Edible Apple

Earlier this week, Digitimes released a dubious report alleging that Apple was working on an iPhone model (dubbed iPhone Math) that would sport a 4.8-inch screen. This mythical, larger screened iPhone was reportedly going to come with an 8 megapixel camera and was going to launch alongside the iPhone 5S. And oh yes, the initial report from Digitimes also claimed that Apple was working on another new iPhone model with a 12-megapixel lens to be released this holiday shopping season.

Given that Apple executives have publicly derided larger screens that are harder to use, it was hard to take the report seriously. And as it turns out, even Digitimes can’t take it seriously.

Today, Digitimes published a new report where it backpedals on its initial claims of a 4.8-inch iPhone.

Previously it was said that Apple would release a lower-cost version of its iPhone with a bigger screen in 2013. But the sources claimed that Apple is indeed developing an iPhone with a bigger screen, but that will not be among the models to be launched this year.

One of the two versions to be introduced this year will target the midrange market segment, but both will adopt in-cell touch technology.

The report also notes that it remains to be determined if Apple will have enough supply of in-cell touch displays to accommodate a more economical version of the iPhone due to poor yields.

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Verizon earlier today released their earnings figures for Q4 2012 and recorded 9.8 million smartphone activations, of which 6.2 million were iPhones. And of that 6.2 million figure, nearly half were iPhone 5s.

By way of contrast, Verizon in the holiday quarter of 2011 recorded 7.7 million smartphone activations of which 4.2 million where iPhones.

That being said, the total number of iPhones activations on Verizon, quarter over quarter, increased by 47%. Not bad considering that everyone seems to be questioning the strength of iPhone demand these days.

As for Verizon’s financials, they posted a fourth quarter loss of $4.22 billion which translates into a loss of $1.48 per share. During the fourth quarter of 2011, the company posted a loss of $2 billion, or $0.71 a share. Of course, this past quarter’s results were affected by Hurricane Sandy and pension issues.

CNET notes:

The pension liabilities cut into earnings by $1.55 a share, while the early retirement of debt and other restructuring activities cut another 31 cents a share from earnings. Sandy cost another 7 cents a share.

Analysts, on average, expected Verizon to post earnings of 52 cents a share and revenue of $29.75 billion, according to Thomson Reuters.

And going back to the iPhone for a minute, Apple’s smartphone this past quarter accounted for 63.2% of all smartphone activations on Verizon compared to 54% during last year’s holiday quarter.

Not too shabby.

All eyes will be on Apple tomorrow afternoon as the company will release its earnings results from the recent holiday quarter. This earnings release will be especially important for Apple investors in light of the recent report regarding Apple’s scaling back of iPhone display orders and the corresponding drop in share price.

Recently, shares of Apple have dropped to 52-week lows, even dropping down to $485 levels for a bit before making up ground and settling in at $500 levels. That said, investors will be watching closely to see if Apple bests analyst expectations.

Last quarter, Apple issued guidance of revenue coming in at $52 billion and EPS of $11.75. Meanwhile, the consensus on Wall Street is that Apple will record revenue of $54.58 billion and EPS of $13.34. That’s nearly a $2 difference in EPS between Apple’s guidance and Wall Street expectations, and given the way analysts typically cover Apple, the company will have to really blow analysts’ already high expectations out of the water to really alleviate the mounting concerns regarding Apple’s ongoing success and profitability, no matter how off-base they may be.

As for Wall St. predictions regarding product sales, they anticipate 5 million in Mac sales, 12 million iPod sales, 50 million in iPhone sales, and 23 million iPad sales.

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Well just look at what Apple is up to these days on the Siri front. A recent job posting from Apple on LinkedIn reveals that the company is looking for someone with writing skills to jazz up Siri’s dialogue.

We’re looking for a uniquely creative individual to help us evolve and enrich Siri, our virtual personal assistant. Siri’s known for ‘her’ wit, cultural knowledge, and zeal to explain things in engaging, funny, and practical ways. The ideal candidate is someone who combines a love for language, wordplay, and conversation with demonstrated experience in bringing creative content to life within an intense technical environment.

