Posted by: Arik Hesseldahl on November 19
Taiwan's DigiTimes is reporting today that Apple has decided to postpone the launch of its pending tablet product until the second half of 2010.
The main reason for the supposed delay is switch in the displays being used: Apple, the report says, wants to use a 9.7-inch Organic Liquid Crystal Display (OLED) on the device, that costs about $500 from the manufacturer, said to be South Korea's LG Electronics. A display at that cost would push the tablet's final price into the $1,500 to $1,700 range, too high for most consumers.
The report goes on to suggest that Apple is planning two tablet models, one with a 9.7-inch display, another with a 10.6-inch display.
Since costs on the display are coming down fast, waiting until the second half of the year will help Apple sell the tablet at lower price, in the $1,200 to $1,500 range, the report says.
These prices are of course higher than what we've previously heard. I've been assuming that the final price would come out to below $1,000, between the price of the least expensive MacBook and the iPod touch, say about $700 to $800.
I'm not the only one who's been thinking this way. Gene Munster of PiperJaffray is out with a research note today on the heels of the DigiTimes report and says first and foremost that Apple investors shouldn't worry about this reported delay, primarily because most analysts haven't factored the tablet into their Apple forecast models for 2010. And if Apple were to release a tablet on Sept. 1, 2010, Munster assumes Apple would sell about 650,000 units at an average selling price of $600. That would amount to a 1% increase in revenue.
If you take the iPhone 3GS as a starting point, its bill-of-materials cost is about $179 according to iSuppli estimates, Munster says. If you take out the iPhone functions, you're left with a BOM of $160. Then if you assume the display is three times the size of the iPod touch, you reach a BOM estimate of about $480. From there you have to work in Apple's distribution, retail margin and other factors to arrive at a final price. "The piece for retail pricing that is unclear are Apple's retail margin expectations around the tablet. We believe Apple will price the tablet to compete in the netbook market at the expense of margin," Munster writes.
He's maintaining his overweight rating on Apple stock and his $277 price target based on a multiple of 25 times Apple's estimated FY 2010 GAAP earnings per share of $11.10. This morning Apple is trading down nearly $4 or nearly 2% at $202.50.
Posted by: Peter Burrows on November 13
Dell confirmed its entry into the smart phone business this morning, almost three months after its marquee partner--mega-carrier China Mobile, owner the world's largest cellular network--announced that it would offer a Dell phone to its 500 million or so subscribers. On the face of it, this seems to be a pretty clunky way to announce the new phone, called the Mini 3.
And yet Dell's actual entry into the market comes on the heels of Apple's disappointing official launch in China, where it's hooked up with smaller carrier China Unicom. While the Chinese seem to love unlocked iPhones, they're not willing to pay the exorbitant price of $880 or more--especially for a device that's had its Wifi capability turned off to comply with China Unicom's demands. The Dell phone doesn't support Wifi either, and I haven't seen an official price for it yet. But my understanding is they are aiming at the lower-end, more affordable end of the smart-phone spectrum.
Dell still has plenty of competition to worry about, since China Mobile has a stable of ten device-makers developing to its oPhone platform, including LG, Philips and Samsung. All will be selling devices built on Google's Android standard. That's terrific for China Mobile and probably for Google, but means a fragmented market for the handset crowd. So while millions of phones will be sold, it's hard to imagine a true break-out hit emerging. And it's harder to imagine that break-out hit coming from Dell.
Still, it's nice to see Dell back in phase with the market. So often over the past few years, it seemed to have the wrong emphasis relative to the market. When the economy was earlier this decade, it's products and brand were considered too pedestrian by many. Then, just as the economy tanked, Dell was trying to go up market with more stylish, design-oriented PCs.
Here's Dell's full release, after the break.
Continue reading "Does Dell Have The Right Answer for China?"
Posted by: Peter Burrows on November 02
It seems Apple is rethinking its TV strategy, in a way that might--if the company can pull it off--give consumers the option to pay Apple less than half as much as they currently pay their cable or satellite provider for a monthy TV subscription.
According to All Things Digital's Peter Kafka, Apple has been trying to convince programmerrs to make their shows available as part of a subscription, available via iTunes. The monthly price would be around $30, he reports.
We've heard these rumors before--but that doesn't mean they're not true. And the approach makes sense. It would give consumers more of what they really want--a lower bill, anywhere access, without having to buy another gizmo.
It also fixes some problems with Apple's current TV plans. It's clear, by Steve Jobs' own admission, that the company's Apple TV device is mostly for hobbyists. The products tepid sales may be less a reflection of the product's quality, than of the simple fact that most humans conceive of TV as a service--something that is simply delivered into their homes, not something they have to buy, set-up and repair. It's no surprise that Apple tried this approach first; it's the ultimate "product company," filled with employees (and a CEO) that like coming to work to great some neat new object of desire. But unlike other forms of media (music fans, for instance, have long purchased their music in the form of a product such as a vinyl album, CD or digital download), TV viewers have always paid that monthly cable or satellite bill (or received terrestrial broadcast TV service for free).
