Buzz on the Second Coming of the iPhone 16 comments
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Speculation about Apple (AAPL) products is always a popular pastime. Lately, two questions are dominating the discussion: how close are we to seeing the second generation iPhone? And, When it gets here, what goodies does it have in store? The answers depend on whom you ask but they may be here sooner than largely expected.
When, When, When?
Regarding timing, the widely held consensus is that June will be home to D-day (delivery day). The theory is Apple
will use their popular developer event to reveal a faster (3G), more
feature laden phone. That timing would also match the planned roll-out date for software upgrades. Piper Jaffray analyst Gene Munster is
among those taking that position (he’s also predicting at least three models of iPhones will be sold globally in 2009 and the annual tally for that year could push 45m units sold globally).
Others are pointing to the newly revealed Samsung (SSNLF.PK) Instinct, a 3G, Touch-controlled phone with an uncanny resemblance to the iPhone. It has some of the things the current iPhone is missing, like expandable memory and a haptic system that provides tactile feedback to touch. Apple will beat that phone to market, they say. They won’t let Samsung get to a 3G touch sensitive phone first. Accordingly, for these speculators it’s by June at the latest.
Another fork in the rumor path is being fueled by existing phone supplies which are currently dwindling. Reports from Apple Insider and other sources claim flagship stores from NYC to San Francisco are low on iPhones. Apple’s own online store is running a 5 to 7 day shipping delay. For a company that carefully manages channel inventory (e.g. the available supply stocks), and usually keeps upwards of three to four weeks projected sales in inventory reserves, to nearly run out is an odd anomaly.
Mismanaging supply or poorly estimating demand is not a mistake usually made. That fact, some speculate, is a sign this is actually the beginning of a product shift and not a coincidence. To their logic, the second generation phone will be 3G (in part to promote better sales in those European and Asian countries that rely almost exclusively on higher speed data networks than EDGE). It will also replace the existing phone rather than be introduced as a new model. The shortage, accordingly, is Apple adjusting inventory reserves to get ready.
A counterpoint to that theory comes from some analysts. Tony Sacconaghi at Bernstein thinks there may be a supply shortage, perhaps due to demand for some components. The current inventory shortfall is only at Apple Stores and not with retail partners, he notes. There’s ample supply in the UK, in France and at U.S. AT&T (T) stores. This he says, makes sense. Shipments to partner stores are recorded as sales. Shipments to Apple’s own outlets aren’t. It’s not a sign of a new phone, just careful financial management of the books. Could be.
April? May? June? It’s anybody’s guess. June does hold the most logic and is for that reason the consensus guess. On the other hand, Apple likes to break tradition. The first iPhone was released in June and everyone’s expecting this one will be too. That could be reason enough to bet May.
Another reason to guess earlier are a series of whispers floating around Silicon Valley, often attributed to Cupertino sources. Three times in the past week I’ve heard that faint buzz. “It’s coming sooner.” The source of one of the three claims cited direct conversations with engineers involved in the project. So… April? May? June? …. Sooner than later seems to be the best bet of the moment.
WHAT WILL THE PHONE FEATURE
Behind door number
two in the great debate is what features and changes a second version
of the iPhone will bring. As with timing, there’s a wide range of
speculation.
The sure thing is support for 3G. Apple is expanding global sales but to really have a shot at strong sales in certain parts of Europe and Asia (including China), they’ll be best served offering a product supporting a faster data-transmission speed. A 3G phone is a necessity.
After 3G it’s another rumor free-for all. iPhone Nano? Clamshell phone with two screens? Two new phones revealed? A Nano and a 3G? Just one? … Lots of chatter.
One popular theory is the phone will feature a front mounted camera to allow for Video Conferences. Others are speculating an improved OLED (organically LED) screen will replace the already impressive display on the phone. Then there’s the question of whether Apple will include an expandable memory slot, software parental controls to block certain features or build in easy access to a widely expected App Store.
