News: Apple already considering iPad price reductions?
Apple executives, speaking in a meeting with Credit Suisse analysts, have suggested that the company is already considering price reductions for its yet-to-be-released iPad tablet should early sales of the device fail to live up to internal expectations. Citing Credit Suisse analyst Bill Shope, the Wall Street Journal reports that Apple wants the iPad to be the best device in several usage cases, including consuming media and browsing the Internet.…
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10 reasons to pass on the iPad? TUAW fact check
Filed under: iPod Family, Portables, Odds and endsOver at TechRepublic's 10 Things blog, Debra Littlejohn Shinder has posted an article called "10 reasons why I'll be passing on the iPad." Some of her reasoning is sound, but quite a few of her points are easy to refute. It's worth looking at her post and the points it tries to make, because it's indicative of a widespread misunderstanding of not only the iPad's capabilities, but also its intended consumer base. 1. There's no physical keyboard Debra's correct that the iPad has no physical keyboard. But what she fails to account for is that not only will Apple sell a keyboard dock for the iPad, the device can also be paired with any existing Bluetooth keyboard. Apple's reasoning for not including a physical keyboard on the iPad is even more compelling than for the iPhone, because unlike the iPhone, you at least have the option of pairing the iPad with a physical keyboard. In order to put a physical keyboard on the device itself, there'd be two options: keep the iPad the same size and sacrifice a third of the screen's real estate, or increase the iPad's size beyond what some (including Debra) already consider unwieldy in order to include a keyboard. In landscape orientation, the iPad's virtual keyboard is nearly the size of a conventional keyboard, too, so while touch typing is going to be a challenge, it's a fair bet that typing on the iPad will be much faster and easier than the high end of 30 - 35 WPM thumb typing many people (myself included) achieve on the iPhone's far smaller keyboard. The lack of a physical keyboard on the iPhone hasn't measurably affected its sales; the iPad isn't likely to suffer many lost sales from this, either. Check out the other nine points by clicking the Read More link below. 2. One size doesn't fit all Debra claims that if the iPad is supposed to be a niche device positioned between a phone and a netbook, it should have a screen size midway between the two -- in other words, smaller than a 9.7" screen. However, that's not how Steve Jobs positioned the iPad at all during the keynote; Jobs's Keynote slide clearly showed the iPad filling a gap between the iPhone/iPod touch and a 13" MacBook. It's puzzling that in one sentence Debra complains about the iPad being too large to fit in your pocket, while in the next sentence she extols the virtues of Sony's VAIO X netbooks, which are almost exactly the same size - in terms of weight and thickness anyway. The VAIO X has an 11.1" 16:9 display, which actually makes it quite a bit larger than the iPad. One other thing about the VAIO X is quite a bit larger than the iPad: the price, which starts at $1299 -- far more expensive than even the priciest iPad. While it's true the iPad won't fit in your pocket, it's still far more portable than even a MacBook Air. Stephen Colbert even managed to pull one out of his jacket at the Grammys, so while the iPad is larger than an iPhone, it's far from the unwieldy monster many people are trying to claim it is. 3. It runs a phone OS One thing many pundits fail to account for is that the iPhone OS is actually a version of OS X adapted for a touchscreen device. No, there's no Finder, Dock, or menu bar. No, there's no Exposé, Spaces, or Time Machine. But the underpinnings of the iPhone OS are exactly the same as those of the Mac version of OS X. So when people complain the iPad doesn't run OS X, they're really pining for OS X features like the ones I already mentioned -- the Finder, Dock, menu bar, etc. However, none of those OS X features are particularly suited to a touchscreen device, especially one with a 9.7" screen. Tablet PCs running the full version of Windows have already demonstrated the pitfalls of running an OS meant for a larger device with a traditional point-and-click interface, and as a result, almost all of those devices have failed to gain traction in the market. Debra and others also cite the iPad's lack of multitasking as a strike against it. On this point, at least, I agree with them. While iPhone OS already allows for limited multitasking among Apple's own apps -- Phone, Messages, Mail, Safari, and iPod can all run simultaneously in the background -- third-party apps are still restricted to workarounds like push notifications. While restricting multitasking makes a kind of sense on devices like the iPhone 3G, with limited processing power and RAM available, on the iPad those technological limitations don't fly as an excuse. You can argue that not having multitasking on the iPad makes it easier to use for Grandma and other non-techies, but it also limits the device's potential utility. Granted, the iPad isn't positioned as a replacement for a MacBook, but the ability to run even one or two third-party apps in the background would make the device far more versatile. Personally, I would be very surprised if Apple doesn't introduce at least a limited form of multitasking in iPhone OS 4.0. Of course, I also said the same thing last year about iPhone OS 3.0, so who knows. One point bears mentioning, though: despite the introduction of iWork for the iPad, Apple is still pushing the device as a platform for consuming media, not as a productivity platform. To get any serious work done, Apple still expects you'll use your main computer, whether it's a MacBook, iMac, or PC. 4. There's not enough storage The most important question to ask on this point is, "For whom?" Debra says the 64 GB model might have enough capacity for her purposes, but she also grouses about the price of that model, comparing it to cheaper netbooks with "four times the storage." I will say that I'm puzzled at Apple's decision to top out the iPad's capacity at 64 GB, especially considering that's where the iPod touch currently tops out. A 128 GB iPad would have been very tempting indeed; unfortunately, given the price of flash memory, it also would have probably cost more than $1000. But what does 64 GB allow you to store? In my case, a 64 GB iPad would hold my entire 39 GB music library -- 19 days worth of music -- plus my entire iPhoto library of over 7000 photos, which, when optimized for the iPad's screen, would probably take up somewhere in the neighborhood of 5 GB, plus or minus a GB or two. At my most app-crazy I had about 2 GB of apps on my iPhone 3G, and "Other" space, presumably including the OS itself, takes up just over 1 GB. Added up, that equates to 47 out of 64 GB. In my case, that leaves over 15 GB of space for document storage, videos, and so forth. Let's say I store my entire Documents folder on the iPad (I wouldn't -- I use iDisk and Dropbox for that) -- 4300 documents taking up just over 2 GB of space. Now we have 13 GB left over for videos and whatever else. Even if I left myself a 3 GB buffer for whatever reason (including accounting for the GB versus GiB difference), that's still 10 GB of space for videos -- enough to store 10 two-hour films at a decent bitrate, or almost an entire season of an hour-long TV series. Let me break that down again -- a 64 GB iPad would store: -- 19 days of music -- 7000 photos -- Well over 100 apps -- A 2 GB Documents folder with 4300 items -- 20 hours of video -- Around 3 GB of space left over for whatever else (temporary photo storage, e-books, accounting for the difference between binary gigabytes versus decimal gigabytes, etc.) Granted, there are people out there with music and photo libraries larger than mine, but most of my Mac-using friends only have, on average, 1500 items in their iTunes libraries, a thousand or so photos, and maybe three pages of apps on their iPhones. 64 GB may not sound like much on paper, but practically speaking, it lets you pack around a lot of media. Unless you're going to spend weeks at a time away from your main computer, the iPad should be able to carry around enough media to keep almost anyone entertained for days on end. 5. There's no HDMI output or camera Debra claims you can't output the iPad's video to an HDTV without an HDMI connector. That simply isn't true; with a VGA adapter, you can output the iPad's full 1024 x 768 video signal to an HDTV. With a component connector, you can output a 576p PAL signal or a 480p NTSC signal to your TV. Okay, fine, it's not 1080p ultra-high-def video, but where exactly are you going to find video of that resolution anyway (besides Blu-Ray and Bittorrent)? I'll admit that it would have been nice to have at least 1366 x 768 video (1080i, in other words), but I'm betting that the vast majority of consumers aren't going to even bother hooking the iPad up to their TV at all when it's far easier to just put the screen on their laps and watch a movie on the iPad itself instead. Another point Debra brings up is the iPad's 3:4 aspect ratio, which is less than ideal for video. This has been argued all over the internet, including here at TUAW, but as many people have pointed out, the 3:4 aspect ratio is ideally suited to pretty much every other function on the iPad except video: books, documents, web pages, and photos are all laid out far closer to a 3:4 or 4:3 ratio than 16:9. Using a 16:9 ratio on the iPad would not only make the device