German Mac cloner: we're meeting needs that Apple doesn't

Posted by Dennis SellersA German firm, PearC, that earlier this year bean offering computers running Mac OS X, in apparent violation of Apple's user license, is expanding its operations into France, the Netherlands and Belgium, reports OSNews.

Posted by Dennis SellersA German firm, PearC, that earlier this year bean offering computers running Mac OS X, in apparent violation of Apple's user license, is expanding its operations into France, the Netherlands and Belgium, reports OSNews.

  • German Mac cloner says it's ready to go to court if need be

    Posted by Dennis Sellers More cloning woes—or another battle, it seems—for Apple. A German firm that earlier this begun offering computers running Mac OS X, in apparent violation of Apple's user licence, says it's ready to face Apple in court.

  • Another Mac cloner appears

    Posted by Dennis SellersA German firm has begun offering computers running Mac OS X, in apparent violation of Apple's user licence. HyperMegaNet has begun selling three configurations of its PearC, offering a choice of Windows or OS X running on a quad-core Intel i7 processor, the successor to the Core 2 Duo that...

  • Wall Street Breakfast: Must-Know News

    Shareholder sues BoA. A Bank of America (BAC) shareholder has filed a legal suit against the company, seeking class action status on behalf of all shareholders eligible to vote on the acquisition of Merrill Lynch. The suit names Kenneth Lewis and John Thain as defendants and faults the two for failing to disclose the full extent of Merrill's losses; the Dec. 5 vote to approve the merger was based on an Oct. 31 proxy statement that hadn't been revised to reflect Merrill's poor Q4 performance. Sony slips. Sony (SNE) warned it will post a Ą260B ($2.9B) annual operating loss on falling demand, a strengthening yen and restructuring costs. The forecast is down from an earlier projection of a Ą200B profit, and far worse than earlier consensus estimates of a Ą100B loss. It will be Sony's first operating loss in 14 years, and its biggest loss ever, as the company has fallen behind Apple (AAPL) in portable music, Nintendo (NTDOY.PK) in video games and is losing money on its flat screen TVs. As part of the restructuring plan, Sony said it may consolidate TV production in Japan into one plant, but analysts call for more drastic steps to turn the company around. Shares -2.8% in Japan (7:00 ET). Rescue buyout for Satyam? Media reports say Indian firm Larsen & Toubro, which holds around a 4% stake in Satyam (SAY), is considering presenting a rescue plan to Satyam's board. Investment banking and government sources said L&T would put a price on its bid once KPMG and Deloitte, Satyam's new auditors, release updated audit results. L&T denied the reports. Satyam's board will begin a two-day meeting today to discuss how to secure emergency funding. AIG selling prized business. AIG (AIG) has begun the sale of its prized Asian life insurance unit, and hopes to pull in as much as $20B on the unit to help repay its government loans. The unit boasts 20M policyholders across 13 countries, employs 200,000 tied agents and last year made an aggregate operating profit of around $2B. AIG has expressed an interest in selling 49% of the unit, but would consider a complete sale, and could be willing to accept shares as acquisition currency. Potential bidders include HSBC (HBC), Prudential Financial (PRU) and China Life (LFC). Apple regains some shine. Apple (AAPL) posted better-than-expected quarterly earnings yesterday (more details below), giving depressed shares a healthy boost with gains of over 8% after hours. Overseas demand for iPods, Mac computers and iPhones offset a slowdown in U.S. sales, pushing quarterly sales past $10B for the first time vs. consensus estimates of the first profit drop in five years. The company posted a cautious outlook for FQ2, forecasting EPS of $0.90-1.00 vs. $1.13 consensus and revenue of $7.6-8B vs. $8.2B. Germany's 'Bad Bank Light.' The German government is working on a new 'Bad Bank Light' rescue plan that could help the industry get hundreds of billions of euros of bad assets off its books. According to media reports, the government would take on the bad assets of banks and absorb associated losses, and would also get a claim on future gains. A similar model was successfully used with East German banks after reunification in 1990. The government could take as much as €300B-€400B in bad assets, though the banks themselves would choose which assets to divest. BoJ forecasts deflation. Bank of Japan voted unanimously to maintain interest rates at 0.1%, and lowered its assessment of the economy. BoJ now sees a longer contraction until recovery starts to kick in by the second half of fiscal 2010. Japan will slip back into deflation during the contraction. Retail sales. Retail chain store sales rose 1.1% from a week ago, ICSC reported, and fell 1.8% Y/Y. "Being a low volume month with little incentive to spend will continue to make January a tough month for retailers." According to Redbook, national chain store sales fell 2.5% in the first two weeks of January, worse than the expected -2.2%, noting retailers don't tend to read too much into January. Shops are building very cautious inventories for the spring season. Housing index drops. NAHB's Housing Market Index came in at a record low of 8 vs. 9 consensus. However its index of prospective buyers rose to 8 vs. 7 in December, while its index of home sales for the next six months inched up to 17 from 16. "Clearly, conditions in the nation's housing market aren't getting any better," said NAHB chairman Sandy Dunn, "and they aren't going to get any better until the federal government takes substantial action to encourage qualified buyers to get back in the market." Earnings: Thursday Before Open AmerisourceBergen (ABC): FQ1 EPS of $0.73 beats by $0.04. Revenue of $16.9B (+4.6%) vs. $17.2B. (PR) AU Optronics (AUO): Q4 EPS of -$0.95 misses by $0.42. Revenue of $1.80B (-62.5%) vs. $1.81B. (PR) Baxter International (BAX): Q4 EPS of $0.91 beats by $0.02. Revenue of $3.13B (+4.1%) vs. $3.15B. (PR) Fifth Third Bancorp (FITB): Q4 EPS of -$3.82 misses by $3.83. Tier 1 capital ratio of 10.59%. Net loss of $2.2B from goodwill impairment, credit actions, higher credit costs and market valuation adjustments. (PR) KeyCorp (KEY): Q4 EPS of -$1.13 misses by $1.11. Revenue of $1.045B (-15.6%) vs. $1.176B. (PR) Knight Capital Group (NITE): Q4 EPS of $0.56 beats by $0.18. Revenue of $330.2M (+28.2%) vs. $261.8M. (PR) Lockheed Martin (LMT): Q4 EPS of $2.05 beats by $0.13. Revenue of $11.1B (+2.7%) in-line. (PR) Nokia (NOK): Q4 EPS of $0.26 misses by $0.02. Revenue of $12.7B (-19.2%) vs. $13.1B. Shares -10.4% premarket.(PR) Potash (POT): Q4 EPS of $2.56 beats by $0.28. Revenue of $1.87B (+30.7%) vs. $1.85B. (PR) SunTrust Banks (STI): Q4 EPS of -$1.08 misses by $1.15. Revenue of $1.93B (+8.8%) vs. $2.16B. (PR) Taiwan Semi (TSM): Q4 EPS of $0.07 in-line. Revenue of $1.96B (-32.1%) vs. $1.95B. (PR) UnitedHealth (UNH): Q4 EPS of $0.78 in-line. Revenue of $20.45B (+9,4%) vs. $20.35B. (PR) Earnings: Wednesday After Close Amdocs (DOX): FQ1 EPS of $0.55 in-line. Revenue of $754M (+1.6%) vs. $792M. Sees FQ2 EPS of $0.47-0.51 vs. $0.57 and revenue of $700-720M vs. $793M. (PR) Apple (AAPL): FQ1 EPS of $1.78 beats by $0.39. Revenue of $10.17B vs. $9.75B. Gross margins 34.7% vs. 31.9% consensus. Macs 2.52M in line. iPhones 4.36M vs. 4.6M. (8-K) Burlington Northern Santa Fe (BNI): Q4 EPS of $1.79 beats by $0.05. Revenue of $4.37B (+3%) in-line. Commits $2.7B in capital expenses for 2009, $150M lower than 2008. (PR) eBay (EBAY): Q4 EPS of $0.41 beats by $0.02. Revenue of $2.04B (-6.5%) vs. $2.12B. Sees Q1 EPS of $0.32-0.34 vs. $0.40, and revenue of $1.8-2.05B vs. $2.1B. Skype growth 26% to $145M. Active users +1% to 86.3M. Gross merchandise volume +1% to $11.47B. (PR) F5 Networks (FFIV): FQ1 EPS of $0.40 in-line. Revenue of $166M (+7.4%) in-line. While some sales are being pushed into later quarters, others are postponed indefinitely. (PR) Kinder Morgan Energy Partners L.P. (KMP): Q4 EPS of $0.24 misses by $0.29. Revenue of $2.29B (-6.4%) vs. $3.41B. (PR) Polycom (PLCM): Q4 EPS of $0.42 beats by $0.02. Revenue of $263M (-0.1%) in-line. (PR) Seagate Technology (STX): FQ2 EPS of -$0.23 misses by $0.18. Revenue of $2.27B (-33.6%) vs. $2.46B. Sees FQ3 revenue of $1.6-2B vs. $2.19B. (PR) Today's Markets Asia markets closed lightly up. Nikkei +1.9% to 8,052. Hang Seng +0.6% to 12,658. Shanghai +1.0% to 2,005. BSE +0.4% to 8,814. In Europe at midday, London +1.2%. Paris +0.8%. Frankfurt +1.0%. U.S. futures: Dow -0.6%. S&P -0.6%. Nasdaq +0.3%. Crude +1.4% to $44.18. Gold +0.01% to $850.20. Thursday's Economic Calendar 7:00 MBA Mortgage Applications 8:30 Housing Starts 8:30 Jobless Claims 4:30 PM Money Supply Notable earnings before Thursday's open: ABC, AUO, AVT, BAX, BBT, BEN, CIT, CMA, CY, EAT, ESI, EXC, FITB, HBAN, IGT, JNS, KEY, LMT, LUV, MTB, NITE, NOC, NOK, ORI, POT, SHW, STI, TCB, TSM, UNH, UNP, UST Notable earnings after Thursday's close: AMD, CBST, CNI, COF, ED, FII, GOOG, ISRG, MSCC, MSFT, PBCT, SNV, SYNA, TPX, WERN, WFR Seeking Alpha editor Eli Hoffmann contributed to this post.

  • Will Google's Android Play DOS to Apple's iPhone?

