Apple's iPad Event Broke the Internets
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Microsoft, Intel to cede tablet market to Apple?
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If the Apple tablet emerges as expected, this will be another big device market, following smartphones, that the PC industry cedes to Apple.
Tablet: Is this the best WinTel-HP can do?
(Credit: Hewlett-Packard)
The writing is already on the wall already for Microsoft and smartphones, as spelled out in a previous post and as documented in shrinking market share numbers.
That's not to say that Microsoft, Compaq (later Hewlett-Packard), and Intel didn't have a chance. Remember the Compaq iPAQ PDA that debuted way back in 2000, powered by an Intel StrongARM chip running an early version of Windows Mobile?
That device had a lot of potential. The operative word being "potential." An iPAQ could have been an iPhone. Or at the very least an iPod. And everybody could be drooling over iPAQs today instead of iPhones. Or using iPAQs instead of BlackBerrys. But of course things didn't turn out that way.
Fast forward to 2010 (January?). Apple announces a tablet and suddenly everyone wants a tablet.
And what have Microsoft, Intel, HP, and others been offering in the interim years when they had every opportunity to come out with a blockbuster tablet? Unattractive, bulky, half-baked convertible laptops that, let's put it this way, have not taken the PC market by storm.
So, here's the $64,000 question, uh, make that the $64 billion question. Why can't the combined R&D smarts, market clout, and overall technological resources of Microsoft-Intel-HP-Dell come up with a thin, sexy compelling tablet and/or media pad that will turn heads and convince the unbelievers (the average why-would-I-need-something-like-that consumer) that a tablet is a must-have product?
Answer: Because Apple will.
Here's a not unlikely scenario. Apple brings out the tablet/media pad, wows U.S. (and world?) consumers, sells a ton of units, Microsoft-Intel-HP-Dell follow suit with slavishly copied devices that don't sell very well comparatively.
iPAQ PDAs: Missed opportunity?
(Credit: Hewlett-Packard)
That's how the market for successful newfangled devices works these days. Apple creates the market and everyone else follows in a panic.
Then there's the Intel factor. Intel also wants to be a player in this space. But Intel and its coterie of PC makers can't get off the traditional-design laptop gravy train. Plus, as formidable a chipmaker as Intel is, it is still behind the Qualcomms and Texas Instruments of the world in building the power-efficient system-on-a-chip silicon that goes into smartphones and will likely go into tablets.
So, here's my question for Intel et al: How many people will be buying Netbooks or Intel-based MIDs (mobile Internet devices) in 2011 if Apple has a more compelling alternative? Answer: a lot less if the Apple tablet exists.
And add Asia-based device makers offering tablets using an Nvidia Tegra 2 chip to that. A number of these tablets are expected too in 2010. In fact, Nvidia is already doing what Intel should have finished doing a long time ago: make a competitive system-on-a-chip that powers small devices. Intel had the chance to make XScale (what StrongARM eventually became) into something big for small devices six years ago. But it didn't. And now Intel is trying to reinvent the wheel by squeezing the upcoming "Moorestown" Atom chip into smartphones.
Intel, I'm sure you think Moorestown is a great idea, but it's a little late. Apple beat you to it by about three years.
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Outage cripples BlackBerry Americas network
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NEW YORK/SAN FRANCISCO (Reuters) - North and South American users of Research in Motion Ltd's BlackBerry smartphone suffered widespread delays in message services on Tuesday, just a week after another outage struck the popular corporate network.
Customers and analysts had raised concerns about network stability after a short-lived outage on December 17 -- the same day the Canadian company reported quarterly results.
RIM said in a statement that some BlackBerry customers in the Americas "are experiencing delays in message delivery. Technical teams are actively working to resolve the issue for those impacted."
Canada-based RIM's line of BlackBerry products is one of the world's most popular smartphone brands, and is used widely among corporations as an email and communications device.
BlackBerry users on Tuesday reported problems on the wireless networks of AT&T Inc, Verizon Communications Inc, Sprint Nextel Corp and T-Mobile USA, a unit of Deutsche Telekom.
BlackBerry customers were also hit by email delays on the morning of December 17, though that outage appeared to affect mainly individual and small-business users, rather than large corporations.
After RIM had major outages in February 2008 and April 2007, customers raised concerns over service stability. The company had pledged to improve reliability to avoid future crashes, but had not disclosed details.