larger than it already is, it would also leave all other forms of media on the device at a disadvantage compared to video. The iPad's lack of camera is another point Debra and others have brought out against the device, but like multitasking, this is one point on which I agree. A back-facing camera like the iPhone's doesn't make a lot of sense on the iPad -- it would be a bit unwieldy trying to take pictures or video with a device this size, rather like trying to hold up a MacBook Air to take photos with its iSight. Most people probably have a standalone point-and-shoot camera that would take better stills and/or video than the iPad's hypothetical back-facing camera anyway, and you can load those pictures directly onto the device with either the iPad-specific camera connector or SD card reader. But a front-facing camera for video conferencing definitely would have been a killer feature. Apple apparently thought so, too, because it actually included a space in the iPad for exactly such a camera, only to withdraw it for reasons known only to Apple. Whether the company is waiting for the next-gen iPad to introduce a camera or pulling a big switcheroo like it did with the original iPhone -- which was originally supposed to ship with the scratch-prone plastic face of previous iPods, but was replaced with nearly scratch-proof glass in the six months between its announcement and release -- no one can say. 6. There are no USB ports Debra's main complaints against the lack of USB ports are that you can't hook up a flash drive or a USB keyboard. As far as the keyboard goes, I've already mentioned the fact that you can purchase a keyboard dock or use a Bluetooth keyboard. As for not being able to hook up a flash drive? I can see why some people might want to do this -- expanding the iPad's storage, transferring files, etc. But I'm willing to bet that for most people this isn't going to be an issue. While I run the risk of sounding like Bill Gates's infamous "640K should be enough for anyone" by saying so (although Gates never actually said that), 64 GB of space on a device like the iPad really should suit most users' needs -- at least for the next couple of years, anyway. As for transferring files? I can think of a number of existing, cloud-based solutions, the most simplistic of which is e-mail. No, you can't transfer several gigabytes of files at a time through e-mail or "the cloud," but most people don't transfer that much data all at one go even a handful of times with a portable device, much less on a regular basis. I'm not going to go full fanboy and say it's a good thing the iPad doesn't come with USB ports. In fact, I'm kind of with Debra and the others on this one in wishing that Apple included at least one USB port. While I probably wouldn't use the port very often (if at all), it definitely falls into the category of "nice to have." I've been an iPod user for almost five years and an iPhone user for a year, and I can count the number of times I've needed/wanted a USB port on one of those devices on exactly no fingers... but I'll admit that I might sing a different tune with a bigger device like an iPad. But for most of the people who are likely to buy the iPad, i.e., the non-geek, non-techie, "I just want internet and music and movies" folks, they're probably not going to miss USB ports at all. 7. There's no flash memory slot No, the iPad doesn't have a flash memory slot. You can buy an SD card reader attachment, though, although Debra and others rail against the added cost of the connector, claiming that in order to reach "the functional equivalent of a netbook, you may end up spending a bundle." A lot of the same arguments for or against USB apply here as well; most non-geeks aren't going to miss an SD slot at all. Transferring documents via SD cards in 2010 reeks of the "sneakernet" we thought we were abolishing along with dot-matrix printers and 2800 baud modems; let's just say that most users are going to have photos and/or videos on their SD cards, most users are going to wait until they get home to their main computer to upload those files, and most users aren't going to care that the iPad's missing a dedicated SD slot any more than they cared about the iPod missing one. If anything, the argument for an SD slot is far weaker than the argument for USB. 8. The price is not right Debra claims the iPad "costs twice as much as the Kindle and other ebook readers." That's flat-out false. The $499 iPad does cost almost twice as much as the standard Kindle, but compared to every other e-reader out there, the iPad's pricing is extremely competitive once you consider all the things the iPad does that the other readers iDon't. A $489 Kindle DX, for example, while $10 cheaper than the cheapest iPad, doesn't have a color screen, has only 4 GB of storage, doesn't have a touchscreen, doesn't run apps, doesn't have e-mail, music, and so on, and so forth. The iPad's price is the one aspect of the device that few pundits have complained about; in fact, the pricing has Wall Street and other financial analysts doing cartwheels. You don't even have to compare the iPad to other companies' similar products to see how good a deal it is. The 16 GB iPad costs $300 more than an 8 GB iPod touch. That $300 gets you twice the capacity, a much larger and higher-quality screen, a more powerful CPU, better Wi-Fi including 802.11n, vastly improved battery performance, a built-in speaker and microphone, and, eventually, access to a host of apps designed to take advantage of the iPad's larger screen and higher performance. A 32 GB iPad has the same $300 price difference compared to a 32 GB iPod touch, as does the 64 GB model. Once you tack on an additional $130 for 3G wireless the price difference widens, but so does the device's utility -- access to wireless broadband anywhere there's an available 3G network, which, as iPhone users already know, is invaluable. Debra compares the fully kitted-out $829 3G-enabled iPad to "a powerful compact laptop that runs a full-fledged operating system and multi-tasks and that has USB and SD and Ethernet connectors, 4 GB of RAM, and 250 GB of storage." The "full-fledged operating system" she's talking about isn't OS X, however, and the laptop she's talking about definitely isn't manufactured by Apple. That might not make a difference to a lot of people, but if you're already in the "Macs cost too much" camp, it's no wonder the iPad doesn't hold much appeal compared to that Windows Home Edition running, plastic, bargain-bin quality laptop from Dell or HP that's almost certain to stop working in two years or less. Yes, I recognize the extremely fanboyish sound of that sentence. No, I don't apologize for it. Cheap laptops are exactly that: cheap. Call it elitism, fanboyism, Kool-Aid drinking, whatever: I'd much rather put up with the iPad's shortcomings than those of the "powerful" but oh-so-cheapo laptops of other manufacturers. 9. It's locked in "You have to buy your apps from the App Store," Debra notes. Yes, you do: from a store that has over 140,000 apps available, most of them for free, and capable of doing almost anything. Hate the App Store for some reason? Fine. Jailbreak the thing and use Cydia instead. Apple may not want you to do this, and they may go out of their way to prevent it, but if you're of the jailbreaking mindset already, that's not going to stop you, is it? A very vocal minority of people love to complain about "vendor lock-in" when it comes to the iPhone/iPod touch/iPad, even though those same people have likely been playing around with video game systems from Nintendo, Sony, and Microsoft for decades -- all platforms with "vendor lock-in" even more pervasive and insidious than that of Apple's platform. What these people don't seem to realize is that same vendor lock-in is precisely what keeps Apple's portable platforms from being riddled with viruses, malware, and apps made of more crap than code. "Security through obscurity" may be a valid(ish) argument to fall back upon with the Mac, but with 75 million plus people using the iPhone OS, it's a very high-profile target for virus writers. That same "walled garden" that Linux proponents and "open internet" evangelists whine about is what keeps the iPhone platform from being an unusable nightmare. Yes, the App Store approval process has in many cases been a pain in the nether regions, but things are improving -- apps that might have once taken days or weeks to get approved are now getting through the approval process in a matter of hours. Has the App Store's "lock-in" affected sales of the iPhone one iota? No. In fact, sales of the iPhone took way off after the App Store's arrival. Yes, "Apple as gatekeeper" gets the George Orwell fans riled. But someone has to keep the gate, because the instant the iPhone OS becomes a truly "open" platform like some people are espousing, that's the same instant the Russian mafia remote-hijacks your iPhone from a basement in Vladivostok because you just had to download that "Siberian Honeys" app from the dark alleys of the internet. Other aspects of dreaded "lock-in" that Debra's concerned about are riddled with falsehoods. "You can't run Skype to make phone calls," with the iPad, she claims. "We wouldn't want to cut into the iPhone market, after all." Say what? That must be news to the Skype team, who's already investigating an iPad-specific Skype app. It must be news to Apple, too, who no longer restricts the use of VoIP over 3G. "Nor can you download Flash to install on the browser, which means you won't be watching those YouTube videos." Say what again? Since when is the iPhone/iPod touch/iPad incapable of watching YouTube videos? Oh right: since never. No, you can't put Flash on the iPad, but according to our informal poll, 75% of people planning on buying one either don't care or are outright glad Flash isn't making an appearance. What about hardware "lock-in?" Debra says that "you can't even remove and replace the battery yourself," which has been true of every single iPod since 2001 and hasn't stopped people from buying them by the millions. She goes on and says, "if you were flying to Australia and wanted to bring along an extra battery for the extra-long flight, forget about it." Um. A two-second Google search for "iPhone external battery" might have been a good idea. Plus, speaking from personal experience, if you stay awake for a full flight across the Pacific Ocean, you're going to have a lot more pressing issues to worry about than your iPad's battery, like the fact that you're going to feel like you got run over by a truck after the plane lands. Take it from one who knows: Trans-Pacific flights are best spent in blissful unconsciousness. 