Indeed, during the first few weeks that Siri was released into the wild, a popular meme consisted of aggregating all of Siri’s off the cuff, biting, sarcastic, and humorous answers to user-based queries. That little bit of fun was rather short lived and soon gave way to the “Siri is really messing me up” meme.

So perhaps Apple is trying to recapture some of that initial excitement by shoring up Siri’s language abilities and entice people to use it more often. Incidentally, one of the key things the aforementioned job description is looking for is someone with the ability to “help the Siri team evolve Siri as a distinct, recognizable character.” In essence, they’re trying to make Siri just a tad bit more human like.

Related: Apple hires Amazon’s William Statssior to lead Siri unit

On Friday, Apple shares closed at exactly $500 a share, and in the wake of reports regarding a bevy of call option activity some believe that forces of market manipulation may have been rearing their ugly heads.

Specifically, it’s been reported that there are approximately 60,000 call options betting that shares of Apple would be priced in the $550 to $700 range come January 19. As a quick primer, a call option enables a prospective shareholder to pay for the right to purchase a stock, at a future date, at a predetermined price.

Karen Haslam breaks it down:

So, if you had purchased one of these call options written in the summer you would have had the right to purchase, say, 100 Apple shares at the price of $550 after 19 January. With each call option giving the buyer the right to purchase 100 Apple shares, billions of dollars could have been tied up in this bet.

If you had bought a call option and Apple had remained at $700 you’d have been in the money by $150 a share. The money managers who wrote the call options would normally prepare for such an eventuality. When call options are written, the money managers usually cover their backs by purchasing stock of their own – this way if the stock price increases above the price range they don’t lose out. This could explain why the stock soared in the summer months – Wall Street may been buying up Apple shares to cover the bets being made with the option calls.

However, with AAPL down at $500, the person who wrote the call option in the first place is the one laughing all the way to the bank because the investors have to pay $50 more per share than the stock is worth. Hence the theory that there has been some stock manipulation.

It appears that the institutional money managers that wrote those call options last summer stood to make a lot of money as long as the price remained below $550 on 19 January.

While it’s easy to dismiss the notion of market manipulation, there’s a lot of circumstantial evidence to suggest that something is afoot. Of course, there’s the Wall Street Journal article regarding Apple scaling back its iPhone display orders which was suspect to say the least. Also, remember that Apple has long been a favorite target of investors looking to manipulate shares for their own well being. In fact, Jim Cramer explained how easy it was just a few years ago.

And once again, in case you missed it, Joe Springer of SeekingAlpha wrote the following this November.

So here is our logic to being patient. It is threefold:

1. Apple had an enormous amount of call options speculation related to its Summer surge
2. A huge share of this was calls with a strike of around the current price of $550 and higher that expire January 19 2013
3. The institutional money managers that wrote those call options and bought common stock to cover will make a lot of money if a) those options expire worthless, and then b) Apple runs after that expiration date

via Macworld

In remarks made on Friday, Taiwan Semiconductor Manufacturing Company (TSMC) CEO Morris Chang said that he anticipates that his company, in 2013, will be responsible for nearly all the chips built using the 28nm process. Consequently, some believe that Chang’s statements indicate that TSMC has at last struck a deal to manufacture chips for the iPhone. Remember that all of Apple’s chips are currently manufactured by Samsung.

According to China Times, Chang’s comments led analysts in attendance to believe that TSMC has secured orders from Apple for its upcoming A series processors. Apple’s A6X chip is currently produced on a 32nm process by Samsung, but a reduction to 28nm could result in power savings and improved performance for future devices.

Notably, a report from earlier this month relayed that Apple was moving its next-gen A6 chip to TSMC as opposed to Samsung and that trial production on A6x chips for Apple had already begun.

via The Next Web

Aubry Johnson, who was previously a lead designer at Color, recently put up a blogpost (since removed) describing the buyout process as applied to Apple’s purchase of LaLa and later Color. Remember than many members of the original LaLa team went on to found Color. Thank god for Google Cache, right?