    Daniel Eran Dilger Today's broad array of smartphone operating system contenders are offering lots of potential answers to a problem that only requires one. It appears the market has two options ahead: either pool generic hardware makers behind a single operating system and deliver a smartphone marketplace that resembles the Windows PC market, or watch them fall to a dominant leader and have a smartphone market that resembles Apple's iPod ecosystem. This decision isn't going to be made by a class of intellectual elite, or by government mandate. it's going to be made by the market itself. Here are the factors that will influence the outcome, either marginalizing Apple's iPhone into a niche as the company has twice experienced previously at the hands of DOS in 1981 and Windows in 1991, or positioning it as the dominant leader as Apple has achieved for itself with the iPod since 2001. The third segment in this series looks at Google's Android and the Open Handset Alliance as a possible “DOS-attack” against Apple's iPhone. Subsequent segments will look at Nokia's newly opened Symbian and other mobile contenders challenging the iPhone. Will the iPhone Meet its Match from a Modern Day DOS? Will Windows Mobile Play DOS to Apple’s iPhone? Will Google's Android Play DOS to Apple's iPhone? Will Symbian Play DOS to Apple's iPhone? Google Acquires Android. In 2005, Google purchased a startup named Android, which had been in business for nearly two years. The secretive startup was known only to be working on software for mobile phones. It was being run by a who's who of mobile industry veterans, including Andy Rubin, the founder of Danger. Rubin had earlier worked at WebTV along with Chris White and Andy McFadden, both of whom had also joined Android. Richard Miner of Orange and Nick Sears of Tmobile also brought their mobile provider experience to Android. At the time of the acquisition, Google didn't announce any plans for Android and instead only told BusinessWeek, “We acquired Android because of the talented engineers and great technology. We're thrilled to have them here.” It appeared that Google was only going to be expanding its search services for mobile phone users, along the lines of the Google SMS answer system it had recently released. Google Buys Android for Its Mobile Arsenal - BusinessWeek Windows XP Media Center Edition vs Apple TV: The Fall of WebTV The GPhone Myth. As reports began to leak out about talks between Google and hardware makers throughout 2007, rumors began to fly about “the GPhone,” a competitive offering that was supposed to take on the iPhone. Some phone enthusiasts hoped Google would jump in to rescue the struggling OpenMoko project and turn it into a viable project that could attack Apple's new smartphone. In October 2007, I printed the Great Google GPhone Myth, taking apart the idea that Google would be directly competing against the iPhone, and describing that Google was really working on a free alternative to Windows Mobile as a conduit for getting its search and related services on a broader variety of mobiles. Google's services were already on the iPhone. In November, Google played its hand: it had organized a consortium of companies called the Open Handset Alliance to develop open standards for mobiles. The first product from the group would be Android, a mobile operating system built on the Linux kernel. Google wasn't getting into the phone handset business at all; it was only making sure that its mobile search products would not risk being marginalized by the threat of Windows Mobile on phones in the same way Microsoft had been working to leverage its PC monopoly to push Google search off the Windows desktop. The Great Google gPhone Myth Introducing Android: Leader of Linux. Two weeks later, Google released an early version of the Android software. On top of a Linux kernel, Android uses a specialized version of a Java Virtual Machine that takes Java language code and turns it into what Google calls “Dalvik bytecode” rather than Java bytecode as a standard JVM would. This allows Google to leverage existing and familiar Java language tools without paying Sun for a Java license. Like Mac OS X and its fraternal iPhone OS, Android includes a variety of open source libraries, including SQLite and WebKit. On top of that, Google developed a series of frameworks that handle the tasks Cocoa Touch does on the iPhone. Android also bundles a set of applications. While Apple adapted its existing Mac OS X to work in a mobile environment to create the iPhone OS, Android is more like a customized Java environment running on a specialized mobile Linux variant: elements of maturity in an otherwise experimental new platform. What is Android? -Google Android was by no means the first mobile OS using Linux. Both Palm and its amputated ACCESS software arm have Linux-based mobile platforms. Nokia has Maemo, which it uses in its Internet Tablets, and also recently acquired Trolltech and its Qtopia mobile Linux platform. Motorola has teamed up with MontaVista Software to use its Mobilinux. Intel created the Moblin project for mobile Linux, aimed at Internet devices. Google's OHA also isn't the first consortium to attempt to standardize a mobile Linux platform. The OSDL started the Mobile Linux Initiative to define requirements for hardware; the Consumer Electronics Linux Forum (CELF) then worked to define various phone profiles aimed at the Japanese market; the Linux Phone Standard (LiPS) Forum tried to do the same thing in Europe. In 2007, LiPS was folded into the new LiMo Foundation, along with the OSDL. All of these committees have had some overlap and some complementary features. Several of Google's OHA partners are also LiMo members, including NTT DoCoMo, Wind River, and Motorola. So why didn't Google just join LiMo? “LiMo, very candidly, wasn't moving fast enough,” OHA board member John Bruggeman told CNET. Google hopes to herd the Linux cats into a progressive, structured platform that can battle against Symbian and Windows Mobile to succeed as the new DOS of smartphones. Will Google fracture or unify mobile Linux? The Presumption of the Necessity of DOS. The previous segment examining Windows Mobile pointed out how the PC industry as a whole assumed that Microsoft's desktop Windows monopoly would easily take over dominance in the MP3 player market, pushing Apple into a niche position. This was expected because DOS had pushed Apple's early computers into a reduced role starting in 1981, and Microsoft had repeated this again in 1991 when the DOS world migrated to Windows, effectively pruning Apple's Macintosh into a Bonsai platform. The inability of one company to dominate any product category has been frequently repeated by PC industry pundits as a given, despite the fact that history is full of examples of this happening. Sony dominated personal music players for two decades under the Walkman brand even while equally large competitors tried to push it from this position; Nintendo has similarly owned handheld gaming despite ill-fated efforts to grab a piece of its pie by products running a generic platform such as Microsoft's WinCE (Gizmondo), Linux (GP32), and Symbian (N-Gage). In fact, outside of the Windows/DOS PC, there are actually few examples of a generic platform taking over an industry. Nearly every other consumer-facing product uses proprietary platforms: car makers, stereo equipment, appliances and so on typically all use designs custom to their maker. The paradox of the Windows PC market has been that Microsoft's broadly licensed software supposedly saves hardware makers from investing in software development while ensuring compatibility, when in reality it adds significant costs to PC makers while limiting their ability to differentiate themselves. That explains why PC makers have been perpetually merging together and going out of business while Microosft has rolled in money over the last two decades. Parallel efforts to copy Microsoft in broadly licensing an operating system have regularly failed: IBM's OS/2, Apple's Mac OS, Palm's PDA OS, even Microsoft's own efforts to duplicate Windows dominance in other markets, from copy machines to PDAs to smartphones to SPOT watches to music players. The closest copy may be Symbian, but its customers are partners, not simply consumers of a generic third party's operating system as Windows licensees are. That indicates it is not necessary to duplicate the dominance exercised by Microsoft over the PC industry in the smartphone market. Google's Android and Symbian exist more as technology sharing pacts among manufacturers, but both aspire to take Microsoft's DOS role among smartphones. However, the idea that Apple's iPhone must be dethroned by a modern-day DOS, whether Windows Mobile, Android, or Symbian, is not just debatable, but does not sync with the reality of more recent events. Apple's recent history of the iPod further refutes the idea that a software analog to Microsoft is needed. The iPod Emergence: Apple & Pixo vs IBM & Microsoft. Apple's iPod in 2001 made no effort to clone the DOS business model; it actually did the opposite. When Apple entered the market, there were a number of existing MP3 devices using custom software, hardware designs, and DRM codecs. The iPod used off the shelf components to deliver a custom MP3 player using third party software, but Apple also added its own technologies: easy to use sync with iTunes, a fast Firewire interface that made uploading music far faster than the prevailing USB 1.0, and an attractive industrial design. With the iPod, Apple played the role of IBM in 1981, using Pixo's embedded operating system to enter the market quickly, just as IBM had used DOS. The difference was that Apple didn't direct any market attention toward Pixo and added a lot of value on top of that core embedded OS. A modern day Compaq couldn't simply clone the hardware and license Pixo to run on it in order to compete against the iPod, because the iPod was much more than just generic hardware running Pixo software. As the iPod developed, Pixo's role diminished and was eventually displaced. Just like IBM, Apple jumped into a new market just as demand was beginning to explode. Apple made MP3 players far more attractive to a general audience by delivering greater playback capacity than most entry level devices offered, along with an ease of use that encouraged buyers to jump in at the higher end of the market. That left Apple with not only the lion's share of the market, but also by far the most profitable segments of the market. Two decades prior, IBM badly fumbled its play with the early PC and ended up irrelevant in the PC world by the late 80s, sideswiped by Microsoft's DOS and the cloners who were licensing it in parallel, notably Compaq and later HP and Dell. Steve Jobs had witnessed that happen, and was determined to not let it happen again to Apple. Rather than being manipulated by a software middleware vendor as IBM had, Apple worked to incrementally develop the iPod market itself. After consuming the hard drive-based player market, Apple took on the Flash RAM-based market with a tiny hard drive system used in the iPod Mini, and followed up with Flash-based devices of its own in the Nano and Shuffle. This allowed Apple to progressively serve an increasingly wider market, incrementally growing upon an established foundation. With the iPod, Apple became, in effect, an IBM with its own internal Microsoft. Microsoft's Failure Despite Features. In contrast, Microsoft entered the music player market by promoting music player hardware reference designs around WinCE. However, it was unable to ship a finished design until the iPod had become firmly established around 2005. Later branded as PlaysForSure, the devices were sold by various hardware makers and all purported to support the same DRM and the same music subscription services while also offering a broader array of hardware that presented video before the iPod did, supported wireless before the iPod, and so on. Despite these unique features, all of those PFS designs still failed. Microsoft blamed the failure of PFS upon its music store and hardware partners and decided to take Apple on itself in 2006. It relaunched a Toshiba PFS player as its own device under the Zune brand, adding WiFi music sharing features and a larger display than the current Pods had. It failed dramatically as well. Did Microsoft's attempts to float a new DOS among music players fail because of Apple's success, or due to Microsoft's own problems? The failure of the Zune, which followed the iPod model rather than the DOS model, seems to suggest that Microsoft itself was to blame. Consider too that Microsoft's Windows Mobile phones, which use the same underlying operating system as its failed PlaysForSure music players and the Zune, had similarly flopped even before Apple could release a charismatic phone equivalent to the iPod. Of course, when the iPhone was released, it hit Windows Mobile hardest. The iPhone made Windows Mobile Smartphones look ridiculous and underpowered, and made Windows Mobile Pocket PC phones look clumsy and awkward, despite the fact that they both supported a variety of features the iPhone didn't, including the ability to edit documents, capture video, send MMS, and so on. Simply adding on features did not enable Microsoft to compete against Apple. The only conclusion that can be drawn from all this is that competing against Apple requires more than just having a feature arsenal. Microsoft's failures in themselves do not necessarily mean that Google's Android will fail in its attempts to float its own smartphone platform. Why Microsoft’s Zune is Still Failing Microsoft’s Zune, Vista, and Windows Mobile 7 Strategy vs the iPhone Will Google Succeed where Microsoft Failed? Microsoft's demonstrated inability to successfully enter consumer markets for MP3 players and smartphones has given observers little faith that the company will somehow turn things around in late 2009 when its next generation of devices are expected to be released. However, prior to that the first fruits of Google's efforts to build its own smartphone operating environment will arrive. Will Google's Android take over Microsoft's crown as the “DOS vendor” among smartphones? Supporters of Google's Android project point to some parallels between Android for smartphones and Windows on the PC: Android will allow hardware makers to differentiate in ways that can offer features Apple can't (or doesn't want to); it should allow software developers to offer features Apple does not allow on the iPhone; it embraces open, hobbyist experimentation in ways that Apple currently isn't; and it opens the potential for content providers that Apple is not interested in allowing. Openness is Android's key competitive feature. Will all this openness allow Google to unseat the iPhone to become the primary platform developers want to participate in, and subsequently soak up the market for third party hardware makers that Windows Mobile serves? While Google currently has no market share due to the fact that no Android phones have yet shipped, it does have broad vocal support from a variety of the same kinds of hardware manufacturers that supported DOS and Windows and helped to make those platforms successful in the desktop PC market. HTC and Android. The first Android phone is expected to be the HTC Dream; Taiwan's HTC (High Tech Computer) also manufactures Palm's Treo Pro phone as well as many of the most visible Windows Mobile devices. In addition to models produced under its own name, HTC also sells Windows Mobile devices under the Dopod brand, as well as no-name phones branded by providers, such as AT&T, Orange, Sprint, T-Mobile, Verizon Wireless, Vodafone, and others. HTC will also be building the XPERIA X1 Windows Mobile phone for Sony Ericsson. HTC was quick to throw its support behind Android despite its long term alliance with Windows Mobile. Why would it so enthusiastically support an unproven platform from a company that has no experience in consumer hardware platforms? One can only assume that HTC is not happy with the current state of Windows Mobile, and desperately wants another “DOS” to succeed where Microsoft's has so spectacularly failed. As an Original Design Manufacturer for Palm, HTC watched as Palm adopted Windows Mobile in place of the Palm OS and subsequently fell even deeper into crisis. Palm's only successful phone since has been its Palm OS-based Centro. HTC undoubtedly sees Android as its ticket to becoming the next Dell, but without a similar dependance upon Microsoft. Android for mobile phones is essentially playing the role of Linux for PCs, except that it has the backing of a major company behind it. Can Android Take on the iPhone with Openness as its Feature? As great as this sounds, it's important to consider that Linux on the desktop has made no significant progress in eating into Windows dominance after a decade of trying. Being open, free, flexible, and decentralized hasn't been enough of an advantage to get consumers to migrate from Windows to Linux in any fraction of significance. Similarly, in the music business, Linux-based MP3 players have had no impact on the iPod, despite offering more features, flexibility, support for additional codecs, and so on. In the mobile phone area, Linux enjoys a sizable portion of the smartphone market, but this is almost entirely due to phones sold by Motorola in China, where the advantages of Linux' openness are void. Motorola's Linux phones offer nothing to users in terms of openness or flexibility, and are really no different in terms of features than other appliance 'feature phones' based upon closed operating systems. And again, a key problem with assaulting Apple in a feature war is that neither the iPod nor the iPhone became popular by being “highly featured.” They both delivered perhaps 80% of the functionality found in all other devices in the market. Rather than trying to match every feature and cater to every niche as Microsoft had with Windows Mobile, Apple's devices did a few things very well at launch, and incrementally developed into full featured devices that still lack some of the more unique features of their competitors. Further, in terms of openness, the demographic that embraces Linux' characteristic freedoms is not the same as the demographic that buys smartphones in quantity and then pays for data service. This is a critical fact to consider because a big part of the iPhone's success stems from the fact that it is being pushed by mobile providers who want to capture the cream of the market willing to pay a premium for data services. The Frankenphone. Combining the fractured aesthetic of HTC's Windows Mobile phone hardware with Android's software, based upon Linux' perpetually unfinished DIY openness and Google's Java-like development platform, will not result in a product similar to the iPhone. Instead, it will look a lot like phones that have already failed in the market. Apple's advantage comes from slick hardware designs with a close attention to detail, combined with software that purposely does less so that