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New iPod nano storage moves to SanDisk from Toshiba, iPhone 4S BOM estimated at $203

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Toshiba-branded NAND flash module in the previous-generation iPod nano (left) and the SanDisk module in the new model (right). Click for larger.

Apple on Monday reaffirmed its dedication to the iPod family and its latest iPod nano saw a slight refresh stemming mostly from the power of software. The enhancements include an improved user interface with larger icons, sixteen new watch faces and the improved Nike+ fitness functionality (accelerometer?). Furthermore, the new interface available to the older nanos, too, via a firmware update. Apple’s diminutive music player is available in seven colors, priced at $129/$149 for the 8GB/16GB version.

Gadget experts at iFixit tore it apart and found out the device carries the same model number A1366 as its predecessor, while the part number shifted from MC688LL/A to MC689LL/A, yet another indication of the minor hardware tweaks. The device still features the same 240-by-240 pixel display which remains inseparably bonded to the front glass. Also looking at the logic board, the seventh-generation iPod nano sports three Apple-branded chips, like its predecessor.

However, Toshiba’s NAND flash module from the previous-generation model has been replaced with flash memory from SanDisk, which appears to be the only major change to the device’s internals. The battery is still soldered to the logic board and getting the display off of the device requires the use of a heat gun, just like before, iFixit noted.

Apple iPod Nano Part 1

Additionally, iFixit’s director of technical communication Miroslav Djuric confirmed to 9to5Mac via email that the new model carries an updated Apple processor, the Apple 339S0104 chip versus the Apple 33850859 silicon found in the previous model. From TechInisights, it appears that this is a repackaged Samsung processor+DRAM:

  • Apple 339S0104 stacked PoP – Samsung APL3278A01 ARM Apps Processor and 512 Mbits Mobile DDR SDRAM from Samsung K4X51323PI

    This stacked package-on-package device, once decapped, revealed another design win for Samsung (manufacturers of the A4 ARM processor).

    This package revealed a Samsung APL3278A01 ARM application processor and 512 Mb (64 Mbytes) of Mobile DDR SDRAM (part number K4X51323PI).

By the way, UBM TechInsights guesstimated that Apple is spending $203 in parts for each 32GB iPhone 4S.

Samsung CEO honors Steve Jobs: He will be “forever remembered by people around the world”

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Samsung, the provider of components that go into Apple products and also the company’s fierce rival in the mobile space locked in numerous legal battles over alleged copying of the iOS devices, has responded to the news of Steve Jobs’ passing with grace. Their CEO Choi Gee-sung was quoted by the Economic Times of India as saying:

Chairman Steve Jobs introduced numerous revolutionary changes to the information technology industry and was a great entrepreneur. His innovative spirit and remarkable accomplishments will forever be remembered by people around the world.

The California-based consumer electronic powerhouse that is Apple is Samsung’s largest individual buyer of electronics components, contributing to an estimated four percent of Samsung’s global revenues. The two companies have been locked in twenty lawsuits around the world pertaining to the various aspects of the software, hardware, packaging and marketing related to Apple’s iOS devices. As a result, rumors spread that Apple was slitting Samsung’s throat with orders stoppage and Taiwan Economic Times reported last month that Apple had begun testing manufacturing of its upcoming A6 chip with TSMC.


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Let’s talk Siri: iOS app is a goner, the trouble in Canada, Siri hacked to run on the A4 iOS devices?

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Siri, an intelligent virtual personal assistant, is being advertised as the iPhone 4S’s killer feature. A live demonstration that Apple’s iOS software chief Scott Forstall gave yesterday (video after the break) wowed the crowd of tech journalists who’ve seen it all. Rightfully, though – Siri is nothing short of breathtaking. Siri can be seen in Apple’s onstage demo accomplishing a wide variety of complex tasks with incredible ease. It delights with conversational responses to inputs: You can tell Siri to move your appointments around, read aloud a text message from Dad and reply with spoken content turned into text, ask it about afternoon weather conditions and latest stock quotes, have it remind you to call Mom when you arrive at Starbucks and much, much more.