Shares in Research in Motion closed 3.6 percent lower at $67.22 on the Nasdaq, and at C$71.21 in Toronto. They were holding steady in after-hours trade on Nasdaq.
(Reporting by Ernest Scheyder and Gabriel Madway; Editing by Ian Geoghegan.)
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High-tech vehicles pose trouble for some mechanics
LOS ANGELES – As cars become vastly more complicated than models made just a few years ago, a growing number of independent mechanics say they have had to turn down jobs and refer customers to auto dealer shops.
That's because they lack the thousands of dollars to purchase the online manuals and specialized tools needed to fix the sophisticated cars.
Access to repair information is at the heart of a debate over a congressional bill called the Right to Repair Act.
Supporters of the proposal say automakers are trying to monopolize the parts and repair industry by only sharing crucial tools and data with their dealership shops.
Automakers, however, say they spend millions in research and development and aren't willing to give away their intellectual property.
FTC taking closer look at Google's AdMob purchase
SAN FRANCISCO – U.S. antitrust regulators are taking a closer look at Google Inc.'s proposed $750 million purchase of mobile phone marketer AdMob, the latest sign of greater government vigilance as Google tries to expand its advertising empire.
The Federal Trade Commission sought more information about the deal this week, according to a Wednesday post on Google's blog.
This so-called "second request" doesn't mean regulators intend to block Google's AdMob deal. Most other acquisitions that go through this stage end up getting approved.
But the FTC's action shows regulators are watching Google more carefully as the company tries to build upon its dominance of the Internet's lucrative search advertising market. Google is expected to pull in more than $22 billion in revenue this year, mostly from ads shown alongside search results and other Web content.
"We know that closer scrutiny has been one consequence of Google's success," Paul Feng, a Google product manager, wrote in Wednesday's blog posting. Echoing previous management comments, Feng said the company remains confident its AdMob purchase, announced last month, will be approved.
Google's huge lead in Internet search triggered a 2008 government investigation that scuttled its plans to enter into an advertising partnership with rival Yahoo Inc., which runs the second most-popular search engine. Yahoo plans to work with Microsoft Corp. instead, beginning next year if those two companies can gain regulatory approval.
Since its inception nearly four years ago, AdMob has built a thriving network that sells and delivers ads on applications and Web sites designed for the iPhone and other mobile devices. It's still relatively small with estimated annual revenue of $45 million to $60 million, but regulators apparently want to understand whether its technology and advertising contacts would give Google an unfair advantage in its quest to sell more mobile phone ads.
Google management has indicated that it believes mobile marketing eventually may become bigger than advertising on Internet-connected computers. That tipping point still appears to be many years away, with U.S. mobile advertising expected to total $416 million this year, about 2 percent of overall Internet ad spending in the country.
The FTC's decision to take more time digging into the AdMob deal means Google probably won't be able to take over the company for several more months, Stifel Nicolaus analyst Rebecca Arbogast wrote in a Wednesday research note. It took a year for the FTC to approve Google's $3.2 billion acquisition of Internet ad service DoubleClick Inc., which was completed in March 2008.
Google's first big deal, a $1.76 billion acquisition of the video site YouTube, was cleared by regulators in a month in 2006.
Separately, Google ran into another potential roadblock Wednesday after another takeover target, On2 Technologies Inc., said that it still hadn't collected enough shareholder support to close its deal. On2, based in Clifton, N.J., adjourned a shareholder meeting to approve its $106 million sale to Google until Feb. 17 in hopes of getting the necessary support.
Google, which is based in Mountain View, agreed to buy On2 in August to help improve YouTube's video technology.
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The Federal Trade Commission sought more information about the deal this week, according to a Wednesday post on Google's blog.
This so-called "second request" doesn't mean regulators intend to block Google's AdMob deal. Most other acquisitions that go through this stage end up getting approved.
But the FTC's action shows regulators are watching Google more carefully as the company tries to build upon its dominance of the Internet's lucrative search advertising market. Google is expected to pull in more than $22 billion in revenue this year, mostly from ads shown alongside search results and other Web content.
"We know that closer scrutiny has been one consequence of Google's success," Paul Feng, a Google product manager, wrote in Wednesday's blog posting. Echoing previous management comments, Feng said the company remains confident its AdMob purchase, announced last month, will be approved.
