Prudential: Apple to release two iPhone models, one with WiFi

[AppleInsider]

Apple Computer plans to introduce two iPod-based cell phone models in the first quarter of 2007 that it will initially manufacture in limited quantities, says one analyst.

In a research note released to clients on Monday, Prudential Equity Group analyst Jesse Tortora said his checks indicate that one model will be a smart phone, including integrated keyboard, video and music capability, while the other model will be a slimmer phone with just music functionality.

The analyst, who remained mum on his sources, said at least one of the models will include WiFi wireless capabilities.

"Although these phones represent significant upside earnings potential for the company, there are some concerns regarding market acceptance and battery life, given the number of functions included in the phones," he wrote. "Our checks indicate that Apple will produce these phones in limited quantities initially as a market test vehicle."

For Apple's fourth fiscal quarter ended September, Tortora expects the Cupertino, Calif.-based company to post some upside to street estimates, driven primarily by Mac sales strength and favorable component cost declines. He's modeling revenue of $4.8 billion and earnings-per-share of $0.55, ahead of consensus estimates of $4.7 billion and $0.51.

"While we expect Mac momentum to continue in the [December quarter] (forecasting 1.9 million units), we are more cautious on the outlook for iPod sales and on Apple’s overall margin prospects," the analyst wrote.

While Tortora said checks indicate Apple is preparing its ODM partners for production orders of as many as 21 million iPod units during the December holiday quarter, he said other checks suggest that iPod unit shipments will come in closer to 16 million units for the quarter.

"Moreover, while our checks indicate that production of Apple's new wide screen video iPod will begin in the [December quarter], we do not expect the product to be released until early next year," he continued. "All told, we would not be surprised to see Apple scale down ODM production plans as the quarter moves on, and think that iPod sales could fall short of investor expectations."

Tortora, who maintains a Neutral rating and $74 price target on shares of Apple, recommended that investors remain on the sidelines until he gets "better visibility into the competitive dynamics of the media player space" and its new product ramps.

[ View this article at AppleInsider.com ]

[mbaynham]

well here's one to ponder over...

[gugy]

well another analyst full of BS.
come on, these guys don't know any more than any of us in this forum.

[mbaynham]

Originally Posted by gugy

well another analyst full of BS.
come on, these guys don't know any more than any of us in this forum.

yer but there getting paid to chat a load of bollocks. man, if i had that job, i would be a millionaire by now..

[McHuman]

Originally Posted by AppleInsider

Tortora recommended that investors remain on the sidelines until he gets "better visibility into the competitive dynamics of the media player space".

[ View this article at AppleInsider.com ]

Thats just a fancy way of saying he wants to wait to see how the Zune does.

[Caribou Killa]

The iPhone I'm a little excited about. Especially the more expensive one, though with my small electronics funds I doubt I'll be getting any phone anytime soon. The widescreen iPod is rediculous. We shouldv'e had it at "It's Showtime!" Just how reliable are these analysts though? Anyone?

[SpamSandwich]

Re: iPhone

The important point was completely glossed over by the analyst... can you squirt a video to another iPhone?

[TenoBell]

Its all coming together. I will be released from the shackles of my cell phone plan January 07. If Apple offers a smartphone they will get $300 from me.

at least one of the models will include WiFi wireless capabilities

Would not be worth it if it kills battery life. Plus if Apple works with T-Mobile they will have 3G capability. WiFi isn't necessary.

The widescreen iPod is rediculous. We shouldv'e had it at "It's Showtime!" Just how reliable are these analysts though? Anyone?

Apple would likely want to keep a wide screen iPod as close as possible the same size, weight, and battery life of the current iPod.

Wide screen devices available right now are either heavier or thicker and have less battery life than the current iPods. Apple is likely waiting for technology and cost of components to come to a place where they feel they can offer a quality wide screen iPod at a reasonable cost.

[SpamSandwich]

If iPhone doesn't work with T-mobile, Steve will never get me on board.

[Caribou Killa]

Excuse my cell phone ignorance but whats so great about T Mobile?

[Bear]

Originally Posted by Caribou Killa

Excuse my cell phone ignorance but whats so great about T Mobile?

Nothing at all.

All the cell phone companies in the US suck. How much they suck depends on where you live and what your needs are. In some areas T Mobile may be great for local coverage, elswhere it might be Verizon. And of course voice and data coverage can be different in an area for a carrier.