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Apple will now accept your used iPhone 4 in exchange for up to $200

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If selling your iPhone on eBay ($357!) or great services like Gazelle are too cumbersome, Apple will now accept your used iPhone 4 and pay for it up to two hundred bucks, depending on its condition. Just head over to the Reuse and Recycle program at Apple’s site and hit the Get Started button underneath the “Get an Apple Gift Card for your old device” section.

If your used iPhone 4 manages to fetch a cool $200, congrats – you just secured yourself a 16GB iPhone 4S free of charge (with a two-year contract). As part of yesterday’s reshuffling, the iPhone 4 is now available only with eight gigabytes of storage and priced at just $99. The iPhone 3GS, meanwhile, has gone free. Both older iPhone models require a two-year plan to fetch those prices. Apple is also offering the iPhone 4 and 3GS without a contract commitment for $549 and $375, respectively. What about a SIM-free iPhone 4S?


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Samsung moves to banish iPhone 4S from Italy, France

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Remember how Samsung threatened to ban sales of Apple’s next iPhone the second it becomes official? They are keeping good on that promise by filing two separate motions for preliminary injunctions in Paris and Milano in an attempt to bar sales of the iPhone 4S in France and Italy. From Samsung’s corporate blog:

Samsung Electronics will file separate preliminary injunction motions in Paris, France and Milano, Italy on October 5 local time requesting the courts block the sale of Apple’s iPhone 4S in the respective markets.

Samsung’s preliminary injunction requests in France and Italy will each cite two patent infringements related to wireless telecommunications technology, specifically Wideband Code Division Multiple Access (WCDMA) standards for 3G mobile handsets.

The infringed technology is essential to the reliable functioning of telecom networks and devices and Samsung believes that Apple’s violation as being too severe and that the iPhone 4S should be barred from sales.

Apple has continued to flagrantly violate our intellectual property rights and free ride on our technology. We believe it is now necessary to take legal action to protect our innovation.

Samsung plans to file preliminary injunctions in other countries after further review.

Cross-posted on 9to5Google.com.

Apple unveils micro USB adapter for iPhones in Europe

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It’s been long time coming and it’s finally here. The U.K. online Apple Store now lists the Apple iPhone Micro USB Adapter, available for £8.00 and shipping October 14. From Apple:

The Apple iPhone Micro USB Adapter allows you to use third-party micro USB cables and chargers to sync or charge your iPhone. Simply connect your iPhone to the Micro USB Adapter, then connect a micro USB cable or charger to the Micro USB Adapter

Standards bodies in Europe had agreed last year that all mobile phones sold in Europe should drop proprietary connectors in favor of standard USB jacks. Apple’s been ignoring the initiative up to the point when some watchers questioned whether the European Union should fine the Cupertino, California-based gadget maker.

As it turns out, Apple has elegantly addressed those concerns with this dongle. What it does for Apple is it lets them follow the letter of the law without redesigning the iPhone or, worse, risk incompatibility problems with a billion dollar ecosystem of accessories that take advantage of Apple’s 30-pin dock connector.


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Stats showdown: iPhone 4S vs. iPhone 4

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Table courtesy of The Verge. Go past the fold for the full version.

Our friends over at The Verge have beaten everyone to the comparison punch by creating this fine table offering an at-the-glance overview of the key hardware features of the newly introduced iPhone 4S and the eighteen months old iPhone 4. Hope you don’t mind that the new iPhone 4S is a tad heavier than its predecessor, full three grams to be precise. We take it you’ll also appreciate Siri, an iPhone 4S exclusive personal assistant based on software which “helps you get things done just by asking”. It’s also our belief you’ll appreciate an hour longer talk time on the iPhone 4S and the new 64GB model costing $399. The full table is right below the fold.


