Author

Avatar for 9to5 Staff

9to5 Staff

Apple continues climb up Fortune 500

Site default logo image

Apple Finds itself at position 103 on the Fortune 500 for 2008.  This represents the highest point it has reached since 1994 when it took  number 67.  After 1994, Apple began a slow slide that didn’t turn around until Steve Jobs returned to the helm.  Last year Apple was at 121 and in 2006 Apple was at 159.  Obviously that is a pretty steep slope Apple is climbing and with the economic downturn effecting everyone a bit moreso than Apple, you should expect to see Apple in the top 100 next year.  In fact, if Apple had not spread its AppleTV and iPhone revenues out over two years, it would have probably made the top 100 this year.

Fortune reported the below figures…

                             $ millions    % change from 2006
Revenues                     24,006.0    24.3
Profits                           3,496.0    75.8
Assets                         25,347.0    —
Stockholders’ equity     14,532.0    —
Market value              125,688.1    — 

 

We’ll find out more at tomorrow’s earnings call.

WTF is 'Conversation'? And why does Jim Cramer think you'll buy his shorted Apple Stock?

Site default logo image

According to popular/controversial stock analyst, Jim Cramer, Apple will be releasing a product called ‘Conversation’.  It is supposed to be some sort of Instant messaging client.  We know Apple is releasing AOL IM with iPhone 2.0 so perhaps this is what he is speaking of. 

Update: According to the Video on CNBC  he was referring to iChatAV – which is a 5 year old product that anyone who has remotely aware of Apple products would have known about for years.  TheStreet.com (which Jim Cramer cofounded) misreported his comments.

[youtube http://www.youtube.com/watch?v=gUkbdjetlY8&hl=en]

Cramer fans, flame on!

UK iPhone selling out, no more revenue-sharing?

Site default logo image

 Last week’s price cut on the 8GB iPhone has paid off with multiple reports of stock running dry as UK consumers run to purchase on of the Apple mobiles, and further suggestions Apple may be preparing to abandon its revenue-sharing model for iPhone sales.

Success has its cost: Mobile Today informs that both O2 and Carphone Warehouse sold out of the model within days of last week’s announcement. Apple continues to offer the model through its online store, but at the original £269 price, rather than the £169 its partners are offering the model for.

The report tells that stores in Newcastle, Birmingham and London claim to have already sold out of the 8GB model, with one Carphone Warehouse employee claiming sales had "doubled" since last week’s announcement. Stock in hand was expected to be refreshed over the weekend, though sales of the 16GB iPhone remain sluggish, suggesting Apple may be forced to permit its partners to implement a similar discount on that model, should the company not plan to maintain it as an option in its future iPhone range.

The move to discount the 8GB model has been seen as an attempt to boost sales of the device, which haven’t met expectations in Europe, and to clear stock for the anticipated debut of a 3G iPhone.

In related news, Italian newspaper La Repubblica today published a report claiming Apple plans to move away from revenue sharing model to adopt a subsidised open network approach. The first fruit of the new effort seems likely to be the non-exclusive release of the iPhone in Italy through Telecom Italia.

 

Leopard's wireless woes

Site default logo image

 Mac users are becoming frustrated at a strange bug in Leopard that’s causing problems with wireless connections.

These bugs are sufficiently serious to have driven the New York City Department of Education to have temporarily suspended receiving shipments of new Macs. 

Recent reports have suggested Apple is working to repair the issue within its upcoming Mac OS X 10.5.3 release, but user anxiety continues to grow, with its discussion forum full of complaints from aggrieved users.

"The WiFi connection is working for hours in a row, but once in a while it suddenly disconnects. It then tries to reconnect, and it looks like it succeeds, but disconnects again after a few seconds," one post from December 2007 explains.

Users report loss of wireless network access after shutting their Macs down, and have resorted to rebooting routers and AirPort Extreme Base Stations along with all manner of software attempts (including attempts using Terminal in some cases). The problem seems frequently to reappear.