So people need to check out the cell phone company and plan based on where they need to use it. And not based on someone liking a carrier in a city they never go to.

[bdj21ya]

Originally Posted by Bear

Nothing at all.

All the cell phone companies in the US suck. How much they suck depends on where you live and what your needs are. In some areas T Mobile may be great for local coverage, elswhere it might be Verizon. And of course voice and data coverage can be different in an area for a carrier.

So people need to check out the cell phone company and plan based on where they need to use it. And not based on someone liking a carrier in a city they never go to.

I definitely agree that coverage in your area is probably the most important. However, I was always impressed with T-Mobile's customer support. I also loved the #min# and #bal# features for checking my minutes/balance.

[monkeyastronaut]

Originally Posted by AppleInsider

one model will be a smart phone, including integrated keyboard, video and music capability, while the other model will be a slimmer phone with just music functionality.

*spits orange juice all over the table* no, no... this can't be right. which one will be the candy bar shaped one? will there be a brown one??

get me teh WU on the phone now!

[melgross]

Originally Posted by Caribou Killa

Excuse my cell phone ignorance but whats so great about T Mobile?

The Ads. She's hot. The service isn't.

[eji]

The prospect of an integrated keyboard is what's making me drool and want to ditch my Zaurus. Most smartphones and PDAs either lack a keyboard or have one that's barely functional, and it's the main reason I went with my Z a few years ago. But I'd ditch this outdated, jury-rigged Linux brick in a second for a well designed, functional Apple smartphone.

[Clive At Five]

I have yet to see a phone w/ integrated keyboard which pleases me, both functionally and aesthetically. Unless Apple impresses me with something shockingly amazing, no smart phone user will I be.

-Clive

[bikertwin]

Originally Posted by Clive At Five

I have yet to see a phone w/ integrated keyboard which pleases me, both functionally and aesthetically. Unless Apple impresses me with something shockingly amazing, no smart phone user will I be.

-Clive

Me, too. I'll probably stick to the music-only iPhone. That way I can replace my phone and iPod.

My Palm Tungsten I can carry around separately, when needed... unless the smart iPhone is suprisingly small.

[melgross]

My Treo 700p is pretty good—except for the keyboard.

I perplexes me as to why someone would think that such small keys should be domed rather than dished. The keys are so close that I hit more than one when pressing with my finger. I don't have big fingers. When I try my nail, it slides off. You can't use the stylus for the same reason.

If they were dished then you could use a nail, or the stylus.

I installed "Mobile Write" which is somewhat like "Graffiti" except that the top third of the screen is for numbers, and the rest is for letters, etc.

Don't forget that Apple has "Ink", which has never really been used, or pushed. Perhaps now is the time for it.

[mugwump]

Any touchscreen device requires more device thickness than a regular one. It will be interesting to see if they go for the thinner form instead.

An Apple smartphone running mobile X will be great. I look forward to it.

[melgross]

Originally Posted by mugwump

Any touchscreen device requires more device thickness than a regular one. It will be interesting to see if they go for the thinner form instead.

An Apple smartphone running mobile X will be great. I look forward to it.

But not much of a difference. A sixteenth of an inch is all that is needed with a small screen.

[anantksundaram]

Originally Posted by SpamSandwich

If iPhone doesn't work with T-mobile, Steve will never get me on board.

I've got news for you: Apple's phone will be GSM, and an exclusive with T-Mobile (I am bummed, since I just signed on to a stupid 2-year Verizon agreement).

[Kenneth]

yea yea.. yet another iPhone article.

Since, I'm happy with my Nokia S60 smartphone and Sidekick 3, I don't think I will actually buy an Apple-branded iPhone. Too little, too late.

[BRussell]

Originally Posted by TenoBell

Apple would likely want to keep a wide screen iPod as close as possible the same size, weight, and battery life of the current iPod.

Maybe, but I think it's at least possible that the videoPod will be added to the iPod line-up, rather than replace the current iPod. In fact, I think that's likely, given the price drop on the recent iPod release. If that happens, it could be almost like a small portable TV with a laptop-size VGA screen, rather than a new iPod.