First off, Johnson describes the impetus behind Apple’s interest in LaLa.

In 2009 when you Googled a song, the first result was a Lala result. Not an iTunes result, not the artist’s MySpace or website… a Lala result. Every click that led to Lala wasn’t leading to iTunes for a potential music purchase. Even worse for Apple, Lala was often a better deal. When Lala partnered with Google (for Google’s Music Beta) there was a clear and present danger to Eddy Cue and his iTunes empire. [Bill] Nguyen had pure gold and started a bidding war for the control of the company.

Following that, both Nokia and Google offered to buy out LaLa, albeit with offers that Nguyen and presumably others at LaLa found embarrassingly low. Consequently, Nguyen pulled some strings and was able to secure a sit down meeting with the higher ups at Apple, including Steve Jobs. And in classic negotiation strategy, he played one side against the other.

He explained that he had offers from the largest mobile OS competitors and that they wanted to acquire his music startup. Cue knew if Google obtained Lala the ownership of the service coupled with search dominance could be disruptive to their stronghold. Bill was notorious at getting great deals with the music elite, usually through Lala’s investor, Warner Brothers Music.

And so, in November of 2009 Nguyen found himself in Steve Jobs’s kitchen in Palo Alto. Also at the meeting, amongst other executives, were Eddy Cue and Tim Cook.

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I’ve been rather upfront regarding my addiction to Angry Birds:

On the advice of a good friend, I picked up the app for a mere $0.99 and have been unable to put it down since. Quick gaming sessions (such is the plan) have consistently morphed into hours of turning colorful birds into dangerous and precise projectiles capable of taking down even the sturdiest and most impenetrable of structures. Alas, promising myself a much needed break after completing a challenging level is of no use. There’s always one more level to be had, new challenges to be conquered, and in the simplest of terms, more pigs to kill.

To date, I’ve played every single Angry Birds game so I can say with authority that one of the best thus far – Angry Birds Rio – is now available for free on iTunes as it is Apple’s free app of the week.

Check it out over here and get your bird slingshot on and here for the iPad HD version.

Related:

Arcade version of Angry Birds

Rovio CEO Peter Vesterbacka thanks Apple for success of Angry Birds

Angry birds developer calls out Android for fragmentation

Playable Angry Birds Birthday Cake [Video]

Angry Birds CEO sees iOS platform as the top platform for years to come

Hot on the heels of reports, albeit unsubstantiated, that Apple was scaling back its iPhone display orders comes word via Reuters that Sharp has effectively ceased production on displays for the 4th-gen iPad.

Sharp Corp has nearly halted production of 9.7-inch screens for Apple Inc’s iPad, two sources said, as demand shifts to its smaller iPad mini.

Sharp’s iPad screen production line at its Kameyama plant in central Japan has fallen to the minimal level to keep the line running this month after a gradual slowdown began at the end of 2012 as Apple manages its inventory, the industry sources with knowledge of Sharp’s production plans told Reuters.

Sharp has stopped shipping iPad panels, the people with knowledge of the near total production shutdown said. The exact level of remaining screen output at Sharp was not immediately clear but it was extremely limited, they said.

It’s hard to know what to make of this given that Apple also sources iPad displays from Samsung and LG Display. Consequently, perhaps the lower throughput of iPad displays at Sharp is nothing more than the to-be-expected seasonal downturn.

via Reuters

If you can’t beat ’em, join ’em, right? A new report claims that Apple may, after all these years, follow the trend and release an iPhone model with a 4.8-inch screen dubbed iPhone Math. An unusual name to be sure, which leads some to believe it may simply be an internal codeword for the device.

The 4.8-inch model will reportedly come with an 8-megapixel camera and will launch alongside the iPhone 5S which will purportedly also sport an 8-megapixel camera. Interestingly, the China Times report also relays that Apple may have an additional iPhone update in the works for the 2013 holiday shopping season in the form of a refreshed model with a 12-megapixel camera.