The situation has existed for months, first afflicting some Mac users who migrated their perfectly serviceable machines from Tiger to the Leopard OS. What makes the solution a challenge to achieve is that not all Macs are affected, meaning most users continue to enjoy acceptable wireless performance, but the problem is still thought to affect many users.

News of the problem in NYC has raised the profile of the long-standing matter, but multiple extended discussion threads on Apple’s website confirms the nature of the problem and the extent to which some Mac users have been waiting for a fix, with some posts dating back to November 2007.

Some users have resorted to reinstalling Mac OS X 10.4 while a fix is put in place, but some reporting their frustration within the company’s discussion forums are beginning to wonder why Apple has failed to issue a statement or full repair of the flaw so far.

Apple’s next Mac OS X 10.5 update is expected to appear within 2-3 weeks.

 

Around the Web – April 21

Site default logo image

 As reported here Saturday, PayPal’s denial of a rumoured plan to block Safari users from using the online payments service leads the agenda this morning. In other news, analysts predict Apple’s Q2 results will once again excel against guidance; China becomes the world’s most-connected internet country; Apple plans virtual stores; a defamation lawsuit against the company has been thrown out of court and reports claim the next Leopard upgrade is currently being tested by developers. 

 

PayPal

As we’ve already revealed, PayPal has no plans to cut Safari users off from its service.

Apple Q2 results

Apple stock hits $161.33 per share as analysts issue positive forecasts for the company’s second quarter earnings, with strong Mac sales and better than expected component prices seemingly set to drive company to exceed guidance. iPhone sales are also set to exceed Apple’s stated 10 million FY2008 target, say analysts from Goldman Sachs and Caris & Co.

China – the world’s internet superpower

China’s 1.3 billion population now includes 233 milllion internet users, as the Olympics host speeds into the information superhigway, making the current debate on human rights, censorship and freedom in Tibet all the more relevant.

Second Apple

Apple patent describes 3D environments for its online shops,, equipped with customer to customer interaction and real live (if virtual) store staff as company develops Web 2.0 front-end for its retail operations.

Off the rap

The lawsuit against Apple, Viacom and BET bought by Rap-A-Lot Records CEO James ‘J Prince’ Smith and his associate Thomas Randle has been kicked out of court. Litigants claimed inclusion of an image of them with an infamous gangster leader in US show, American Gangster, had caused them harm. Judge rejects case.

Mac OS X 10.5.3

Developers are testing the next major build of Mac OS X 10.5, with Apple distibuting a pre-release version of the wide-ranging software update among select ADC members, Apple Insider reports. Software release expected within weeks.

 

Updates for the older Mac

Site default logo image

 It’s a little-known fact that Apple maintains a library of software updates for older (pre-January ’98) Macs, Newton and Apple II machines.

The company hosts a huge library of downloads for these veteran machines, naturally warning that "all the software here is considered obsolete and may do harm if improperly installed. Please use extreme caution." 

All Apple software released since January 1998 remains available, but that’s found within the AppleCare Knowledge Base.

What this means is that if you have a veteran Mac and hope to squeeze a little more out of it you can at least easily locate the relevant updates, and while that’s well known in parts of the Mac community we thought it worth noting today for those of us who weren’t aware of the fact, but may suddenly have need for the software.

Oh, there’s a caveat: software that’s no longer available may be listed on Apple’s page, and the list reflects US releases only. " For software for other languages follow the same architecture format according to the language of your Macintosh Operating System."

Apple’s archive software page is here.

 

Paypal denies Safari-blocking reports

Site default logo image

 News in brief: There’s been multiple reports claiming PayPal plans to block Safari users from using its service on account of the browser’s lack of built-in anti-phishing features.

The Safari block has been mooted as part of a package of moves to combat phishing attacks: for example, PayPal will warn users of older browsers that they are vulnerable to such attacks, and will eventually block older browsers from accessing its service. This move generated a wave of speculation claiming the company plans to remove support for Safari, but this is not the case, PayPal explained last night.

