From the Applevine: Legal Trouble Averted, New iPhone Coming?

Friday, while the market was digesting more bad financial news, and tech watchers were processing the market’s overwhelming lack of confidence in RIM’s (RIMM) near term “land grab” spending plan, three news kernels hit the Applevine. Two, both positive, concerned the removal of minor legal obstacles from Apple’s (AAPL) path. The third piece, while only rumor, concerned iPhone production volume and the prospect of a new model.

The Battery Break
In July, 2007, customer Jose Trujillo filed a lawsuit in Illinois accusing Apple of fraud for not disclosing fully the costs associated with iPhone battery replacements. The “limited charging” cycles, and likely need for paid replacement during the life of the phone, Trujillo argued, effectively translated into a recurring fee that should have been disclosed prior to his purchase. 

U.S. District Court Judge Matthew Kennelly disagreed. He found Apple sufficiently disclosed the battery limitation on the iPhone’s packaging. A summary judgment was granted to dismiss the case – lawsuit averted.

(The suit against AT&T (T) mobility, however, continues. We’ve posted a PDF copy of the most recent ruling on that branch of the case on Scribd for those wanting to review.)

Accessible iTunes
Averting another potential legal issue, Apple, the Massachusetts Attorney General and the National Federation of the Blind, reached a joint agreement to improve iTunes accessibility for the visually impaired.

According to terms announced in a statement from attorney general Martha Coakley, Apple has agreed to make sure future versions of iTunes and iTunes U are compatible with screen access software that can render the on-screen information to either Braille or speech (iTunes U is a collaboration between Apple and various colleges to present educational content). 

Apple has pledged that iTunes U will be fully accessible by December 31st.  iTunes and the iTunes store will be adapted by June 30th 2009. 

In addition, Apple will be contributing $250,000 to the Massachusetts Commission for the Blind to help the blind community buy assistive tools to help them use computers and access the internet.

Production Volume Adjustments or New iPhones
The last bit of Apple news for the day was a report on ZDNet that iPhone production may be slowing down. It cites analyst research from boutique technology investment bank, Pacific Crest Securities. 

Pacific Crest’s analysts are predicting Apple will cut their 2008 3G build targets from 18 million units to 14 or 15million. “Supply chain channel checks" are the explanation. The firm doesn’t believe the adjustment will have much impact on Apple, however. It’s suppliers that will suffer.

As an interesting aside, Pacific Crest’s Andy Hargreaves also noted stores are carrying lower inventory of the 8GB phone. He speculates the adjustments could be part of an inventory adjustment that would see the introduction of a 32GB model and a price decrease on the 16GB phone (from $299 to $199).

At this point, both the supply data and changes to the model line-up are purely speculative; fuel for the Applevine.

Comments

[brewer:]

Could be a memory bump or a slight revision. Sales are well on track.

2008 Sep 29 12:29 AM

[jmmx:]

The last I heard was that Apple wanted to sell 10M total iPhones in 2008, including the original 2.5G models. So now are we supposed to be upset that they are selling ONLY 14 M 3G units alone? Gee... I'm crying!!

2008 Sep 29 02:52 AM

[mollytjm:]

from what i understand, China doesn't have 3G capability so Apple is retooling to make phones that work with the other network there.

good day to buy appl...really cheap.

2008 Sep 29 03:40 PM