Tantalizing, to be sure, but it takes a leap of faith to assume Apple will go ahead and release a 4.8-inch screen, and then to believe that another model will come along just a few months later seems well beyond Apple’s typical product upgrade patterns.

The shipments for components, including touchscreens and cameras, will start rising significantly in March, and iPhone manufacturers will begin production in late April. Hence, Apple’s suppliers will see major growth in 2Q 2013.

Hon Hai Precision Industry Co. Ltd. will undertake 90% of the manufacturing orders, and Largan has received orders for 8 million camera lenses. Fujikura, Flexium and Zhen Ding will share production orders for printed circuit boards.

Foxconn Technology and Coxon will provide molding parts for Apple’s new models; Foxlink will continue to offer connectors; Hon Hai Precision’s Microelectronics Technology will start designing 4G network solutions for Apple.

There of course have also been rumors that Apple will release a more economical (read: low cost) iPhone this Spring to target emerging markets and more cost conscious consumers.

And returning for a second to reports of a larger iPhone, previous reports from Digitimes and Jefferies analyst Peter Misek have indicated the same. Back in early January Digitimes reported that Apple may be following the trend of 5-inch displays for higher end models while Misek wrote in a research note to investors:

Several iPhone 6 prototypes appear to be floating around. The model with a 4.8″ screen is the most interesting. It has a Retina+ IGZO screen, a new A7 quad-core processor variant, and a new form factor with no home button. Full gesture control is also possibly included.

via China Times

Behold, a photo of Ashton Kuther as Steve Jobs and Josh Gad as Woz. Gad seems like an interesting choice for the role, and he certainly could use some help with his beard. Kutcher, on the other hand, has the Jobs look down pat.

The indie film, creatively titled “Jobs”, will be released this April and will close out the Sundance Film Festival in Utah at the end of January.

The description of the movie reads:

Directed by Joshua Michael Stern, written by Matthew Whitely, shot by Oscar- winning cinematographer Russell Carpenter and produced by Mark Hulme, jOBS details the major moments and defining characters that influenced Steve Jobs on a daily basis from 1971 through 2000. jOBS plunges into the depths of his character, creating an intense dialogue-driven story that is as much a sweeping epic as it is an immensely personal portrait of Steve Jobs’ life. The filmmakers were granted unprecedented access during shooting to the historic garage in Palo Alto, that served as the birthplace to Apple Inc. jOBS stars Ashton Kutcher, Dermot Mulroney, Josh Gad, Lukas Haas, J.K. Simmons and Matthew Modine.

Echoing reports from a few other analysts, Jefferies analyst Peter Misek recently issued a research note to investors claiming that Apple’s preliminary builds of the iPhone 5S will commence in March ahead of an anticipated launch date in either June or July.

Notably, this would mark Apple’s return to a Spring/Summer launch schedule. If you remember, the delayed launch of the iPhone 4S due to technical problems pushed back Apple’s typical Summer/annual refresh cycle.

Misek also noted that Apple is currently testing two iPhone models – the iPhone 5S and perhaps a lower-cost model as well. This also aligns well with a number of rumors that have been floating around the blogosphere as of late.

What’s really interesting, though, is that Misek claims that Apple’s next next-gen iPhone, the iPhone 6, will sport a whopping 4.8-inch display. Color us skeptical on that, but if folks keep snatching up large screened Samsung smartphones en masse, perhaps Apple will have no choice but to listen to the mass market.

Returning to the lower-cost iPhone for a second, Misek believes Apple will keep costs down by implementing a polycarbonate casing and not utilizing a Retina Display or an LTE chipset.

I personally don’t think Apple would revert back to a non-Retina Display – the difference is stark and would clearly make the device seem “cheap” as opposed to lower cost. As for alternate materials and no LTE support, well that does make a lot of sense.

via AppleInsider