Google's huge lead in Internet search triggered a 2008 government investigation that scuttled its plans to enter into an advertising partnership with rival Yahoo Inc., which runs the second most-popular search engine. Yahoo plans to work with Microsoft Corp. instead, beginning next year if those two companies can gain regulatory approval.
Since its inception nearly four years ago, AdMob has built a thriving network that sells and delivers ads on applications and Web sites designed for the iPhone and other mobile devices. It's still relatively small with estimated annual revenue of $45 million to $60 million, but regulators apparently want to understand whether its technology and advertising contacts would give Google an unfair advantage in its quest to sell more mobile phone ads.
Google management has indicated that it believes mobile marketing eventually may become bigger than advertising on Internet-connected computers. That tipping point still appears to be many years away, with U.S. mobile advertising expected to total $416 million this year, about 2 percent of overall Internet ad spending in the country.
The FTC's decision to take more time digging into the AdMob deal means Google probably won't be able to take over the company for several more months, Stifel Nicolaus analyst Rebecca Arbogast wrote in a Wednesday research note. It took a year for the FTC to approve Google's $3.2 billion acquisition of Internet ad service DoubleClick Inc., which was completed in March 2008.
Google's first big deal, a $1.76 billion acquisition of the video site YouTube, was cleared by regulators in a month in 2006.
Separately, Google ran into another potential roadblock Wednesday after another takeover target, On2 Technologies Inc., said that it still hadn't collected enough shareholder support to close its deal. On2, based in Clifton, N.J., adjourned a shareholder meeting to approve its $106 million sale to Google until Feb. 17 in hopes of getting the necessary support.
Google, which is based in Mountain View, agreed to buy On2 in August to help improve YouTube's video technology.
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Apple's stock hits new high as gadget buzz builds
NEW YORK – Apple Inc. shares hit an all-time high Thursday after a published report suggested the intensely scrutinized yet secretive company may be getting ready for a major product announcement.
Citing unnamed people familiar with the preparations, the Financial Times reported on its Web site Wednesday that Apple has rented space for several days in late January at an arts center in San Francisco.
The company is famed for its highly staged launches. CEO Steve Jobs has used past events to introduce groundbreaking — and lucrative — gadgets such as the iPod and the iPhone.
Although Apple has not acknowledged working on a tablet computer — the company is notorious for keeping upcoming product plans closely guarded — analysts expect the company's next blockbuster to be something of a cross between a laptop and an iPod Touch, which is essentially an iPhone without the calling features.
Apple did not immediately respond to a request Thursday for comment on the FT report.
In a note to investors this month, Oppenheimer's Yair Reiner said Apple could have a tablet out by late March or April based on checks with contacts in the U.S.
Brian Marshall, an analyst with Broadpoint AmTech, expects the device to launch late in the first quarter, but he said the rise in Apple shares Thursday had more to do with investor behavior at the end of the year.
He said that after cashing in from the rise in Apple shares over the past few months, "people are coming back to the well," betting the stock will head even higher in 2010.
Apple shares hit an all-time high of $209.35 at one point on Thursday, topping the previous record of $208.71, set Oct. 21. The stock was up $6.94, or 3.4 percent, to $209.04 in afternoon trading.
Apple shares have recovered from a 52-week low of $78.20 in January, helped by consistently growing profits.
Even during the worst of the recession, people continued to buy iPods, iPhones and Mac computers. In its most recent quarter, the Cupertino, Calif., company reported a 47 percent jump in net income to $1.7 billion, on revenue of $36.5 billion.
With a market capitalization of more than $182 billion, Apple is now bigger than rival computer makers Dell Inc. and Hewlett-Packard Co. combined. Dell has a market cap of about $28 billion, while HP is at $124 billion.
RELATED QUOTES
AAPL 209.04 +6.94
DELL 14.79 +0.45
HPQ 52.87 +0.38
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Making the Web Wider With an Eye on Accessibility
Imagine not being able to use a mouse to open a Web browser or a keyboard to type an e-mail. What if you couldn't distinguish colors on a computer screen or type the distorted letters in order to buy concert tickets or enroll in a class? Despite technological advances aimed at making the Internet easy to use, the World Wide Web is not wide open for many people.
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Memory chip shortage seen in H2 2010: DRAMeXchange
LONDON (Reuters) - Memory chips for computers are likely to be in short supply by the second half of next year as consumers demand more capacity and companies embark on a delayed drive to replace PCs, industry tracker DRAMeXchange believes.