In a response to an article on the Wall Street Journal, PayPal Corporate Communications spokesman, Michael Oldenburg said: "PayPal is developing features to block customers from logging into PayPal when using obsolete browsers on outdated or unsupported operating systems. An example of such a browser/OS combination might be, for example, Internet Explorer 4 running on Windows 98. In doing so, we better protect our customers from viewing a phishing site through their browser. We have absolutely no intention of blocking current versions of any browsers, including Apple’s Safari, from our website."

So, Safari and PayPal are safe, for the moment.

 

Grocery shopping? Don't forget your iPhone…

Site default logo image

 Looking forward, five major firms are working with high street stalwart, the Kroger Co. on a new mobile shopping coupon scheme.

The firms, which include Procter & Gamble, The Clorox Co., Del Monte Corp. Kimberly-Clark, and General Mills Inc., plan a four month test later in the year to see if shoppers take to the idea of using their mobiles to hand over virtual discount coupons for their shopping.

Kroger Co. runs multiple US shops: convenience stores like Turkey Hill and Kwik Shop; department stores including Smith’s Marketplace, Fred Meyer and Fry’s; and locations such as Food 4 Less, City Market and PayLess.

Sure, we’re not saying iPhone’s going to be part of the trial – to be honest, we don’t know, but we do recall Forbes mention of Apple patents to let iPhone (or iPod touch) users order goods using their iTunes account (conceivably) at high street shops such as Starbucks. But speculation isn’t fact, just expression of what’s possible.

 

3G iPhone in production, Euro-networks lose on v.1

Site default logo image

 Apple has placed orders for the production of the second-generation iPhone, while its European network partners complain at lower than expected sales.

The company has asked its Far East suppliers to produce 200,000 units of the new second generation 3G-enabled iPhone by the end of May, with production ramping up to two million, or 500,000 per week, in June, making a June release of the device a done deal.

This information comes from a reputable source – The Times newspaper, which explains the new iPhone will have a "radically different" appearance to the current generation. "Among the possibilities are flip version, which would enable the screen to be larger, and a sliding model with a regular qwerty keyboard – as opposed to a touchscreen one," the report informs.

The report also predicts prior claims multiple iPhone versions will eventually be made available, and suggests Apple may end its current strategy of introducing the device into specific countries in partnership with one mobile operator in favour of making it available through multiple carriers. Apple has described itself as "not wedded" to its exclusivity strategy, but the report explains it may diversify availability of the product perhaps as soon as next year.

The Times also reports disappointing iPhone sales in Europe. Germany, France and the UK between them reportedly sold 333,000 units by the end of December, but expectation had been for between 500,000 to 600,000 sales in the period. As it is, Apple’s network partners appear left with significant stock of the current generation of the device, leaving them exposed to potentially losing money on the deal, though Apple’s meeting with Orange France this week suggests the company is under some pressure to share that risk. Kathryn Huberty, an analyst at Morgan Stanley told The Times that losses on early model iPhones would be "significant".

 

Around the Web – April 18

Site default logo image

 All quiet on the Mac news front so far today: Apple patents iPod headset tech; mutterings of subsidised iPhones in France; MacBook Air and iPhone spurring wider use of touchscreens and LED displays; and Apple declared the world’s most innovative company by BusinessWeek. Also Apple responds to Windows and Safari critics.

Headset displays

Basically the buzz is that Apple’s patented a pair of technologies describing ways to make a small and light video headset display, potentially for use with iPods and iPhones. The filings date from 2006 and observe some health and safety issues with the laser technology used in the solutions.

French iPhone discount beckons

Orange executives are meeting with Apple to discuss subsidies to boost iPhone sales in France. A report from French newspaper, Les Echos says the two companies aren’t happy with French iPhone sales, with recent price cuts in Germany and the UK, French customers shouldn’t have long to wait.

Apple screens

Two separate reports explain that the MacBook Air is spurring use of more environmentally-friendly LED screens in laptops, with prices falling for these (DisplaySearch). And the iPhone is inspiring other handset makers to deploy touchscreens in their devices, said Swenc Technology executive, Kevin Chuang.

Innovative Apple

Recall Apple boss Steve Jobs’ determination to invest his way out of the last recession? Well, Apple did, and now it’s riding high, equally determined to invest its way out of the new one, winning the company praise and plaudits in a BusinessWeek report.