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Pre-order iPhone 4S Friday, October 7 in the US, UK, Canada, Australia, France, Germany (it lands October 14)

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The headline says it all. Apple CEO Tim Cook has just wrapped up the “Let’s talk iPhone” press conference by confirming pre-ordering dates for the new iPhone 4S. In case you haven’t realized, the amazing Siri personal assistant feature is exclusive to the iPhone 4S because it requires lots of computational power provided by the handset’s dual-core A5 chip, the same that runs inside the iPad 2, too. Also worth noting, a 64GB version has now been added to the iPhone lineup for the first time.

Your iPhone 4S lineup now looks as follows: 16/32/64GB versions priced at $199/$299/$399. The company will begin accepting pre-orders this coming Friday, October 7 for buyers from the United States, the United Kingdom, Canada, Australia, France, Germany and Japan. A week later, on October 14, the device will ship in the aforementioned countries. The initial wave will be followed by the iPhone 4S rollout to 22 more countries by the end of October, including Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, Hungary, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Mexico, Netherlands, Norway, Singapore, Slovakia, Slovenia, Spain, Sweden and Switzerland.

Oh yeah, it’s coming to Sprint, too.


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Apple demoes amazing Siri personal assistant

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Despite Phil Shiller’s remark that it may not be such a good idea to demo Siri, iOS chief Scott Forstall took the stage to demo the feature previously known as Assistant, which 9to5Mac exclusively revealed (here and here). “Siri is your intelligent assistant that helps you get things done just by asking”, says the official tagline. It’s activated just by holding down the home button briefly and understands natural-language queries in English, German and French, with more languages possibly following at later time.

For starters, you can, say, tell Siri to set an alarm clock just by saying “wake me up at 6 AM”. Or, you could ask Siri something like “What time is it in Paris?” and it will speak aloud “The time in Paris, France is 8:16 PM” How nice is that?

How about asking Siri “Do I need a raincoat today”? Sure, you can do that and it’ll respond “It sure looks like rain today”. That’s the power of the DARPA-funded military project striving to create an artificial intelligence-backed personal assistant that learns.

Siri is omni-present throughout the entire operating system so you can issue complex voice commands that include core functionalities. Siri can text messages for you, set calendar appointments, compose and dictate email, look up contacts, create notes, search the web, create geolocation-based reminders such as “remind me to call my wife when I leave work” and lots, lots more.

If there ever was such a thing as a software-based killer feature on a mobile phone, this is it. Also worth noting, the amount of user interface work Apple’s done around Siri is just mind-blowing, as you can see on the included screenshots. It’s not a pretty interface, great speech recognition/synthesis and clever artificial intelligence: Siri taps the power of the web to deliver mash ups that will blow your mind. More examples below the fold:


Images via Engadget


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Apple refreshes iPod touch: Now in white, 8GB model dropped to $199, available October 12

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Apple’s marketing honcho Phil Schiller took it upon himself to unveil a refreshed iPod touch lineup, which now includes both black and white models (remember, we called both), plus a new breakthrough price of just $199. The iPod touch is Apple’s “most popular iPod”, Schiller told the crowd, adding this:

It’s thin, it has the Retina Display. HD video. Gyro. Amazing gameplay. It’s the most popular music player, and the #1 portable game player.

The revamped models look the same as the fourth-generation iPod touch, which was available only in black. The new iPod touches now come in both black and white. As mentioned, the entry-level 8GB version now starts out at just $199. Apple is clearly positioning this device as a portable gaming machine, aiming with it directly at Sony and Nintendo.

So, the new iPod touch lineup now looks like this: The 8/32/64GB white or black for $199/$299/$399. It ships by October 12. Sweet.

iCloud launches October 12, iTunes Match end of October in the U.S., Find My Friends announced

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Image via The Verge

Eddy Cue, Apple’s new iTunes/iCloud chief, has just went through a series of iCloud features at the company’s Cupertino, California campus. He covered the stuff Steve Jobs already explained during his WWDC keynote talk this past summer, including Documents in the Cloud, Photo Stream, iTunes in the Cloud and redownloading purchased content.