it can do what it does better. Even Apple's own conservative attempts to broaden its software capabilities with iPhone 2.0 have resulted in instability problems that can be blamed upon both Apple's early releases of its phone operating system and software from inexperienced third party developers new to the platform. Would the current frustrations with iPhone 2.0 be somehow mitigated by additional openness that also embraced all kinds of variables from different hardware makers with less quality control than Apple, a loose committee of additional cooks working to serve up operating system features targeted at every possible conceived need, and a wider third party software group with fewer constraints on illegal behaviors? The Failure of Open. While it is politically unpopular to criticize the well meaning efforts of open source contributors, the failure of Linux on the desktop, the failure of the vaporware Indrema game console, and the failure of the OpenMoko project to deliver a workable phone within a year of its deadline all underline the serious problems open development faces in the world of consumer oriented devices. Open has simply failed to deliver on its promises in the world of consumer hardware. OpenMoko was supposed to release its first mobile phone to consumers for $250 several months in advance of the iPhone. When the iPhone shipped, the group then announced new plans to get its phone out by the end of 2007. Instead, this spring the group announced new plans to move to an entirely different development platform, and ship its phone mid year for $400 with limited functionality and incomplete software outside of basic GSM phone features. Linux's notable successes, from Motorola's Linux phones to the Tivo DVR to Linksys Routers, have often come without any associated openness or freedom, and were instead delivered simply to provide their manufacturer with a free kernel to build upon. This indicates that while Linux may find its way into an increasing number of smartphones, it will likely not be accompanied by the glorious freedom of an open development environment Google has said it would offer with Android. Apple iPhone vs the FIC Neo1973 OpenMoko Linux Smartphone Can Google Succeed Where Open Has Previously Failed? Despite “openness” being Android's strongest competitive feature compared to Apple's iPhone, Google recently revealed that its wide-open development model is intentionally gravitating towards a closed association of top tier partners due to practical considerations. In July, Google accidentally sent out a notice that revealed that it had been seeding private SDK updates to only a subset of its contributors, angering those who believed that Android would be as open as Linux on the desktop or the OpenMoko project. Further, Google has restricted initial development to higher level APIs just as Apple did, further indicating that Google itself realizes that being wildly open to impress a minority of hobbyists will not result in the commercial success of its new platform. That serves to neuter Android's primary advantage over the iPhone. Without delivering on the premise of being wide open, Android is really just a less mature set of Java libraries used to create a specialized binary that runs on a Linux foundation. Unlike Apple's iPhone, Android phones won't have a slick user interface developed by professional artists, nor the iPhone's legacy of mature software development frameworks crafted over the last thirty years, nor the iPhone's tightly integrated hardware with award winning industrial design, nor its marketing power tied into the iPod and Apple's retail stores. Android won't be an open iPhone, it will only be a Windows Mobile phone with a better kernel that runs specialized Java software instead of Win32 or .NET code. Don't expect consumers to be impressed by that. The Biggest Missing Feature. There is one remaining factor that strangles to death any last remaining hope that Android might assassinate the iPhone and assume the crown of the “DOS of smartphones.” That is: Android delivers zero price advantage to consumers. In 1981 and 1991, consumers who wanted Apple computers faced the sticker shock of a somewhat arrogant price tag. Apple sold its computers, as it still does, at the higher end of the market, but there was simply far more range in prices available. In 1981, that meant the Apple II was $2600 and the new Apple III was $3500, even before you added a monitor. On the low end, Commodore sold its far less powerful, but “still a computer” Vic-20 for $300, while IBM entered the market with the IBM PC at $3000. Over the next few years, Apple focused on delivering additional sophistication at the same price, releasing the $10,000 Lisa and then the $2,500 Macintosh. IBM continued selling PCs in the same $3,000 to $10,000 range, but other DOS PC vendors began selling machines at prices that ranged as low as $1500. That left Apple with a roughly $1000 price premium over low end PCs. The products weren't really comparable, but consumers only saw the huge price difference. In 1991, Apple was still selling moderate to high-end Macintoshes for $3,800 to $10,000; the crippled Mac LC was $2500, and obsolete-at-birth Mac Classic ranged from $999 to $1500. Windows allowed PC makers to ship a functional $1500 PC and claim a rough approximation to Apple's $2500 entry level system, maintaining that apparent $1000 price premium. Today, pundits are lucky to find a Dell or HP system that is even a couple hundred dollars less than a comparable Mac. However, in the smartphone business, the iPhone 3G is now the same price, if not less, than generic competing phones on the market. Even more significant is the fact that the price of the phone hardware is nearly nothing compared to the cost of the service plan. This fact simply eases any price premium that could cause buyers to flock to a smartphone running a generic operating system over buying the iPhone 3G, regardless of whether it runs Windows Mobile or Android. 1990-1995: Planting Software Seeds Android Partners Have Already Failed. That same pricing principle similarly prevented buyers from considering many of the alternatives to the iPod. While Apple's original iPod models were more expensive than many of the first MP3 players on the market, they were price competitive with models offering similar features. By 2004, it was Apple who was undercutting MP3 competitors on price. Microsoft offered zero price advantage when it began selling the Zune, a major factor in its failure, but Microsoft simply couldn't out-price the iPod; it was already losing money offering the Zune at the same price as the iPod. Apple now has tremendous market power in buying RAM and other components that will prevent any competitors from being able to offer a huge discount over the iPhone's $199 price tag. Even if competitors were to give their phones away, they would only offer a $200 discount to users who would then still need to pay the same mobile fees to use the phone. Android's other partners, including Samsung and LG, have already failed to capture any significant market share in the music player market. Are they going to maintain their position as smartphone makers now that they face similar competition from Apple, its iPod ecosystem, its iTunes Music and Apps Store, Apple's retail store experience, and other factors that are pushing the iPhone? If they can, it is not obvious how partnering with Android will help. Other Problems for Android. Android was announced in early November 2007 and was followed with an early preview SDK within a couple weeks, a month ahead of Apple's initial announcement of the iPhone 2.0 SDK. However, between March and July 2008, Apple delivered nine progressive releases of its SDK, opened its App Store, and sold 60 million apps, raising $30 million to support iPhone software development in just the first month. It has since released three more SDK updates to developers related to iPhone 2.1, which is expected next month. Android just published its first open SDK beta update earlier this week, warning developers that “applications developed with it may not quite be compatible with devices running the final Android 1.0.” Additionally, Android still has no phones available. By the time the HTC Dream is expected to launch, Apple will have an installed base of around ten million iPhone (and iPod touch) users supporting software development through iTunes. The business model for selling Android apps is no better than that for selling jailbreak iPhone apps: there is no iTunes Apps Store to promote them, so users will have to track them down on their own. Android developers also have no real freedom that jailbreak iPhone developers lack. The only difference is that there are ten million iPhones to sell jailbreak apps to, and currently zero Android phones. If selling a jailbreak iPhone app sounds like more trouble than its worth, imagine trying to sell Android apps to a non-existant audience. Now add the official iPhone App Store into the mix, where publicity, promotion and profits are booming. What platform is going to have the most applications? How many users will flock to a smartphone platform with no apps? The wisdom of releasing a desirable phone and achieving a significant installed base before releasing an SDK makes a lot more sense in retrospect. Additionally, while Apple has a decade of experience in shipping regular updates to Mac OS X and its Xcode developer tools, Google has only shipped a random assortment of web-oriented SDKs (a number of which have been abandoned) as a tangent to its core business of selling advertisements. When the Android SDK 1.0 is finished later this year, developers will not only lack an installed base to sell their apps to, but will also have no high profile market for selling their apps in, and subsequently no financial incentive to develop applications that add value to the Android platform, just like Linux on the PC desktop. Around the same time, possibly within the next month, Apple will be shipping its second major OS release: iPhone 2.1. Apple will also be upgrading its entire user base to the new software so that developers will have a cohesive platform to target. This mirrors the efforts Apple has taken to upgrade its Mac OS X users to the same reference release. Mobile developers will be seeing money pouring in via iTunes while crickets chirp in the Android section of various mobile online stores. Apple’s iPhone Vs. Other Mobile Hardware Makers: 5 Revenue Engines Same Same, But Different: DOS Model Problems. Android developers will also have a series of other problems to manage. Like Windows Mobile, Android is intended to support everything, from BlackBerry-style keypad phones with a small touchscreen to the simple Windows Mobile Smartphone form factor lacking a touch screen to iPhone-like full size touch screens. Also like Windows Mobile, Android phone makers will have the option to leave off Bluetooth, WiFi, GPS location services, graphics hardware acceleration, and so on. Each Android phone will also have unique camera hardware, support for different video and audio codecs, and varied support for other differentiating proprietary services demanded by mobile operators. This will force developers to to make complex decisions regarding the lowest common denominator they choose to support. So while the iPhone will have a cohesive feature set, a managed software environment, and a functional market, Android will be a loose federation of hardware makers selling the same random features found on Windows Mobile today, with a chaotic development environment that lacks any central market for users or developers. And it will be run as an experiment by a company with no experience in consumer hardware or platform development. The Missing Tap. One specific example of the “DOS model problem” is that Android currently does not support multitouch. It's not touched on in the API, and Google quietly tap dances around its omission. Why no multitouch? Because multitouch screens are expensive, and most OHA hardware members are more interested in making a profit in a competitive phone market rather than impressing consumers as Apple did with the iPhone. Most existing smartphones, even those trying to directly rival the iPhone, use a stylus driven, pressure sensitive tap screen or a simpler, cheaper touch technology that lacks support for sensing multitouch. The iPhone's screen can actually sense up to five fingers at once, but the primary feature multitouch offers on the iPhone is the two fingered tapping and the pinching effects everyone associates with it. Android could certainly support multitouch if there were a demand for it, but that's the point: Google knows that its hardware partners are cheap and unlikely to put out hardware that actually competes with the iPhone. Instead of using expensive technologies that deliver clever yet largely invisible functionality, OHA members, just like PC makers, are far more likely to add flashy, impractical gadgety fluff that's cheap to tack on, such as slide out keyboards, neon tubes, and scratch and sniff stickers. That's how you impress gullible nerds on the cheap. Google itself is blowing smoke and erecting mirrors to distract from the reality that it being a “DOS vendor” means supporting bargain basement hardware from penny pinching duplicators. Android has been demonstrating some “wow” features such as a Street Maps app that pans around based on an internal compass in the demonstration phone. The problem is that that kind of thing only makes for a fun demo. Nobody needs to twirl around their phone in the air to see a view of the other side of the street, but everyone who has used an iPhone will wonder why they can't pinch to zoom out. Even worse, most Android phones aren't going to have a compass built into them, so Google is demonstrating features most Android users won't be able to use. That Sounds Like Microsoft… Google's design decisions are beginning to look a lot like Windows Vista; rather than actually working to make laptops boot faster, Microsoft came up with the idea of adding a small screen to the back of Vista laptops so users could check their email without having to wake the system up. But this was a stupid idea for a number of reasons, the most obvious being that most users just want a laptop that boots up quickly. Few laptops got the mini screen, but every user who tries Vista on their laptop will wonder why it doesn't boot up as fast as Mac OS X Leopard. In the same way, Google is advertising features for Android that most users won't ever see in their actual phones while ignoring things people will expect based on their exposure to the iPhone. Android is simply selecting the wrong features. Android will offer the advantages of supporting MMS, recording video, and the list of other features Windows Mobile already supplies. Those features didn't stop Apple from firing past Microsoft in the smartphone arena however, just as the Zune's highly touted WiFi and screen didn't phase iPod buyers. Incidentally, just months after the Zune, Apple had not only demonstrated a larger display but a higher definition multitouch screen, and not only WiFi, but functional WiFi that could be used to browse the web or check email. This suggests that Apple, with its faster release schedule, won't stay behind any of the leading features potentially offered by Android for very long. Android partners, however, will find it as difficult to catch up with Apple's unique features, just as Microsoft has been stymied to keep up with Mac OS X, the iPod, and the iPhone. The underlying reason: both Google and Microosft are tasked with maintaing support for a huge variety of hardware options demanded by all their partners. Apple has the unique circumstances to do only what it needs to do itself. Android in Windows Mobile's Shoes. Like Windows Mobile, Android faces a difficult market. In the US, it competes against the popular BlackBerry in corporate markets and the iPhone among consumers. Worldwide, it competes against entrenched market leader Nokia. The difference is that Google, unlike Microsoft, has no in. Windows Mobile was adopted by Windows-bound IT shops despite its weaknesses. Nobody has any preexisting reason to try an Android phone apart from hobbyists and open software enthusiasts, a demographic that has done little to move Linux on the PC desktop. Google also lacks Microsoft's installed base; it's starting from zero. The smartphone industry initially doubted Apple's chances of making much progress with the iPhone, despite the company having the Mac platform, the iPod, retail stores, platform development experience, marketing savvy, industrial design prowess, and so on. Google doesn't have any of those things. Mobile Providers vs Android. Apple also started with an exclusive partnership with AT&T, a three legged race that demanded effort from both. Google is hoping that hardware makers handle the hardware details and that mobile providers will be excited to sell its Android phones. While hardware makers such as HTC clearly appreciate having found a free alternative to Windows Mobile, it's not obvious why providers would be excited about Android, as it promises an openness that most mobile providers strongly oppose. AT&T took a big risk in getting behind the iPhone, as the phone encouraged users to use email rather than fee-based SMS and MMS, it supported WiFi for data access, and it bypassed AT&T's MEdia Net services to plug into iTunes instead. Verizon refused to parter with Apple and grant it those kinds of concessions. Is AT&T going to take a similar risk to partner with a phone that is not exclusive to it, and is Verizon now going to open its arms to support phones that do not exclusively support BREW, VCast and its other proprietary services? While Android may well eat into Microsoft's Windows Mobile business by stealing away its hardware makers, it seems unlikely that Android will ever serve as more than free alternative to Windows Mobile in a market where Windows Mobile is increasingly irrelevant. Android may have the dubious distinction of swallowing Microsoft's mobile business the same way Microsoft ate up the Palm OS, but even if it accomplishes that goal, Google will likely find itself unsustainably hungry immediately afterward. It will also find itself swimming in a shark tank of hungry rivals, including Nokia's Symbian, RIM's BlackBerry, and Apple's iPhone. Symbian is the final generic platform vying for the opportunity to play DOS in the smartphone market. The next article will examine Nokia's chances in its bid to match Microsoft's PC dominance in the mobile market while setting out in a new venture to copy Android's open software model. Did you like this article? Let me know. Comment here, in the Forum, or email me with your ideas. Like reading RoughlyDrafted? Share articles with your friends, link from your blog, and subscribe to my podcast (oh wait, I have to fix that first). It's also cool to submit my articles to Digg, Reddit, or Slashdot where more people will see them. Consider making a small donation supporting this site. Thanks!