Apple answers Windows critics, almost

So, Windows users were furious when Apple changed its software update system for their platform in a way which meant they were ‘encouraged’ to install Safari, even if they hadn’t done so before. Well, the latest edition of the Software Update system at last offers installation of the Apple browser as an option – though the company still leaves the install option checked by default, perhaps it should be a free choice?

Microsoft sales tool

Site default logo image

Real internal video from the world’s biggest software company, featuring the delightful “Rocking Our Sales” by Bruce ServicePack and the Vista Street Band. Oh dear…

[youtube http://www.youtube.com/watch?v=sPv8PPl7ANU&hl=en]

Amazon MP3 beats iTunes on album sales, kinda?

Site default logo image

 iTunes may be the number one US music retailer, but Amazon boss Jeff Bezos thinks he has the Apple service beat in terms of album sales.

Bezos talked business with Fortune this week, it’s a wide-ranging chat that covers many of the bases of the giant online retailers international operations and his near-death experience during a fated helicopter ride. And includes the Amazon boss’ claim that his MP3 service outsells Apple, at least when it comes to album sales, at least proportionally.

An Amazon spokesman explains: "One exec I know at a big label, who asked to remain anonymous, says he’s excited by one trend in particular: At Apple”s iTunes store, two thirds of the music sold is single tracks and one third is albums. But at Amazon, two thirds of the music sold is albums and one third is tracks." 

The Amazon boss is otherwise reluctant to talk about Apple, but with recent data revealing just 10 per cent of Amazon’s MP3 customers are former iTunes users, and with the company reportedly selling a fraction of the quantity of music sold by Apple’s service, the proportional difference may mean very little in terms of sales numbers and revenue.

That Apple seems on track to seize 28 per cent of the global music market by 2012 was also recently indicated by In-Stat Research.

Take a look at the Fortune interview here.

 

She's back: Ellen Feiss in online screening

Site default logo image

 Famed church of Mac cult figure Ellen Feiss’ film, ‘Bed and Breakfast’ will be broadcast online next week.

The film was shot in France in 2006 and follows a young American couple on vacation in France looking for an old friend who has inherited a castle. It’s the debut movie for Feiss, who became an internet celebrity following her appearance in one of the initial "Switch" campaign ads from Apple.

Feiss became a cult figure after her "Switcher" ad aired in 2002. In one unreleased ad, Feiss talked about an Apple PowerBook: "It’s really fast and it’s silver… and I don’t have to watch airplane movies any more", she said. Her laid back personality generated huge interest in the teenager, who turned down appearances on The Tonight Show and The Late Show with David Letterman in order to lead a normal teenager’s life.

The film marks the first fictional programming for The Digital Lifestyle, which was founded in November 2007 by former Apple employees.

TheDigitalLifestyle will screen the film on Monday, April 21 at 9.30am ET. During the one-time only broadcast, viewers will be able to chat with each other in real time. 

 

 

Around the Web – 17 April

Site default logo image

 Good morning. In brief, today’s key stories include a Safari update to fix the well-publicised PWN 2 OWN hack; Apple takes 6.6 per cent of the US computer market – even while US consumer spending slows; IBM’s plotting a move to Mac and everybody’s war-chalking nowadays. Read on…

Safari updated

Apple’s Safari 3.1.1 update is available now. It’s a security and stability patch that among other things fixes the vulnerability that was used to hack into a MacBook Pro at the CanSecWest security conference in late February. It’s worth noting it took Apple just three weeks to fix this widely-reported vulnerability (which researchers now admit can be used to undermine most platforms running WebKit).

Apple market grows

Two reports, one from IDC, the other from Gartner, indicate Apple continues to gain marketshare with its rate of growth vastly exceeding the industry average. The computer maker now holds 6.6 per cent of the US market, with shipments up 32.5 per cent (Gartner) or 25.1 per cent (IDC). It shipped 1.01 million Macs in Q1, the analysts explained.