The App Store would make sense. In the first four days after the release of the iPhone software development kit, Apple reported more than 100k downloads. Blogging software firm Six Apart is promising a native Typepad Application. Wordpress is expected to offer some blogging plugins too. Game makers from Popcap and EA (ERTS) to THQ (THQI) are all coding titles. Even Apple rival Microsoft (MSFT) is rumored to be sidestepping an exclusive attachment to their windows mobile platform in favor of porting some version of Microsoft Office for use on the iPhone. An App Store would allow easy access to purchase and manage these and other titles. An idea there will be some sort of hot key to access such a store, other than an icon on the touch screen, is not, however, likely.
Other changes that have been speculated about but seem less likely than others at this point include the prospect of a non-warranty voiding user-removable battery (the iPod still doesn’t have that feature either) and the inclusion of some sort of tactile feedback system like on the new Samsung Instinct. Such a haptic system would make use of the vibrating ringer to give some slight vibrating feedback to each touch of a virtual button. It would be a nice feature but it’s not widely expected for now.
Ultimately, it’s the same ending each time: More Apple rumors means more wait and see. Safe bet is sooner than later, June at the latest, and expect the announcement to be more than just one thing. Apple likes to surprise and dazzle. A few modest evolutionary changes are not likely to be the only thing revealed with the second coming of the iPhone.
Apple’s Q2 Earnings call is scheduled for Wednesday, April 23 at 2PM PST. At the very least, there will be an explanation of the shortages then.
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Stock will be well north of $200 by fall. I did a write up on AAPL on my bloga few days ago:
www.thecreatingwealthb.../
This sort of statement makes me nervous - it sounds as though you're emotionally wedded to this stock, never a good position to be in as an investor.
Stocks *never* get creamed for "no reason at all". If you don't know why it was crushed, it means you don't understand the stock and shouldn't be investing in it.
oled is mostly buzz-word. everyone uses it, few seem to have clear idea what it's good for. some say it improves battery life, others that it is still unstable, loosing brightness when aging. who knows?
lacking features keeping iphone from succeeding in demanding european and japanese marktes: gps, 5mpix camera with autofocus lens and flash, second camera, better bluetooth support, replacable battery (though this is not going to happen).
Why do people persist in asking a camera in their phone? Does your car make coffee, even though you drink a lot of coffee in your car? No. Confusing a phone with a camera kills the phone. I for one am glad that Apple keeps the camera function tame. It's a gadgety distraction from making a good phone. Not saying I wouldn't enjoy 5MP and a flash, but I'd rather have all of the other features are top-notch first.
GPS? I do think that would be a great addition. Though, that may be another diversion from making a great phone, especially if it affects the form factor, battery life, etc.
What's more attractive in a phone would be the combination of quality gadgets in a single device. The iPhone is practically a portable computer, though perfectible.
Amazingly, AMZN's PE is about 60-- and that's a "one-trick pony" company! And one tied to physical media. Kindle and UnBox seem very likely to flop, IMHO. Deeply flawed concepts.
After reading it and undertstanding some the potential math on the Iphone...its would not be impossible for earnings to double...however from what I have read elsewhere, they amortize the Iphone revenue over 24 mos. They use subscription accouting for the IPHONE so maybe it gets to those earnings in 2009.....but thats ok by me as I too am in it for the long haul.
I will be commenting on Apple quite often in my blog www.thecreatingwealthb.../
as I too am a MAC / Iphone lover :)
Samij, I like how you always point to the Iphone doing poorly overseas when the reality is, there's a gigantic black market for it in the rest of the world. I would like to remind you of the case of the missing Iphones that came to light with AT&T's and Apple's previous earnings reports, and now, the supply shortage which increasingly appears to be, again, unlocked phones going overseas.
iPhone II will be an enormous success in business as well as with consumers. The outlook/exchange server tie in is a done deal, no question that will be part of not only iPhone II but the original one as well will gain this capability.
There was indeed no real reason for the fall in january, aside from the US financial troubles! APPL has come back better than most already, and for good reason. I think a lot of people that got out of GOOG, MSFT, etc... are looking for their next investment.