Tech Industry

 Apple’s purchase of PA Semi doesn’t mean the company’s relationship with Intel is cooling off, Apple CEO Steve Jobs told the Wall Street Journal.

The relationship between Apple and Intel is still strong, Jobs said, "We have a great partnership with Intel. We expect that to continue forever.”

As 9to5 Mac reported early this week, the acquisition wasn’t driven by any plan to migrate Macs back to PowerPC, but by Apple’s interest in hiring PA Semi’s team of expert chip designers, Jobs reassured. The newly-hired talent will lend their expertise to Apple’s work developing chips for portable electronics devices such as the iPod and iPhone. Jobs explained Apple has "been involved" in designing chips for these for some time.

Asked if Apple plan to return to the PowerPC chip in its Macs, he said “I wouldn’t lose too much sleep over that. We’re very happy with Intel.”

News around the web is spreading that Apple is going to announce the 3G iPhone on June 9th – at Apple WWDC 2008.  While this makes much sense, we really feel that you’ll have to sweat it out for at least a month before they are in your grubby hands.  Apple typically waits about six weeks between announcing products and releasing them when they involve the FCC.  Hope this doesn’t affect your summer vacation plans ;)

 Carphone Warehouse is out of stock of 8GB iPhones following its recent move to cut £100 off the cost of the device.

The high street mobile phone retailer has been warning website publishers who are members of the Tradedoubler affiliate advertising network to stop advertising the discounted models, as they’re out of stock.

"Thanks to the most phenomenal response to the promotion, The Carphone Warehouse is now out of stock on the Apple iPhone," a message from the retailer reads. "Please can you remove all reference to the iPhone promotion in your copy."

The company website continues to take orders for the 8GB model, but the retailer says it doesn’t "expect to receive any additional stock at this time." 

The imminent release of a new version of the iPhone was once again discussed by the analysts at CitiGroup last night, where Richard Gardner and Yeechang Lee predict the new device will be announced during the WWDC keynote speech on 9 June.

The analysts say the new (3G) iPhone will be the "first of an impressive wave of new products", predicting upgraded laptops and iPods may also make their appearance at the show.

More information is coming out of Geek Sugar on new iMacs being released this week.  The normal prediction:  Speed bump via Penryn processor upgrade and bigger hard drive varieties.  Same price points. 

While that may be true, we’d also like to see some of the Blu Ray, video upgrades and HDMI goodness the new motherboards can provide.  This would be the first upgrade since the Aluminum iMacs were introduced on August 7th.  Remember that?

 Microsoft seems to be changing its attitude to the Yahoo deal, with the company’s bombastic boss, Steve Ballmer, changing his tune on the deal.

Microsoft is offering $44.6 billion to acquire Yahoo, but management there are stoutly resisting the offer, even though Microsoft is threatening to launch a proxy vote battle to see the current board replaced.

Yahoo’s resistance is so strong, including an unusual ads sharing deal with Google, that now Ballmer may be considering how he can exit the deal without appearing a complete failure – in the week CNBC’s Jim Cramer called Windows "irrelevant". "We’re prepared to move forward without a merger with Yahoo," Ballmer said onstage at a technology conference in Milan.

"Today Google has the lead, there’s no doubt about it and I wanna make sure that they have plenty of competition," Ballmer said. "We think the best way to move that forward quickly is to come together with Yahoo. I hope that it works, but if it doesn’t we go forward alone."

[youtube http://www.youtube.com/watch?v=tmja_g5h4Fg&hl=en]

 CRM software maker Salesforce and Apple seem to be growing increasingly tight, with a major move to Mac now the speculation of the day,

At Apple’s March iPhone event, a Salesforce representative took the stage to demonstrate a version of that company’s sales software running as a native application on the iPhone.

“The opportunity to use the innovative iPhone OS platform to deliver compelling Software-as-a-Service applications to mobile users is empowering to us, and ultimately, our customers, “said Marc Benioff, chairman and CEO of Salesforce.com. “They are asking us for new ways to harness the power of Force.com to access their business information on any device regardless of location.”