US consumer electronic sales snap

Most US consumers say they’ll spend less on consumer electronics in the next three months as they grapple with fear of recession and debt. As the US economy heads into melt-down, most players seem set to be affected by what the latest ChangeWave Consumer US Spending report claims to be the weakest 90-day spending outlook for the sector since their analysis began.

Apple finally takes it to IBM

Remember the 1984 ad? We do. Know who the big face on the screen was? IBM, some say. Now Apple’s former chip supplier seems set to make the switch, with revelations that an internal survey has found most employees prefer Mac above PC when they’re giving the choice. So now IBM is testing Macs for use within its business with an eventual plan to offer new employees (most of whom already prefer the Mac) the choice of platform.

You’re entering a war-chalk zone

Be ready, people, that slow internet connection on your wireless network may mean someone’s piggy-backing your bandwidth without permission: new research from Accenture shows 12 per cent of surfers in the US and UK have logged onto someone else’s unsecured WiFi connection. 

Got a story? Drop it into the comments below.

 

Apple plots iPhone diversity roadmap

Site default logo image

 

Apple may plan to introduce not one, not two, but three different iPhone offerings, perhaps even as soon as June, implementing 3G support and offering an iPhone mini to widen the reach of its technology, at least that’s todays rumor.

Apple’s apparently considering a premium model iPhone that’s equipped with support for 3G. Larger than the existing model its extra size conceals a battery offering triple the duration of the current generation, with more models too… 

The company also plans to retain its current EDGE-network iPhone, though capacity could climb to match that of the iPod touch, which itself could see a capacity bump (though with next stop being 64GB it’s possible the high-cap touch would demand a premium price, which may limit its success in the curently shrinking CE market).

There’s even a plan for a new entry-level model (image is just here) of the iPhone. This is slimmer and smaller, has a large screen, offers just 4GB capacity and no video playback. This model’s set to cost around $169.

Be warned, however, all we’re reporting here is the latest speculation which comes direct from here, though the publication disparages its own rumour with the warning: "We are not known as a rumor site of any accuracy, and we present this rumor and all rumors merely as topics of discussion for our readers."

We think a move to diversify the iPhone range makes some sense, though we suspect any move to force customers to purchase a premium model of the device just to gain 3G support would meet a frosty reception.

 

 

Apple signs new iPhone parts supplier, updated

Site default logo image

 Apple has signed-up United Microelectronics Corporation (UMC, NYSE) to create chips for the next-generation iPhone.

The move means the end to the sole supplier status enjoyed by former supplier of these particular components, Taiwan Semiconductor Manufacturing, according to local reports.

Siliconware Precision Industries Co. will provide packaging and testing of the UMC chips contracted for use in the iPhone, the report adds.

Later reports confirm the company has been asked to produce Infineon Technologies’ 3G baseband chip, which will be used in the new Apple iPhone that supports 3G. UMC stock currently stands at $3.39 on the New York Stock Exchange.

 

 

Around the Web

Site default logo image

The Apple news web’s still reeling at the lack of any big deal announcements from the mothership Tuesday, this blackout likely reflects the company’s customary radio silence in the days before it makes its quarterly financial results public (on 23 April). 

This morning’s highlights include wide reporting of the O2 iPhone price cut we revealed earlier this month; new graphics upgrade kits for the Mac Pro; much more information on WWDC 2008 and news of the Apple Design Awards (now with added iPhone categories); iTunes user loyalty seems high; Intel’s Q1 results and AOL’s move to introduce Mobile Search for the iPhone. Read on…

O2 £100 iPhone discount

As we predicted in February, O2 and Carphone Warehouse have lopped £100 off the cost of the 8GB iPhone. The 16GB model remains the same price, and the deal’s only available while stocks last…does this mean new iPhones in June?

GeForce 8800GT for older Mac Pros

Remember the olden days when the graphics power you had in a pro Mac was all the graphics power you could ever expect, bar buying a new Mac? Yet another benefit of the new intel architecture is easier support for better graphics cards. Now Apple’s introduced the NVIDIA GeForce 8800GT upgrade kit for older Mac Pros, available now on the US store the kit costs $280.