  • Leopard and the History and Future of Mac OS X on PowerPC

    Daniel Eran DilgerHow long will Apple continue to support existing models of Macs in the latest version of Mac OS X? Previous versions of Apple’s OS have drawn the line for officially supported Macs based on practical considerations, rather than just being arbitrary or artificial. Here's what the past suggests for Mac OS X Leopard and the version that comes after it.The Post-Copland Crisis.Apple carried along official support for the 1986 Mac Plus through Mac System 7.5.5 in 1996. That established an expectation for Mac users that any new Mac System Software would be able to run across a decade long generation of old hardware. Further, Apple had only begun officially selling System 7 as a retail product a few years earlier; many Mac users continued to think of the Mac operating system as something that was available for free, as it had been in the past. That unreasonable support expectation combined with the sense of entitlement held by Mac users had helped to complicate Apple’s mid-90s failure to deliver Copland as a successor to System 7 between 1993 and 1995, and would continue to dog the company in its plans to provide a significant system software update after Copland was mothballed. Faced with the task of maintaining full backward compatibility for both existing applications and a wide range of hardware--but without any assurance that a significant number of Mac users would actually pay for the upgrade--it’s no wonder why Apple was stuck at System 7 for over a decade (Mac OS 8 and Mac OS 9 were only retoolings of the System 7 operating system released in 1991), and why plans to completely overhaul System 7 with Copland and Gershwin failed.If Apple had the luxury of operating outside of a real market economy and could simply rely on guaranteed future sales at high retail prices, it could have plowed along for twice as long and eventually released something, as Microsoft did a decade later with Windows Vista. As Windows Enthusiasts like to point out, Vista will eventually get deployed no matter how bad it is. [The Secrets of Pink, Taligent and Copland][Has Leopard Fallen into a Copland-Vista Conundrum?][SCO, Linux, and Microsoft in the History of OS: 1990s]Spindler’s Complications.By 1990, Apple CEO John Sculley had recognized that Apple needed to set a reasonable minimum hardware threshold for its operating system releases and to figure out a way to get Mac users to fund the expensive operating system development the company was doing. At that time, both Microsoft and IBM were charging PC users around $100 for retail copies of Windows or OS/2, neither of which were even really usable.Figuring out how to actually accomplish those goals never got done at Apple. Instead, Sculley’s successor Michael Spindler attempted to imitate Sony by releasing ranges of Mac hardware under a variety of vaguely Latin sounding names--Quadra, Centris, and Performa--and a series of confusing, nondescript model numbers. Starting in early 1994, Apple also underwent a complex transition from its original 680x0 Macs to PowerPC hardware. Since much of the original Mac software was written in assembly language, the transition relied on emulation of the existing Mac System Software, which further complicated efforts to deliver significant new features without breaking existing software or prematurely cutting off support for existing machines. Non-PowerPC Macs continued to be sold into 1996.Spindler’s Apple also began plans to license the Mac software to other hardware makers in late 1994, including APS, Bandai, DayStar, Motorola, Pioneer, Power Computing, Radius, and UMAX. That effort skimmed off the cream of Apple’s profitability and handed it to the cloners, leaving Apple to service the low end of the market at Sears with its Performas while also funding the development of nearly profitless Mac System Software to support an increasingly wide range of hardware. [Why Apple Failed]Simplifying the Mac Hardware Lineup Around the G3.When Steve Jobs returned to Apple in 1997, the company's product line was all over the place, although efforts were already underway to simplify things. Apple had only just discontinued the last of its 680x0-based Macs a year earlier. Under Spindler replacement Gil Ameilo, Apple had also scraped together a "Unity" release of System 7, newly rebranded as Mac OS 7.6. That release officially extended support back to all "32-bit clean" Macs, which included the eight year old Mac IIci from 1989.The installed base of Mac hardware not only spanned across two hardware platforms--680x0 and Power PC--but nearly each individual Mac model from Apple had also used its own highly customized and often uniquely quirky hardware design. The cloners were also introducing subtle differences in their own machines, too.Despite using the very modern PowerPC processors and Open Firmware, Macs in 1997 still incorporated old Mac ROMs to maintain software compatibility with the existing Mac OS. After taking control of Apple in the middle of that year, Jobs announced the release of a highly simplified product line using the new G3 processor. The G3 was such a significant leap over earlier PowerPC processors that even the entry level G3s were faster than the top of the line models Apple had been selling. So while Apple had a confusing array of eight different major PowerMac models at the beginning of 1997, by the end of the year it only had two: a desktop G3 and a tower G3. It also shipped a G3 PowerBook.[How CPR Saved Apple]Mac OS X 10.0 - 10.2: G3 Only.The introduction of the G3 processor created a clean line between it and the wide array of odd PowerPC hardware designed prior to 1997. The G3 also signaled the end of the line for the various models built by Mac cloners, who all refused to license new versions of the Mac OS at terms Jobs deemed reasonable. The G3 was also the first PowerPC processor optimized to run Mac software. That made it an easy minimum target for Mac OS X, which remained in development through 2001. In the meantime, Jobs bought out Power Computing--the largest Mac cloner--for $100 million, and terminated other clone agreements by releasing Mac OS 7.7 as “Mac OS 8� in mid 1997. That revision also became the first edition of the Mac OS to really be successfully sold at retail; over 1.2 million copies were sold within the first two weeks. The next fall in 1998, Apple released Mac OS 8.5, which was the first version to be PowerPC-only, limiting support to Macs sold over the last five years. In 1999, Apple shipped Mac OS 9. The new Apple had proved it could plan, ship, and sell regular releases of an operation system. The next task would be shipping Mac OS X as a major new leap past the classic System 7.Between 2001 and 2002, the 10.0 to 10.2 versions of Mac OS X limited support to the G3 desktop Macs, including those first introduced in late 1997. It did not support the original PowerBook G3 unveiled alongside the G3 desktops however. The first supported PowerBook was the "WallStreet" revision introduced in May of 1998. That maintained the roughly five year support window for machines to be updated with new versions of Mac operating system software. [Apple Sells 1.2 Million Copies of Mac OS 8 - Apple][Leopard, Vista and the iPhone OS X Architecture]Mac OS X 10.3: New World Macs Only.After moving its hardware line to the G3, Apple next delivered a revised "New World" platform which modernized the Mac's hardware and removed its old hardware ROMs, replacing them with “ROM in RAM� software loaded from disk. The first New World model was the first iMac in 1998. The beige G3 Macs from 1997 were replaced with a single new "blue and white" G3 in early 1999, which used the same translucent plastic as the iMac. Apple shipped its first "New World" laptop in the Lombard PowerBook G3, distinguished by its translucent bronze keyboard. In July 1999, Apple released the iBook.The release of Mac OS X Panther 10.3 in 2003 extended support back to Macs with G3 processors and built-in support for USB. This wasn't due to an actual requirement for USB, but rather a shorthand way to describe a cutoff for the support of the significantly different architecture of "Old World" Macs designed prior to the iMac, as all New World Macs also provided support for USB. Panther retained a roughly five year support window for existing Mac models.Mac OS X 10.4: Modern New World Macs Only.In 2004, Mac OS X Tiger 10.4 retained support for most New World Macs using G3 processors, but required support for built-in FireWire. Again, this wasn't related to a need for FireWire ports, but rather a way to exclude support for the earliest of the now five year old New World Macs, which Apple decided would not run Tiger acceptably, including: the original 1998 iMac.the original 1999 iBook.the 1999 "Lombard" PowerBook G3.These five year old machines can still run Tiger using XPostFacto, a third party enabler designed to force Mac OS X to run on earlier systems. However, significant differences in their hardware--coupled with their limited performance--prevented Apple from officially supporting them.In the case of the Lombard PowerBook, its DVD drive was never supported for movie playback under Mac OS X because the system did not have the power to decode DVD video in software; under Mac OS 9, it relied on a hardware decoder. Rather than holding up Mac OS X to develop custom support for the obsolete hardware decoder in the now half-decade old Lombard PowerBooks, Apple told its users to continue using the playback software it came with. [XPostFacto: OS X for Legacy Macs - Other World Computing]Mac OS X 10.5: 867 MHz Processor Required.For Leopard, Apple is specifying an 867 MHz G4. That excludes support for the now functionally obsolete G3s, and draws a line down the middle of the 2001 "Quicksilver" PowerMac G4s, excluding support for the 2001 G4 Cube and the first three generations of the Titanium PowerBook G4 up to late 2002. This again maintains official support for five to six years of Mac models.This break roughly corresponds to the arrival of the G4+, a revised version of the G4 with support for L3 cache and improvements to AltiVec. It is also near the line for supporting Quartz Extreme and the higher end Core Image, both of which are technologies used to delegate graphics work to the video card. However, Core Image is not a requirement for using Leopard; such a requirement would exclude support for all G4 desktops and laptops prior to 2003. Leopard Looms Large.That indicates Apple is being fairly liberal in officially supporting older models in Leopard. The obvious reason for this is that Apple wants to sell Leopard to as many Mac users as possible, even more than it wants to use Leopard to sell new Macs. Between 2001 and 2002, Apple sold just over 6 million Macs. From 2003 to the present, Apple has sold about 23 million Macs. Apple wants to target the broadest possible market for Leopard, so excluding support for older machines is done with some hesitation. By extending support back into 2001, Apple is selling to an audience of nearly 30 million versus 23 million.At the same time however, the likelihood of selling retail copies of Leopard to users of older Macs begins to drop as six year old machines go out of service or are no longer viewed by their owners as needing brand new software. This spring, analysts estimated an installed base of around 22 million active Mac users, an increase of 6 million over their figures from 2005.[Mac install base estimated at 22 million pre-Leopard - AppleInsider][Market Share vs Installed Base: iPod vs Zune, Mac vs PC]Is Leopard the Last Hurrah for Power PC Macs?The reports of PowerPC's obsolescence have been greatly exaggerated. Last year, the rumor was that Leopard would be released only for Intel Macs. This year, with Leopard looming on the horizon, the new rumor is that Mac OS X 10.6--possibly named Lynx or Cougar--will be Intel-only. However this is only uninformed speculation. When this rumor came up earlier about Leopard, I posted the article, “Unraveling The PowerPC Obsolescence Myth.� It pointed out that Apple would not release an Intel-only Leopard for an audience of the roughly 3 million new Intel Macs sold in 2006 when it could reach an installed base of around 20 million Macs with a Universal Leopard.It noted, “If Apple continues to sell new Macs at current rates, it will be 2008 before Intel Macs begin to outnumber PowerPCs, and that assumes that every year, 4 million old PowerPC Macs will be destroyed. There will be a significant proportion of PowerPC Macs still buying software well into 2010, and the market will accommodate them.�[Unraveling The PowerPC Obsolescence Myth]Why the Mac OS X Backward Compatibility Window May Increase.Apple’s Mac OS support troubles back in 1996 related to the support of multiple platforms, a wide variety of different models, and an inability to effectively market the Mac OS. Those issues are no longer factors today. Despite Apple’s maintenance of dual platforms since the transition to Intel began in 2006, technology has erased the barrier as a real problem.The majority of the installed base of around 22 million Macs is PowerPC; less than 10 million are Intel Macs. Apple has started to sell dramatically more new Macs at a faster rate over the last couple years--displacing the PowerPC majority more rapidly--but there will still be a lot of PowerPC Macs well into 2010. Worrying about 10.6 or even 10.7 being Intel-only shouldn't be among anyone's greatest concerns. By 2009, the likely ballpark release date of Leopard's successor, the trailing end of officially supported Macs would include over 8 million PowerPC Macs sold since 2004, even more machines--and more recent models--than Apple is targeting now by reaching back into 2001 to support QuickSilver G4s in Leopard. Further, supporting machines from 2003--including the first G5s--will be no difficult stretch, because the Mac architecture didn't change dramatically between 2003 and 2005 in the way that it rapidly did between 1997 and 2000. In addition, Mac OS X hardware dependancies have been designed to degrade gracefully. For example, the acceleration framework and Core Graphics libraries make use of specialized hardware if available, or simply run on the general purpose CPU if it isn’t.It's also interesting to note that prior to 2000, Macs weren't sold with Mac OS X because it didn't yet exist. That means earlier versions of Mac OS X supported years of Macs that were never really designed to run it, while Leopard still supports the vast majority of the machines anyone ever bought with the expectation to actually use Mac OS X. New generations of Mac OS X will have fewer reasons to exclude support for existing hardware, leaving the support line tied to practical performance.[Why Apple hasn't used Intel processors before]Intel-Only Not Necessary.Around 11 million Macs were sold between 2003 and 2005, and all of them were PowerPC. It would be foolish for Apple to simply exclude that audience in the next revision of Mac OS X without good reason. As it works out, there really isn't any good reason for Apple to ditch PowerPC. Apple's Universal Binaries architecture makes it relatively easy to maintain support across multiple platforms. It's not like the move from Motorola 680x0 classic Macs to PowerPC, where old 680x0 software was emulated at significant cost on PowerPC, and new PowerPC code couldn't run at all on 680x0 Macs. That situation left developers to wonder which they should invest their support in and for how long. Universal Binaries means there isn't any tough choice to make.Universal Binaries not only support PowerPC and Intel, but also make supporting 32 and 64 bit architectures easy. Leopard supports all four Mac platforms in the same software release:32 bit PowerPC G464 bit PowerPC G532 bit Intel64 bit Intel Microsoft faces big problems in migrating its users to 64 bits, because it has no seamless architecture to waltz its 32 bit Intel users onto 64 bit hardware. Instead, Windows users have to obtain a separate 64 bit edition of their operating system, new 64 bit drivers, and new 64 bit applications. Supporting both is problematic, and deploying software across both is also trouble. Even Microsoft hasn’t delivered its portfolio of applications for its 64 bit versions of Windows. Microsoft faces enough troubles selling Vista, let alone its deferred plan to deal with 64 bits and EFI at some point in the future. Apple already has both issues covered, allowing it to concentrate on more interesting tasks. [How Apple’s Firmware Leapfrogs BIOS PCs]Applications that are Intel-Only.For Apple and third party developers using Apple's Xcode tools, supporting both Intel and PowerPC architectures is really no more difficult than supporting just Intel Macs. In fact, Apple has also ported Mac OS X to the ARM architecture for use in the iPhone and the iPod Touch, demonstrating that it can flex its multi-platform muscle in several directions, not just as one-time, disposable transition plan. Universal Binaries isn’t a crutch, its a powerful deployment technology.There are only three types of developers that will have any reason to deliver Intel-only Mac apps:Companies like Adobe, which base their applications on their own custom, internal cross platform architecture. Since Adobe maintains its own system that is based on Intel-centric development, its new apps such as Soundbooth aren't ever going to appear for PowerPC. If it used Xcode’s Universal Binaries, this would not be a problem. Xcode doesn't target Windows though (at least not in a way Adobe can use!), so Adobe rolled its own system.
Software designed for Windows and ported to Intel Macs using a WINE-like engine. This is how EA is porting its new games to the Mac. They are actually Windows games running on a thin portability layer that emulates the Windows APIs. Since games don't integrate into the desktop UI, a full Mac port isn't very valuable for users or worth doing for the developer, particularly since the Mac gaming market is still pretty small. Porting over Windows games is far faster and keeps new releases in sync so that Mac gamers will have access to new titles sooner, and won't miss features such as network play. 
Environment emulators and other software tied directly to the x86 architecture, including Parallels. These can't be ported to PowerPC for the same reason that it makes no sense to port Virtual PC to Intel. Apart from running Windows--which is tightly bound to the 32-bit x86 architecture--there is really very little software that needs to run on a specific processor.For most other software, including the vast majority of what makes up Mac OS X, it really isn't difficult to deliver both PowerPC and Intel versions, so as long as there are PowerPC Macs around, there'll be PowerPC software. That makes it extremely unlikely that Apple would drop support for PowerPC in the next generation of Mac OS X after Leopard.Maintaining and Growing the Mac Installed Base.What about the argument that Apple would prefer to “force� users to buy a new Mac to get the latest system rather than simply upgrade their existing hardware? Consider that Apple’s Mac profit margins are around 20% or less, while its Mac OS X margins are closer to Microsoft’s 80% Windows margins. [Office Wars 2 - Microsoft’s Outrageous Office Profits]Mac users paying to upgrade to Mac OS X are likely to buy a new Mac eventually as a replacement, so Apple’s delaying that hardware sale for a profitable software upgrade makes more sense than forcing existing Mac users to go out and buy new hardware, which might involve comparing a new Mac against a PC running Windows.The more Macs that can run the most recent version of Mac OS X, the more attractive the target is for third party developers. Apple wants to maintain the majority of Mac users on the latest version of its software. In contrast, Windows Vista is competing against Windows XP, and the fact that Microsoft only earns 20% of its revenues from (the much more expensive) retail box sales indicates that most PC users upgrade when buying a new PC. More Mac users pay to upgrade their software.That fact contributes toward making the Mac platform far more valuable than Windows; despite having only 3% market share of the entire world’s production of PCs, Apple makes more money on hardware sales than Dell with its 15% share of the market, and--after including Microsoft’s tremendous losses from its non-monopoly businesses--made half as much money in software as Microsoft did with its 98% share. Windows Enthusiast prefer not to think about this.Even stripping Apple of its iPod revenues, which PC pundits love to do, the company still earned $4.4 billion on its Macintosh business last year, over a third as much Microsoft brought in from its entire Windows, Office, and server operations combined. Apple’s 2% of the PC market doesn’t seem so small anymore. [Can Apple Take Microsoft in the Battle for the Desktop?][Market Share vs Installed Base: iPod vs Zune, Mac vs PC]What do you think? I really like to hear from readers. Comment in the Forum or email me with your ideas. Like reading RoughlyDrafted? Share articles with your friends, link from your blog, and subscribe to my podcast! Submit to Reddit or Slashdot, or consider making a small donation supporting this site. Thanks!