The Find My Phone feature which pinpoints a lost or stolen iOS device on the world map has been renamed simply Find My Devices, suggesting Macs will be added at some point, too. He also announced Find My Friends, a new service along those lines which displays location of friends on a map using location services from their iOS device. Eagled-eyed readers will remember 9to5Mac broke news of Find My Friends back in January 2011.

Some have already coined a new name for it: The iOS Latitude. Don’t worry, you have privacy controls at your disposal allowing you to set Location sharing to only happen during set periods of time and you can control with whom to share your location.

This will no doubt be the parents’ favorite. Find My Friends, as you may have guessed, will be provided as a brand new app for your iOS device. The iTunes Match service will go live at the end of October in the United States. Apple is working on enabling it internationally, Cue said. Surprisingly, Cue said that the iTunes Match streams music and stores it intelligently on the device. As you may recall, there has been some concern over whether the music-matching service streams or not.

The iCloud, which replaces the MobileMe (which in itself was an advanced version of .Mac) goes online for everyone October 12, just like the final shipping version of iOS 5.

iOS 5 is coming October 12 as a free update

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iOS is coming next Wednesday, October 12, Scott Forstall just said at the “Let’s talk iPhone” event in Apple’s Cupertino headquarters. We’re also expecting the new iPhone to go on sale October 14-ish or around that time. Mark your calendar and clean up and back up personal information on your iOS devices to make a major upgrade as painless as possible come next Wednesday. The software will roll out to all devices October 12, he said. It will be a free update, compatible with the iPhone 3GS, iPhone 4, the original iPad, iPad 2 and the third- and fourth-generation iPod touch.


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Apple: iPad is king of the hill, we sold 250 million iOS devices

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Image via The Verge

Apple CEO Tim Cook focused on iPad, Apple’s newest business during an opening segment of his “Let’s talk iPhone” talk at Apple’s Cupertino campus. “We think iPads can change the way teachers teach, and kids learn. Many educators agree with us. In fact, every state in the US, now has an iPad pilot program, or are deploying one,” he said while showing pretty slides depicting a range of different iPad users flashing happy smiles.

The device has a 95 percent satisfaction rate, he stressed. More importantly, “kids are going to be amazing on those virtual keyboards when they grow up”. How true. And he wasn’t referring only to kids in the United States.

Pilots are using iPads in place of heavy flight manuals and “over 80 percent of the top hospitals in the US are testing or piloting iPads”. Impressive. “And it doesn’t stop there, from the boardroom to the backroom”, Cook said, remarking:

And despite everybody and their brother trying to compete with iPad, 3 out of the 4 tablets sold in the US are iPads.

Another unheard of number: 92% of the Fortune 500 companies are testing or deploying iPad. Last, but not least, Apple has passed the quarter of a billion sales mark with iOS devices.

Cook: “iPod is still a large and important market for Apple”

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Image via Engadget

Another tidbit regarding the iPod. Apple’s music player brand still holds a 78 percent market share a decade since its launch. Quite impressive. They sold over 300 million iPods to date. “It took Sony 30 years to sell 220 million Walkman cassette players,” Apple CEO Tim Cook remarked. We take it that means the iPod classic isn’t going away.

The iPod family of music players still have a lot to offer, he said, noting that nearly half of sales are from users who already own one. Apple shipped 45 million iPods from July of last year to June of this year. As for iTunes, the online music store now commands a 20 million songs-strong catalog. Remember, iTunes Store launched with just 200,000 songs.

