Posted by: Peter Burrows on January 06
Are we seeing AT&T; seriously begin planning for the time when it no longer has an exclusive on the iPhone? On the day after Google’s introduction of its Nexus One phone, the carrier announced its intention to sell five Android phones, as well as two models from Palm. The Android phones--including at least one from Motorola, Dell and HTC--will be out in the first half of 2010. That is, before August--which is just when most Wall Street analysts believe that the iPhone exclusive with Apple will lapse. What a coincidence.
AT&T; also announced a new site called www.att.com/edo, where it will highlight a range of other “emerging devices” that will run on its networks. One example, announced today, is a $149 digital picture frame for receiving photo mail. This is no surprise, since AT&T; has been talking up an emerging devices strategy for the past year. But the timing is interesting. Could it have something to do with the expected launch of a tablet device by Apple later this month? Makes me wonder if AT&T; will have an exclusive—or any deal at all—to provide the network for the much-hyped device.
Personally, my hunch is that the tablet will not be 3G compatible at all, but will only have Net connectivity when a WiFi hotspot is around. That hasn’t stifled demand for the iPod touch very much, and that device also works only with WiFi. And why would Apple put its gold-plated brand at any more risk through its association with AT&T;? That would be almost inevitable, since tablet users would likely have as many problems as iPhone users do with spotty 3G coverage. And despite some reports to the contrary, I’d be surprised if the tablet will work on Verizon’s 3G network, either. Some of my best sources describe the device as essentially an “oversized iPhone,” which would suggest that it’s built on the same architecture as the iPhone—which doesn’t work with Verizon’s CDMA-based 3G network.
An AT&T; spokesperson declined to comment, when asked if today's announcements had anything to do with the likely end of iPhone exclusivity.
Posted by: Arik Hesseldahl on January 06
PiperJaffray analyst Gene Munster, in a research note out today, takes a close look at Apple's international distribution of the iPhone, and the results are interesting. Expectations around iPhone sales outside the US may have been too conservative. He expects Apple to sell 36 million iPhones during the calendar year. That estimate, however, doesn't account for the possibility that Verizon Wireless will add a version of the iPhone for its network during the year, he writes.
Munster then goes on to do an interesting country-by-country and carrier-by-carrier breakdown of estimated iPhone sales and concludes that while North America will still account for the biggest single geographic market and consume about 16.7 million units, markets outside North America will collectively account for more than 19 million.
Perhaps it's no surprise that the US, Germany, the UK and France are the countries where iPhone sales are strongest so far, and each are expected to account for between 1.5 and 2 million iPhones in 2010. Where else in the world will you see sales like that? Russia for one. Combine the estimated sales at the three carriers offering the iPhone -- Megfon, MTS and Beeline -- and you see that Russians could buy more than 1.8 million iPhones in 2010. India, with two carriers could be even stronger, with 2.3 million. He sees China selling 1.6 million and Brazil coming in just shy of a million at 970,000.
Munster says that while competition is heating up in the smart phone business, and specifically calls out Google's Nexus One, announced yesterday, he says Apple still has a comfortable lead, with its 100,000 apps to Google's 20,000 and the fact that the iPhone is available in 77 countries versus 48 for Android phones.
Munster is maintaining his "overweight" rating on Apple's stock, and has a price target on it of $277, which is based on a valuation of 25 times his estimate of Apple's non-GAAP earnings per share of $11.10 for fiscal 2010.
Posted by: Peter Burrows on January 05
I've been listening to the features of Google's new Nexus One at Google's press conference. It's a gorgeous device, and stacks up brilliantly from a specsmanship perspective. But so far the features haven't blown me away as gamechangers that will pull huge numbers of customers from the iPhone or anything else (other than availability on Verizon, but more on that later). The phrase repeated to describe various features is that it is "just a fun way to..." to a particular thing--whether it be scrolling through apps, or "Live Wallpaper" that lets you see dynamic photo of floating leaves rather than a static shot. The only new capability that seems to leap out as a differentiator versus Apple is comprehensive voice-enablement. That is, anything you can type you can also speak--whether its composing emails, tweets or Facebook status updates.
Now, the company is laying out details of a new online store for consumers, where you can buy a phone without service for $529 or with service for $179 from T-Mobile. The idea was to price the subsidized version at rates similar "to other high-end smart phones." (So far, there's been not a single actual utterance of the phrase iPhone on stage). So far, T-Mobile is the only carrier ready to go. But Google is also announcing that Verizon Wireless and Vodafone have "have agreed to join the program." So phones will be available from Verizon and Vodafone "this Spring."
No details yet on what new phones or packages may be coming down the pike, but Mario is now walking through details of the shopping experience. But as a veteran of Apple events but a newbie to the Google-plex, I must say I'm still waiting for that ground-shaking "One More Thing" announcement. The VZ comes close, if only becuase it's a business arrangement that Apple doesn't currently have. I'm not sure that's enough to steal much thunder from Apple--especially if rumors are true of a iSlate release later this month.
Posted by: Peter Burrows on January 05
I'm at the Google-plex, where the company just announced what it calls the first of a new class of products called the Super Phone. Kinda makes an iPhone sound pretty pedestrian, no?
So far, project leader Mario Queiroz has given a hint as to the answer regarding a key question about the device--that Google sees it as an "examplar" for what's possible for handset makers to do, rather than a new Google offensive to be a leading phone maker itself. "The volume, quality and variety of Android phones in the market today has exceeded our most optimistic expectatioins. But we want to do more," he said. "What if we worked even more closely with our partners to bring devices to market that help us showcase the great software technology wer’e working on here at google.” He then explained that the "dictionary definition of Nexus is that it’s a point of convergence, a means of connection. The Nexus One is where web meets phone. It’s an exemplar of what’s possible.”
Now, Erick Tseng is walking through some of the specs, including a 3.7-inch AMOLED display and 1 GHz Qualcomm Snapdragon processor and flashy new "multi-color LED" trackball that gives you context about what you're doing. And all in a package that's lighter than a standard Swiss Army Knife, and the thinness of a No. 2 pencil.
Posted by: Peter Burrows on January 05
On the eve of the day Google officialy debuts its Nexus One smart phone, there's word that Apple is about to purchase Quattro Wireless. This well-funded start-up specializes in mobile advertising, and has been talking up its status as the largest remaining pureplay in this hugely promising area within minutes of Google's announcement last Nov. 9 that it had purchased AdMob, the previous holder of that title. I know because I was pitched by the company's PR department at 1:11 EST that day--less than an hour after Google issued its press release on the deal.
If true, Apple's Quattro acquisition opens up what may turn out to be the most important front yet in the intensifying rivalry between Apple and Google as they position themselves for tomorrow's hot growth markets. Selling hardware--whether Nexus One phones based on its Android software or laptops based on its unfinished Chrome OS--will never be core to Google's advertising-based business. Neither will digital music, telephony or other areas where these one-time allies are companies are bumping into each other. That's because Google gets about 85% of its sales from search advertising, and most analysts don't expect that to come down by much. But mobile advertising--the part of that search business with the most exciting growth potential--is absolutely critical to Google's long-term prospects.
Evidently, Apple is serious about getting its fair share of a market that many believe will one day be larger than today's PC-based online advertising market. One investment banker says he heard that Apple offered $400 million for AdMob--the second highest bid, says the banker--before Google ponied up its winning $750 million offer. If reports are correct, Apple managed to get Quattro for $275 million. That's down from the $400 million Techcrunch says was initially being discussed. But it's more than enough to show that Apple is willing to go on the offensive against Google, rather than just play defense as the search giant moves into more of its markets.