  • Wall Street Breakfast: Must-Know News

    TARP watchdog to probe NY Fed over AIG. According to prepared testimony, TARP Special Inspector Neil Barofsky launched two new investigations into the New York Federal Reserve's actions during AIG's (AIG) bailout. Barofsky will look at whether there was any misconduct related to the public disclosure of the $62.1B paid to counterparties, and will also investigate the NY Fed's level of cooperation with a previous audit of the counterparty payments. In a further development, Geithner, who was head of the NY Fed at the time of AIG's bailout, has said counterparties weren't a consideration in structuring AIG's rescue. However, emails have subsequently shown that counterparties were indeed discussed, and buying out banks' AIG contracts was deemed better "from a financial-stability perspective" than other AIG rescue options being considered. AIG holds onto ILFC unit. AIG (AIG) has decided not to sell its aircraft-leasing unit, International Lease Finance Corp., after concluding the potential profit wouldn't justify the sale of such a key asset. AIG will now have to continue funding the unit's large balance sheet either through cash or new debt-financing while it also works to repay billions of dollars in federal bailout funds. It's unclear whether AIG's decision is connected to reports that Steven Udvar-Hazy, a founder and CEO of ILFC, is planning on leaving the company this week. Merger approved for Live Nation, Ticketmaster. The Justice Department approved the merger of Live Nation (LYV) and Ticketmaster (TKTM), on the condition that Ticketmaster sells its Paciolan unit to a unit of Comcast (CMCSA), that the combined company licenses its primary ticketing software and that it doesn't retaliate against venues that use another provider. The new Live Nation Entertainment will own more than 140 concert venues across the world, and will sell roughly 140M tickets per year to 22,000 concerts. The news sent shares climbing yesterday, with LYV closing up 14.7% and TKTM +15.8%. U.K. exits recession. The U.K. emerged from recession, barely, reporting GDP growth (.pdf) of 0.1% in Q4 2009 vs. the previous quarter. However, the growth rate was far less than the +0.4% expected and has raised concerns that the economy could fall back into contraction. Japan outlook turns negative. Earlier this morning, S&P revised its outlook on Japan to "negative" from "stable," potentially putting at risk Japan's AA long-term rating. The ratings firm cited concerns over "the Japanese government's diminishing economic policy flexibility" and over growing "fiscal and deflationary pressures." Japan's government debt is already among the highest for rated sovereigns, and S&P thinks the debt burden will continue to rise, peaking at 115% of GDP over the next few years. Moody's and Fitch Ratings kept their grades unchanged today, calling Japan's debt burden 'relatively moderate' and expressing confidence that "the market will finance this without putting big upward pressure on yields." Deal will create massive printer firm. Privately held Quad/Graphics Inc. is expected to buy Canadian rival World Color Press for $1.3-1.4B, creating the second-largest commercial printer in North America and posing a threat to industry giant R.R. Donnelley & Sons (RRD). Sources said the firms hope to close the deal this summer, and estimate combined 2010 earnings would be around $875M. Fed mulls new benchmark rate. Federal Reserve officials begin a two-day FOMC meeting today, and one of the items on the agenda is whether to adopt a new benchmark interest rate to replace the one that's been used for the last two decades. Instead of the federal funds rate, officials may choose to use the interest paid on excess bank reserves. Porsche sued by VW short sellers. Porsche is being sued by short sellers of Volkswagen (VLKAY.PK) stock. The group of short sellers claim that Porsche misled investors by denying it planned to acquire Volkswagen and by using manipulative trades to hide its stock positions, and then sent the stock rocketing as short sellers tried to cover their positions. The plaintiffs are seeking to recover more than $1B in damages. White House aims for stimulus, and reduced spending. Gearing up for the State of the Union address tomorrow, the White House released details on a series of initiatives meant to help middle-class families, including a set of tax credits and an automated-IRA system for workplaces. Obama also proposed a three-year freeze on domestic spending accounting for one-sixth of the federal budget. The freeze would save $250B by 2020. In addition, Democratic lawmakers are considering an $80B jobs-stimulus package that would provide tax credits to small and medium-sized businesses that hire workers. Apple's healthy earnings beat. Apple (AAPL) posted better-than-expected quarterly results (see details below), buoyed by strong sales across most of its product lines. However, Apple's results were also helped by new accounting rules allowing the firm to recognize all the revenue for iPhone sales at the time the devices are sold, rather than having to defer that revenue over 24 months. (Read Apple's earnings call transcript) GM's Whitacre chooses himself for CEO. Edward Whitacre, chairman and interim CEO of General Motors, said he will assume the position of permanent chief executive. Whitacre said staying on as CEO hadn't been his original intention but that the firm needs stability and he felt increasingly comfortable in the job. Separately, GM acknowledged it held advanced talks with Spyker Cars, but said it's still moving forward with plans to wind down its Saab unit. China raises select reserve ratios. Asian markets traded heavily down (see details below) following reports that China moved forward today with a planned increase in required reserves for some of its banks. Some banks were also told to suspend new lending for the rest of the month. In another move that surprised markets, the central bank left yields unchanged in its closely watched one-year bill sale, though analysts think this is just a pause in tightening policy and not a reversal. More cyber-attacks. A Chinese human-rights group said it and four other advocacy and news organizations were targeted in cyber-attacks over the weekend. The group said that the hackers were "of unknown origin" but hinted the Chinese government might be to blame. Goldman caps U.K. pay. Goldman Sachs (GS) is capping compensation at Ł1M ($1.6M) for the company's partners in London, in response to the one-time 50% bonus tax announced by U.K. Prime Minister Gordon Brown last month. Most other firms subject to the tax are spreading the penalty out across a wider swathe of employees, sometimes across their entire workforces. Home sales drop. Existing Home Sales fell 16.7% to 5.45M in December, vs. expectations of 5.78M. The supply of homes rose to 7.2 months. NAR chief economist Lawrence Yun said there were no surprises in the data, but noted that although "sales are on track to rise again in 2010," the labor market "remains a concern and could dampen the housing recovery – job creation is key to a continued recovery in the second half of the year.” Earnings: Tuesday Before Open Baker Hughes (BHI): Q4 EPS of $0.43 beats by $0.08. Revenue of $2.4B (-24%) vs. $2.3B. (PR) Corning (GLW): Q4 EPS of $0.44 beats by $0.02. Revenue of $1.5B (+41%) vs. $1.4B. (PR) DuPont (DD): Q4 EPS of $0.44 beats by $0.03. Revenue of $6.4B (+10%) vs. $6.1B. (PR) MGIC Investment (MTG): Q4 EPS of -$2.25 beats by $1.1. Revenue of $406M (-2%) vs. $394M. (PR) Regions Financial (RF): Q4 EPS of -$0.51 misses by $0.17. (PR) Tellabs (TLAB): Q4 EPS of $0.09 beats by $0.02. Revenue of $389M (-5%) in-line. (PR) Travellers (TRV): Q4 EPS of $2.12 beats by $0.63. Revenue of $6.4B (+11%) vs. $5.2B. (PR) Weatherford International (WFT): Q4 EPS of $0.02 misses by $0.09. Revenue of $2.4B (-8%) vs. $2.3B. (PR) Earnings: Monday After Close Amgen (AMGN): Q4 EPS of $1.05 misses by $0.08. Revenue of $3.8B (+2%) vs. $3.85B. Expects fiscal 2010 capex of about $600M. (PR) Apple (AAPL): FQ1 EPS of $3.67 beats by $1.60. The company elected to adopt required accounting standards changes related to revenue recognition, retrospectively. Revenue of $15.7B (+32%) vs. $12B. Sees Q2 EPS of $2.06-2.18 vs. $1.77, on sales of $11B-11.4B vs. $10.4B. Gross margin of 40.9% vs. year-ago 37.9%. Sold 3.36M Macintosh computers, up 33% from year ago. Sold 8.7M iPhones, up 100% from year prior. Sold 21M iPods, an 8% decline. (10-Q, PR) Atheros Communications (ATHR): Q4 EPS of $0.62 beats by $0.09. Revenue of $186M (+89%) vs. $175M. (PR) Olin (OLN): Q4 EPS of $0.28 may not be comparable to estimates of -$0.05. Net income of $21.8M incorporates $37M of pretax recoveries of environmental costs expensed in prior periods and $1.2M pretax gain from sale of a manufacturing facility. Revenue of $351M (-19%) vs. $330M. (PR) Packaging Corp. of America (PKG): Q4 EPS of $0.16 beats by $0.03. Revenue of $532M (-3%) vs. $510M. Sees Q1 EPS of $0.12 vs. $0.17. (PR) SL Green Realty (SLG): Q4 FFO of $0.87 misses by $0.01. Revenue of $247M (-8%) vs. $239M. (PR) Texas Instruments (TXN): Q4 EPS of $0.52 beats by $0.03. Revenue of $3B (+21%) in-line. Expects Q1 EPS of $0.44-0.52 vs. $0.43, on revenues of $2.95B-3.19B vs. $2.83B. (PR) VMware (VMW): Q4 EPS of $0.31 beats by $0.05. Revenue of $608M (+18%) vs. $554M. Sees Q1 revenue of $580M-600M vs. $530M. (PR) Zions Bancorp (ZION): Q4 EPS of -$1.26 beats by $0.38. Net interest income of $457M (-10%). Net loan charge-offs of $292.1M vs. $381.3M in Q3. (PR) Today's Markets In Asia, Nikkei -1.8% to 10,325. Hang Seng -2.4% to 20,109. Shanghai -2.4% to 3,019. BSE closed. In Europe at midday, London -0.5%. Paris -0.6%. Frankfurt -0.4%. Futures: Dow -0.4%. S&P -0.55%. Nasdaq -0.2%. Crude -1% to $74.49. Gold flat at $1,095.20. Tuesday's Economic Calendar FOMC Meeting, Day 17:45 ICSC Retail Store Sales8:55 Redbook Chain Store Sales9:00 S&P Case-Shiller Home Price Index10:00 Consumer Confidence10:00 FHFA Housing Price Index10:00 State Street Investor Confidence Index10:00 Richmond Fed Mfg.5:00 PM ABC Consumer Confidence Index Notable earnings before Tuesday's open: ABC, BHI, CVG, CBE, GLW, DAL, DD, EMC, FPL, JNJ, MHP, MTG, NVS, NUE, BTU, RF, SHW, TLAB, TRV, X, VZ, WFT Notable earnings after Tuesday's close: ALTR, BXP, CNI, ELY, GILD, IDTI, MCK, MOLX, PTV, QLGC, RFMD, STLD, STM, SYK, TSFG, YHOO Seeking Alpha editors Eli Hoffmann and Jason Aycock contributed to this post.

