Apple Reports Best Second Quarter Yet

     Apple reported record fiscal 2Q 2008 financial results ending March 29, 2008. While profits rose across all company divisions, margins were less than previously expected. Apple reported a gross profit of of $7.51 billion and a net profit of $1.05 billion. Last year for the second fiscal quarter, Apple made a gross profit of $5.26 billion and a net profit of $770 million, however gross margin was 32.9 percent this year down from 35.1 percent last year.

     Apple sold 10,644,000 iPods, 1,703,000 iPhones, and 2,289,000 Macs during the second quarter. Revenue growth for the Mac division was exceptional with 54 percent compared to the same quarter last year. Apple reported an overall revenue growth of 43 percent with over $17 billion in revenue and $4 billion in cash flow for the first fiscal half of the year. Apple’s CEO Steve Jobs added in a press release: “we have strong momentum to launch some terrific new products in the coming quarters”. Apple stock closed at $162.89, up $2.69 for the day.

D.S.

La Repubblica: Italian 3G iPhone Due in Few Weeks

     TIM ( Telecom Italia Mobile ) has secured the right to sell the next generation iPhone without a contract and carrier lock, Stefano Carli reports for the prestigious Italian newspaper La Repubblica. There will be no revenue sharing nor carrier exclusivity, both of which Carli credits to the six month negotiations headed by TIM’s chief Franco Bernabè. Carli goes on to say that Jobs was ultimately convinced by Bernabè to abandon the successful US iPhone carrier model to one which would work best in the Italian market.

     “The agreement is revolutionary because it signals a major change in the Apple strategy” writes Carli. He cites 3 major points in the agreement:

- the current generation iPhones will not be marketed in Italy, instead the new 3G handsets will be directly introduced,

- the agreement is not based on ‘revenue sharing’, instead each iPhone is marketed at a “higher price”,

- TIM is not given an exclusive carrier deal, but the right to sell the 3G handsets at least through summer ‘08, after which Vodafone and 3 are the candidates most likely to bring the iPhone to Italy for next Christmas.

     Carli then asks: “It’s a strange agreement at first site. TIM takes the iPhone home first and pays much less than the others before it. Why would Jobs accept all this?”. Carli reasons given that pre-paid voice plans are very popular in Italy, making huge profits from them would not be possible. Jobs’ primary objectives now seem to be promoting the Safari mobile browser to encourage the higher consumption of data and promoting content purchase from mobile iTunes rather than to sell fewer handset at the highest possible cost that come bundled with carrier exclusivity and fixed plans.

Read the entire article here ( in Italian )

D.S.

Report: Apple iPhone Hits India in September

     IndiaTimes is reporting that VodaPhone will carry the iPhone for the Indian market come September and the UK based company is also “likely to become the carrier for the Australian market once iPhone is launched there”. The iPhone may in fact launch in India and other less affluent markets like Mexico and some south east Asian countries in the months to come, just don’t be surprised if a less featured model is introduced instead of the upscale 3G model everyone is expecting. Could the NanoPhone be introduced in India first?

Read more here

D.S.

PC World Reveals 3G iPhone Features

     Tom Spring describes in his PC World Blog some features of the upcoming 3G Apple iPhone:

- 3.5G

- 8, 16, and 32GB

- thinner case and better camera

- GPS

Read more here

D.S.

Source: NanoPhone by the Start of ‘09

     I’ve been talking to a few people in the know regarding the introduction of lower end iPhone models and it sounds like Apple is working on multiple iPhone projects, however technical issues have mainly hindered an early release of new lower-end handsets. The NanoPhone, for instance, was repeatedly described by my sources as an unbelievably small and thin model which has suffered from adequate battery life. Feature-wise, I’m told the NanoPhone will lose the camera and forego some of the advanced features in the upcoming iPhone second generation model like 3G capability and GPS in exchange for a user interface which was described as more innovative than the current generation. I was told that the ideal scenario for Apple would have been to separate the launch of the 2 models by several months, first introducing the 3G iPhone in June and then the NanoPhone just before the holiday season ‘08. While that may still play out, the more likely scenario will be the introduction of the NanoPhone at the start of ‘09 at the Macworld gathering. I’ll have more on the NanoPhone development later.

D.S.

Attack of the iClones: Nokia Readies the Tube

     Looks like Samsung, LG, and HTC won’t be the only big name handset makers to introduce an iPhone clone: James Sherwood of The Register reports “Nokia has confirmed that it’s developing a touch-screen equipped handset to take on the Apple iPhone”. The device will be another shameless rip-off of iPhone’s good looks and hopes to marginally imitate some iPhone functionalities, although it won’t have a multi-touch sensitive screen. No date or price have been released.

Read more here

D.S.

RBC: Apple Underestimated Post Holiday iPhone Demand

     A few days ago, Gene Munster of Piper Jaffray reported in a research note to clients that current generation iPhone shortages are largely due to a production ramp down in anticipation of a new 3G model. Today RBC Capital rebuts this argument by saying that Apple’s low iPhone stocks are a result of “unanticipated strong post-holiday sales of the device”. In other words, Apple simply underestimated post holiday demand and therefore, production of current generation models needs to be ramped up again. As my iPhone sources have also previously confirmed, Apple’s next gen iPhone is due to be released in June.

D.S.

Piper Jaffray: 45 million iPhones to be Sold in 2009

     Philip Elmer-DeWitt reports for Fortune.CNN blogs that Piper Jaffray analyst Gene Munster has reiterated his prediction that Apple will sell 45 million iPhones a year by 2009. Munster goes on to detail how Apple accomplishes this by predicting Apple will introduce “a family of 2 to 3 iPhones — including lower-priced models selling for $200 to $300″ and by “entering new countries”. Now, if you remember from my Apple iPhone plans article earlier, my iPhone insider has already confirmed an ambitious Apple internal target of selling close to 50 million handsets in 2008 by introducing 2 lower models. I believe however, that the prospects of a significantly weaker domestic consumer market will affect those sales targets somewhat.

Read more from Fortune.CNN

D.S.

Analyst: Apple Orders 10 million 3G iPhones

     MacDailyNews reports that Gartner analyst Ken Dulaney claims “Apple has ordered a second round of 10 million next-gen 3G iPhones”. As I have reported from my sources, Apple will likely release the 3G iPhone model sometime in June so we could be very close to its introduction.

Read more from MacDailyNews here

D.S.

Am Tech Analyst: Apple and RIM Both Good Solutions for Enterprise

      Shaw Wu of American Technology Research voiced his confidence in the enterprise solutions offered by both Apple and Research In Motion ( RIM ). In a note released to investors today, Wu says that while ActiveSync, recently licensed by Apple from Microsoft, features simplicity and cost efficiency, RIM’s email implementation has better network security and bandwidth efficiency. Wu also believes iPhone’s OS robustness and efficiency plus support for Exchange may give it an edge over RIM devices.

     It should be noted that while both technologies offer a simple interface for users, they differ a great deal in key areas. RIM’s technology has better security through use of dedicated servers and encryption and ActiveSync offers simpler data routes and hence greater cost efficiency. As Wu also mentions, greater potential software development on iPhone is another area that may help Apple gain an edge.

D.S.