WWDC 2008

Apple has announced an additional batch of 90 sessions for its forthcoming WWDC event, these reveal a host of interesting areas developers will be able to explore on the iPhone and the Mac; the company has also announced this year’s Apple Design Awards, with two new sections for the iPhone. More here.

Amazon up the creek

Amazon’s new music download store has been doing its best to compete with iTunes, snag is, most iTunes users are happy with what they already have. New research from the NPD Group confirms that only around one in ten people using Amazon’s store have previously shopped with iTunes. While this means the digital market’s set for growth, it also means those plotting to overthrow Apple’s music retail domination have to stop cackling and get back to the drawing board. 

Intel results

Sure, Intel’s Q1 results may have taken a hit, mainly due to weakness in the flash memory market generated as a result of economic malaise and continued weakness in consumer electronic sales, but it’s 12 per cent year-on-year income decline hides a couple of high points: demand for processors, particularly mobile processors, remains strong.

"We’re seeing PC penetration growing more rapidly," Mac user and Intel boss Paul Otellini said. Intel also confirmed new Atom processors will appear in PCs from mid-year, confirmed plans to ships a SIX-CORE Xeon chip later this year, and hinted Nehalem processors will appear in 2H2008.

AOL Mobile Search

AOL yesterday officially launched the beta version of AOL Mobile Search, a new development created for the iPhone and iPod touch. This combines results from multiple destinations. (Meanwhile, the financial world’s considering if mooted plans to merge AOL with Yahoo in an attempt to spurn that unfriendly Microsoft attempt to take Yahoo over will succeed).

We’ll be back with more as and when it happens.

 

iPhone for India on Vodafone, September

Site default logo image

 Apple will release the iPhone in India in September, local reports claim.

The company is partnering with Vodafone India for the launch, which is expected to take place in September. Initial reports claim the 8GB iPhone will be the first model to ship, with a higher-capacity version set to reach the sub-continent in mid-2009. And Vodafone may also pick up the deal as network partner for Australia.

“The carrier deal for India is being worked out with Vodafone,” an Apple source, told the Business Standard, adding: “Vodafone could also become the carrier for the Australian market once iPhone is launched there, though more than one carrier is likely for Australia.”

Vodafone officially denies any such deal, though company insiders have confirmed it, the report claims. Apple is engaged in a slow expansion into the country, with plans to open a second store in Bangalore and a third in Chennai this year. India is a critical market: the Indian mobile subscriber base is set to almost double to 500 million by 2010, the report explains.

 

UPDATED: O2 CONFIRMS

Site default logo image

 

O2 this afternoon confirmed its new discounted price tag on the 8GB model iPhone.

The news follows a similar price cut earlier this month by Apple’s Germany iPhone partner, T-Mobile.

 

As predicted by 9 to 5 Mac in February, when we reported plans to cut prices on the device "perhaps as late as mid-April". O2 has applied a £100 discount on the 8GB model of the iPhone.

In a press release the network announced the 8GB iPhone deal, which can now be purchased for just £169 until 1 June 2008. The offer is available from tomorrow on all O2 iPhone tariffs and will create "additional momentum for what has been O2’s fastest-selling device," the company said. The 16GB iPhone remains priced at £329.

"With the highest customer satisfaction of any device on O2 and unparalleled mobile Web access, the iPhone offers the best mobile experience in the market. Through introducing this special offer, O2 aims to expand the iPhone’s reach, bringing its benefits to an even greater number of customers," the company explained.

O2 also confirmed some interesting statistics regarding its iPhone customers, saying the device has been, "hugely successful in attracting new high value customers to O2 who are also more likely to recommend O2 to their friends and family. 60 per cent of iPhone customers are new to O2 while iPhone customers spend on average 30 per cent more than other Pay Monthly customers."

Signs that the 8GB model will eventually be made obsolete are clear in the small print to the deal, with O2 explaining: "The special offer is subject to stock availability."

The discount comes as reports suggest Apple is moving to introduce a new model of the device, introducing 3G support.

