Gadget Stock Watch: Apple Pre-Earnings, Video Game Roundup, More

1. All eyes on Apple's earnings. With Macworld and January options expiration history, Apple (AAPL) reports FQ1 earnings after Tuesday's market close. Earnings Whispers ® EPS estimate is $1.85, versus the Street's average estimate of $1.61. Although Apple's fiscal Q1 is its biggest quarter, investors will be more focused on the company's guidance and comments as to how it views the weakening U.S. economy (note, Apple unveiled iPhone service pricing for corporate users on Monday). Apple shares are down around 20% from a month ago when it was trading above $200/share intra-day.

2. Video game roundup. Electronic Arts (ERTS) says it will distribute a free download of an installment of its popular "Battlefield" series this summer. Instead of selling it at retail locations, EA is looking to generate revenue via advertising and in-game transactions. Separately, the hit game "Guitar Hero" by Activision (ATVI), set a new industry record by reaching $1B in N. American sales over a 26-month period, according to NPD. Guitar Hero III, released in Oct., is the single year all-time best-seller by volume and dollar value. Gamers have already downloaded 5M songs, which cost $2.50/song or $6.25 for a 3-song bundle. Meanwhile, Sony (SNE) said it posted record PS3 sales in Europe over the holidays, but analysts are skeptical it can reach its fiscal year target of 11M console sales. Sony's earnings will seemingly improve as its Games division approaches break even/profitability. However, its ordinary shares lost 5.7% on Tues. and are off 18% ytd. Lastly, the NY Times reports Texas Instruments (TXN) is upping its bet on rear-projection TVs, partially aimed at attracting game enthusiasts.

3. Philips beats estimates, but CE unit flat. Royal Philips Electronics (PHG) posted better-than-expected Q4 earnings on Monday, but operating profit at its Consumer Electronics division was flat, despite a 7% increase in revenues. LCD TV pricing pressure has hurt profit growth. Philips' CEO said margins remain "unsatisfactory." There is hope for LCD TVs resulting from a supply shortage and the upcoming Beijing Olympics. The WSJ reports "LCD Profits Are Booming," including at LG.Philips LCD (LPL). Philips was last up 1.5% in early afternoon trading in Amsterdam.

4. Kyocera to buy Sanyo's cellphone business. Kyocera (KYO) announced it will buy Sanyo's (SANYY.PK) loss-making cellphone business for the US$ equivalent of as much as $468M. Kyocera is looking to expand its struggling U.S. operations. However, analysts have been doubtful of possible synergies since the deal was first disclosed in October without pricing. The combined entity will have only 1.5% global market share. Ordinary shares of Sanyo dropped 8.3%, while Kyocera lost 5.7%, in a broad market selloff Tuesday in Tokyo.