Now it looks like Salesforce has taken Apple’s Mac message to heart – and plans to migrate its 4,000 employees to the Mac, making the company one of the largest enterprise software companies to use the Mac. The reason for the switch is telling, according to blogger (and iPhone developer) Alex Curylo: "Why, you ask, Security! The resources it takes to defend against all the stuff the baddies throw at a PC, it’s just cheaper/easier to pay a few bucks more for a Mac and not have any of those issues." It’s a major bonus for Apple’s increasing acceptance by business and enterprise shops as Mac sales climb 50 per cent year-on-year.

40% US Sales increase
47% international

Retail 50% new to Mac

51% growth year 3.5 times PC growth

2-3 times for last 3 years

37% desktop growth

portables 61%

MacBook Air  – No number
3-4 weeks channel inventory

73% US Marketshare of iPods

45 more stores in fiscal 2008

expecting 33% growth over year ago

According to EETimes,

On Monday (April 21), P.A. Semi informed its customers it was being acquired and it could no longer guarantee supplies of its chips. The startup did not identify the acquiring company but said that company may be willing to supply the chip on an end-of-life basis, if it could successfully transfer a third-party license to the technology.

That license in question is probably a PowerPC architectural license that P.A. Semi has with IBM Corp. that allowed the startup to design its own PowerPC chip from scratch. IBM was not immediately available for comment on the issue.Apple has not publically detailed its plans for the acquisition, but may speak on the issue during an earnings cal scheduled for today (April 23). P.A. Semi customers were told the acquiring company was not interested in the startup’s products or road map, but is buying the company for its intellectual property and engineering talent.
P.A. Semi reportedly has about 150 employees and is being acquired by Apple for $278 million.

P.A. Semi’s customer base was largely military and there is even some concern that the U.S. government may not let the buyout happen unless the parts get delivered.

So the question: What is Apple going to do with all of this engineering talent – for which it paid almost $2 million a head for? (including support staff?!)

Wow, we didn’t see this coming at all.  Apple buys PA Semi, a fabless chip company that specializes in high performance, low power PowerPC based processors for $278 million in cash.   The founder of P.A.Semi, Dan Dobberpuhl, has a history of designing StrongARM chips – the kind currently in use in the iPod Touch and iPhone – from his former work at DEC.

Let’s get this straight.  This isn’t a company that makes graphics chips or coprocessors or anything else.  They make CPUs and they are based on the Power architecture that they license from IBM.    This means that Apple’s long term strategy includes the PowerPC platform?  In their handhelds – iPods and iPhones?   Will we see a  2Ghz PowerPC iPhone in the future? 

How about desktops?  Gaming systems? 

And what about the Intel Atom?  Lots of questions we’ll hopefully get answers to later today.

Or maybe Apple just bought PA Semi for their talent and expects the new company to help integrate chips into Apple products.

Still.  Wow.

More 9to5mac coverage here and here

The announcement that Apple bought P.A. Semi today for $278 million brings up a lot of questions.  What is this company about and why would Apple buy them?  At first glance, it seems very strange.

P.A. has one major product and about 150 really smart engineers.  They have lots of venture capital including money from Texas Instruments.  They also have a genius of a CEO in Dan Dobberpuhl, who has a long history in designing revolutionary chips – including DEC Alpha and the ARM architecture while he was at DEC in the 1980s and 1990s.

The most interesting thing about this purchase is the nature of P.A.’s one major product.  The PowerPC chip called PWRFicient.  Yes, the same architecture that Apple dumped in 2005 in favor of Intel’s x86 architecture.

As the name implies, the chips are extremely efficient low-power versions of the PowerPC…nothing that would find its way into a desktop or power laptop.  However, Apple is certainly interested in the low-power game, which in fact was the original reason for leaving IBM: Steve Jobs said "this performance/watt graph shows us we must move to Intel".

So what is this chip going to be going into?  We’d say anything between a MacBook Pro and iPod Nano is a good candidate.

When?  Who knows how long this has been brewing behind closed doors?  Apple may have a product ready at WWDC (Tablet?) or it might be a year out.   We’d guess somewhere in between.

Here’s where it gets interesting.  The PWRficient chip builds on StrongARM’s legacy of power efficiency while adopting a PowerPC core – take a gander at Dan’s (may we call you Dan?) Presentation (PDF link).  StrongARM is the current processor technology deployed in Apple’s iPod Touch and iPhones.