The new subscription approach also fits with what's happening in the world. Technologically, it fits with the rapid rise of digital streaming, in which a consumer views a piece of content that resides out on the Internet, as opposed to having to store a copy of that content on the hard drive in their PC, iPod or iPhone. So long as the content can be delivered in this manner glitch-free, streamed content fits better with how many people want to get their digital video: on whatever screen is most convenient. While the Apple TV might appeal to people that are fixated on watching Web-fare on their big screen TV, more people I know are far more interested in getting TV content, and any other kind of content, onto their laptop, PC or smartphone.
No company is as well positioned to satisfy this demand than Apple. Many carriers have plans to make their content available in more numerous, and interesting ways. Microsoft continues to push its "Three Screens and a Cloud" vision. But only Apple has iTunes. Hundreds of millions of people have tthis program installed on their PCs, Macs, iPods and iPhones, and more than 75 million have an ongoing billing relationship with the online store by the same name. Rather than any one product, it seems to me Apple's greatest imperative should be maintaining iTunes' role in these consumers' lives. The Apple TV may never be a hit. But consumers that decide to get their TV via iTunes rather than their current provider will be much more likely to buy new Apple products down the road. Certainly, many would consider a device for watching TV that is more portable than a MacBook, but larger than an iPhone. A tablet device, for example.
All of this remains conjecture, and assumes that Apple iTunes chief Eddy Cue can land the necessary content deals. It won't be easy, since these partners will be loath to cross their current distributors. But don't count Cue out. I wrote about him in the magazine recently, and my sources all say he's an immensely talented negotiator, that has pulled off many deals that looked impossible.
Such was the case when Apple first got studios to sell downloads via iTunes in 2005. After Jobs won over Disney, Cue wooed many of the others, says one former Apple manager. “Once a deal is worked out with a leader in a particular deal--in this case Disney--Eddy's great at convincing the others that they better get on the bandwagon." He does it with charm, rather than threats, says the source. "He's a schmoozer in the grand style--in a good way. Most of the people he deals with think of him as a close personal friend."
Posted by: Arik Hesseldahl on October 27
Rob Hof has a post next door on Tech Beat regarding today's news that Google Voice is allowing people to sign up for the service using their existing mobile numbers.
The classic complaint about Google Voice is that you have to start with a new number, and then pass that number around to everyone who's likely to call you in order for it to be effective. That presents a mild annoyance. If someone is accustomed to calling your cell phone number all the time, they just keep calling it and when they leave messages, they go not to Google Voice, where they get transcribed and forwarded to your email address and stored indefinitely. Rather these messages go to your wireless carrier's voice mail system where they're stored for a limited time, hard to get at, impossible to forward or share, and never transcribed.
As part of the rollout of the new features I noticed something very interesting on my Google Voice account. I noticed that the two mobile phones attached to my Google Voice account, one a Blackberry on Verizon, the other an iPhone on AT&T, had a new setting: "Activate Google voicemail for this phone." I clicked it and was given instructions on phone number to dial that began with *71. Essentially what I think it does is tell your wireless carrier to forward an unanswered call to Google Voice, essentially bypassing the carrier's voice mail system.
That means people call and leave messages on my mobile number will get transferred to Google Voice. And because those messages go straight to my email address, I'm more likely to respond to them quickly, or to return the call, and I can effectively forget about the passcode to get into my mobile voice mail account.
And if you're an iPhone user and a Google Voice customer, you can more closely integrate the two products into a more seamless experience, whether or not Apple ever gets around to approving the Google Voice application for the iPhone.
What's still missing from Google Voice is number portability for land lines. I would really like to transfer my home telephone number to Google Voice, and stop paying the exorbitant fees to Verizon for a phone I rarely use. I'd get rid of it entirely except for the fact that its in the 212 area code, for New Yorkers, losing a 212 number is, as I once wrote, like giving away a pet. Services like RingCentral, which I reviewed in the magazine over the summer, and Vonage allow number portability. Why not Google Voice?
Posted by: Arik Hesseldahl on October 23
FCC Chairman Julius Genachowski was here at BusinessWeek's offices in New York today for an extensive interview with the staff. We talked about numerous things, including his agency's quest to begin crafting new rules around net neutrality, the matter of Apple, AT&T and Google Voice , and the Obama Administration's efforts around using economic stimulus money to build new broadband pipes.
During the entire conversation he took the opportunity to charge his iPhone, and after we had wrapped up the interview someone asked him what his favorite app is.
For the record, the chairman's favorite iPhone app is Vito Technology's Star Walk, a simple astronomy application that harnesses the iPhone's GPS capabilities to present an on-screen view of what stars and constellations should be visible on a clear night from your current location. He said he's recently been introducing his 5-year old daughter to the pleasures of stargazing, and that the application has been useful in explaining what they're seeing in the night sky. As you move the phone right and left or up and down, the view of the sky shown on the phone moves with you. It also contains links to Wikipedia articles about celestial bodies like planets and nebulae and it contains information on the phases of the moon. (Image below from Appcraver.)
