Edible Apple

It used to be that we’d speculate on what features Apple’s next-gen iPhone would have, but now the iPhone’s release date is also a question open to speculation. Apple of course routinely released a new iPhone model in the Summer months, but the delayed October launch really changed things up.

Since then, many have wondered if Apple would revert back to a Summer launch schedule or if it would maintain the 12-month release cycle and thus release its next-gen iPhone in the Fall of 2012. Most believe, however, that a Fall launch makes more sense since it pulling the iPhone 4S off the shelves prematurely just to have a new model out in the Summer wouldn’t make much business or practical sense.

And now comes word that Apple, even if they wanted to aim for a Summer launch, will likely have to wait until the Fall anyhow due to supply constraints involving LTE chips from Qualcomm.

Qualcomm last week warned analysts that they’re having issues meeting expected demand for its 28-nanometer LTE baseband chip, all but assuring that the iPhone 5 will be penciled in for a Fall 2012 launch as Qualcomm needs those extra few months to ramp up supply.

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Well it looks like the controversy surrounding alleged e-book price fixing won’t be the only antitrust lawsuit Apple has to deal with.

Apple, along with Google, Intel, Adobe, Pixar, Intuit, and Lucasfilm, are being taken to task for agreeing to anti-poaching agreements wherein each of the aforementioned companies were precluded the recruitment of employees from any of the other companies.

In Silicon Valley, where engineering talent is king, keeping talented employees from jumping ship to rival firms is a top priority. The lawsuit, however, claims that in implementing these agreements, employees are often held hostage to the extent that their job opportunities may be limited as a result.

Despite efforts to have the case dismissed, US District Judge Lucy Koh ruled this past February that the case would continue pending an amended complaint from the plaintiffs. That complaint has since been amended and Koh has ruled that the case can proceed.

If this all sounds familiar, it’s because the companies at issue already settled the matter with the US Justice Department back in 2010. The current suit in question, however, is a private suit brought by 5 software engineers who complain that the alleged agreements narrowed employment opportunities and ultimately costing employers as much as hundreds of millions of dollars.

Now Reuters is reporting that further efforts to have the case dismissed have fallen short.

District Judge Lucy Koh in San Jose, California, rejected the companies’ bid to dismiss claims brought under the federal Sherman antitrust law and California’s own antitrust law, the Cartwright Act.

In a decision on Wednesday night, Koh said the existence of “Do Not Cold Call” agreements among various defendants “supports the plausible inference that the agreements were negotiated, reached, and policed at the highest levels” of the companies.

“The fact that all six identical bilateral agreements were reached in secrecy among seven defendants in a span of two years suggests that these agreements resulted from collusion, and not from coincidence,” Koh added.

Steve Jobs was notoriously protective over his employees and always paranoid that rival companies would poach Apple’s best and brightest. In one famous anecdote relayed in his biography, Jobs, while at the time the subject of a Time cover story, made it clear that the magazine was not, under any circumstance, to post the name of Apple engineer Jeff Robbin. Robbin was a key member of the original iPod team and it’s been rumored recently that he’s leading the charge on Apple’s rumored HDTV.

During the 2010 investigation, it was revealed that Google had tried recruiting an Apple engineer, prompting Jobs to email Google CEO Eric Schmidt with a message that said, “I would be very pleased if your recruiting department would stop doing this.”

The story goes that Schmidt forwarded the message along and that the employee who reached out to the Apple engineer was ultimately fired.

Reuters notes that the case is on track for trial in June 2013.

You might say this has been a long time coming, what with Henry Blodget’s steady stream of ill-informed posts coupled with shoddy, second-rate analysis. The most recent example isn’t the most egregious, but it’s the most recent, so here we go.

A few days ago, Blodget wrote that Apple may really be in trouble. Despite fundamentals that Blodget acknowledges are still strong, the Business Insider founder expressed worry because Verizon’s iPhone sales numbers over the last quarter was 25% lower than their iPhone sales in the last quarter.

It’s endlessly frustrating to see these moronic tech writers completely unable to engage in even a rudimentary attempt of serious analysis.