More info:

http://pasemi.com/processors/index.html

http://en.wikipedia.org/wiki/PWRficient

http://www.electronicsweekly.com/Articles/2005/10/24/36730/pa-semi-attacks-performancewatt.htm

In April 2005, Apple was at a crossroads.  IBM wasn’t delivering on its 3GHz chip promises and wasn’t making efficient, low power, high speed versions of its processors.  It just wasn’t a priority.  Apple had to do something.  At the time, that something turned out to be moving to Intel x86 processor lineup which blew away anything IBM had to offer (Apple was still using Motorola/Freescale G4s in its laptops) in terms of power/watt.

The Register broke the story a year later that there was a third player involved in that switchover.

P.A. Semi

P.A. Semi had a chip that would have kept Apple on the PowerPC processor roadmap for the next few years.  It had a low power 2GHz 64-bit dual-core PowerPC processor that matched up very well against Intel’s Core Duo line.  The problem was that this chip wasn’t going to be able to be produced in large quantities until 2007.  Far too long at that point to wait on an unproven technology.

Had Apple decided to go with P.A. Semi at the time, Adobe, Microsoft, and others wouldn’t have had to port their apps to work on Intel. Rosetta wouldn’t have had to be slapped on every Intel machine either.

Conversely, Mac users wouldn’t have had the option of using Parallels and VMWare Fusion as well as benefitting from lower-cost Intel parts and components.

Obviously Apple never lost touch with P.A. Semi and never really stopped working with them on some level.  Apple now sees their technology as so incredibly important to their core business that they’ve bought them with cash.

It is amazing how things in the technology industry come full circle…in such a short amount of time.

 Apple’s planning an international campaign to boost iPhone sales and propel it towards its ten million unit sales target for 2008.

Emerging reports claim Apple will introduce the 3G iPhone to the Belgian market by June, making available through all local mobile network operators.

Earlier this week La Repubblica reported that the iPhone will debut in Italy with Telecom Italia but will be sold unlocked.

These reports confirm Apple is abandoning its previous bring to market iPhone strategy, in which it reached exclusive distribution deals with a key partner in each territory.

While these deals have seen some success in terms of attracting new users to the chosen networks, in sales terms things haven’t truly worked out.

The Italy and Belgium deals seemingly propose a new M.O., in which one local network may have exclusive distribution rights for the device for a short time (a month or two) after which it will be made more widely available from multiple networks. Essentially users will be able to buy an iPhone and use them on the network of their choice. It will be sold unlocked.

Apple’s iPhone sales in Europe were dampened by its previous strategy. Mobile phone users here are a sophisticated bunch, and disliked it that Apple forced them to sign-up to a single network, rather than being able to shop around for the best deal or the most effective coverage for their area. A move away from exclusivity also removes one of the primary reasons customers weren’t purchasing the device.

Apple’s also set to answer a second major criticism – lack of 3G support, with an iPhone capable of support for the fast wireless data transfer network standard expected to ship by June. 

With a host of applications set to make their debut at WWDC 2008 (also in June), and new features within the in-development iPhone 2.0 software, Apple is also responding customer demands for features such as: MMS messaging, Bluetooth streaming support, voice over IP and enterprise class security.

Price remains a sticking point, but it seems the company is plotting a course to make iPhones more widely accessible. American Technology Research analyst Shaw Wu yesterday predicted: "In addition to a 3G version, our sources indicate that the 2.5G model could see a minor casing change and lower price point closer to $299-349 vs. its $399 price today."

Apple also seems to be plotting a more diverse iPhone roadmap, planning future versions which should be cheaper, if less well-featured, than before.

Apple’s PA Semi acquisition is the biggest news since the Intel switch, take a look at what our team’s dug up around the site. We expect more revelations during the company’s financial results call tonight. Despite the importance of Apple’s big news, the Mac news web is on fire this morning, read on…

Mac share doubles

Lehman Brothers yesterday began coverage of Apple stock, offering a $195 target price and predicting Apple’s market share will double by 2013. "Macs may have reached a tipping point with share on its way toward doubling over the next 3-5 years," said analyst Ben Reitzes. The analyst also observes Apple to be the most well positioned company to exploit the move toward mobile smart devices. More here.