10. The network Yep, the iPad's 3G connection is only available on AT&T's network... if you live in the United States. If, like me, you live in what's known informally as "the rest of the world," this argument against buying a 3G-enabled iPad holds no water for you. But let's stick to the States for a moment and analyze Debra's argument against AT&T's network. No, AT&T isn't everyone (or possibly even anyone)'s favorite US network, but the pay-as-you-go, completely contract-free plans available for the iPad are very compellingly priced. You can get 250 MB of data for $14.99 (not the $20 Debra claims in her article), which is more than enough for casual data usage. 250 MB doesn't sound like a lot on paper, but that's what my iPhone plan started out at here in New Zealand. I never once went over 100 MB or so of monthly data usage until I started using iPhone tethering, and I'd consider my data usage fairly robust. The "unlimited" AT&T plan at $30 a month is an even better deal, and even if "unlimited" only means 5 GB, you're not going to burn through that much data unless you're using the connection every waking hour of the month. Debra's argument against these plans is that it's another bill to pay on top of your cell phone bill, but that's the beauty of the iPad plans: without a contract to commit to, you can cancel the plan whenever you want. If you start out with the $30/month "unlimited" plan on the iPad, only to find out your usage isn't topping 250 MB, rather than being locked in to that plan for another 23 months, you can downgrade to the $15 plan. If you find that you don't need the 3G coverage at all, you can always buy the Wi-Fi only iPad. "Here's wishing you good luck on finding those Wi-Fi hot spots," Debra says in response to that idea, which sounds about right for us in New Zealand, where free Wi-Fi is about as rare as gold, but makes much less sense in the US, where free Wi-Fi is usually only a library or café away. If you absolutely must have 3G on the iPad, absolutely must not use AT&T, and are prepared to spend twice as much for the privilege of going with Verizon, you always have the option of hooking the iPad up to a MiFi (possibly -- we'll have to wait until the iPad's actually released before we know if this will work or not). Additionally, just because the iPad isn't available on Verizon right now (now now NOW) doesn't mean it never will be; Apple and Verizon are reportedly "still talking" about bringing the iPad and/or iPhone over to the network. We've come to the end of Debra's ten points, but not to the end of mine. My final point, the one that sums up all of this: like the Mac, like the iPod, and like the iPhone, the iPad is not for everyone. It's not even for me -- despite all the words I've just spent defending it, I'm not buying an iPad until next year at the earliest, and only if I decide against replacing my current, aging MacBook Pro with the same computer rather than an iMac/iPad combo. The bottom line is that the iPad can't be all things to all people. It's not meant to replace a full-fledged Mac or PC -- it's meant as an ultraportable extension of a larger device, and one with a far simpler and more intuitive interface, a "computer for the rest of us," if you will. And make no mistake: for every Debra Littlejohn Shinder, for every "open internet" geek who screams "vendor lock-in" every time Apple's name is mentioned, for every "no multitasking, no Flash, no sale" techie, for every dismissive pundit who shrugs and says, "It's just a big iPod touch," there's at least one person who has been waiting for a device just like the iPad, and those people are the ones who will make it a success. Whether you like it or hate it, the iPad is indicative of the future direction of computing. But, just for the sake of argument, let's say we can cook up a portable computer far "better" than an iPad, a dream device that has USB, 1080p output, a removable battery, runs the full version of OS X, has a front-facing camera, isn't dependent on AT&T, isn't "locked in" to the App Store, has a physical keyboard, widescreen-formatted display, and has more than 64 GB of storage. What might such a device look like? Oh. Right. TUAW10 reasons to pass on the iPad? TUAW fact check originally appeared on The Unofficial Apple Weblog (TUAW) on Thu, 04 Feb 2010 10:00:00 EST. Please see our terms for use of feeds.Read | Permalink | Email this | Comments Apple - iPhone - Steve Job - IPod Touch - Sony
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Apple May Lower the Price of the iPad: This is Not News
Sometimes I have to wonder whether everyone has taken leave of their senses. The big ânewsâ doing the rounds in the last twenty four hours is that Apple execs have admitted they are prepared to change the price of the iPad should consumer reception (read: sales) demand it. Yeah, thatâs right; Apple admitted it might revisit the price of the iPad sometime in the future, and change it according to sales performance. Shocking, that a company might operate according to a business plan designed to encourage sales and make money, eh? Apparently, thatâs somehow mind-boggling news. It got started because of a report by Matt Phillips of the Wall Street Journal, who wrote; Apple intends to stay ânimbleâ on pricing of the iPad, possibly lowering prices if the newly unveiled tablet device fails to gain traction among consumers. (Top prize goes to Engadget for their humorous response/headline, âApple to be ânimbleâ on iPad pricing, athletic on pommel horseâ.) Phillips quoted a note from Credit Suisse analyst Bill Shope who, following a meeting with Apple executives, said; âWhile it remains to be seen how much traction the iPad gets initially, management noted that it will remain nimble (pricing could change if the company is not attracting as many customers as anticipated),â This only bolsters my long-held belief that analysts are, apparently, paid for pointing out the blindingly-obvious. That tendency to wrap together common sense and âwhat we all knew anywayâ as âsomething new and worthy of reportingâ is usually exemplified by Gene Munster, but since heâs been quiet for the last week or so, I guess Shope will have to do. (I predict that, in the weeks ahead of the iPad launch, Munster, or some inspired analyst like him, will issue a note to the press proclaiming, âAppleâs App store sales will perform better in this quarter than in the same quarter last year.â Or itâll be something even more obvious, like âApple will sell more iPads this year than they did in 2009âŚâ and I guarantee the tech press will rush to report that âadviceâ like itâs vitally important ânews.â You just wait and see.) Confidence The point here is that Apple is doing nothing revolutionary or surprising by admitting the fact that, according to the ebb and flow of consumer demand, it will revisit its pricing strategy for the iPad. This is what all businesses do with all products, all the time. Apple is always revising its prices; MacBooks, iMacs, iPods and iPhones get at least one price change on an annual basis. Itâs not a big deal that they will do the same for the iPad, and it certainly doesnât point to any lack of confidence in the product itself. Let's not forget the infamous iPhone price-cut of â07; after launching the iPhone with a hefty $599 asking price, Apple reduced it by a whopping $200 just a few months later. The only difference between then and now is Appleâs transparency (yeah, I canât believe I said that either). During his keynote presentation late last month, Steve Jobs said of the iPad; âWe want to get this into the hands of as many people as possible.â That is, after all, the overriding reason for the agreeably-low price of the entry-level iPad. Here Come the Trolls Sadly, the predictable fan-baiting didnât take long, with the likes of Should-Know-Better-Than-That Windows evangelist Paul Thurrott writing, in a blog post provocatively entitled âDo Not, Under Any Circumstances, Buy an iPadâ; Following news that I was right about Apple's decision to not allow iPad pre-orders would cause many potential buyers to reassess things, comes this unbelievable bit of news directly from Apple itself: The company said that it would aggressively lower prices on the iPad if/when it doesn't take off in the marketplace. Aside from the clumsy jumble of clauses and inventive use of the adjective âaggressivelyâ, (as far as I can see, neither Shope nor Phillips ever used that word) I really want to point out, one last time, and for the record — this is not âunbelievableâ news. Far from it. It is, in fact, the most ordinary, run-of-the-mill, standard business practice, entirely believable news one could expect from a consumer electronics company. (Quite what Appleâs flexible pricing strategy has to do with Thurrottâs theory about the inability to pre-order an iPad is beyond me; can anyone say âstraw man?â) It comes down to this; the wider tech press are, inexplicably, falling over themselves to write-off the iPad as a failure before itâs even out of the starting gate. (Donât forget, the iPod was panned by critics and tech âexpertsâ when it first launched. The iPhone was subject to its own fair share of harsh criticism, too.) No one can say exactly how successful the iPad will be, and while thereâs no harm in speculating (after all, much Apple coverage is precisely that) itâs sad to see how some corners of the tech community choose to interpret every little thing Apple does (or says it might do) as âevidenceâ of failure. I think Iâm being rational and level-headed. You might think Iâm a shameless fanboy. Either way, let me know exactly what you think in the comments below. Related GigaOM Pro Research: Web Tablet Survey: Appleâs iPad Hits Right Notes 5 Tips for Developers Targeting the iPad How AT&T Will Deal with iPad Data Traffic