Comparing Verizon’s Q1 iPhone sales to iPhone sales in the December quarter – which encompasses the holiday shopping season and the iPhone 4S launch – is completely asinine and non-instructive. What folks should really focus on is how iPhone sales have either increased or decreased from the first quarter of 2011. To that end, iPhone sales on Verizon, quarter over quarter, increased by over 50%. Now to be fair, the iPhone 4 didn’t launch on Verizon until February of last year.

In any event here’s what does matter – the iPhone accounted for over 50% of all of Verizon’s smartphone sales this past quarter. How people are construing this as a bad thing is beyond me.

So why is Blodget so worried?

First, the Apple zealots have gone silent. Earlier, we reported a fact that could be construed as negative for Apple–that iPhone sales had plunged 24% quarter over quarter at Verizon–and we weren’t immediately attacked by a band of crazed fanboys. Normally, that happens within seconds of saying anything that isn’t orgasmically pro-Apple.

Solid analysis there, Henry.

Perhaps the zealots, as Blodget affectionately refers to them, aren’t terribly taken with Blodget’s elementary analysis (apparently I’m the exception). Incidentally, does this attack on Blodget mean that Apple is actually a-ok?

But there’s something else that happens to be ruffling Blodget’s feathers.

Second, Apple is not backing off on the flawed gimmick known as Siri–instead, it is doubling down. Apple is now paying celebrities zillions of dollars to hawk Siri on TV, when even Apple fans have gotten so frustrated with the feature that they’ve basically stopped using it.

Siri is not ready for prime-time, and we suspect that Steve Jobs would have understood that, ripped the Siri product team’s faces off, and then either killed Siri or fixed her. The new Apple, without Steve, hasn’t done either. Instead, it has commissioned even more expensive advertising to hawk a product that doesn’t work.

Apple’s commitment to the current version of Siri, in our opinion, is not a good sign of the company’s discipline post-Steve.

So we’re worried about that.

Now full disclosure. I don’t really us it too much, and I’d hesitate to call it a killer feature. But that notwithstanding, the fact that Apple is advertising Siri is by no means an indictment on Apple, nor a reason why anyone should be worried. And funny how Blodget has no idea how much Samuel L. Jackson is getting paid, but apparently assumes its somewhere in the “zillion” range. What’s more, the Business Insider link he himself links to calls the ad “amazingly great.”

And just what info is Blodget using to state that Apple fans are “frustrated” with Siri and have stopped using it. The latest report I saw, from March, relays that 87% of iPhone 4S users use Siri at least once a month. Okay, so maybe it’s not that much, but people are buying up the iPhone 4S in droves regardless. Also, keep in mind that Apple’s plans for Siri remain in motion, and we haven’t even seen the extent to which Apple will flesh out its functionality.

Wait, I’m not done ranting.

It’s getting extremely annoying watching people try and imagine what they think Steve Jobs would do.

Would Steve Jobs have killed Siri? Is this seriously a question? Here’s what we know – Steve Jobs spent a  boatload of money to acquire the technology and Apple (while Steve Jobs was alive) positioned Siri as one of the core features of the iPhone 4S. Something tells me Jobs would have axed it at all (I suppose now I’m imagining what Steve Jobs would do). Sue me.

Moving on, Blodget’s line about Apple’s discipline post-Steve is absolutely baseless, and perhaps not terribly surprising given that Blodget, in a former life, was charged with civil securities fraud and is now banned from the securities industry altogether. Blodget was charged, in part, with issuing public assessment of stocks that conflicted with internal Merril Lynch emails. So what’s the parallel I’m hinting at here? Blodget has a history of saying stuff just to say it.

Does Apple have reason to worry? Maybe. That is to say if iPhone and iPad sales disappoint and Apple’s earnings take a big tumble. And long term, we’ll have to see if Apple can maintain its vigorous pace of innovation and revenue growth.

In short, Apple’s future is by no means a sure thing. Hell, no company’s future is. But to say that Apple is in trouble because Apple fans didn’t respond en masse to Blodget’s concern regarding Verizon’s iPhone sales is pretty egotistical and arguably narcissistic. And Apple sure as hell isn’t in trouble because it continues to advertise Siri. Talk about laughable.

I have no idea what Blodget is smoking, but something tells me it’s something illegal.