Tim Cook: Apple’s Shanghai store welcomed 100,000 visitors on opening weekend

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Tim Cook is onstage at Apple’s Cupertino campus and he just shared a few tidbits regarding Apple’s retail efforts. He specifically focused on the new Shanghai store, Apple’s largest in Asia. Calling it “absolutely gorgeous” (it is!), Cook said the location welcomed 100,000 visitors on opening weekend. In fact, on opening day Apple sold more Macs than in any other store in the world. For comparison, the LA store took a month to reach its hundred thousandth visitor. As of today, Apple has 357 brick-and-mortar stores in eleven countries. Cook promised more store openings in order to “raise the bar at retail”.

Important shipment landing to select RadioShack stores

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BGR has just obtained an interesting image suggesting that select RadioShack stores are getting “important shipment” Monday and Tuesday. It should “not be opened for any reason”, usually a tell-tale sign of Apple products inside. According to the note, RadioShack will police employees by sending auditors to select stores who will determine whether or not the packages had been tampered with.

“Any violation of this direction could result in disciplinary action up to and including termination”, reads the notice. This is no definite confirmation that these packages contain bran-new iPhone 4S devices, but it’s highly likely given that their inventory system has iPhone 5 placeholders.

iPhone 4S images appear on Apple’s website

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Need more proof that Apple’s next iPhone allegedly dubbed the iPhone 4S will sport the same design as the current-generation iPhone 4? Well, a pair of images just appeared on Apple’s website, representing the black and white iPhone 4S models. The Newsstand app icon on the homescreen gives away that the devices run iOS 5. Notice a gap in the upper right corner of the stainless steel band, just like on the CDMA iPhone 4?

This could easily signify that the iPhone 4S in fact is a dual-mode handset which runs on both GSM and CDMA networks, as rumored. Need even more proof that this is legit? Just change the URLs by removing the ‘s’ after the ‘iphone4’ part of the URL and you’ll get the old images, shown below (old images: black, white).

Thanks, Scott!


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TNW: iPhone 4S will have “more definitive GPS features”, teardrop iPhone 5 just a prototype

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According to The Next Web and the “sources familiar with the situation”, the iPhone 4S, about to be unveiled at Apple’s Cupertino campus around 10am PT, 1pm ET, will sport “more definitive GPS features”, as well as the ones already rumored, such as an eight-megapixel camera on the back with a backlit sensor, a much faster dual-core A5 processor with 1GB RAM (twice the iPhone 4) and the pocket personal assistant simply named Assistant:

Our sources tell us the iPhone 4S “is much more powerful than an iPhone 4″ and “feels like the high-end device”, all but confirming that the device will feature Apple’s new A5 processor and include 1GB RAM, as tipped in previous reports, noting that the device will retain the same dimensions and design as the iPhone 4.

The GPS feature could be a Mapping thing – perhaps turn by turn directions or it could be Find My Friends, which we’ve detailed before. As for the back camera (which 9to5Mac discovered was sourced from Sony), the publication’s sources mentioned a 3264-by-2448 pixel resolution, the same as the now famous Sushi shot which made rounds in early September. The iPhone 5 with its teardrop design? Author Matt Brian explains it’s a prototype for a future iPhone 5 “which won’t be available any time soon”, which is in line with 9to5Mac’s findings pointing to the iPhone 4S with a design akin to the existing iPhone 4.

WSJ: The new iPhone won’t support Sprint’s 4G WiMAX network

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Just hours ahead of the Let’s talk iPhone event at Apple’s Cupertino headquarters, the Wall Street Journal taps the people familiar with the company’s plans who claim the device “won’t operate on long-term evolution or WiMAX fourth-generation networks”, adding:

The people said the device will work on 3G networks, which are broadly in use today and are the standard for the current iPhone 4. AT&T says its HSPA+ network has 4G-like speeds.

The story also confirms a Wall Street Journal report from yesterday claiming Sprint pledged to a cool $20 billion in iPhone orders in the next four years. “Sprint Nextel is expected to join AT&T and Verizon Wireless in offering the device later this month, though T-Mobile has said it isn’t signed on yet with Apple”, writes author Greg Bensinger. Additionally, the Journal’s blog post has essentially debunked a BGR story from yesterday which speculated Apple Sprint would allegedly get an exclusive on iPhone 5, described as a 4G WiMAX phone.