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iPad Prices Could Possibly Change Depending On Consumer Reception
According to an analyst from Credit Suisse, Apple is planning on staying "nimble" on its pricing of the iPad, especially if it doesn't fare well with consumers on its release.The analyst note out of Credit Suisse came out Sunday after they recounted meetings with Apple executives. The Apple officials that met with analyst Bill Shope also supposedly downplayed the potential for a bit of overkill of other Apple product lines.The note read:"Apple wants the iPad to be the best device for a few key use cases. For instance, the company believes it could eventually be seen as superior to both handheld and notebook devices for browsing the Internet, using the App Store, and consuming mobile media (video, photos, and e-books). Nevertheless, in other areas, notebooks, the iPhone, or an iPod may be more appropriate. This clear segmentation of capabilities suggests that cannibalization may be less of a concern than most currently believe."Shope also continued that despite Apple's pricing of the iPad, Apple seemed to indicate that they would proceed with price cuts if device demand didn't coincide with Apple's expectations. "While it remains to be seen how much traction the iPad gets initially, management noted that it will remain nimble (pricing could change if the company is not attracting as many customers as anticipated)."Apple shares are down about 7% on the year. Since the iPad was released, the company's shares are down about 5.5%.via The Wall Street JournalImage courtesy of Public Radio
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Wall Street Breakfast: Must-Know News
Stress tests may reveal banks' capital needs. As the May 4 reveal date for stress tests draws closer, officials are considering releasing assessments for each of the 19 banks and may require those that need more capital to disclose how they plan to raise additional funds. Under that scenario, lenders would have to specify whether they want to convert government preference shares, issue more stock or rely on an additional bailout. The push for disclosure is meant to help the public better discern between the health of individual banks. Sources say regulators want the banks to have at least 3% tangible common equity. Lewis: Fed, Treasury urged Merrill silence. According to a recently obtained copy of CEO Ken Lewis' February testimony to New York's attorney general, Bernanke and then-Treasury chief Paulson pressured Bank of America (BAC) to stay silent on its increasingly troubled deal to acquire Merrill Lynch. Despite an obligation to disclose any material financial hits to shareholders, officials pressed Lewis to keep quiet during government-funding negotiations to ensure important financial institutions wouldn't fail. Publicizing Merrill's losses would have allowed Bank of America's shareholders the opportunity to stop the deal and let Merrill collapse. Counter-counter-offer on Chrysler debt. After rejecting a too-rich counter-offer from Chrysler creditors, the Treasury has reportedly raised its own offer in an effort to reach a deal with lenders by the end of the month. The new deal would see lenders get $1.5B of first-lien debt and a 5% equity stake in a restructured Chrysler in exchange for the $6.9B of debt they now hold. The Treasury had previously suggested lenders write off all but $1B of the debt and receive no stock. GM to miss debt payment, idle plants. Trying to avoid bankruptcy ahead of the government's June 1 deadline, General Motors (GM) may rush to close dealerships, scrap models and could idle most of its plants for around two months this summer. The moves could help GM break even with annual sales as low as 10M vehicles. Meanwhile, CFO Ray Young said the company doesn't plan to pay off $1B of debt due June 1, and will instead swap the debt for shares or rely on bankruptcy protection. The tougher public stance towards bondholders is meant to lay the groundwork for what promises to be an ugly debt-for-equity swap GM expects to launch by next week. Hard times for Hartford. Hartford Financial Services (HIG) is said to be seeking bids from rivals including Travelers Companies (TRV) for its flagship property insurance business. Sources said Hartford has been shopping the unit after losses in its life division led to credit downgrades, and that damage from the financial crisis may ultimately lead to a breakup of the insurer. The property unit is estimated to be worth $4B-$8B. Obama meets with credit card chiefs. Obama will meet with executives from the credit card industry today, one day after a congressional panel approved legislation to curb credit card fees and limit consumer penalties. The American Bankers Association is concerned such restrictions will tighten the availability of consumer credit and make it more expensive. Bank of America (BAC), American Express (AXP), Citigroup (C), Wells Fargo (WFC), JPMorgan Chase (JPM), Capital One (COF), Visa (V) and Mastercard (MA) will be among the 13 companies represented. NY cracks down on pension agents. New York State's public pension fund will ban the use of middlemen who help private-equity funds and other investors secure its business. The state is investigating whether these middlemen, called placement agents, were involved in a scheme to receive illegal payments from firms trying to win state business. As one of the nation's largest public pension funds, New York's decision could prompt other states to follow suit. Morgan mulls TARP repayment. Despite reporting a larger-than-expected quarterly loss, Morgan Stanley (MS) CFO Colm Kelleher said the company will 'consider' repaying $10B to the government. The statement comes less than a month after CEO John Mack told employees 'it's the wrong time' to return the money. Morgan Stanley had a Tier 1 ratio of 16.4% at the end of March, or 12.9% if the bank repays TARP funds. Shares +2.9% premarket (7:00 ET). Credit Suisse profit beat. Credit Suisse (CS) posted a better-than-expected Q1 profit, bouncing back from several quarterly losses in 2008. The bank saw a net profit of 2B Swiss francs ($1.72B), more than double analysts' forecasts. Though short on details for its 2009 outlook, the bank said it is "in a position to weather the storms and perform well when market opportunities arise." Shares +10.5% premarket (7:00 ET). Apple shines on iPhone sales. Apple's (AAPL) quarterly earnings easily beat consensus estimates (see details below) as strong sales of iPods and iPhones held up despite the weak economy. Profit was also helped by declining commodity prices for key product components like aluminum and memory chips. This was the company's first quarter since CEO Steve Jobs went on medical leave. eBay gets okay on Gmarket buy. eBay (EBAY) won regulatory approval from South Korea's antitrust watchdog to proceed with its planned purchase of Gmarket (GMKT). A majority of Gmarket shareholders have already agreed to the cash tender offer. Glaxo to release study after long delay. GlaxoSmithKline (GSK) will release the first study comparing its cervical cancer vaccine with Merck's (MRK) blockbuster Gardasil at a May 10 medical meeting. The fact that the results are being released 14 months after the study concluded and at a relatively unknown meeting have left investors and analysts puzzled. Freddie CFO takes his own life. Acting CFO of Freddie Mac (FRE) David Kellerman was found dead in his home in what appears to be a suicide. Kellerman had worked at the mortgage giant for 16 years. House prices rise slightly (.pdf). FHFA's House Price Index showed U.S. home prices rose 0.7% in February M/M, bringing the twelve-month total to -6.5%. January's previously reported 1.7% gain was revised down to 1.0%. Earnings: Thursday Before Open AmerisourceBergen (ABC): FQ2 EPS of $0.95 beats by $0.06. Revenue of $17.31B (-2.5%) vs. $17.93B. Sees full-year EPS of $3.18-3.30 vs. $3.19. (PR) Alexion Pharmaceuticals (ALXN): Q1 EPS of $0.16 beats by $0.02. Revenue of $81M (+78.7%) vs. $82M. (PR) AU Optronics (AUO): Q1 EPS of -$0.71 misses by $0.04. Revenue of $1.5B (-66.7%) in-line. Expects utilization rates to improve substantially in Q2. (PR) AutoNation (AN): Q1 EPS of $0.23 beats by $0.07. Revenue of $2.47B (-35.6%) vs. $2.74B. Says it reduced debt by $500M in Q1, and remains in compliance with all debt covenants. Sees sales improving in H2. (PR) Black & Decker (BDK): Q1 EPS of $0.22 beats by $0.14. Revenue of $1.07B (-28.2%) vs. $1.16B. Sees full-year EPS of $1.50-1.90 vs. consensus of $1.79. (PR) Bunge (BG): Q1 EPS of -$1.76 misses by $2.25. Revenue