Prices for DRAM chips, the most common type of computer memory, have stabilized over the past two months after rising for most of the year as recession-struck chipmakers slashed capacity and capital spending, causing shortages.
DRAMeXchange forecast on Thursday that shipments of PCs would rise 13 percent next year, driven by notebooks, with 22.5 percent growth to 160 million units, and pared-down netbooks, set to rise 22 percent to 35 million units.
"DRAM will likely face a serious shortage in 2H10 triggered by the hot PC sales," DRAMeXchange said. "The DRAM price decline will likely be eased in 2Q10. That is, DRAM vendors will have a great opportunity to remain in profit for the whole year." Top U.S. memory chipmaker Micron on Tuesday delivered its first quarterly profit in nearly three years as rising prices lifted sales beyond expectations.
DRAMeXchange forecast that 2010 capital expenditure by DRAM vendors would rise 80 percent from this year's record low to $7.85 billion, rising to $10 billion to $12 billion by 2011 or 2012.
Industry leader Samsung would spend $2.6 billion, it predicted. Fellow Korean chipmaker Hynix said on Thursday it planned 2.3 trillion won ($2.2 billion) in capital expenditure next year.
(Reporting by Georgina Prodhan; Editing by David Cowell)
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Prices for DRAM chips, the most common type of computer memory, have stabilized over the past two months after rising for most of the year as recession-struck chipmakers slashed capacity and capital spending, causing shortages.
DRAMeXchange forecast on Thursday that shipments of PCs would rise 13 percent next year, driven by notebooks, with 22.5 percent growth to 160 million units, and pared-down netbooks, set to rise 22 percent to 35 million units.
"DRAM will likely face a serious shortage in 2H10 triggered by the hot PC sales," DRAMeXchange said. "The DRAM price decline will likely be eased in 2Q10. That is, DRAM vendors will have a great opportunity to remain in profit for the whole year." Top U.S. memory chipmaker Micron on Tuesday delivered its first quarterly profit in nearly three years as rising prices lifted sales beyond expectations.
DRAMeXchange forecast that 2010 capital expenditure by DRAM vendors would rise 80 percent from this year's record low to $7.85 billion, rising to $10 billion to $12 billion by 2011 or 2012.
Industry leader Samsung would spend $2.6 billion, it predicted. Fellow Korean chipmaker Hynix said on Thursday it planned 2.3 trillion won ($2.2 billion) in capital expenditure next year.
(Reporting by Georgina Prodhan; Editing by David Cowell)
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NEON SUES IBM ALLEGING ILLEGAL DISPARAGEMENT OF ZPRIME
Neon, the company behind zPrime, the software that helps users move legacy workloads to specliaty engines and thereby reduce their metered software charges, has sued IBM in Federal Court. The case was filed in Austin, near Neon's home town, which is one of the cities served by the U.S. District Court for the Western District of Texas. The suit stems from allegations that IBM has falsely disparaged zPrime and misrepresented in a material and harmful way the software and maliciously disputed the legality of using it on IBM mainframes while knowing otherwise.
The key Federal law invoked by Neon is the Lanham Act. The Lanham act is part of U.S. trademark law, not antitrust law. It has been invoked in this matter because Lanham can bring a successful plaintiff substantial relief quickly and perhaps simpley (compared to an antitrust suit, anyway). The law appears to fit the circumstances as described by Neon, although it is a safe bet that IBM will say Lanham has no applicability to this matter. Neon's Lanham hook has been sunk into the way IBM has disparaged zPrime and Neon in its effort to dissuade mainframe users from buying the product.
The Lanham act is named after a Texas Congressman, Fritz Lanham, who served (and got his law passed) during the Truman administration. The Lanham Act has been updated and amended during the more than six decades since its initial passage.
In recent years, IBM has been accused of antitrust violations by rivals such as Platform Solutions, which it bought and slaughtered, and T3, which is has not bought and not yet slaughtered. In its suit, Neon says IBM is probably violating antitrust law in the mainframe business, but Neon is not making any antitrust claims at this time. Neon views an antitrust suit against IBM as a morass. Instead, Neon is using its assertions about IBM's allegedly monopolistic practices to paint a dark picture of Big Blue's business practices. But that does not mean Neon's suit is confined to a Lanham claim. On the contrary: Neon has also invoked California's law against unfair competition and some related Texas law.