[OfficerDigby]

What I don't get is his models for Macs being sold looks fantastic, fantastic growth etc (1.9M Macs!) - but apparently it means nothing if Microsoft sell a Zune or until Apple releases an iPhone or two.
WTF? What Mac market share growth would this analyst need to see for him to see the point in investing based upon it? I don't get it!

[mrtotes]

Keyboards on mobile devices are crap.

I'm looking forward to seeing Apple's solution.

[SteveGTA]

this doesn't sound Apple-like, this guy is full of shit.

1) I doubt they'll release two different phones right off the batt. maybe two phones with minor differences but two totally different designs.. no..
2) Keyboard? i think not..
3) Apple is not a company that throws out crappy products to "test" the market. They try to do it right the first time. If they wanted to test the market I'm sure theyd already have a phone out.

[aegisdesign]

Too late. My Sony Ericsson p990i arrives on Thursday. It cost £49. http://shop.orange.co.uk/shop/show/h...il/pay_monthly

Maybe next year once they've worked out the kinks. I still need a new small phone though for when I don't want to carry a chunky smartphone so maybe if they do an iPhone Nano and it's next to free on pay-as-you-go and easy unlocked I'll try one of those. In the meantime, I'll stick with the excellent UIQ phones which in general work better than any other smartphones with MacOSX and iSync.

[TenoBell]

Maybe, but I think it's at least possible that the videoPod will be added to the iPod line-up, rather than replace the current iPod. In fact, I think that's likely, given the price drop on the recent iPod release.

That's possible. But I think they won't launch until the time is right to do so.

I cannot see them bringing a full screen iPod that is significantly heavier or have significantly less battery life and sell it for more than the current iPod.

[aegisdesign]

The problem I have with the full video iPod is where you're expected to get the content from. Music CDs can be ripped easily because they have no DRM. DVDs do. Plus it takes a lifetime to transcode a DVD to ipod sized video unless you've got the latest top end kit.

That leaves buying videos from the iTunes store. Something you can only do in the USA currently and it's incredibly limited.

So, for all but the geeks who know how to illegally rip DVDs and Americans, there's no content AT ALL for a video iPod. Music is still where it's at.

[freakboy]

uh.. video content: insert DVD, wake up. Video content ready. What's the problem?

[SpamSandwich]

Originally Posted by Caribou Killa

Excuse my cell phone ignorance but whats so great about T Mobile?

If you travel internationally they have far greater coverage.

[SpamSandwich]

Originally Posted by melgross

The Ads. She's hot. The service isn't.

If you're looking for lousy service and coverage, just get Sprint.

[SpamSandwich]

Originally Posted by anantksundaram

I've got news for you: Apple's phone will be GSM, and an exclusive with T-Mobile (I am bummed, since I just signed on to a stupid 2-year Verizon agreement).

How do you "know" this?

[jasong]

I'd go for this if it had Palm or Windows compatibility built in. I have a treo and use numerous medical apps on it, and I am not willing to carry two devices. The likelihood of any company porting their Palm/Windows apps to the iPhone is pretty small (unless they just take over the market). Of course I have two devices to carry around now as it is, iPod and Treo, maybe I'll upgrade to an iPhone and get a cheap Palm for my med apps.

[Skwidspawn]

I might be the only person in this forum with something positive to say about this, but I LOVE the idea. Right now I carry a wallet, Treo, iPod, and keys in my pockets. That means that I carry around 4 pockets-worth of electronics, and only 3 available pockets (I don't use my other back pocket, don't want to crush something or stab myself). I think that an iPod phone "iPhone" is a natural progression. Pretty much everyone with an iPod has a cell-phone these days, making a product that combines the two together is extremely smart on Apple's part. The idea of having two models is also ingenious. A base model for minimalists who just want iPod Nano capability/capacity as well as a simple "does it's job well" cell-phone. A Smartphone for people who want 5G iPod capabilities and also want to be able to take notes, email, play games, surf the web, etc... on their device.

If Apple makes a Smartphone that works seemlessly with a Mac (and Windows) I would be very willing to shell out $500 for it since a plain phone with the same capabilities plus an iPod would run you well over that price!

->Jason: If such a device is in the works from Apple you can be assured that they will have a very simple way to program apps for the device. There would be a ton of early adopters out there who would love to get their hands on the device. You can be sure that it would be beautiful and very appealing to people. I wouldn't be surprised if companies that make Palm apps would be able to port such apps over to the iPhone fairly easily enough.