of $9.2B (-26.2%) vs. $11B. (PR) Canadian Pacific Railway (CP): Q1 EPS of C$0.39 misses by C$0.09. Revenue of C$1.07B (-6.6%) vs. C$1.04B. "The unprecedented temporary decline in traffic in some of our key markets (as measured by carloads), particularly potash (-70%), Canadian coal (-30%), and automotive (-43%) has resulted in more than 2,400 employee layoffs to date." (PR) Celestica (CLS): Q1 EPS of $0.13 beats by $0.04. Revenue of $1.47B (-20%) vs. $1.51B. Q2 guidance in line. (PR) CIT Group (CIT): Q1 EPS of -$1.30 misses by $0.84. Tier-1 capital ration 9.3%. (PR) CME Group (CME): Q1 EPS of $3.20 in-line. Revenue of $647M (+3.5%) vs. $656M. Average rate per contract increased 12% to $0.83. (PR) ConocoPhillips (COP): Q1 EPS of $0.56 beats by $0.14. Revenue of $30.7B (-44.1%) vs. $26.34B. Shares +4.3% premarket. (PR) CONSOL Energy (CNX): Q1 EPS of $1.08 beats by $0.15. Revenue of $1.22B (+18.8%) in-line. "Energy companies with less than stellar financial positions could find it very difficult to obtain reasonable financing terms to maintain their operations. We believe that this will impact supply and could set the stage for higher coal and natural gas prices as early as '10." Shares +3.5% premarket. (PR) Cooper Industries (CBE): Q1 EPS of $0.47 beats by $0.01. Revenue of $1.26B (-18.7%) vs. $1.32B. Sees Q2 EPS of $0.50-0.60 vs. $0.60 and full-year EPS of $2.30-2.60 vs. $2.40. (PR) Danaher (DHR): Q1 EPS of $0.72 misses by $0.01. Revenue of $2.63B (-13.2%) vs. $2.67B. (PR) Diamond Offshore Drilling (DO): Q1 EPS of $2.51 beats by $0.29. Revenue of $886M (+12.7%) vs. $878.5M. (PR) EMC (EMC): Q1 EPS of $0.16 in-line. Revenue of $3.15B (-9.2%) vs. $3.25B. Sees global IT spending down in the low-double-digits for 2009. Expects $450M in cost reductions, up from a previous estimate of $350M, but says margins will decline due to weaker IT spending. (PR) ENSCO International (ESV): Q1 EPS of $1.56 beats by $0.04. Revenue of $514M (-9.6%) in-line. (PR) Exelon (EXC): Q1 EPS of $1.20 beats by $0.07. Revenue of $4.75B (+3.6%) vs. $4.62B. Reaffirms full-year EPS guidance. Shares +0.4% premarket. (PR) Fifth Third Bancorp (FITB): Q1 EPS of -$0.04 beats by $0.23. Tier 1 capital ratio of 10.9%. Tangible equity ratio of 7.9%. (PR) Goodrich (GR): Q1 EPS of $1.35 beats by $0.28. Revenue of $1.7B (-2.8%) in-line. Sees full-year EPS of $4.50-4.75 vs. $4.63, and revenue of $6.9B vs. $7.1B consensus. (PR) Hershey Foods (HSY): Q1 EPS of $0.38 beats by $0.03. Revenue of $1.24B (+6.5%) vs. $1.19B. Reaffirms 2009 net sales growth of 2-3%. Sees EPS increasing at less than its long-term objective of 6-8%. (PR) JetBlue Airways (JBLU): Q1 EPS of $0.08 beats by $0.05. Revenue of $793M (-2.8%) vs. $810M. Operating margin of 9.3% vs. 2.2% a year ago. First profitable Q1 since 2005. Shares +9.9% premarket. (PR) L-3 Communications (LLL): Q1 EPS of $1.66 beats by $0.03. Revenue of $3.64B (+3.7%) in-line. Reaffirms full-year guidance. (PR) Logitech (LOGI): FQ4 EPS of -$0.20 misses by $0.26. Revenue of $408M vs. $496M. Gross margin fell to 25% from 35.6% last quarter. "Our sales were negatively impacted by the combination of weak consumer demand and the accelerating reset by our channel partners of their weeks of supply." Shares -11.3% premarket. (PR) Marriott International (MAR): Q1 EPS of $0.24 beats by $0.10. Revenue of $2.5B (-14.8%) in-line. Issues downside EPS guidance for Q2 of $0.20-0.23 vs. $0.26 consensus. Maintains guidance for FY '09 of $0.88-1.02 EPS. (PR) Marshall & Ilsley (MI): Q1 EPS of -$0.44 misses by $0.11. Revenue of $M in-line. Q1 loan-loss provision of $478M. Shares +5.6% premarket. (PR) National-Oilwell Varco (NOV): Q1 EPS of $1.13 beats by $0.07. Revenue of $3.48B (+29.6%) vs. $3.29B. "Though the pace of new capital equipment orders has slowed in the short run, we believe investment in drilling equipment will resume, to enable the industry to explore new oil and gas frontiers. Nevertheless market conditions remain very challenging, and the timing of a recovery is uncertain." Shares -4.4% premarket. (PR) NII Holdings (NIHD): Q1 EPS of $0.43 beats by $0.07. Revenue of $M (+961%) in-line. Shares +2.3% premarket. (PR) Novartis (NVS): Q1 earnings of $1.96B ($0.87/share) vs. consensus of $1.89B. Sales fell 2% to $9.71B. Sees drug sales up mid-to-high single-digits. Shares +4.7% premarket. (Bloomberg) Occidental Petroleum (OXY): Q1 EPS of $0.50 beats by $0.13. Revenue of $3.07B (-49%) vs. $3.18B. Production was up almost 8% in Q1. (PR) Philip Morris (PM): Q1 EPS of $0.74 beats by $0.05. Revenue of $5.6B (-5.5%) vs. $5.48B. Reaffirms full-year guidance of $2.85-3.00 vs. consensus of $3.02. (PR) PNC Financial Services (PNC): Q1 EPS of $1.03 beats by $0.61. Revenue of $3.9B (+112.6%) vs. $3.5B. (PR) Potash (POT): Q1 EPS of $1.02 beats by $0.16. Revenue of $922.5M (-51.2%) vs. $975.5M. Issues downside EPS guidance for Q2 of $1.10-$1.50 vs. $2.21 consensus, and FY '09 EPS of $7.00-$8.00 vs. $9.65. (PR) RadioShack (RSH): Q1 EPS of $0.34 beats by $0.12. Revenue of $1B (+5.6%) vs. $0.94B. Comps were up 5% vs. Q1 2008. (PR) Raytheon (RTN): Q1 EPS of $1.11 beats by $0.10. Revenue of $5.88B (+9.9%) vs. $5.6B. Full-year guidance in line. Shares +2.4% premarket. (PR) Royal Caribbean Cruises (RCL): Q1 EPS of -$0.17 beats by $0.17. Revenue of $1.33B (-7.2%) in-line. Sees full-year EPS of $1.35 vs. consensus of $0.97. Shares +13.5% premarket. (PR) Sigma-Aldrich (SIAL): Q1 EPS of $0.68 beats by $0.04. Revenue of $519M (-8.8%) vs. $532M. Full-year guidance in line. (PR) Suncor Energy (SU): Q1 EPS of $0.24 beats by $0.12. The decrease in earnings was primarily from lower price realizations, with benchmark commodity prices significantly weaker in Q1 '09 vs. Q1 '08. (PR) SunTrust Banks (STI): Q1 EPS of -$0.46 beats by $0.19. Revenue of $2.24B (+16.3%) vs. $2.06B. Majority of loss was due to a $715M goodwill impairment charge. Tier-1 ratio estimated at 11%, up 13 points from last quarter. (PR) Supervalu (SVU): FQ4 EPS of $0.87 beats by $0.08. Revenue of $10.82B (+4.2%) in-line. (PR) Thermo Fisher (TMO): Q1 EPS of $0.62 misses by $0.08. Revenue of $2.26B vs. $2.42B. Sees full-year EPS of $2.80-3.10 vs. $3.15, and revenue of $9.6-9.9B vs. $10.14B. "Our customers are clearly delaying their capital purchases in the current environment." Shares -7.6% premarket. (PR) Union Pacific (UNP): Q1 EPS of $0.72. beats by $0.06. Revenue of $3.42B (-20%) vs. $3.55B. "The difficult economic conditions continue to affect our business volumes. During this challenging time, we are reducing costs across the board..." Shares +2.7% premarket. (PR) UPS (UPS): Q1 EPS of $0.52 misses by $0.04. Revenue of $10.94B (-13.7%) vs. $11.44B. Sees Q2 EPS of 0.45-0.55 vs. consensus of $0.65. "Economic indicators tell us recovery in the U.S. might begin late this year, but more likely not until 2010." Shares -3.7% premarket. (PR) US Airways (LCC): Q1 EPS of -$2.28 beats by $0.10. Revenue of $2.46B (-13.6%) in-line. "Our first quarter loss reflects the weakness in the global economy that has negatively impacted revenues throughout our industry. The steps we have taken to adapt to this environment are having a significant positive impact, though, as evidenced by our significant improvement in earnings excluding special items and fuel hedges." Shares +6% premarket. (PR) Zimmer (ZMH): Q1 EPS of $0.95 beats by $0.01. Revenue of $993M (-6.3%) vs. $1B. Sees full-year EPS of $3.85-4.00 vs. $3.88. (PR) Earnings: Wednesday After Close Apple (AAPL): FQ2 EPS of $1.33 beats by $0.24. Revenue of $8.16B vs. $7.96B. Sees FQ3 EPS of $0.95-1.00 vs. consensus of $1.12, and revenue of $7.7-7.9B vs. $8.28B. Mac sales of 2.22M (-3% Y/Y). iPod sales 11M (+3%). iPhone sales 3.79M (+123%). (PR) Alliance Data Systems (ADS): Q1 EPS of $1.19 beats by $0.09. Revenue of $480M (-3.8%) vs. $488M. Sees Q2 EPS of $1.05 vs. $1.22. (PR) eBay (EBAY): Q1 EPS of $0.39 beats by $0.05. Revenue of $2.02B (-7.8%) vs. $1.94B. (PR) Equifax (EFX): Q1 EPS of $0.58 beats by $0.04. Revenue of $453M (-10%) vs. $448M. (PR) F5 Networks (FFIV): FQ2 EPS of $0.38 in-line. Revenue of $154M (-3.1%) in-line. Says Feb. sales were particularly slow, but March improved significantly. (PR) Leggett & Platt (LEG): Q1 EPS of $0.06 misses by $0.01. Revenue of $718M (-28.1%) vs. $807M. Sees full-year EPS of $0.60-0.90 vs. $0.72, and revenue of $2.9-3.3B vs. $3.39B. (PR) Lam Research (LRCX): FQ3 EPS of -$0.71 misses by $0.05. Revenue of $174.4M (-71.6%) vs. $175.9M. (PR) Noble (NE): Q1 EPS of $1.62 beats by $0.16. Revenue of $896M (+4%) in-line. (PR) Novellus Systems (NVLS): Q1 EPS of -$0.47 beats by $0.04. Revenue of $98.9M (-68.6%) vs. $101.7M. Says it's cautiously optimistic order activity has stabilized. (PR) Pactiv (PTV): Q1 EPS of $0.69 beats by $0.23. Revenue of $766M (-5.2%) vs. $732.5M. Sees Q2 EPS of $0.54-0.58 vs. $0.51 and full-year EPS of $2.15-2.25 vs. $1.89. "Compared with the first quarter of last year, we benefited from lower raw material costs, as well as lower logistics costs, and improved productivity." (PR) Robert Half International (RHI): Q1 EPS of $0.06 in-line. Revenue of $823M (-32.8%) vs. $844M. (PR) SLM Corp. (SLM): Q1 EPS of -$0.03 vs. consensus of $0.12. Loss was partly the result of ongoing dislocation in the commercial paper market. (PR) VMware (VMW): Q1 EPS of $0.25 beats by $0.05. Revenue of $470M vs. $474M. Sees Q2 revenue flat to down vs. a year ago. (PR) Xilinx (XLNX): FQ4 EPS of $0.26 beats by $0.08. Revenue of $395M (-17%) vs. $383M. (PR) Yum! Brands (YUM): Q1 EPS of $0.48 beats by $0.08. Revenue of $2.22B (-8.1%) vs. $2.33B. Sees full-year EPS of $2.10 vs. $2.08. Says Q2 likely to be its most challenging quarter. (PR) Today's MarketsOverseas markets moved higher Thursday, giving a boost to futures.