Lastly, if you take a look at Blodget’s Apple writing, he consistently changes his tune about Apple’s future prospects on almost a weekly basis. Anything to generate pageviews I suppose, or perhaps see his name in print.

This coming Tuesday, Apple will deliver its Q2 2012 earnings and analysts are busying themselves with updating their projections for EPS and hardware sales.

This past Friday, Sterne Agee analyst Shaw Wu revised his own projections via a note to investors, writing that he expects Apple to deliver strong than expected results on the strength of impressive iPhone and iPad sales. Mac sales, however, will come up a little short according to Wu.

Wu anticipates Apple will report sales of 29.5 million iPhones and 12.3 million iPads, up from previous estimates of 26 million and 11.5 million respectively. As for Macs, Wu expects Apple to report sales of 4.3 million units.

All told, Wu anticipates Apple will report revenue of $36.8 billion with EPS of $10.20. Wu holds a $750 price target on Apple shares which have been sliding quite significantly lately, closing out the trading day on Friday at $572.98, down from an all-time high in the mid $640 range just a few weeks ago.

While the past quarter isn’t Apple’s busiest (that honor falls on the December quarter), iPad sales should be robust in the wake of the new iPad launch. We’ll have to wait and see what iPhone sales have in store, but it’s worth pointing out that more than half of all of Verizon’s smartphone sales during the past quarter were iPhones.

via Mac Observer

Check out the BeatBlaster app for the iPad. It lets you access your entire music collection through a sleek 80’s style interface. The attention to detail here is astonishing. The video below is self explanatory and is well worth watching. Put simply, the app transforms  your iPad into a Hi-Fi Sound System. And in case you’re wondering, it’s Air Play compatible and is only $2.99 on iTunes.

BeatBlaster iPad APP from BeatBlaster on Vimeo.

We should note that we haven’t given this app an actual try ourselves, and some of the recent comments on iTunes suggests that a recent update has rendered the app somewhat buggy. We’ll let you know if a subsequent update addresses some of the more recent complaints.

Apple is reportedly engaged in negotiations to resolve their ongoing dispute over the iPad trademark that has been in dispute for some time. If you recall, Apple, through a subsidiary, purchased the rights to the iPad trademark from Proview in 2009. Proview, however, asserts that the deal didn’t include the trademark rights for the Chinese area.

And so, a legal dispute was born.

Macworld reports:

Ma Dongxiao, a lawyer representing the Chinese company Proview, said on Friday the talks were happening, but declined to offer details.

The legal dispute between Apple and Proview is still being deliberated by the Higher People’s Court of Guangdong Province. But earlier this week, the court recommended that both Apple and Proview find a way to mediate the dispute, according to a court spokesman.

Before a ruling is issued, Chinese law allows both parties to enter a “mediation procedure” to negotiate a possible settlement. But the talks are voluntary, the court spokesman said.

Some interesting news on an otherwise slow Friday news day. The Taiwan based Central News Agency is reporting, citing research analyst David Hsieh, that the iPhone 5 will incporate “in-cell” technology which will result in a potentially much thinner device.

This story was echoed by a Digitimes report:

Apple’s new iPhone, which is expected to be released in the third quarter of 2012, is likely to adopt in-cell touch panels rolled out by Sharp and Toshiba Mobile Display (TMD), according to sources in Apple’s supply chain.

An improvement in yield rates of the in-cell touch panels at Sharp and TMD has persuaded Apple to choose to cooperate with Japan-based panel makers, the sources noted.

Sharp will produce the in-cell panels at its 5.5G lines, while TMD will utilize its 6G lines for production, indicated the sources, adding that the two makers will begin to ramp up in-cell panel production in the second quarter of 2012.

Earlier this week, a Korean report surfaced claiming that the iPhone 5 will employ “liquid metal” alloys, also in an effort to deliver a thinner form factor while increasing device durability. Also, remember that previous iPhone 5 reports have pointed to a device with a longer form factor and a larger 4-inch screen.

FOSS Patents writes:

In February, Apple brought a new U.S. federal lawsuit against Samsung, the second of its kind in the Northern District of California. Late on Wednesday by local time, Samsung brought its answer to the complaint as well as infringement counterclaims over eight patents.