  • 100 Greatest iPhone Apps of 2009

    From marking its first year this past summer, to boasting over 100,000 applications in its catalog, the App Store has been great for many developers on the iPhone platform this past year. With 2010 right around the corner, we wanted to take a look back at the 100 greatest iPhone apps of 2009. These applications were nominated by Mac|Life readers. All of these apps have something in common: They've helped make the iPhone better over the past year.   MobileMe iDisk (free)This little iPhone app lets MobileMe users browse through files stored on their iDisk with ease. The app also lets you view files like PDF, Microsoft Word, Excel, PowerPoint, Image files, and iWork files. In addition, you can share files right from your iPhone.  Evernote (free)Evernote is the free online service/application that lets you store notes and images in notebooks for later use. The iPhone application really comes in handy, especially since it syncs with the cloud. Coupled with the new offline viewing for premium users, Evernote has to be one the best iPhone apps, hands down.    Facebook (free)It seems like all of our friends are on Facebook these days, so why shouldn't Facebook be everywhere? Well, with their iPhone application it can definitely seem like that. This application allows you to manage all of your friends, posts, messages, uploads, and otherwise use Facebook without being inside of a browser.   Shazam (free)Without this wonderful application, we would still have that snazzy song stuck in our heads without knowing the title or band. Shazam provides a great service to iPhone users for the wonderful price of free; however, if you're into product(RED), they have a Shazam(RED) version available as well.   Tweetie 2 ($2.99) It seems like Twitter is becoming as ubiquitous as Facebook, and it also seems like there are a bevy of iPhone Twitter clients. Tweetie would have to be a newcomer that won the hearts of the iPhone users everywhere. Multiple Twitter accounts, contact linkage, multiple attachments, offline mode, and more. Tweetie 2 has you covered.   Twitterrific (free)Twitterrific is the great-granddaddy of Twitter clients on the Mac and iPhone, but it doesn't disappoint. Twitterrific got a new face lift this year that updated the client to be in line with other clients like Tweetie. By far, this is the nicest looking Twitter client on the iPhone.  SimplyTweet ($4.99)With the advent of push notifications for the iPhone, SimplyTweet is probably one of the cheapest solutions for bringing push to your tweets. This app also contains all of the features of other comparable Twitter clients.   Zipcar (free)Zipcar is one of those revolutionary applications, giving you the ability to not only pick out a rental car from the Zipcar service, but also unlocks the doors on the car right from the iPhone.   Dropbox (free)This small newcomer of a company has shown time and time again that they can play with the best when it comes to online storage in an iDisk-style fashion. Dropbox offers up 2GBs of free online storage to users (along with other premium paid services). With their iPhone application, you can view and manage files on-the-go with ease.  Pastebot ($2.99)With iPhone 3.0, cut, copy, and paste became a reality on the iPhone. With Pastebot, multiple clippings in an easy to use clipboard manager become a reality. This application also lets you sync over your clippings from your Mac to iPhone and vice versa.   Stanza (free)With Amazon Kindle-like finesse, Stanza lets you read eBooks on your iPhone for free or little cost. Download free Guttenberg Project books, or paid books from several publishers right from the app; then sit back and read.   TomTom U.S.A. ($49.99)This year gave way to turn-by-turn GPS navigation apps for the iPhone. TomTom is one of the many GPS apps available that is really well designed. This app has 3D maps, fast route calculations, and a new lower price that many iPhone owners will enjoy.  Navigon MobileNavigator ($59.99)With maps from NAVTEQ, and features like Lane Assist Pro, Navigon is a great navigation app for the iPhone. The app also includes Google local search, iPod control, and bird's-eye view of maps.   Things ($9.99)Sure, it's been around since the App Store launched, but it gained tighter syncing with its Mac counterpart, which makes it all the better. Things is a complete GTD (Getting Things Done) solution for your Mac and iPhone.  1Password Pro ($7.99)What would we do without 1Password? This handy application manages all of our passwords on both the Mac and the iPhone. And with the pro version, you get all kinds of nifty features like copy/paste passwords, folders for managing, and copying multiple field values. If you're always forgetting your passwords, this app is for you.   VNC Lite (free)This application is a must have if you want to control your Mac or PC right from your iPhone. It has zoom and scroll capability, landscape mode, and support for 8 and 32 bit color modes.  AP Mobile (free)AP Mobile lets you browse local, national, and international news right from one iPhone application. Utilizing news from the Associated Press newswire services, this application sends out push notifications of breaking news straight to your device. You'll always know what's going on with AP Mobile.  Air Sharing Pro ($6.99)Air Sharing Pro gives you the ability to turn your iPhone into a wireless hard drive that can be mounted on your Mac to add files for viewing from the device. You can also mount remote file server, connect to your computer, perform advanced file operations, and print files directly from your iPhone.    Documents to Go ($9.99)Docs to Go has been around since the Palm days, but the application has also made its way over to the iPhone and it's pretty decent. The application lets you sync your Microsoft Office (Word, Excel, PowerPoint, PDF, etc.) files to your iPhone and create/edit Word and Excel files. You can then sync the files back to your Mac or PC with the included Desktop sync utility.   Yelp (free)Yelp has definitely helped us when we're hungry and visiting a new area. This application searches for places around you like restaurants, bars, cafes, and more; plus, it lets you write and read reviews. With the augmented reality of the Yelp Monocle built right in, this app is worth a look.   Remote (free)Apple's Remote application has cut down on the clutter needed for a Mac or Apple TV. With one device you can control the ATV, iTunes or Front Row on the Mac via a Wi-Fi connection.   Pandora (free) The iPod feature on the iPhone is great, but if you're looking for a great music experience, Pandora is a good way to go. This application allows you to stream uninterrupted music from Pandoras online service straight to your iPhone in an iPhone styled application.   AOL Radio (free)AOL Radio gives you a streaming music experience from their online service and from CBS Radio. This app also lets you listen to streaming local radio stations, including live steaming sports stations. Plus, AOL Radio now streams 128kbps while on Wi-Fi, 3G, or EDGE.   Rolando 2: Quest for the Golden Orchid (free)Ngmoco did something interesting with their latest iteration in the Rolando series. Rolando 2 is free for the first chapter, but other levels can be purchased using the in-app purchases. Ngmoco has created a game play that is like no other on the iPhone with the Rolando series.  OmniFocus ($19.99)OmniFocus is similar to other GTD (Getting Things Done) applications, but it gives you the ability to manage tasks by location. OmniFocus is like a task list on steroids.    Lose It! (free)So many people try to lose weight all the time, but often time fail to succeed. This iPhone application can keep you motivated to lose weight by keeping you on track with eating and exercise habits. Lose It! is a free application that also interfaces with an online companion website.    Todo ($9.99)Todo is a great GTD task manager that lets you sync with applications like iCal, MS-Outlook, Remember the Milk, and Toodledo over Wi-Fi and 3G. You also get a full calendar view for choosing due dates.   Assassin's Creed ($4.99)Gameloft has innovated the iPhone game marketplace with games like Assassin's Creed. They've taken a game that's from another console and brought it to the iPhone, but the game feels like it has been created especially for the device. You can take this great RPG with you anywhere.   Dragon Dictation (free for limited time)Dragon Dictation gives you speech to text software for the iPhone that lets you speak what you want to say instead of typing it. This application, which is built around the popular Dragon Naturally Speaking Engine, works extremely well.    Convertbot ($0.99) Ever out and about and need to convert between two units? Convertbot lets you convert between over 440 different units with ease. It can also convert currencies and the rates are updated upon launching the app.     I Am T-Pain ($2.99)Admit it, you've been singing along to T-Pain songs and you've really wanted to make your voice sound exactly like his? Well, with this auto-tune music application for iPhone you can do exactly that. Just select your favorite song and start singing. Being famous not included.  Shoot It! (free, paid service)Shoot It! is a social network application that lets you take any picture you want and turn it into an actual snail mail postcard. You can select a photo, add an address and note, and the next business day the postcard will be printed and mailed out for you for only $0.99 for the US.   IMDB (free)The Internet Movie Database has long been the go-to destination for looking up information about movies and TV shows, and now it has its own app on the iPhone. You can get all of the information you would on their website, but now in a convenient iPhone-formatted way.   Analytics App ($5.99)Analytics App for iPhone lets us see our Google Analytics stats no matter where we may be. This app offers up a Today report, dashboard quick view, and more analytics data than you could ever want.   HyperBowl ($1.99)Sure, there are a lot of bowling games for the iPhone, but none of them match the legacy that HyperBowl has. The gameplay feels organic, with its beautiful outdoor themed bowling lanes.  Wolfram Alpha ($19.99, on sale)Wolfram Alpha is the new smart search engine that Wolfram Research recently launched. You can now have all of that power right on your iPhone with this small application.   Wunder Radio ($6.99)Wunder Radio is an iPhone application that can stream live from over 50,000 Internet radio stations. This application also includes a sleep timer and ability to listen to local NOAA weather radio streams.   New York Times (free)Always stay up to date on the news with the New York Times application. The application synchronizes with the NYT news site so you can read stories even when you don't have an Internet connection.   Occasions ($0.99, on sale) Never forget any of those important dates with this application. It syncs with Facebook and your contacts to find Birthdays and reminds you via push notifications. Also reminds you of holidays and other important events.   Doodle Jump ($0.99) This addictive little game has been likened to the original version of Mario Bros. Tilt the iPhone to move around in this 2D game. Facebook and Twitter integration means you can brag about your accomplishments to your friends.  Touch Todo ($0.99, on sale)Touch Todo lets you sync your todos with Google Calendar (not Google Tasks, however) and in turn to the native iPhone calendar. Application backs up your todos on Google Docs for safe keeping, and send tasks from one iPhone to another.   Tap Forms Database ($8.99)The Tap Forms Database lets you easily and securely store information like social security numbers, drivers license number, or credit card numbers for later look up. Handy if cards get lost or stolen, and includes AES-256 bit encryption for all data stored in it.  Bento ($4.99)Bento for iPhone is the companion application for the Mac version. It will sync with your Mac and bring over all of your databases. You can then edit and create data on-the-go.   Daylite Touch (free, additional software required)The Daylite Touch application syncs with the Daylite Server on your Mac to help you manage your business projects, contacts, and tasks all in a streamlined interface that feels very native to the iPhone.   Skies of Glory (free)Shoot World War II airplanes out of the sky in this action game. Featuring awesome graphics and great Internet 8-player multiplayer mode, this game is a great deal.    BeatMaker ($19.99)Who says you can't create music on the iPhone? With BeatMaker that's completely possible. This application is basically a recording studio in your pocket with the ability to export your creations right from the device. Comics (free)Reading comics is just plain fun, and with Comics for the iPhone, you can read over 70 comics for free from one simple application. The app allows you to browse and view nearly 700 different comics.  Ustream Live Broadcaster (free, account needed)UStream Live Broadcaster gives you the ability to stream live audio and video from your iPhone over Wi-Fi or 3G to the world via the free UStream.tv service. You can also take live polls and see the UStream IRC chat room for your stream.  The Oregon Trail ($4.99)The classic Oregon Trail game is back in an iPhone version that's just as good as the original. In this side-scrolling adventure game, you'll guide a family through the Oregon wilderness in search of shelter. Along the way, you'll have to protect yourself from wild animals and other events that take place.   Amazon Mobile (free)Amazon has changed the way many of us shop online, and they've also changed the mobile shopping experience with their iPhone application. This application lets you do all of the normal Amazon.com stuff, but you can also take a picture of an object and let Amazon figure out where the product is on the website via Amazon Remembers. Tap Tap Revenge 3 (free) A music rhythm game that started out life as a jailbroken game when the iPhone was first released has matured into a great game backed by music from popular artists. The third iteration of this game boasts extensive online multi-player support over both Wi-Fi and 3G. In addition, TTR 3 gives you weapons and shields for use when playing online. Gorillacam (free)The iPhone includes a great camera, but some of the functions are limited. Gorillacam is an application that can extend that functionality to include a bubble level, grid, time-lapse, and even a self-timer. You can also specify how many shots are taken over a specified interval.  Photoshop.com Mobile (free)Good, free, photo editing software on the iPhone is hard to find, but who would have guessed that Adobe would release their Photoshop.com software on the iPhone for free? Well, you get some basic editing functionality and the ability to upload your photos to the Photoshop.com cloud.  Mover Lite (free) Moving items like photos, video, contacts, and calendar events from one iPhone to another can be a bit of a kludge depending on what application you're using. But with the free Mover+, it's easy and cool at the same time.    Call of Duty: World at War: Zombies ($9.99)A mini game from the World at War console game, CoD:WaW:Zombies lets you frag zombies all day... right from your iPhone, too! Choose from several different modes, including an infinite mode. This game makes any company meeting go by much faster (Please note: We're not responsible for any job loss resulting from the mention of this game).   BeeJive ($5.99, on sale)BeeJive gives a lot of instant messenger bang for the buck. Not only does it support the most popular IM services, but it also lets you create as many logins as you need. Plus the application includes Push Notification support, and the ability to send and receive attachments like photos, video, and audio (recorded directly from the application).    Awesome Note (+Todo) ($3.99)Combining both notes and to do lists, Awesome Note (+Todo) has a great-looking interface that lets you organize all of your ideas and projects in one app. In addition, you can insert images into notes from the camera, and import/export to Google Docs and Evernote.    Credit Card Terminal ($0.99, on sale)This application has been shown on Apple's commercials and is quite nifty if you are a small business. Credit Card Terminal gives you the ability to accept credit card payments anywhere you may be, quickly and easily.   ReelDirector ($7.99)Who says you can't put together a full movie on your iPhone? With ReelDirector you can, and you can even include opening and closing credits, transitions, and more. When you're done, save, email, or upload directly to YouTube.  Trivium ($2.99)Test your trivia skills against the computer or against a friend around the world. Trivium has thousands of questions for you to answer and a head to head network play that works over Wi-Fi, 3G, and EDGE. Four different modes including: Endless, Endurance, 100 Questions, and Timeless.   Rock Band ($4.99, on sale)A rhythm game to end all rhythm games, Rock Band lets you play the drums, guitar, or bass. Plus, you can sing your way to the top in this game that includes 26 free tracks.  Tweetr ($3.99)Have something amazing to say on Twitter, but don't want to tweet it right now? Tweetr is an application that lets you schedule tweets for multiple accounts for a later time when it might be more relevant.   Peggle ($1.99, on sale)Pop Cap's highly addictive game for Mac and PC made its way over to the iPhone in a move that just seemed natural. Shoot your way to becoming the Peggle master in this arcade adventure game.   NetNewsWire (free)NetNewsWire changed the way that many people read their favorite RSS (really simple syndication) feeds on the Mac, but that same experience was moved to the iPhone. The earlier versions were a bit clunky, but NNW now syncs with Google Reader which makes reading feeds on-the-go that much better.    Yowza!! (free) We normally stray away from applications with two exclamation marks in the title, but this one is just that good. Yowza can end up saving you a few chunks of change with its many coupons that are sorted by your location.  WriteRoom ($4.99)Distraction-free writing at its finest on the Mac, and now the iPhone. Sync documents over with built-in syncing, and just write. Plain and simply. You can change the colors in the preferences.  Wikitude (free)Augmented reality on the iPhone was a huge hit this year, and with Wikitude you can browse the space around you and see all of the Wikipedia articles that correspond to your location. Just launch the application and bubbles will appear all around you with Wikipedia articles for cities, buildings, etc.  Mark the Spot (free) AT&T finally started paying more attention to its network and users when they launched the Mark the Spot application for iPhone. You can submit network trouble spots, which will help AT&T in fixing network problems. Sure, this app isn't the nicest looking, but it gets the job done.   Ramp Champ ($1.99)Skee ball is just plain fun, and with the Icon Factory's Ramp Champ, it's even fun on the iPhone. Choose between several different lane themes, and even purchase add-ons that will expand the available themes. Earn tickets to "purchase" cool digital trinkets.  WordPress 2 (free)Mobile-Blogging (MoBlogging) has becoming increasingly popular among people who travel, and it's extremely easy with WordPress 2 on the iPhone. If your blog platform is WordPress, then you'll be all set to connect and add content right from your iPhone.   Fandango (free)Find movies around you, watch previews, get showtimes, and even purchase tickets on-the-go with the awesome Fandango application for iPhone. You can also see critic and fan ratings for different movies.   Flickr (free)Upload, view, and share your photos with the world on Flickr with this application. In addition, you can view friends photos and comment on them from one convenient location.   DOOM Classic ($2.99, on sale) Who doesn't love DOOM? Now you can play it all day long, right on your iPhone. Includes multi-player mode with up to four players over the Internet. MapQuest Navigator ($3.99, service plan required)MapQuest started offering turn-by-turn directions with its maps. Not only that, but they offered a completely different pricing strategy than the other guys: With the $3.99 purchase, you'll get 30-days of use, after which you can purchase different tiers of service between 30-days and one year.   Where To? ($2.99)With GPS-style POI (point of interest) searching, Where To allows you to pinpoint a location, be it a restaurant, amusement park, or even an archery range. The application then locates the POI inside of the Maps application on the iPhone.     Skype (free)Skype VoIP (Voice over Internet Protocol) has been beneficial more than once for us, and with AT&T's announcement that they'll be allowing VoIP apps on the 3G network, we're extremely excited about Skype. This application will allow you to place calls through Skype and chat with your friends.   Fring (free)Fring is a free VoIP and chat solution for the iPhone. The cool factor about this application is that they just started doing one-way Skype video chat right from your iPhone.   SlingPlayer Mobile ($29.99)SlingBox Solo, Pro, or Pro-HD owners will appreciate the ability to stream live TV to their iPhone over Wi-Fi. In addition, you can  control the video for many set-top boxes including the Apple TV.   PocketGod ($0.99)A minigame that lets you rule over an island. You can bring life to new islanders, take life away, and otherwise demonstrate your powers in this hypnotic game.   FlightTrack Pro ($9.99)Never be in the dark about your flight information again. FlightTrack Pro lets you track your flight and get updates via push notifications. You can also see a live flight map with weather radar.   RedLaser ($1.99)Scan the barcodes of products and instantly get back product search results that includes the price online. A great way to bargain shop when in the store.   Attendance ($3.99)Always know who was missing at that last meeting with Attendance. This iPhone application lets you mark atendees present or absent for any meetings or class for later reference. You can import people from contacts in Address Book or from a CSV file on a web server.    Read It Later Pro ($4.99)Who says you can't put something off for later? Well, you can put off reading webpages with Read It Later. This application interfaces with a free online service and Firefox plugin that allows you to save webpages for reading later.   FastMall (free)Ever been in a mall and didn't know where the rest room was? Well, you could find a mall guide, or you can also bust out your iPhone with FastMall. This application lets you download mall maps (for a small fee) that will guide you around the mall similar to the way a turn-by-turn GPS does.   CBS Sports: Live College Games ($4.99) This CBS application lets you view stats and live stream video of college football and basketball games from the Big East, SEC, and Bit Ten conferences. This application will work over both Wi-Fi and 3G.   Vintage Video Maker ($2.99)Turn your iPhone 3GS into a camera that can shoot video with three different filters: 20's movie, black and white video, and 60's home video. You can assign classical 20's piano music to accompany your video or the sound of a projector running.  G-Park ($0.99)Never forget where you parked your car with G-Park. This application uses the GPS in the iPhone 3G or 3GS to park your car and locate it when you're ready to drive home.   CubeCheater (free)Solving a Rubik's Cube is fun, but you might be in the mood for letting your iPhone solve it for you. With CubeCheater, just input your cube's state and it will tell you how to solve it.   Where R U? ($0.99)Want to find out where friends or family are located geographically at a particular moment? If they have Where R U, they can let you know where they are and you will be shown their location on a Google Map. Nifty application for keeping tabs on your kids.   Photo2Contact (free trial, in-app purchase)Do you get tired of sending photos to each and every one of your friends or family members? Photo2Contact allows you to easily export a group of photos as a zip file and uploads them to an FTP location, and automatically emails your friends to let them know how to download them.    DogBook (free)Join the over 2 million pet owners who have created a Facebook profile for them. DogBook lets you see a list of your animals, their friends, and even lets you find nearby Parks. If your pet gets lost, use "Arf Alerts" to alert everyone in the area.   Qik Live (free)When you just want to post a quick video to the Internet, Qik is a, well, quick solution. Their new Live application lets you stream live video from your iPhone over 3G and WiFi. You can also send and receive chat messages with your viewers.   Cha-Ching Mobile ($2.99) Cha-Ching mobile is money management software that complements its Mac-counterpart. This application gives you the ability to manage your money and budget on-the-go and sync back later to your Mac over Wi-Fi.   Amazon Kindle for iPhone (free)Read Kindle books on your iPhone without having to purchase a separate version of the eBook. Amazon delivers the content wirelessly over Whispernet. Get an almost identical reading experience as on the Amazon Kindle.  Shelf Life ($1.99)Keep track of the expiration dates on food in your refrigerator and pantry with Shelf Life. This application uses a database that its users contributes to to determine the shelf life of foods found in your kitchen. You can also specify a custom shelf life.   Pizza Hut (free)Need food and need it quick? Pizza Hut now allows you to place an order for anything on their menu, directly from your iPhone. Checkout and pay right from the device as well without ever leaving your house.   Memento ($0.99)Send customized greetings to people through e-mail right from your iPhone. Memento lets you pick a template, add a photo and message, and send to loved ones. The application comes with 19 templates.  Eventful (free)Never be bored with Eventful. This free application lets you find local events happening in your area and lets you know what venues and performers will be heading your way.   OpenMaps ($1.99)OpenMaps for iPhone uses the open map data from OpenStreetMap.org, which contains editable maps for the entire world. The application lets you download maps for use when you don't have an Internet connection, and can use the built-in GPS to locate you.  TextGuru ($4.99)Sure, there are a lot of text editors for the iPhone, but TextGuru will let you edit HTML documents and preview them right from the device. In addition, you can download PDF files from the Internet into TextGuru for offline viewing.  Got a favorite app we missed? Drop it in the comments and share your excitement with the world.  