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Could iPad prices drop the way the iPhone did after launch?
Filed under: Hardware, RetailLooks like they might. That's the opinion of a note out last night from Credit Suisse quoting meetings with Apple executives. The Wall Street Journal this morning quotes Senior Analyst Bill Shope as saying "While it remains to be seen how much traction the iPad gets initially, management noted that it will remain nimble (pricing could change if the company is not attracting as many customers as anticipated)." This is a similar situation to the original iPhone launch in 2007, where the original price quickly dropped US $200 from the original $599 retail. Agitated early adopters got a $100 Apple store credit from Apple. Apple will be watching sales of the device carefully in the early days, and the company appears to have enough margin built into the iPad to take some hits if it is slow moving. On the other hand, if the iPad blows the doors off Apple stores in sales, don't expect any discounts soon.TUAWCould iPad prices drop the way the iPhone did after launch? originally appeared on The Unofficial Apple Weblog (TUAW) on Mon, 08 Feb 2010 14:00:00 EST. Please see our terms for use of feeds.Read | Permalink | Email this | Comments iPhone - Apple - Wall Street Journal - Credit Suisse - Unofficial Apple Weblog
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Does 'Nimble' Pricing Suggest iPad Won't Move?
Apple surprised some company watchers with its relatively low price points for the iPad, and it appears prepared to go even lower, if necessary. It will be flexible about pricing if consumer demand for the device does not shape up as expected, according to a note from Credit Suisse reported in The Wall Street Journal. That was the take-away from a recent meeting between Credit Suisse analysts and Apple officials, according to analyst Bill Shope.
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iBook Therefore I Am - The iPad vs. the Kindle and the Nook
Donât Sell Your Amazon Stock Just YetâWeâre incredibly psyched to pioneer the next generation of digital journalism,â Martin Nisenholtz senior vice president, digital operations for The New York Times, gushed during todayâs iPad debut.Frankly, folks, the future looks pretty boring. The New York Times looked lovely on the iPad. But⌠inline video clips and photos? Synching to the iPhone? Thatâs all? Nice, but surely we can do better? While the iPad has turned out to be much more than a way to save trees, porting print to digital was widely expected to be a big part of the package, at least for news publishers who are struggling to hold their own in a dying market and presumably for the 6 million people that a recent study by Forrester Research indicated will buy e-readers this year. Media reports released pre-show strongly suggested that what we now know as the iPad could be nothing less than the messiah of the publishing industry. The Wall Street Journal stated on Tuesday that âBook publishers were locked in 11th-hour negotiations with Apple Inc. that could rewrite the industry's revenue model after the technology giant unveils its highly anticipated tablet device Wednesday ⌠Apple's new multimedia tablet device ⌠is trying to change the way much of traditional media is delivered.âThe reality was less than a revolution, at least as far as traditional media was concerned. Itâs a beautiful new device, but the media it delivers still looks the same. Enthroned on stage in his comfy chair, Steve correctly positioned the iPad as a device that creates âa third category between a laptop and a smartphone.â A device that lets you browse the web, email, look at and share photos, watch videos, play games, enjoy music and read e-books. Altogether, itâs a great package. But if you primarily want an e-book reader (because you already have, for example, an iPhone and a MacBook), the iPad isnât the most compelling choice. The iPad does boast a color display, unlike any other reader, which is a big step forward. Steve said Apple has partnered with five publishers to deliver content: Penguin, Macmillan, Simon & Schuster, Harper Collins and Hachette. Representatives from none of these companies joined Steve on stage.iBooks supports the open ePub format, unlike Amazonâs Kindle which uses a proprietary format. This is great, because iPad owners will be able to download public domain books from Google and check out books from their local library, as well as buy books from Appleâs own book store. But other e-book readers use the same ePub format, so that doesnât give Apple a big edge.The demo screens indicated that the eBooks from the iBookstore will be priced from $9.95 to $14.95, other digital book stores tend to hold the line at $9.95. In fact, Ted Kennedyâs True Compass: A Memoir, shown on stage at the iPad demo, is sold for $9.95 at Amazon (Kindle edition) and $14.95 at the Apple iBooks store (according to the price shown on screen during the demo). iBooks has all the basic features youâd expect in a digital reader app with a few nice refinements, for example rather than just changing the size of the font you can change the actual font itself as well as its size. You tap right or left, or drag, to flip though pages. All other e-book reading devices offer free wireless downloads for books -- thereâs no need to pay a monthly access fee. iPad users will have to cough up the cash, for 250MB of any type of content a month, itâll be $14.99 or $29.99 for unlimited data. Service provided by AT&T, and iPads have WiFi and (at least some models) have 3G. All the currently available e-Book readers have 3G, most have WiFi. The pricing model makes sense, because the iPad isnât a dedicated book reader, but itâs a drawback for those who are primarily interested in using it as a reader.Priced at $499 for the basic model, the iPad is twice as much as Amazonâs Kindle or Barnesâ and Nobleâs Nook. Thatâs more than fair -- the iPad does much more than either of the readers. But again, if all you wanted was an e-book reader, the iPad is a costly choice.As a total package, the iPad is undeniably cool. As the savior of the publishing industry, the promised messiah that was going to take us forward into a world of interactive books and new ways of producing and interacting with text content⌠it falls short. The Form Factor: The iPad: 9.56âx 7.47âx 0.5 inch,1.5 pounds, 9.7 inch ED-backlit color screen with 1024-by-768-pixel resolution at 132 pixels per inch (ppi), 1GHz Apple A4 chip, 16-64 GB flash storage, pricing starts at $499 for 16 GB of storage and Wi-Fi, tops out at $829 for 64GB of storage with WiFi and 3G.The E-book Reader Competition: Kindle 2 $259.00Amazon10.2 ounces, 8" x 5.3" x 0.36", 6" diagonal black and white E Ink display with no backlighting. 3G Wireless connectivity at no charge (paid by Amazon), battery life up to 1 week with wireless on, up to 2 weeks with wireless off. MP3 player. The New Oxford American Dictionary included. Holds up to 1,500 books (memory is not expandable), text size is adjustable, the Kindle can read aloud to you and has a QWERTY keyboard. The Kindle 2 has a basic web browser thatâs usable with text-centric sites. Amazon claims over 400,000 books are available for the platform âand we are adding more every day.â New York Times Best Sellers and most new releases are $9.99, users can download a chapter or two of books they are interested in for free, and buy the book if they are interested in reading further. The Kindle uses a proprietary e-book format. Amazon recently announced that it would be releasing a Kindle Development Kit in February which gives developers access to programming interfaces, tools and documentation to build active content for Kindle. The Kindle DX has a 9.7" diagonal e-ink screen and is 10.4" x 7.2" x 0.38". It holds 3,500 books and sells for $489.00 Nook$259Barnes and Noble(Expected ship date Feb 12)11.2 ounces, 7.7âx4.9âx 0.5â, 6" diagonal black and white E Ink display with no backlighting, 3.5 inch color navigation touch screen, 3G wireless and Barnes & Noble in-store Wi-Fi (B&N promises that Nook owners will be able to read entire e-books for free in the store). Up to 1,500 eBooks, with a 16GB MicroSD card capacity is expanded to up to 17,500 eBooks. Includes MP3 player.The Nook supports industry standard e-book formats so users can also download the free public domain titles from Google Books and check out library books as well as purchase books from B&Nâs bookstore and independent publishers. Reviews have indicated slow performance and limited battery life. The Nookâs most exciting features are centered on its use of non-proprietary formats and open source software. The Daily Edition $399.99Sony 12.75 ounces, 5â x 8-1/8â x 0.6", 7 inch black and white E Ink display, 3G wireless (free), memory expandable to 32 GB, Microsoft Windows 7 operating system, Sony claims 7 days of use with wireless on, up to two and a half weeks with wireless off. No internet browsing, no text to speech.Like the Nook, Sonyâs reader supports industry standard e-book formats, but its store offers a smaller selection of recent books, and fewer periodicals and newspapers, than Amazon or B&N. Itâs bigger screen is the standout feature here, and doesnât seem to justify the significantly higher price point.