Neon is represented by the Houston firm Reynolds, Frizzell, Black, Doyle, Allen & Oldham.
Like Neon, IBM has already been talking up its side of the story in the business press, along the way conceding that zPrime really could save users a bunch of money. IBM told Bloomberg news that Neon's zPrime "is akin to a homeowner tampering with his electrical meter to save money." Neon would be unlikely to approve of the term tampering, but its complaint seems to say that IBM's practices are a bit like those of a utility company . . . if the utility company happens to be Gazprom.
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The key Federal law invoked by Neon is the Lanham Act. The Lanham act is part of U.S. trademark law, not antitrust law. It has been invoked in this matter because Lanham can bring a successful plaintiff substantial relief quickly and perhaps simpley (compared to an antitrust suit, anyway). The law appears to fit the circumstances as described by Neon, although it is a safe bet that IBM will say Lanham has no applicability to this matter. Neon's Lanham hook has been sunk into the way IBM has disparaged zPrime and Neon in its effort to dissuade mainframe users from buying the product.
The Lanham act is named after a Texas Congressman, Fritz Lanham, who served (and got his law passed) during the Truman administration. The Lanham Act has been updated and amended during the more than six decades since its initial passage.
In recent years, IBM has been accused of antitrust violations by rivals such as Platform Solutions, which it bought and slaughtered, and T3, which is has not bought and not yet slaughtered. In its suit, Neon says IBM is probably violating antitrust law in the mainframe business, but Neon is not making any antitrust claims at this time. Neon views an antitrust suit against IBM as a morass. Instead, Neon is using its assertions about IBM's allegedly monopolistic practices to paint a dark picture of Big Blue's business practices. But that does not mean Neon's suit is confined to a Lanham claim. On the contrary: Neon has also invoked California's law against unfair competition and some related Texas law.
Neon is represented by the Houston firm Reynolds, Frizzell, Black, Doyle, Allen & Oldham.
Like Neon, IBM has already been talking up its side of the story in the business press, along the way conceding that zPrime really could save users a bunch of money. IBM told Bloomberg news that Neon's zPrime "is akin to a homeowner tampering with his electrical meter to save money." Neon would be unlikely to approve of the term tampering, but its complaint seems to say that IBM's practices are a bit like those of a utility company . . . if the utility company happens to be Gazprom.
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Apple shares hit new high on tablet excitement
SAN FRANCISCO (Reuters) - Apple Inc shares reached their all-time high on Thursday as excitement builds over the expected release of its tablet computer.
Although Apple has never acknowledged that a device exists, anticipation is peaking as the company enters the new year.
Option traders exchanged about 275,000 contracts in Apple, above its average daily turnover, as calls outpaced puts by nearly two to one, according to option analytics firm Trade Alert
"Investors are excited about an anticipated release of an Apple tablet," said William Lefkowitz, options strategist at brokerage firm vFinance Investments in New York.
"People are expecting this to be a product that would allow Apple to continue its tremendous growth. In addition, Apple stock hit a new high today and looks very strong on a technical basis," he said.
On Wednesday, the Financial Times reported on its blog that the company has rented a stage at a venue in San Francisco and will make a "major product announcement" on January 26.
The report, which cited people familiar with the plans, did not say whether Apple would introduce the tablet at the event. Apple has declined to comment.
The tablet could be a touch-screen device that resembles a larger iPhone or iPod touch, and could cost anywhere from $500 to $1,000, analysts have said.
There is a 50 percent chance that Apple will announce the tablet in January, with a shipping date by the end of March, Piper Jaffray analyst Gene Munster said in a research note on Wednesday.
The tablet could be released in late March or April, Oppenheimer & Co analyst Yair Reiner said earlier this month.
Although most analysts have not included the tablet in their financial estimates, many expect it to be significant for Apple, complementing its portfolio of iPhones, Mac computers and iPods.
Reiner said the device could add 25 cents to 38 cents to Apple's earnings per share.
The median price target on Apple is $242.50, roughly 16 percent higher than its closing share price on Thursday.
Shares of Cupertino, California-based Apple rose as high as $209.35, passing their previous all-time high of $208.71, before closing up 3.4 percent at $209.04 on the Nasdaq.
(Reporting by Gabriel Madway in San Francisco and Doris Frankel in Chicago; Editing by Derek Caney and Robert MacMillan)
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