Two of those patents are FRAND-pledged patents that Samsung declared essential to ETSI standards. Five of the patents (including the two FRAND patents) were originally applied for by Samsung, while three others were acquired (one from Hitachi, one from a group of three inventors). Also, Samsung’s complaint states for two of the patents that Apple was shown “detailed explanation[s]” of infringement (presumably that means claim charts) in October 2010. One of those two patents was previously asserted against Apple but then withdrawn from the first California litigation between these companies.

Verizon today released their earnings from the quarter gone by and noted that it activated 3.2 million iPhones. Impressively, that figure accounts for more than half of Verizon’s quarterly smartphone sales which checked in at 6.3 million units. EPS came in at $0.59, a 15.7% increase from the same quarter a year-ago.

Check out their full press release over here.

The Korean based ETNews is reporting that Apple’s next-gen iPhone, tentatively dubbed the iPhone 5, will utilize “liquid metal” alloys as a means to produce a device that is thinner, lighter, and more importantly, more durable in the face of drops and other damage inducing events.

According to industry sources, the next flagship phones of the companies are expected to adopt unprecedented materials for their main bodies, that is, ceramic for the Galaxy S3 and liquid metal for iPhone5, both being thin, light and highly resistant to external impacts. The new phase of the rivalry is because neither one of them can get a decisive edge over the other solely with its OS and AP specifications, features or design.

If you recall, Apple back in 2010 signed a deal with Liquidmetal Technologies whereby they were given free access to all of the company’s intellectual property. The benefit of the technology includes

• High Yield Strength
• High Hardness
• Superior Strength/Weight Ratio
• Superior Elastic Limit
• High Corrosion Resistance
• High Wear-Resistance
• Unique Acoustical Properties

We haven’t seen ETNews pop up in the Apple rumor mill much before, so take this report with a grain of salt.

With Apple set to report earnings next week, and the stock now back to previous above $600 trading levels, Godman Sachs analyst Bill Shope today issued an extremely bullish research note on Apple, advising investors to stock up on Apple shares in the weeks ahead.

On the absurd notion, from a boneheaded analyst, that carrier subsidies for the iPhone are on the wane, Shope notes that these concerns are overblown.

While some carriers will attempt to reduce the subsidy burden and tighten upgrade policies, many more will likely hold steady to capture share from the latter camp. In the end, all carriers are attempting to migrate their installed bases from feature phones to data-centric smartphones, and amid this transition, we think the risk of losing market share in the iPhone sub-segment is likely to be too great to ignore. On a shorter-term basis, we believe the building rhetoric for lower subsidies and tighter upgrade policies is likely to fade to a whimper, as vendors prepare their marketing strategies for the iPhone 5 refresh later this year.

The iPhone is the Michael Jordan of smartphones. Hell, even Sprint CEO Dan Hesse said as much a few months back. In short, the iPhone is the sole device that attracts users to new carriers in droves. iPhone subsidies are so high because carriers see a healthy return on investment.

Regarding the annual concern that the June quarter will be slower on account of no new products, Shope adds:

We believe recent investor concerns over a ‘catalyst-light’ June quarter are misguided, since this will be the first full quarter with a refreshed iPad, a lower-priced iPad 2, and a fully ramped iPhone distribution channel; in other words, the June quarter is when many of the recent catalysts begin to fully manifest into earnings power.

Also, remember that there are reports Apple may release a 7.85-inch mini iPad sometime during the third quarter of 2012.

And as for Mac sales, which some analysts believe will come in below initial estimates, Shope agrees. However, he writes that stronger than expected international sales may balance out weaker than expected domestic sales.

All told, Shope put a $750 price target on Apple shares, up from a previous target of $700.

via Business Insider

With Facebooks’s acquisition of Instagram clocking in at $1 billion, everyone’s asking just what exactly is Facebook getting out of the deal. The answer, in a nutshell, is users, about 35 million and growing to be exact.

Breaking down the purchase price per user, Wired calculates that Facebook is paying Instagram approximately $28 for each new user. It also calculates similar costs across other big name acquisitions in tech and finds that the average cost per user is about $92.

But the cost per employee checks in at about $77 million (13 employees), a pretty astronomical amount rivaled only by Google’s 2006 acquisition of YouTube which had a cost per employee figure of $24 million/each for a staff of 67.

via Wired