O2 improved its iPhone tariffs in February, increasing the text and minutes included in the £35 per month tariff in an attempt to boost sales of the device.

 

Around the Web

Site default logo image

 Good morning. Key Mac-related reports circulating across the web this morning include the tragic death of Mac news pioneer, Stan Flack; various problems afflicting Apple’s laptops; a purported launch date for iTunes in Russia; new Apple TV software and an attempt by giant UK retailer, Tesco, to take on iTunes. Read on…

First. it’s with great sadness we must report the passing of MacCentral and MacMinute founder, Stan Flack. Flack (42) died at his home in Canada of complications bought on through an existing medical condition. His death has caused great sadness across the Mac web, with friends and colleagues lamenting his passing. 

Macworld’s Jim Dalrymple

Macworld’s Peter Cohen

Macsimum News’ Dennis Sellers

MacBook Problems

MacBooks are suffering unexpected graphics problems, mutliple reports explain. These problems are being widely reported on Apple’s discussion forums, with the company telling afflicted users it is looking into these complaints, promising, "further information will come in the form of a Knowledge Base article, Software Update, or Software Release."

iTunes Russia

A confused report emanating from a Russian publication claims Apple will launch iTunes in the country (the world’s thirteenth largest music market) on April 21. Russian music sales reached $210 million in 2006.

Apple TV updated

Apple has updated the Apple TV, introducing version 2.0.2 of the software. Little is known about the patch, beyond the addition of slightly improved Flickr support and claims the patch improves wireless network connectivity and speeds up remote control navigation. 

Tesco v. iTunes

Finally, UK retailer Tesco has announced plans to launch an MP3 download service, offering a catalogue of tracks in a format unhampered by digital rights management technologies. This move means the retailer is now in direct competition with iTunes, 7 Digital, eMusic and other UK digital music services.

Apple hire hints at strategic acquisitions

Site default logo image

 Apple may be preparing to engage in a significant strategic acquisition, at least that’s what’s suggested by the company’s move to hire HP’s leading legal corporate buyout specialist, Charles Charnas.

Bear with us. We understand that recruitment isn’t necessarily the most engaging story, but let’s take a quick look at this. 

Firstly, Apple has hired Charnas to lead its corporate department, filling a role that hasn’t been occupied for seven years. In his new post, Charnas will oversee Apple’s intellectual property and strategic acquisitions. 

We accept that Apple’s IP effort may need an extra hand as the company files patent after patent in order to secure and develop its iPhone.

Consider the experience the newly-appointed lawyer and 18-year HP veteran has: principally, he led the $25 billion merger between Compaq and HP. That he was involved in such a significant business deal lends him valuable experience, and makes it a viable speculation that his role at Apple will be to lead the company in another key strategic bid.

"He’s been known as one of the high-profile heavy hitter corporate lawyers in Silicon Valley for many years," Anna Marie Armstrong, a legal recruiter for Mlegal told Law.com. "It seems like Apple’s at a point where they want to hire really senior experienced lawyers for their in-house department."

Apple is widely known to be sitting on a huge heap of cash – around $18 billion. The company has used its cash hoard to engage in strategic investments in the past: purchasing huge quantities of flash memory to secure iPod shipments or acquiring audio company Emagic in order to bring market-leading audio application Logic into the Apple fold.

It’s no surprise that Apple is preparing to flex a little of its financial muscle in some strategic investments. Apple’s Chief Financial Officer Peter Oppenheimer alluded to this when asked what the company planned to do with its cash reserves. Rather than a stock buyback, he explained: "Our preference continues to be to maintain a strong balance sheet in order to preserve our flexibility to make strategic investments and/or acquisitions.”

And it’s not just the cash Apple has to hand: the pathways to investment aren’t so direct. Should the company want to retain some of its cash, it could ask executive board member Al Gore to put in a word for the company at venture capital firm, Kleiner Perkins Caufield & Byers, where he has a seat. (So it’s no surprise that particular VC firm is handling the $100 million iPhone development fund). Given Apple’s track record across the years, the company would have no problem finding venture capital firms and other investment partners should it want to punch above its weight in an acquisition. 