Sony buys Gracenote

Look, Sony America has bought the Gracenote service. We don’t know how this is going to play out. It’s important because Gracenote (once known as the CDDB) is the software technology that drives the track and album recognition facility in iTunes – it’s what iTunes uses to identify the contents of CDs as you put them into your Mac or PC. And Gracenote is used by other media playing software, too. We’d like to know just how much data Gracenote has collected on user’s personal collections, and we’d also like to know what Sony plans to do with the service?

Yahoo earnings climb

Yahoo management seem to us to be doing a pretty good job of keeping Microsoft’s hostile takeover at bay, revealing a strong set of results (PDF). Microsoft is threatening to get dirty in its takeover bid with a proxy war, we just wonder how many of Microsoft’s former competitors also plan to engage in a protective mission. And if Microsoft fails in its attempt, well, will it be the beginning of the end for the world’s largest software company?

Microsoft dumps on customers

Remember MSN Music? Microsoft’s first attempt at an iTunes-killer? We do. Remember the DRM it used, and the way the company then dumped on its partners when it introduced the Zune? We do. Remember the debate about DRM, and what happens if the company that creates the DRM on music purchases ceases to support it? We do. Well, now Microsoft has royally dumped on MSN Music customers, announcing that it will no longer supply authorization keys for songs purchased from the defunct MSN Music service. That means that when your authorised set of computers stop working, so will the music you paid for. This underlines the inherent danger of DRM in general, and reinforces music fans in their negative perception of Yahoo’s unwanted suitor. We think former MSN Music customers should kick up a fuss, or switch to Mac.

Apple and design

Apple is the world’s leading designer of consumer electronics products, winning prestigious design awards on a regular basis. No surprise then that the company is once again in the running for the world’s most important design awards, with no less than eight products nominated for this year’s D&AD awards. 

Steve Jobs, Apple and Disney

Not news, per se, but fascinating all the same. Take a look at SeekingAlpha’s interesting opinion piece, in which Jason Schwarz speculates Apple boss, Steve Jobs, used Eisner’s Disney turnaround as a partial blueprint to transform Apple’s fortunes on his return to the company.

Mac’s get satellite TV

From the whisper and rumour dept., Terratec and Elgato are developing a USB TV card for Macs that accommodates a slot for a satellite TV validation card, effectively opening your Mac up to become a satellite TV receiver. It’s pretty cool.

Sorry for the late arrival of the round-up today – we’ve had a lot on our mind.

A midnight stroll down Regent Street yielded a particularly interesting view of the flagship Apple store.  It seems the place is getting a major makeover.  Massive chunks of the floor were being upgraded as well as a few large displays being unveiled.  Something in the works for tomorrow to coincide with the earnings call?  Doubtful…but the store is going to look a little "spiffier".  More pictures…

Update: My 2am grammar/spelling sux and iFoAppleStore says that this was an update to accommodate crowds.

 Apple’s US network partner AT&T this morning revealed positive financial results, boosted by its wireless unit profits climbed 22 per cent. However, investors were disappointed at the lack of any immediate breakdown in iPhone sales, sending Apple’s stock on a downward trajectory, currently trading at $160.26 (down $7.90).

Investor anxiety is high at present, with deepening gloom in the US economy and depressing forward analyses of consumer electronic spending. And with Apple set to reveal its Q2 FY 2008 financial results tomorrow, lack of an admitted iPhone sales boost seems to have been sufficient to drive the sell-off, regarded by some on financial bulletin boards as representing particularly heavy trading.

Despite the malaise, AT&T did admit some iPhone goodness: "iPhone continues to be very popular with customers, feedback is very good," the company said.

AT&T also confirmed a high average revenue per iPhone user, characterising these as in the "mid to upper 90’s" across its customer base.

The iPhone’s also acting as a miracle cure to attract new users to AT&T, the company admitted. "We continue to see customers adopting iPhone. Over 40 per cent are new to us."

AT&T’s 22 per cent gains were driven, at least in part, by iPhone usage and sales. The company revealed an 18.3 per cent increase in wireless revenues with wireless data revenues from areas such as internet access, messaging and media bundles up 57.3 per cent.