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Analyst: Apple to be 'nimble' on iPad pricing, athletic on pommel horse
Apple's $499 starting iPad price tag is already lower than many people -- and a few competitors -- expected, but apparently Steve and company have left themselves a little wiggle room: Credit Suisse analyst Bill Shope says that Apple told him it'll remain "nimble" when it comes to iPad pricing, suggesting that the price could drop if sales don't meet targets. That's not a hugely surprising thing to say, considering Apple's trying to be the first to achieve real success with a 'tweener device and strong pressure from netbooks, laptops, and smartphones threatens to collapse the space entirely, but a lot of people are taking it to mean some kind of drop is a done deal -- particularly since Apple cut the price of the first-gen iPhone by $200 just a few months after it launched and saw already-solid sales triple. We're honestly not so sure, though: Apple always tells investors that it's confident in how its products are priced but responsive to market changes, and it's not like a smaller price cut boosted the Apple TV into hit product territory. We'll see what happens after the iPad actually goes on sale -- we doubt we'll see any changes for another few months at least.Analyst: Apple to be 'nimble' on iPad pricing, athletic on pommel horse originally appeared on Engadget on Mon, 08 Feb 2010 15:21:00 EST. Please see our terms for use of feeds.Permalink All Things Digital | Wall Street Journal | Email this | Comments
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Wall Street Breakfast: Must-Know News
Apple: What recession? Apple (AAPL) customers continued to buy up iPhones and Mac computers, seemingly ignoring the recession and helping the company's Q4 results shine. "We are thrilled to have sold more Macs and iPhones than in any previous quarter," Steve Jobs said. Apple easily exceeded analysts' Q4 earnings expectations as back-to-school promotions drove sales: revenue grew 25% to $9.87B versus last year's quarter, while net income surged 47% to $1.67B (see more numbers below). Apple shares rose 7.2% to $203.43 in after-hours trading; the stock has more than doubled this year. Read Apple's earnings call. Lehman's Europe unit readies $90B claim. Lehman's European arm, now managed by PricewaterhouseCoopers, is preparing a new $90B claim against the U.S. parent of the failed bank - bringing the unit's total claims against various Lehman entities globally to $208B. PwC fees for managing the wind-down so far: €168M ($253M). Icahn targets CIT. Corporate raider Carl Icahn turned up the heat on CIT Group (CIT) Monday, slamming the company for unfairly favoring large bondholders with its revised debt exchange offer and saying he was prepared to offer a better deal by lending the company $6B and saving it $150M in fees. In a letter to CIT's board, Icahn said the proposed alternative $6B loan package is "the latest example of incompetent and unconscionable behavior" from CIT's board. Prospective lenders, he says, would get well in excess of what the current syndicated loan market should dictate, in exchange for voting their debt in favor of the company's reorganization plan. Morgan confirms Van Kampen sale to Invesco. Morgan Stanley (MS) confirmed Monday that it's selling its retail asset-management business, including the Van Kampen fund unit, to Invesco (IVZ), for $1.5B in stock and cash, including a 9.4% stake in Invesco. "By taking a minority interest in Invesco, Morgan Stanley will be able to realize significant value in partnership with a world-class player," co-president James Gorman said. The deal, rumored for months and expected to close in mid-2010, will remove some sales limits that Van Kampen managers faced since Morgan's JV with Smith Barney closed. Bernanke warns U.S., Asia to mind the gap. Fed chairman Ben Bernanke called on U.S. and Asian leaders to "avoid ever-increasing and unsustainable imbalances in trade and capital flows," saying the U.S. financial system is currently "overwhelmed" by an inflow of capital. Speaking Monday at a San Fran. Fed conference on Asia, Bernanke warned that while the U.S. trade deficits with developing countries are not as onerous as they were two years ago, they are still a threat to the global economy. World leaders believe global economic growth must begin to depend less on the U.S. consumer. Fed tests exit tool... As global central banks begin to weigh inflation risks, the Fed confirmed Monday it has begun experimenting with "triparty" reverse repo agreements, but says their actual use is not imminent. In a reverse repo, the Fed pledges mortgage-backed securities and Treasurys it bought as collateral for short-term loans, thereby draining cash from the financial system. Reverse repos are normally the domain of the 18 primary dealers; the experiment involves extending that to deals with the $2.5T money-market mutual fund business. ... while Australia says inflation risk looms. The Reserve Bank of Australia believes that the risk to global economic growth is passing, and that the bigger threat is now inflation. "Keeping interest rates at very low levels for an extended period could therefore threaten the achievement of the inflation target over the medium term," according to minutes from its Oct. 6 meeting, released Tuesday. At the meeting, the RBA unexpectedly raised its policy rate by 0.25% to 3.25% - its first such hike since March 2008, and the first in a major developed economy since the start of the financial crisis last year. Galleon faces massive withdrawals. Clients of hedge-fund giant Galleon jumped ship Monday after Friday's arrest of co-founder Raj Rajaratnam, forcing Galleon to unload some of its holdings, including tech stocks. So far, investors have requested $1.3B of the total $3.7B Galleon manages, and two of its brokerage firms - Bank of America (BAC) and Barclays (BCS) - have cut off relations with the firm. In a letter to investors and employees Monday evening, Rajaratnam said the charges "are, without exception, entirely baseless," and vowed to defend the firm. Financial sector fraud on the rise. Fraud is increasing twice as fast in the financial sector as in other sectors, according to Kroll's annual Global Fraud Report, released Monday. In a survey, senior executives said North America had been particularly hit hard by the financial crisis: the average financial services company lost over $15M to fraud over the past three years. The report comes as sources say investigators plan to charge 10 more securities dealers with insider trading, some linked to Galleon Group, which is at the center of one of the biggest-ever undercover operations into illegal trading (see above). Bair speaks up for small banks. FDIC head Sheila Bair warned Monday small community banks are struggling to compete against their too-big-to-fail rivals. "Too big to fail has become worse," she said, "it's become explicit when it was implicit before." Bair contends government guarantees create competitive disparities between large and small banks, because "everybody knows small institutions can fail," making it more expensive for them to raise capital and secure funding. China fires new salvo in trade tussle. In the latest in a series of China-U.S. trade disputes, China's Ministry of Commerce took preliminary measures Monday to impose tariffs of as much as 36% on certain nylon imports from the U.S., saying the imports have damaged the domestic industry. The ruling affects imports of Nylon 6, used to manufacture a variety of products, including toothpaste and chiffon. Affected U.S. firms include BASF's (BASFY.PK) U.S. arm and Honeywell (HON). Group support for Microsoft/Yahoo tie-up. In an open letter, advertising industry heavyweights urged the Department of Justice to fast-track approval of a Microsoft (MSFT) / Yahoo (YHOO) tie-up, saying the potential benefits for advertisers, marketing services agencies, Web site publishers and consumers are "too important to wait for." Google (GOOG) remained more circumspect, perhaps because it doesn't want to alienate customers. Earnings: Before Open Bank of New York Mellon (BK): Q3 EPS of $0.54 beats by $0.06. Revenue of $3.33B (+3.7%) vs. $3.18B. Provision for credit losses goes to $147M from $61M last quarter. (PR) Biogen Idec (BIIB): Q3 EPS of $1.12 beats by $0.08. Revenue of $1.12B (+2.8%) in-line. Shares -1.9% premarket. (PR) BlackRock (BLK): Q3 EPS of $2.10 beats by $0.17. Revenue of $1.14B (-13.2%) in-line. "Improving investor sentiment was the most important factor in third quarter results. Clients are putting money back to work in the markets, driving inflows in equities and bonds, and outflows in money market funds industry-wide." Shares +0.9% premarket. (PR) Brinker International (EAT): FQ1 EPS of $0.17 beats by $0.02. Revenue of $778M (-20.9%) vs. $766M. Cost of sales fell to 28.2% from 28.4% last quarter. (PR) Caterpillar (CAT): Q3 EPS of $0.64 beats by $0.58. Revenue of $7.29B