Certainly that Apple has recruited a buyout specialist of the calibre of  Charles Charnas suggests plans are afoot. But who is in the company’s sights? 

Speculation here has been historically fruitless. Apple is unlikely to merge with Disney, for example, while both brands can work successfully together, a merger between the two would occlude both company identities, potentially harming the business of both.

Apple’s music business efforts could generate some interest among board members in the purchase of a music label, such as EMI. In a sense to bring the company behind Apple Corps. into the Apple Inc. fold offers poetic symmetry, but Apple’s involvement in music distribution means such a deal could raise anti-trust concerns. (Though Charnas probably has the experience to handle such regulatory probes).

A purchase of Nintendo has often been discussed, but with the Wii console at the zenith of its success the price tag on that company may be too high. 

Looking to the computer market, Dell’s continued decline could make that company a perfect target for acquisition: on lyrical basis it would be a perfect response to Michael Dell’s famed comment in the ’90’s in which he urged returning CEO Steve Jobs to sell then-failing Apple and return the money to shareholders. In a business sense, such an acquisition could potentially help Apple introduce low cost Macs, massively inflating its market share and disrupting the industry landscape. 

Other potential targets could include Sun, Yahoo, or even a move to bridge the gap between Apple and Sony.

Naturally, all of this is speculation, and speculation on Apple’s business plans is often frustrating, frequently fruitless, and occasionally no more than smoke that’s absent of fire. But it’s speculation based on one key and highly salient fact: Apple has hired one of the most experienced buyout specialists in Silicon Valley to lead a part of its legal team that’s focused on acquisitions.

This makes it insanely easy to believe Apple has something in the works, and suggests initial conversations with regard to a (or multiple) buyouts has led to the need to put together a legal team to make such moves more concrete.

Given the regulatory need to warn investors of any major investment or acquisition plans before they take place, Apple’s recruitment of Charnas means the analyst community will be looking to Apple’s financial results announcement of April 23 for some intimations as to the company’s plan, though with the lawyer only recently hired, it could be too early for full disclosure at this time.

All the same, the hire leaves the field open for a new wave of speculation: Who do you think Apple plans to buy, and what effect could it have on the industry landscape? 

 

Blockbuster working on "AppleTV Killa"

Site default logo image

According to the Hollywood Reporter, Blockbuster is shopping around for hardware to help it bring its customers media in yet another format.  Blockbuster already has stores and mail and is now working on kiosks and downloading, through portable content-enabled devices.  This would obviously be direct competition for Apple.

Blockbuster rival, Netflix is bringing to market a product made by LG that hopes to compete in the download rent market as well.  However, both of these companies are months behind Apple in development and don’t have anywhere near the competency in making easy-to-use, powerful consumer software.

According to HR:

The product would be an offshoot of Movielink, the online film service Blockbuster acquired last year that allows consumers to watch films licensed from the major studios on their PCs.

Delivering movies to TV might be the most audacious attempt yet that Blockbuster is making to reinvent its brand as digital delivery weakens the viability of its retail footprint. But by offering a home-based alternative to its stores, Blockbuster risks cannibalizing its core brick-and-mortar business in the hope that its brand will be a force online.

The device is believed to be a stand-alone product akin to Apple TV as opposed to embedding a Blockbuster-branded service in such existing devices as Microsoft’s Xbox 360 or TiVo. While going it alone could give it a distinctive positioning in the crowded "over-the-top TV" marketplace, that won’t come without significant investment in marketing and manufacturing, though the latter cost might be shared with a consumer electronics company that has yet to disclose its participation.

Blockbuster knows all too well the importance of online film rentals. When Apple said in January that iTunes would adopt a rental model, it sent Blockbuster’s stock plummeting 17% to an all-time closing low (HR 1/16).

Movielink was created in 2002 by MGM, Paramount, Sony, Universal and Warners. Five years later, the underperforming venture was sold to Blockbuster for $6.6 million. The deals give Blockbuster online rights to about 6,000 movies, though there are restrictions on moving content beyond PCs and TV.