AT&T’s reported first-quarter 2008 net income totaled $3.5 billion, up 21.5 percent from $2.8 billion in the year-earlier first quarter, and reported earnings per diluted share totaled $0.57, up 26.7 percent from $0.45 in the first quarter of 2007.

All eyes now fix on Apple’s financial results announcement tomorrow. Analysts are generally optimistic on what is to be revealed, but many will be looking to Apple’s traditionally conservative guidance to figure out just how well company management hope to survive the current downturn.

 The talented hands at Computer Choppers have put together this most enticing creature of desire, a gold and sapphire MacBook Air.

Essentially, the modification uberkinds have taken a standard edition of the lightweight Apple laptop and covered it in 24-carat gold, applying dozens of multi-coloured sapphires onto the Apple logo on the lid of the device.

Sure, gold isn’t the most ‘now’ choice in precious metals for the fashionistas, but it’s a recession-proof investment, and the modders also offer iMacs in platinum, so it’s not all bad. The price isn’t too appalling: $5,000 will get you one of these blinged-up MacBook Airs (normal price $1,799), which add just a couple of ounces to the product’s base weight. The sapphires cost you extra, though, you’ll need another 3,000 bucks for these.

Additional details: The modded-MacBook Air’s a standard 1.6GHz model with 2GB memory and an 80GB drive. And the company is also offering a polished gold external SuperDrive to go with its golden system.

 Just a rerun of an old favourite: A younger Steve Jobs speaks on Microsoft. Watch out for his classic delivery of the line, "for the most part". Enjoy!

[youtube http://www.youtube.com/watch?v=upzKj-1HaKw&hl=en]

It’s all about financial chatter and multimedia on the Apple news front this morning, with more analysts offering positive targets on the company’s stock and the debut of ITV on the Mac. 

In other news, Apple ships the Aperture SDK and reveals many plug-ins to match; Apple further improves its Chinese retail presence; MacBook Pro software updates and news Apple plans an IM client for iPhone. Read on…

Financial Chatter

As my colleague Cleve Nettles reported this morning, Apple’s at number 103 in the Fortune 500 list for 2008. That incredibly significant inclusion surrounds the fact most Wall Street analysts now think Apple has a strong chance to succeed, with Mac sales climbing much faster than the industry average. Analysts at Leham Brothers, RBC Capital, Goldman Sachs and Caris & Co have all issued positive comment on the stock in advance of Apple’s Q2 financial results announcement tomorrow. Price targets are slowly climbing back toward Apple’s 52-week top end of $200 per share.

iTunes, ITV and the Mac

UK broadcaster ITV this morning took two steps toward the Apple ecosystem, making selected shows available for purchase and download through iTunes UK, and launching the beta Mac version of its online catch-up TV service using Microsoft’s Silverlight technology.

Aperture plugs-in

Apple this week released the software development kit for Aperture which enables third party developers to build plug-ins for the professional application, extending its functionality. In conjunction with the release, several developers have moved to immediately introduce plug-ins, including the Dfx Digital Filter Suite from the Tiffen Company and Power Stroke, Light!, and Ozone from Digital Film Tools. Plug-ins from several other developers are expected soon.

China calling

China’s going to be in the headlines all year with global media attention focusing on the world’s leading internet-connected nation; now Apple’s opened its first store-in-store with Best Buy in Shanghai while local reports confirm two own-brand Apple stores are set to open in Beijing.

Updated laptop updater

We think this is happening too much recently. Apple has moved fast to ship an updated version of the MacBook Pro firmware update it shipped earlier this month. MacBook Pro EFI Firmware Update 1.5.1 "fixes several issues to improve the stability of MacBook Pro computers," Apple explains. Links to the previous iteration of the software no longer work – and reports claimed the previous build caused blank displays.

IM for iPhone

As we all know, the problem with the iPhone SDK is it doesn’t allow developers to have their apps running as a background application, which will cause some headaches for those cooking up Instant Messaging (IM) applications. Last night it emerged Apple holds a patent for an IM client for the iPhone. End of story.

 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.

 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.

 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".