  • Fiat’s 500C the Makings of an Apple iCar

    Back in 2007, the Mac web rumor mill was abuzz for a while about a reported September meeting in California between Steve Jobs and Volkswagen CEO Winterkorn over possibly integrating the iPod, iPhone, and other Apple products into an automobile — with blogosphere speculation about possibly even an Apple/VW joint venture “iCar” project. However, by late November, the German site Capital was reporting (Google translation) that Apple/VW discussions, although confirmed by Volkswagen, had ground to a halt. Steve Jobs as Auto Exec.? Fast-forward two years. It's an understatement to say that the automobile industry has been turned on its head by the global recession. Apple, however, is doing considerably better, which has led to speculation as to what Steve Jobs would do were he running an auto-making firm — say beleaguered General Motors. Last fall the New York Times' Thomas Friedman mused, “Somebody ought to call Steve Jobs, who doesn’t need to be bribed to do innovation, and ask him if he’d like to do national service and run a car company for a year. I’d bet it wouldn’t take him much longer than that to come up with the G.M. iCar.” Fiat Chrysler a More Logical iCar Partner Steve Jobs of course has had other challenges to contend with over the past year, but the ideal of an Apple iCar still tantalizes some of us crossover auto-buff Mac and gadget fans. I think a rather more promising candidate for an Apple automotive venture joint partner would be Chrysler, rather than GM or VW. Why? Well for one thing, Chrysler is now controlled by Italy's Fiat S.p.A., currently in the hunt to re-enter the U.S. automobile market after a nearly two-decade absence, building the brand from the ground up, as it were, and the CEO of both companies, Sergio Marchionne, is reportedly a big fan of the Apple business model. Last June, TIME magazine noted that, “Since he took over as chief executive of Italy’s Fiat in 2004, the chain-smoking Canadian-Italian has used Apple as a model, focusing on the way Steve Jobs transformed it from an also-ran computer company into a global icon of cool. He encourages Fiat managers to take a close look at Apple’s branding prowess and even asks them to benchmark their activities against the company.” The TIME piece also cited Carlo Alberto Carnevale, professor of strategic management at Milan's Bocconi University's business school, observing, “The challenge for Fiat Chrysler is to move away from popular products and into 'pop' products, full of cool environmental technology and on the right side of history. In that sense, it's the same bet as Steve Jobs'. That's why Marchionne uses that metaphor.” Why Not an iCar Version Too? But what if it became more than a metaphor? I say this because the iconic Fiat 500C (“Cinquecento”), which has been a rip-roaring sales hit in Europe and elsewhere (currently sold in 59 markets), is expected to anchor the brand's re-entry into the North American car market, with Road & Track magazine reporting that at least four Fiat 500 versions will be gracing showrooms here for the 2011 model year, including hatchback, convertible, wagon, and sporty-hatch versions. Why not a fifth, “iCar” version? The Fiat 500 seems to me an ideal base for an iCar treatment. Unveiled at the 2009 Geneva Motor Show, the new Fiat 500C version is like the VW New Beetle, the BMW Mini, and arguably even the Ford Mustang, a retro-interpretation of an automotive icon from the '50s or '60s, in this instance the original 1957 fabric roof Fiat 500, but with thoroughly modern mechanicals and engineering under the classic-appearing skin. Fiat notes that the new Cinquecento was developed by the Centro Stile Fiat design center using an IT industry-esque “open-source approach,” continually evolving on the basis of input from users and enthusiasts. Environmentally Friendly and Uber-Cool The Fiat 500, available with a variety of what the company says are “environmentally friendly engines,” has reconfirmed its status as an Italian style icon, winning more than 30 awards, and with upwards of 11 million internet users visiting its website. Fiat affirms that is sees the Cinquecento to be a “platform upon which Fiat Automobiles is building a whole family of cars with advanced technology and high attention to detail.” It's not at all an extravagant stretch to imagine that an iCar version of the Fiat 500C could quite harmoniously be included in that vision. A Cinquecento-based, Apple co-branded iCar would have both the timely characteristics of small size and light environmental footprint, which, combined with the uber-cool Apple “i-factor” that could at least conceivably make it the iPhone/iPod/iMac of the automobile world. Perhaps I'm wildly fantasizing, but it sounds like a workable plan to me.

