Faster, cheaper iPhone to draw crowds around globe

(swiped from Reuters)

NEW YORK (Reuters) - The new iPhone is expected to attract hordes of buyers when it goes on sale on Friday in more than 20 countries, helping Apple Inc (AAPL.O: Quote, Profile, Research, Stock Buzz) handily beat its target to sell 10 million of them by the end of 2008.

The much-anticipated smartphone has faster Web links than the first iPhone, supports third-party software like games, and is being heavily subsidized by many phone carriers, with some even giving it away to attract new subscribers.

Atlantic Equities analyst James Cordwell said Apple may sell more than a million new iPhones in the first weekend, partly because it is selling in so many more countries than the first one, which was only available in six.

Some 270,000 people bought the first iPhone in the few days after its launch in late June 2007, after many U.S. customers had lined up for days outside its stores. AT&T (T.N: Quote, Profile, Research, Stock Buzz), the sole U.S. carrier, will shoulder much of the cost for the latest phone to halve the price.

"They're going to bring users in droves to this product," Deutsche Bank analyst Chris Whitmore said. He sees Apple burying its own 10 million sales target by selling about 10.5 million of the new high-speed iPhones this year, having already sold more than 6 million of the first one to date.

Whitmore said price and distribution were two key reasons why the new device, which plays music and supports corporate e-mails, would outsell its predecessor.

NEW MARKETS

While some analysts expect the new phone to sell best in the United States and Western Europe, consumer excitement in new markets such as Hong Kong, Japan and New Zealand appeared to foretell strong demand in other markets too.

"The key is less likely to be demand and more likely to be supply," said Atlantic Equities' Cordwell.

In Hong Kong, Hutchison Telecommunications (2332.HK: Quote, Profile, Research, Stock Buzz) was flooded with 60,000 online applications over the weekend from consumers hoping to buy the 500 phones on sale there.

In New Zealand, which will be the first country to sell the phone due to its time zone, people started lining up outside a Vodafone (VOD.L: Quote, Profile, Research, Stock Buzz) store on Tuesday, according to a local paper.

02, the UK arm of Telefonica (TEF.MC: Quote, Profile, Research, Stock Buzz), said its website was overwhelmed with early orders on Monday after being hit with 13,000 orders per second during the peak, according to a spokesman who said it had sold out in a few hours.

The carrier, which is giving the phone away to customers who commit to specific data service packages, said it has stock left to sell in stores Friday and expects more deliveries.

Carphone Warehouse Plc (CPW.L: Quote, Profile, Research, Stock Buzz), a UK phone retailer, said interest for the latest iPhone is 10 times higher than for the first device. Neither company gave specific sales figures.

T-Mobile, owned by Deutsche Telekom (DTEGn.DE: Quote, Profile, Research, Stock Buzz), said it has received orders for several thousand iPhones in Germany alone, where the cheapest iPhone will sell for 1 euro. It also plans to offer it in the Netherlands and Austria starting on Friday.

PENT UP DEMAND

Investors will be particularly interested in demand in Japan, where consumers have a strong penchant for advanced mobile devices. Some see the plan by Japan's number-three mobile service provider, Softbank (9984.T: Quote, Profile, Research, Stock Buzz), to sell the iPhone as a big threat to market leader NTT DoCoMo (9437.T: Quote, Profile, Research, Stock Buzz) as Apple fans were already lining up in Tokyo two days before launch.

But many analysts are skeptical the device will be popular among mainstream customers as it does not support television services or electronic payment features widely used in Japan.
However, Mitsubishi UFJ Securities analyst Shinji Moriyuki said Softbank stores were getting 50 to 100 inquiries a day per store about iPhones, compared with up to 30 a day before the launch of DoCoMo's popular 906i device series.

Research firm Enterbrain said 6.7 percent of 1,200 people it surveyed in Japan wanted to buy an iPhone immediately, while 35.7 percent were interested but undecided.

Even in mainland China, where Apple has announced no carrier deals or official plans to sell the phone, retailers were gearing up to sell gray-market iPhones.

Many carriers are making buyers of subsidized iPhones commit to contracts they cannot break without a penalty, to discourage them from unlocking the phone to work on other networks.
But a merchant on the third floor of the Cybermart mall on Shanghai's posh Huaihai Road said hacking would still happen.

"As soon as we get it from Hong Kong and bring it over and unlock it, you should be able to buy it here by the end of July at the latest," said the vendor, whose surname was Zhang. "The Chinese are very quick at unlocking iPhones."

Apple still gets paid for hacked phones. Whitmore estimated iPhone gross profit margins at more than 50 percent, versus his estimate for iPod margins in the low 30 percent range.

"To the extent it cannibalizes iPod, it's better economically for Apple," he said.

(Additional reporting by Sophie Taylor in Shanghai, Sachi Izumi in Tokyo, Nicola Leske in Frankfurt, Edwin Chan and Vinicy Chan in Hong Kong, Georgina Prodhan and Kate Holton in London; Editing by Braden Reddall)

Rumors Be Damned! Apple slashes iPhone price! And much more...

SAN FRANCISCO (Reuters) - Apple Inc. sharply cut the price of its iPhone on Wednesday and rolled out an iPod with a touch screen that can browse the Internet wirelessly, as well as improvements to its iTunes Web store.

Apple's stock price fell 3.5 percent. It had been on a tear since the company said it would be making an announcement on this day, rising 13.5 percent over the past week.

The company is fighting to maintain its lead in the digital media business at a time when the company faces renewed attacks from rivals including Microsoft Corp., which cut the price of its own wireless music device, the Zune.