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Hard Candy is making 50,000 cases for iOS device with a 4.5 inch screen

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The front side of an alleged 4.5-inch iOS device with the elongated home button. Click for larger.

One would assume case vendors would stop making oversized iPhone cases now that we have a pretty clear picture of the iPhone 4-like design of the iPhone 4S. Not Hard Candy Cases, a mobile accessories company which decided to ramp up manufacturing for a range of cases seemingly designed for a mystery iOS device with a 4.44-inch display. According to Cult of Mac editor Leander Kahney who profiled the company, they claimed to have “received identical data about the device from three sources”. Per their info, this device “is significantly bigger than the iPhone 4, but the case tapers, making it feel a lot thinner”. Here are some of the cases in question.

The design also calls for a large, lozenge-shaped home button that they say could lend itself well to the new Assistant feature believed to stem from Apple’s acquisition of Siri, an artificial intelligence company. From the mouth of Hard Candy CEO Tim Hickman, the design also includes the teardrop-shaped form factor:

The mystery device is wider, taller and thinner than the iPhone 4. It has a tapered design which makes it feel very slim. It has a much larger screen than anyone is expecting — 4.44-inches diagonal. The Home button is lozenge-shaped. The mystery device is 4.83-inches tall, 2.63-inches wide, and .28-inches thick. It is thicker at the top than the bottom. Other external details are similar to the iPhone 4, except the Mute button has been moved to the other side.

Hickman believes it could represent a new iPod touch…


The back side of an alleged 4.5-inch iOS device. Click for larger.


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In Sydney, Apple turns down olive branch from Samsung

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Apple today before a Sydney court rejected Samsung’s seemingly practical proposal calling for the removal of certain Galaxy Tab 10.1 capabilities in exchange for a smooth tablet launch in Australia. Samsung reportedly agreed to take out the feature which ignores unintended touches on the home screen to prevent apps from being launched accidentally. Apple, it appears, instead wants a definite ruling on a temporary Galaxy Tab 10.1 injunction, which should be expected later this week.

If the court sides with Samsung, it gets to launch its iPad rival in Australia in time for Christmas. If not, the case drags out into another year, possibly without a clear winner in sight. Remember, Samsung threatened to ban sales of the new iPhone in Korea the instant it launches. Apple is scheduled to unveil their next iPhone at a media event today in the Cupertino headquarters at 1pm ET, 10am PT. The event is headlined under the “Let’s talk iPhone” tagline, suggesting that the rumored Assistant feature will be in the focus, among other things.

Lawyers for the Cupertino, California-based Apple insist the Galaxy Tab 10.1 “is vastly the one that is going to be targeting the iPad 2”According to Reuters, Apple lawyer Steven Burley made it clear that “the main reason we are here is to prevent the launch and maintain the status quo”. Note: The Wall Street Journal provides a live blog of today’s court hearing. Such a legal maneuvering on the part of the iPhone maker suggests that Apple isn’t interested in settling its dispute with Samsung out of the court unless, of course, unexpected legal setbacks arise.

This is the second blow in two weeks to Samsung’s efforts to make peace with Apple, its largest buyer of components such as NAND flash chips, custom-designed iPhone processors and displays.


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Samsung produces convenient iPhone 4S comparison chart

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Talk about speeds and feeds.

Underwhelmed with Apple’s new iPhone 4S, but obviously viewing it as a potential threat, Samsung is luring undecided or perhaps disappointed fans into considering the Galaxy S II smartphone. The company has issued an email to customers, attaching a convenient comparison table that pits the features of the iPhone 4S against its own Galaxy S II device. On closer inspection, however, some of the entries in Samsung’s table raise eyebrows.