  • Wall Street Breakfast: Must-Know News

    Skype to get new owner. eBay (EBAY) is expected to announce this morning that it has reached a deal to sell its Skype unit to a group of private investors. The investment group likely includes new venture capital firm Andreessen Horowitz, as well as early Skype investor Index Ventures and private-equity firm Silver Lake Partners. The price of the deal is still unknown, but eBay has said previously that it wants around $2B for Skype. Shares +2% premarket (7:00 ET). BoA ready to repay? Bank of America (BAC) is reportedly offering to repay part of its bailout money, and the U.S. is pressuring the bank to pay at least $500M to cancel a potential loss-share deal with the government. Sources said both sets of discussions relate to extra aid Bank of America received to complete its acquisition of Merrill Lynch. If Bank of America repays the additional $20B it was given in January, it will no longer be considered an 'exceptional' aid recipient and therefore won't be subject to the intense scrutiny of Congress and pay czar Kenneth Feinberg. Shares -2.4% premarket (7:00 ET). Disney's marvelous acquisition. Disney (DIS) agreed to acquire Marvel Entertainment (MRVL) in a stock-cash transaction worth around $4B, a 29% premium for Marvel shareholders. Disney will begin to feature Marvel's portfolio of over 5,000 characters in Disney movies, theme park rides, TV shows and merchandise, a move which may help Disney better target the demographic of boys from their preteen years into young adulthood. S&P warned it may downgrade Disney because the relatively expensive acquisition, combined with stock buyback plans and the potential for continued recession-related declines, could lead to "debt leverage remaining above our threshold for an extended period." The deal is a setback for Paramount (VIA), which will be able to complete but not extend a recent distribution deal with Marvel, and for Electronic Arts (ERTS), which some analysts had thought might be acquired by Disney, a deal that no longer seems likely in the short term. (Read Disney's press release) AIG loses Starr case. A federal judge ruled against AIG (AIG) in its efforts to win $4.3B in damages from Starr International, the company run by former AIG chief Hank Greenberg. The judge affirmed a jury verdict that found no breach of trust by Starr for selling AIG stock rather than using its AIG shares to fund an executive retirement program for generations of the insurer's employees. Separately, AIG, Greenberg and former CFO Howard Smith agreed to enter binding arbitration by October 15 to settle various outstanding legal disputes. Shares -6.9% premarket (7:00 ET). Citi sheds credit card portfolios. As part of its effort to shed weak businesses, Citigroup (C) said it sold three credit card portfolios representing $1.3B in managed assets, but didn't disclose the terms of the deal. Though the sale is relatively small, the lack of transparency didn't sit well with critics, who noted the taxpayer-funded bank "said it had sold undisclosed assets to an undisclosed buyer for an undisclosed price, resulting in an undisclosed profit or loss." Sources said the buyer is likely U.S. Bancorp (USB). C -3.6% premarket (7:00 ET). PetroChina buys Canadian oil stake. PetroChina (PTR) moved forward in its quest for overseas expansion, agreeing to pay C$1.9B ($1.7B) to closely-held Athabasca Oil Sands Corp. for a stake in a Canadian oil sands project. PetroChina's deals represent around 20% of China's $17B in spending on overseas energy assets since December, and this is PetroChina's largest North American acquisition to date. Icahn offloads Yahoo shares. Activist investor Carl Icahn disclosed in a regulatory filing that he sold 12.7M shares of Yahoo (YHOO) at the end of August, bringing his stake down to 4.48%. Icahn said he remains 'optimistic' about Yahoo's long-term outlook and the sales were only meant to 'provide a more desired balance' in his portfolios. Sony goes Chrome. Sony (SNE) plans to put Google's (GOOG) Chrome browser on Vaio laptops in the U.S., the first such deal for Chrome since it was announced last year. Google declined to disclose details of the deal, which went into effect this summer, and said it's looking to reach similar arrangements with other computer makers. Without those partnerships, Google's Sony deal may be too small to matter. Apple may opt for more carriers, face SEC probe. Piper Jaffray analyst Gene Munster wrote in a research note that Apple (AAPL) is likely to add new U.S. carriers for its iPhone within a year. Repeated speculation points to Verizon (VZ) as a likely addition, while AT&T (T) faces questions about how much it really gained from its role as exclusive carrier. Separately, the Huffington Post reported the SEC is investigating possible insider-trading offenses in shares of Apple, including whether anyone was given enhanced insight into Steve Jobs' health condition or if some investors had advanced notice of iPod sales results. Both Apple and the SEC declined to comment. AAPL -1.3% premarket (7:00 ET). JetBlue, Lufthansa to share codes. JetBlue (JBLU) and Lufthansa announced a code-sharing agreement allowing the airliners to expand their networks through connecting flights. Lufthansa holds a 19% stake in JetBlue, but the relationship has raised some concerns among rivals and this latest move will likely exacerbate those concerns. The deal must be approved by the Department of Transportation. Big Tobacco files free speech suit. Tobacco company R.J. Reynolds (RAI) joined other tobacco makers in suing the FDA, challenging the regulator's new authority over tobacco. The companies say their First Amendment rights to free speech have been violated and the law's provisions "severely restrict the few remaining channels we have to communicate with adult tobacco consumers." Charities scammed by Madoff face clawbacks. Madoff liquidator Irving Picard said he may sue charities that were Madoff clients to reclaim the fake profits they withdrew. By law, Picard must file clawback suits against investors that profited from Madoff's scam, even if they did so unknowingly. Picard, who until now hadn't outlined his strategy for dealing with charities, said charitable organizations aren't exempt from such 'avoidance actions.' Cities are gloomy on shrinking revenues. City revenues fell in FY '09 for the first time in seven years, according to a report by the National League of Cities to be released later today. Weak growth in property taxes and sharp declines in sales taxes, income taxes and state aid contributed to a 0.4% decline in city revenues even as expenses rose 2.5%, creating the worst outlook in the 24 years since surveying began. Nor is relief in sight, as tax revenue is expected to lag any economic recovery. European leaders target bank pay. German Chancellor Angela Merkel and French President Nicolas Sarkozy promised to fight excessive pay in financial firms and to toughen regulation of the financial sector. The U.K.'s Gordon Brown echoed those sentiments, saying excessive pay must be reined in and compensation should be based on long-term success rather than short-term speculative gains. The comments come ahead of a G-20 meeting in Pittsburgh on Sept. 24-25. Commercial mortgage defaults rising. The commercial mortgage default rate more than doubled in Q2 as compared to the year before, reaching 2.88% of outstanding balances. Commercial mortgage-backed securities [CMBS] account for 22% of the $3.4T in commercial real estate debt, and researchers believe defaults on CMBS could pass 7% by the end of the year. Chicago business activity improves (.pdf). The Chicago Purchasing Managers Index registered at 50 in August, better than the consensus of 48 and up from 43.4 in July. This is the index's highest level since September 2008. New orders were up 4.5 to 52.5, while prices paid jumped 15 points to 50. European joblessness climbs (.pdf). Unemployment in the 16-nation eurozone climbed to a new ten-year high of 9.5% in July even as the economy began to signal a recovery. Across the entire 27-nation European Union, unemployment rose to 9% in July. Spain leads the bloc in joblessness, with nearly one in five workers without a job. Earnings: Monday After Close Benihana (BNHN): FQ1 EPS of $0.05 misses by $0.05. Revenue of $96M (+2%) vs. $97M. Sees full-year EPS of $0.40-0.45 vs. $0.46, and full-year revenue of $305M-310M vs. $323M. (PR) Culp (CFI): FQ1 EPS of $0.15 beats by $0.03. Revenue of $46M (-23%) vs. $45M. Sees Q2 revenue down 5%. (PR) Sina (SINA): Q2 EPS of $0.29 in-line. Revenue of $90M (-1%) vs. $88M. Sees Q3 revenue of $91M-94M vs. $96M. (PR) Today's MarketsIn Asia, stocks managed to pull back into positive territory after yesterday's selloff. European markets and U.S. futures are slipping.

  • Wall Street Breakfast: Must-Know News

    BoA gets another handout. Bank of America (BAC) is close to finalizing a deal in which the government will provide billions of dollars in aid to help the bank close its Merrill Lynch acquisition. BoA approached the Treasury in mid-December, sources say, warning that Merrill's larger-than-expected Q4 losses posed a problem in the acquisition process. Concerned the deal's failure would further hurt shaky financial markets, the Treasury agreed to help create a plan including additional funds from TARP. (BoA has already received $25B in federal rescue funds.) Details are still being finalized, and an announcement is expected on Tuesday when BoA reports quarterly earnings. Apple's Jobs loss. Apple (AAPL) shares plunged over 7% in after hours trading yesterday on the surprise announcement that CEO Steve Jobs will take a medical leave until June. Only nine days ago, Jobs reluctantly released a public letter saying he had a non-life-threatening hormone imbalance and would continue in his role as CEO as he recovered. In a new, cryptic letter, Jobs called his health problems 'more complex than I originally thought.' COO Tim Cook, respected in the company for his expertise, will take over day-to-day operations. This is his second time at the helm of the company, having taken over when Jobs underwent cancer treatment in 2004. Many investors and analysts are worried Jobs' absence will hurt the company at a time when it's struggling to find the next big thing, though others believe Apple is sufficiently innovative and well-placed in the market to continue without its famed leader. The company will likely face several lawsuits from investors angered over Jobs' failure to fully disclose his health problems. Fund custodians under fire for Madoff losses. HSBC (HBC) and UBS (UBS) are potentially facing liabilities of up to $3.2B as the financial custodians of funds in Luxembourg and Ireland with Madoff-related losses. As custodians, the two banks were charged with overseeing the funds and managing cash inflows and payments to investors. A lawyer representing 10 French retail investors and two institutions that face Madoff-related losses at Luxembourg funds said "UBS didn't do its job of knowing at all times where the assets were, and the same with HSBC," a failure of duty lawyers will have to prove to recoup investor money. The legal firm representing both HSBC and UBS said the funds were created by investors specifically looking to place money with Madoff, and as such the custodian had only 'a very, very, very small role to play.' Lilly reaches drug settlement. Eli Lilly (LLY) agreed to a $1.42B settlement over criminal and civil charges that it illegally marketed Zyprexa, its blockbuster antipsychotic drug, for unauthorized patient use. Lilly was accused of pressing doctors for years to prescribe Zyprexa for children and the elderly, two groups for whom the drug is not federally approved and poses extra risks. Anticipating a settlement last fall, the company set aside $1.4B for that purpose. Lilly will also plead guilty to one misdemeanor violation of the Food, Drug, and Cosmetic Act. Black report from Beige Book. Overall economic activity has continued to weaken across nearly all of the Federal Reserve districts, according to the Fed's Beige Book. Retail sales were generally negative, manufacturing decreased, construction weakened, lending remained tight and the labor market continued to soften. As if the report weren't already sufficiently depressing, the Fed noted that a 'substantial number of job reductions in the financial sector have yet to show up in payroll statistics.' (Read the full report) Bartz searches for right MSFT approach. With Bartz as its new CEO, Yahoo (YHOO) is several steps closer to a search deal with Microsoft (MSFT), though sources from both companies said a deal is unlikely to be imminent. In a company-wide meeting, Bartz said she plans to spend considerable time researching whether to sell Yahoo's search business, but added that her 'gut' feeling was to hold on to the business. Although Bartz's appointment is seen as a fresh start for the company, Microsoft is busy dealing with other problems, including cost cutting, that could get in the way of a sale or partnership. Mortgage apps surge. Mortgage applications jumped 15.8% last week, MBA reported, as record-low interest rates spurred a 25.6% increase in refinances from the previous week. Refinances now account for 85.3% of all applications, up from 79.8%. The Average 30-year mortgage rate dropped to 4.89% from 5.07%. Despite mortgage mods, foreclosures soar. Foreclosure filings jumped 81% in 2008 to 3.2M, RealtyTrac says, with one in every 54 U.S. households getting at least one foreclosure notice. "Clearly the foreclosure prevention programs implemented to date have not had any real success in slowing down this foreclosure tsunami," RealtyTrac's CEO James Saccacio said. Activity did slow by 4% in Q4, but jumped 17% in December from November - another signal mortgage moderations helped to temporarily slow, but not stop, foreclosures. On Wednesday, Foreclosures.com reported a 63.5% jump in foreclosures. Retail sales fall. Retail sales fell 2.7% from November to $343.2B, according to the Census Bureau, and were 9.8% lower than a year ago. Consensus was for -1.2% M/M. Excluding auto sales, December was -3.1% M/M vs. estimates of -1.3%. "We finally saw confirmation of our original expectations that holiday retail spending would prove acutely weak, though even we underestimated the degree of weakness," one economist says of the larger than expected drop in retail sales. "Bad ugly and worse," says another. Import/export prices. Import prices declined 4.2% in December from a month earlier, the fifth straight down month, vs. consensus of -5.3%. Export prices also fell for the fifth consecutive month, declining 2.3%. Import prices -9.3% on the year (fueled by a 47% drop in petroleum); exports -3.2%. Earnings: Thursday Before Open ASML Holding (ASML): Q4 net loss of €88M ($115.9M), slightly better than consensus of -€104M but a far cry from profit of €193M in the year earlier period. Sales of €494M (-48%). 2009 outlook is grim, as "the severity of the global economic downturn has caused semiconductor manufacturers to delay their investment plans." (PR) JPMorgan (JPM): FQ4 EPS of $0.07 beats by $0.07. Revenue of $17.2B (-0.9%) vs. $18.8B. (PR) Earnings: Wednesday After Close Xilinx (XLNX): FQ3 EPS of $0.32 in-line. Revenue of $458M (-3.5%) vs. $444M. (PR) Today's Markets Asia markets closed heavily down following Wall Street losses. Nikkei -4.9% to 8,023. Hang Seng -3.4% to 13,243. Shanghai -0.45% to 1,920. BSE -3.45% to 9,047. In Europe at midday, London -0.1%. Paris -0.4%. Frankfurt -0.05%. U.S. futures: Dow +0.1%. S&P -0.3%. Nasdaq -1.4%. Crude +0.8% to $37.59. Gold +0.5% to $813.10. Thursday's Economic Calendar 7:45 ECB Announcement 8:30 Producer Price Index 8:30 Empire State Mfg Survey 8:30 Jobless Claims 9:00 RBC CASH Index 10:00 Senate confirmation hearings for SEC nominee Schapiro 10:00 Philadelphia Fed Survey 10:30 EIA Natural Gas Report 12:30 PM Fed's Yellen speaks on economic outlook 1:40 PM Fed's Lockhart speaks on economic outlook 1:55 PM Fed's Evans speaks on economic outlook 4:30 PM Money Supply Notable earnings before Thursday's open: APH, ASML, JPM, MI Notable earnings after Thursday's close: DNA, INTC Seeking Alpha editor Eli Hoffmann contributed to this post.

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