Chief Executive Steve Jobs, who also showed off an iPod nano with a video screen, said the company was refreshing its entire line of music players. In addition, Apple's iTunes Web music store will begin selling songs over wireless connections, he said.

This means that for the first time, people can download songs directly to an iPod rather than through their computers.

Commenting on the stock move after the iPod changes were announced, Paul Foster, options strategist at Web information site theflyonthewall.com in Chicago, said: "Buy the anticipation and sell the reality. I guess investors were anticipating something more positive from Apple."

Apple shares, up about 70 percent this year, fell $5.00 to $139.16. Shares of iPhone service provider AT&T, which are up about 13 percent this year, fell 1.6 percent to $39.63 on the New York Stock Exchange.

Apple said the price of the iPhone model with 8 gigabytes of storage was cut to $399 from $599 and that it would discontinue a model with less memory.

"Apple has always been aggressive with price cuts to keep the competition at bay," Shannon Cross of Cross Research said.

Apple will also update its iTunes online music store to let customers turn songs into ringtones for the iPhone and to allow customers to buy songs while connected wirelessly.

The new touch-screen iPod will have many of the features of Apple's hit iPhone, including a touch screen, the ability to connect to the Internet wirelessly using Wi-Fi technology, and a mini Web browser.

"We've built in Wi-Fi and we've made it usable," Jobs said, in what could be seen as a dig at Microsoft's Zune, which beat the iPod to market with Wi-Fi but has not enjoyed the iPod's popularity.

Microsoft cut the price on its Zune by $50 to $199.

"Microsoft looks like it is entering Apple's territory in a larger way, which would lead to lower margins down the road in Apple products," said Tim Biggam, lead options strategist at online brokerage thinkorswim in Chicago. "But the long-range impact of Microsoft on Apple products remains to be seen," he added.

Apple also said it had struck a deal with Starbucks Corp. to let customers buy music from Apple's wireless iTunes music store while they are at one of the chain's coffee shops.

You can view the Photos of the press conference here. You can see a live video demo of it via Reuters here as well.

For more information on Apple and it's many different innovations discussed at it's press conference today, you can go to Apple's website.

iPhone/iPod Rumors?

(swiped from RollingStone)

It’s official, the famously secretive Apple will announce something having to do with iTunes, the new iPod or even the iPhone, on September 5th. The company, which is known for its Willy-Wonka levels of secrecy about new products and announcements, sent out invites to a few thousand journalists, analysts and other industry folks that feature a picture of the Cover Flow scrolling-album-artwork feature familiar to anyone with iTunes or an iPhone. So even though that gives us a hint that the announcement will be music-related, we still don’t have a clue what the specific news will be. And neither does anyone else, but this hasn’t stopped the blogosphere rumor mill from swirling, intensely. We scoured the Internet to find what we think are the five most likely Apple announcements next week. Just know that Steve Jobs could surprise us all and do something completely different.

• Touchscreen iPod: There’s no doubt that the addition of the touchscreen and Cover Flow feature to the iPhone made it the best iPod ever, so it’s time to spread the love to Apple’s non-cell-phone handheld icon. Rumors of a touchscreen à la iPhone have been swirling ever since an Asia-based tech rumor site revealed the Taiwanese company that was to provide the touchscreens for a new iPod.


• The Beatles catalog on iTunes at last: First Paul McCartney, then John Lennon made it to iTunes (Ringo’s post-Beatles work was added today, and word has it George Harrison is coming up soon). Now that the lawsuit over the Apple name has been long resolved, it’s time for the Beatles catalog to get on iTunes’s virtual shelves. This will likely be the cherry on top of any bigger iPod announcements. The ironic thing is, after years of such careful protection and avoidance of online distribution, the Beatles’ songs will finally get sold in the least protected way possible, with non-DRM tunes from EMI! Get yer CD rippers ready!


• Wi-Fi download store for iTunes: Following in the footsteps of the Zune, Music Gremlin and the Sansa Connect (with Yahoo! Music Unlimited), a Wi-Fi download store that lets users download right to a wireless-enabled iPod sounds sweet. This rumor has been going around for a while, and just resurfaced yesterday. It’s certainly possible, but we think Apple will limit Wi-Fi to the iPhone for now. Adding communication capabilities to the iPod just cannibalizes iPhone sales — and who wants an Internet Tablet or device, anyway (we talking about “Internet-surfing,” but not much else, devices as the Sony Mylo, the PepperPad and the Nokia Internet Tablet).


• Nanos with bigger memories: The main cool thing about the Nano is it doesn’t have any moving parts because it uses Flash memory instead of a hard disk. Problem is, Flash memory didn’t come in larger sizes, until now. So a pint-sized Nano with more memory would be a very welcome thing indeed. Incidentally, there are also rumors of a Shuffle with more memory, which means you could seriously bring your whole music collection to the gym with you.


• The European iPhone: This is almost a given, since Apple has been talking about a fall launch for the iPhone since June. Only question is, which carriers and which countries will get the iPhone first? Our money is on France, England and Germany, the three Euro countries that download illegal music the least (at least according to our Madrileno tech writer friend Angel Jimenez, who writes for Spain’s largest daily newspaper, El Mundo). This announcement is likely, particularly since Apple just launched TV show downloads on iTunes in the U.K., for nearly four times the price (almost $4!) it costs Stateside.
  
• Bonus Rumor: Ringtones! This is also looking very solid: According to reports, for a small fee you will be able to make ringtones on your iPhone out of tracks for sale at the iTunes Stone.