For example, Samsung is downplaying the importance of Siri by describing it as the ‘voice activation’ feature and comparing Siri to Vlingo, a free download from Android Market. While Vlingo is billed as the best personal assistant on Android, it isn’t as comprehensive or deeply integrated as Sir, which surprises with its conversational attitude and artificial intelligence features allowing it to learn from past interactions with the user.

Also, the Cameras section in Samsung’s tablet ignores the iPhone 4S’s enhanced camera system, which is based on Sony’s lens and the improved sensor from Omnivision. The iPhone 4S’s back camera has a fifth lens, the larger f/2.4 aperture, the backside illumination sensor, as well as face detection and video stabilization capabilities, none of which Samsung bothered to mention. Instead, they tout their admittedly superb Super AMOLED Plus display which is “preferred 2 to 1 against other leading displays by Strategy Analytics”, a 1.2GHz or 1.5GHz dual-core processor (versus the A5 chip in the iPhone 4S) and, of course, 4G networking supporting WiMax, HSPA+ 42 or HSPA+ 21 MBps.

Apple’s handset sports HSPA 14.4Mbps networking that marketing chief Phil Schiller said could file as 4G, but underscored Apple won’t follow in the footsteps of its rivals by misusing the term “4G”. Perhaps Apple’s decision was influenced by a new bill to force carriers to disclose real 4G speeds?

Samsung’s table also underscores the openness of Android allowing for multiple app stores, music stores and online services. Finally, they are still referring to the Galaxy SII as the thinnest smartphone despite losing out the title to iPhone 4 in the U.K., per last month’s ruling by the UK Advertising Standards Authority.

Go past the fold for the full speeds and feeds chart and Samsung’s email message in its entirety.


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WSJ: Sprint bets the farm, ponies up $20 billion to get the iPhone

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The Wall Street Journal is reporting that Sprint, the third largest wireless operator in the US, is figuratively “betting the company” on the iPhone, having committed to buy 30.5 million iPhones – at a cost that could only be described as sureal. Citing the obligatory “people familiar with the matter”, the Journal wrote that Dan Hesse, the CEO, told the board in August that Sprint “would likely lose money on the deal until 2014”. He also convinced the board that the lack of the iPhone was “the No. 1 reason customers leave or switch”. The board then signed off on the so-called “Sony” project, even though they were aware of a “staggering” hit to Sprint’s operating income, because they realized Sprint couldn’t compete otherwise:

Mr. Hesse told the board the carrier would have to agree to purchase at least 30.5 million iPhones over the next four years—a commitment of $20 billion at current rates—whether or not it could find people to buy them, according to people familiar with the matter. In order to keep the price people pay for the phone low and competitive with rivals, Sprint would be subsidizing the cost of each phone to the tune of about $500, which would take a long time to recoup even at the high monthly fees iPhone users pay.

Directors debated what they had just heard. Some worried the payoff would be too long in coming. One member questioned whether the multiyear deal might outlast the iPhone’s popularity. To sell that many iPhones, Sprint would have to double its rolls of contract customers, convert all of them to the Apple device or a combination of the two.

Also surreal to say the least: BGR has heard that Sprint will actually get the rumored iPhone 5, which is said to be a 4G WiMax device. The story has it that Verizon Wireless and AT&T get to wait out until the first quarter of 2012 before launching a 4G LTE version of iPhone 5 on their respective networks. This could also explain why Verizon sided with Samsung in Apple litigation (and AT&T smartly kept their mouths shut).

Whichever way you look at it, the Sprint iPhone deal is HUGE. Apple has just secured additional shipments of up to eight million iPhones annually for the next four years. It’s reasonable that Sprint would sell that many iPhones a year and the deal would boost Apple’s annual revenues by five billion dollars. It also sends out a clear message to carriers that don’t yet carry the iPhone: Either you pay through the nose and get the phone that can turn your fortunes around or risk getting left behind.


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