vs. $7.49B. "We believe the third quarter marked the low point for Caterpillar sales and revenues in what has been the toughest recession since the 1930s. We are seeing encouraging signs that indicate a recovery may be underway." Shares +4.4% premarket. (PR) China Mobile (CHL): Q3 net profit of 28.6B yuan ($4.2B), up 2.6% from 27.9B last year, short of consensus of 29.2B. Sales rose 9% to 114.1B yuan. Ebitda rose 5% to 57.8B yuan, short of 58.1B consensus. (Bloomberg) China Telecom (CHA): Q3 profit of 2.39B yuan ($350M), down from 4.6B last year, and well short of consensus of 3.68B. Ebitda profit margin slipped to 41.1% from 42.3%. (Reuters) Coach (COH): FQ1 EPS of $0.44 beats by $0.05. Revenue of $761M (+1.1%) vs. $754M. (PR) Coca-Cola (KO): Q3 EPS of $0.82 in-line. Revenue of $8.04B (-4.2%) vs. $8.11B. "We expect the consumer to continue facing economic uncertainties into 2010 and for consumer sentiment to recover slowly.: Shares -1.2% premarket. (PR) Comerica (CMA): Q3 EPS of -$0.10 beats by $0.43. $311M provision for loan losses, unchanged from Q2. (PR) Diamondrock Hospitality (DRH): Q3 FFO of $0.19 beats by $0.02. Revenue of $138M (-14.6%) vs. $134M. (PR) DuPont (DD): Q3 EPS of $0.45 beats by $0.12. Revenue of $5.96B (-18.3%) vs. $6.14B. Sees full-year EPS of $1.95-2.05 vs. $1.83. "We see overall sequential improvement in our industrial businesses as market conditions begin to firm." (PR) Forest Laboratories (FRX): FQ2 EPS of $0.85 misses by $0.01. Revenue of $963M (+4%) vs. $1B. (PR) Great Atlantic & Pacific Tea Company (GAP): FQ2 EPS of -$1.18 misses by $0.47. Revenue of $2.06B (-5.4%) vs. $2.13B. "The current challenging economy continues to impact our business. The macro headwinds including rising unemployment, intensifying price competition and now also deflation are creating an even more difficult short-term economic environment." Shares -9.7% premarket. (PR) Illinois Tool Works (ITW): Q3 EPS of $0.60 beats by $0.07. Revenue of $3.58B (-19.8%) in-line. Operating margin 13.5% up from 9.9% last quarter. (PR) Invesco (IVZ): Q3 EPS of $0.24 in-line. Revenue of $706M vs. $687M. Shares +3.6% premarket. IVZ announced yesterday it would acquire Morgan Stanley's (MS) retail asset management business, including Van Kampen Investments." (PR) Jefferies Group (JEF): Q3 EPS of $0.42 beats by $0.14. Revenue of $M (+154.5%) in-line. Shares +6.1% premarket. (PR) Journal Communications (JRN): Q3 EPS of $0.02 misses by $0.06. Revenue of $105M (-22.9%) vs. $108M. (PR) LaBranche (LAB): Q3 EPS of -$0.22 misses by $0.27. Revenue of $M in-line. Shares -4.9% premarket. (PR) Lockheed Martin (LMT): Q3 EPS of $2.07 vs. consensus of $1.83. Revenue of $11.06B (+4.5%) vs. $11.4B. (PR) Lexmark (LXK): Q3 EPS of $0.65 beats by $0.20. Revenue of $958M (+6%) vs. $901M. Gross margin 32.7% vs. 32.5%. Sees Q4 EPS of $0.50-0.60 vs. $0.47, revenue "up slightly." Stronger than expected customer demand drove better than expected growth. (PR) Marshall & Ilsley (MI): Q3 EPS of -$0.68 in-line. Average loans and leases fell 6% to $47.1B. "There are some encouraging early signs that credit quality is improving, but we realize it will take a few more quarters to fully address our problem loans." Announces $775M common stock offering. (PR) Parker-Hannifin (PH): FQ1 EPS of $0.45 beats by $0.28. Revenue of $2.24B (-27%) vs. $2.17B. Shares +4.9% premarket. (PR) Pfizer (PFE): Q3 EPS of $0.51 beats by $0.03. Revenue of $11.62B (-2.9%) vs. $11.41B. Sees full-year EPS of $2.00-2.05 vs. $1.98. (PR) Precision Castparts (PCP): FQ2 EPS of $1.54 misses by $0.09. Revenue of $1.3B (-27.6%) vs. $1.4B. "From a top-line perspective, overall sales declines seem to be bottoming out in the second quarter." (PR) Regions Financial (RF): Q3 EPS of -$0.37 misses by $0.12. Revenue of $1.62B (-20.3%) vs. $1.58B. Allowance for credit losses +2.9% to $1.025B. Shares +0.35% premarket. (PR) Sherwin Williams (SHW): Q3 EPS of $1.51 beats by $0.16. Revenue of $2B (-12%) in-line. Sees Q4 EPS of $0.35-0.55 vs. $0.61, and revenue down 8-12% Y/Y. (PR) State Street (STT): Q3 EPS of $1.05 beats by $0.01. Revenue of $2.24B (-19.3%) in-line. Shares -0.75% premarket. (PR) UAL (UAUA): Q3 EPS of -$0.43 beats by $0.51. Revenue of $4.43B (-20.3%) in-line. Shares +8.1% premarket. (PR) UnitedHealth (UNH): Q3 EPS of $0.89 beats by $0.12. Revenue of $21.7B (+7.6%) vs. $21.56B. (PR) United Technologies (UTX): Q3 EPS of $1.14 beats by $0.02. Revenue of $13.38B (-11.3%) in-line. "Order rates for most of our businesses have largely stabilized, although the shape of recovery is still uncertain." (PR) Western Union (WU): Q3 EPS of $0.33 beats by $0.01. Revenue of $1.31B (-4.6%) in-line. Says recent stabilization trends are encouraging. (PR) Earnings: Mon. After Close Apple (AAPL): FQ4 EPS of $1.82 beats by $0.40. Sales of $9.87B vs. $9.2B. Sees FQ1 EPS of $1.70-1.87 vs. consensus of $1.91 on sales of $11.3-11.6B, in line. Sold 3.05M Macs, 10.2M iPods, and 7.4M iPhones during quarter. Gross margin 36.6%. Shares +5.9% AH. (PR) Atheros Communications (ATHR): Q3 EPS of $0.46 beats by $0.08. Revenue of $157M (+13%) vs. $147M. Shares +2.1% AH. (PR) Boston Scientific (BSX): Q3 EPS of $0.19 beats by $0.05. Revenue of $2.03B (+3%) vs. $2.04B. Sees Q4 EPS of $0.17-0.21 vs. $0.17. Expects full-year adjusted EPS of $0.75-0.79 vs. $0.56. Shares -7% AH. (PR) JDA Software Group (JDAS): Q3 EPS of $0.40 beats by $0.04. Revenue of $96M (-3%) vs. $92M. Shares -2.8% AH. (PR) Lincare (LNCR): Q3 EPS of $0.53 beats by $0.01. Revenue of $393M (-3%) vs. $391M. Shares -0.8% AH. (PR) Packaging Corp. of America (PKG): Q3 EPS of $0.25 in-line. Revenue of $554M (-11%) vs. $549M. Sees Q4 EPS of $0.13 vs. $0.17. Shares -7.4% AH. (PR) Steel Dynamics (STLD): Q3 EPS of $0.30 beats by $0.07. Revenue of $1.2B (-54%) vs. $1.1B. Shares +2.6% AH. (PR) Texas Instruments (TXN): Q3 EPS of $0.42 beats by $0.03. Revenue of $2.9B (-15%) vs. $2.8B. Sees Q4 EPS of $0.42-0.50 vs. $0.40. "Our balance sheet is strong and has allowed us to opportunistically make investments in Analog and Embedded Processing throughout this downturn that should provide returns for years to come." Shares +2% AH. (PR) UDR Inc. (UDR): Q3 FFO of $0.31 beats by $0.01. Rental income of $150M (+2%) vs. $149M. Lowers full-year FFO guidance to $1.14-1.20 from $1.23-1.35, vs. consensus of $1.27. Shares -0.5% AH. (PR) Volterra Semiconductor (VLTR): Q3 EPS of $0.19 misses by $0.01. Revenue of $29.7M (-3%) in-line. Shares -10.3% AH. (PR) Werner (WERN): Q3 EPS of $0.26 beats by $0.06. Revenue of $429M (-27%) vs. $428M. Shares +3.3% AH. (PR) Zions Bancorp (ZION): Q3 EPS of -$1.41 misses by $0.17. Revenue of $753M (+29%) vs. $633M. Shares -1.1% AH. (PR) Today's MarketsAsian markets were mostly higher Tuesday, while Europe stocks were mostly lower. Nasdaq futures are well higher on the strength of Apple's (AAPL) blowout Q4; other indexes are flat.
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With iPad Content Deals Up in the Air, Apple Begins to Temper Expectations
The April 3 release date for the iPad is fast approaching, and a new report finds that Apple is starting to temper their own expectations for the device as they struggle to get content deals inked.MacRumors has the details on the new report from The Wall Street Journal, which finds Apple backing off of their previous high expectations as they rush to finalize deals with content providers for the April 3rd launch of the iPad. The report finds that Apple is setting aside television content and iPad-specific content such as newspaper, magazine and textbook deals to focus on what they can lock by the deadline.âYet the company is still negotiating with media companies for a price cut on TV shows that people can download onto the device, said people familiar with the matter,â the report reads. âApple also hoped to work closely with newspaper, magazines and textbook publishers on new ways to digitally present print content on the iPad, but has for now put the effort on backburner in favor of focusing on other content, said one of those people.âAs previously reported here and elsewhere, many potential content partners have been reluctant to sign up under Appleâs terms -- as much as they want to bring their content to new devices such as the iPad, theyâre wary about risking future revenue streams under Cupertinoâs terms.MacRumors notes that e-books have likely received most of Appleâs immediate attention, since the iBooks app will debut alongside the iPad -- or rather, be available to download as soon as new owners boot their device. The new iBookstore is surely one of the key focus areas for Apple in their race against time.The good news for Apple, if reports are to be believed, is that the company is rumored to have already sold âhundreds of thousandsâ of iPads since the preorders began last Friday -- that means the device has the potential to outsell the original iPhone in the first three months of sales.Not bad for a device that many were quick to dismiss when it was unveiled in late January, eh?