idea that the music labels “are generally unwilling to license their music for online sale except in protected formats,” a statement that seems to lack credibility in light of recent moves into DRM-free sales by industry heavyweights EMI, Warner Music Group, and Universal Music Group.

Apple planning iPhone-based transaction system?

  • December 27, 2007
  • Apple,

A new Apple patent application suggests that the company is working on a wireless transaction system for devices such as the iPhone and iPod touch that would allow customers to order quick service items like coffee and fast food directly from their device, and to receive notification when their order was ready. According to the patent, the goal is to avoid an “annoying wait in a long queue if the purchaser arrives before completion of the order.” The application also describes a way to keep tabs on customers’ shopping preferences and favorite orders. Forbes says that the patent puts the Apple/Starbucks partnership “in a new light,” stating that the technology could move Apple “from the business of simply selling gadgets and music and movies that can be played on those devices into an intermediary in all kinds of exchanges.”

Apple patent points to multi-touch games

  • December 7, 2007
  • Apple,

A newly-published Apple patent application covering “techniques for providing input to interactive and multitasking applications” also hints at the possibility of games for the iPhone and iPod touch. The patent describes a multi-touch control scheme that would present users with two applications at once: one being the game itself, the second being some other type of application. Specific regions on the screen would be assigned to each application, allowing the user to control both depending on what part of the screen they touch. The patent specifically mentions a “game input area” and a “game scene,” and also mentions how the technology might be used for in-game control: “Input can be provided in a simple and more intuitive manner by effectively allowing the user to interact with the input area in a way that mimics or approximates a desired action (e.g., moving a ball or bat around by inputting a rotational movement). Examples of such interaction include positional, directional (e.g., rotational), press or pressure input (or movement) which can easily be provided by a thumb or a finger, for example, on a touch screen.” Despite the seemingly direct mentions of multi-touch gaming found in the patent, it is still uncertain whether Apple will leverage this technology to offer games on the iPhone and iPod touch. [via Infinite Loop]

Apple donates iPods to students who lost homes

  • December 5, 2007
  • Apple,

Apple has quietly donated more than 100 iPods to students in the Poway school district, near San Diego, CA, who lost their homes during the October wildfires. Poway resident Steve Boyack asked Apple for the donation, thinking about the high school students who were affected. “The idea came up because of our experience in the past, helping with fire relief,” said Boyack. “It seemed like the high school kids were being left out. Having four boys, I thought what would be nice for the kids, and I thought iPods are an accessory most kids like and can’t live without.” Boyack said that Apple now plans to expand the program to the entire county, and that it didn’t want any publicity. “It was strictly from the heart and just wanting to help,” he said.

Apple’s Joswiak talks iPod, iPhone

  • November 26, 2007
  • Apple,

In a recent interview with Fortune, Apple’s vice president of Hardware Product Marketing Greg Joswiak spoke about the current state of the iPod, how the marketing of the devce has changed over the years, the iPod touch and iPhone SDK, the potential for growth in some international markets, and more. Responding to a question on how to handle an open iPod and iPhone, Joswiak said, “One of the things Steve talked about in his open letter is something Nokia’s doing, which is requiring a digital signature. That way if there’s something wrong with an application, you have a way to track it back to where it came from. So one of the things we want to do, again, is create a development environment that is going to maintain the security and reliability of the iPhone yet at the same time offer developers some really cool things that we can do.”

Speaking about the changes in iPod marketing that have been made over the years, Joswiak said, “I think what has changed over time is certainly early on, people had to understand what an iPod was about. You had to understand the whole message of a thousand songs in your pocket. So some of the early advertisements had to set up some of that foundation. In a market like the U.S., where we have 77 percent market share, that’s really not required. People understand what the iPod is – it’s become a cultural phenomenon here. So we can change the way that it’s marketed.”

He continued, “But when we went into Europe a couple of years ago with advertisements, when France was in single-digit market share and Germany was in single-digit market share, we again had to establish the ‘thousand songs in your pocket.’ We ran advertisements that were more foundational than the silhouette ads that we’ve done. And we saw market share rise pretty significantly — again, our latest French and German market share is about 28 percent each. That’s a pretty significant rise over a two-year period.” Joswiak went on to say that he sees a “significant opportunity” in international markets where the iPod’s market share is below 30 percent, due to the lack of a major name-brand competitor.

Finally, in discussing how Apple plans for future models, Joswiak explained, “We try to understand as we develop our product road map, what’s going to be exciting in the future. And that’s one of the advantages we have over our competitors. Our competitors tend to put the cross hairs on where we are now, and by the time they come up with a product that tries to match where we are now, we’re beyond them. We’re one or two generations beyond, moving faster than they are.”

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