[Aries 1B]

Originally Posted by Skwidspawn

I might be the only person in this forum with something positive to say about this, but I LOVE the idea. Right now I carry a wallet, Treo, iPod, and keys in my pockets. That means that I carry around 4 pockets-worth of electronics, and only 3 available pockets (I don't use my other back pocket, don't want to crush something or stab myself). I think that an iPod phone "iPhone" is a natural progression. Pretty much everyone with an iPod has a cell-phone these days, making a product that combines the two together is extremely smart on Apple's part. The idea of having two models is also ingenious. A base model for minimalists who just want iPod Nano capability/capacity as well as a simple "does it's job well" cell-phone. A Smartphone for people who want 5G iPod capabilities and also want to be able to take notes, email, play games, surf the web, etc... on their device.

If Apple makes a Smartphone that works seemlessly with a Mac (and Windows) I would be very willing to shell out $500 for it since a plain phone with the same capabilities plus an iPod would run you well over that price!

Originally Posted by Skwidspawn

->Jason: If such a device is in the works from Apple you can be assured that they will have a very simple way to program apps for the device. There would be a ton of early adopters out there who would love to get their hands on the device. You can be sure that it would be beautiful and very appealing to people. I wouldn't be surprised if companies that make Palm apps would be able to port such apps over to the iPhone fairly easily enough.

Look at your Dashboard content. I am convinced that a 'hidden' reason for the development of Widgets was not only to feed Dashboard, but to have a readymade body of software to feed a Video iPod and/or the iPhone and/or the iTablet.

...I hope.

V/R,
Aries 1B

[wirc]

Originally Posted by SteveGTA

this doesn't sound Apple-like, this guy is full of shit.

1) I doubt they'll release two different phones right off the batt. maybe two phones with minor differences but two totally different designs.. no..
2) Keyboard? i think not..
3) Apple is not a company that throws out crappy products to "test" the market. They try to do it right the first time. If they wanted to test the market I'm sure theyd already have a phone out.

1. Actually doesn't this make perfect sense if you go with Steve's idea of a grid for business and consumer products. Imagine a larger, possibly aluminum smartphone for business and a smaller candy-bar phone for most people. Integrating a phone, pda, and computer under a killer OS would be a huge incentive to some business owners to switch platforms, if only from some variant of the halo effect. Add the media player functionality to it for some smooth jazz and you'll have executives clamoring for it, since they can plug it into their BMWs or take it with them in transit.

A consumer phone would probably be just a good-looking phone with good menus and useful features.

2. Perhaps thinking outside the box is a good idea for this one. I have faith in Mssrs. Ive and Jobs to come up with something more innovative, probably also something very obvious that we are missing. The first thing they teach you in a design school is how to break your preconcieved notions and look at things in a totally different way. It's pretty disturbing how much junk is piled up over more obvious answers by years of thinking in one particular way. Consider, for example, the way people often percieve OS X being too simple or not linear enough, which is a product of hand-holding MS technology.

3. Maybe they already have. Why else would they drop such an ugly, unworkable POS as the ROKR E1. I can't imagine that Steve would let that out without some kind of ulterior motive. The iTunes on Motorola phones deal looks to me like an experimentation phase that is to be merged with iPod and a dash of OS X.

[Skwidspawn]

Originally Posted by Aries 1B

Look at your Dashboard content. I am convinced that a 'hidden' reason for the development of Widgets was not only to feed Dashboard, but to have a readymade body of software to feed a Video iPod and/or the iPhone and/or the iTablet.

...I hope.

Wow... that's an awesome idea. With the updated widget creation tools in the next release of OSX Leopard we can expect to see some pretty powerful widgets find their way into the Dashboard. If Apple went with this sort of idea for a phone we could expect some very cheap, extremely powerful application appear for the phone quickly. Writing a simple spreadsheet or text editing widgit that communicates with Office or Pages would be easy! Aries... you've gotten me all excited over here!

[MacGregor]

Originally Posted by Aries 1B

Look at your Dashboard content. I am convinced that a 'hidden' reason for the development of Widgets was not only to feed Dashboard, but to have a readymade body of software to feed a Video iPod and/or the iPhone and/or the iTablet.

...I hope.

V/R,
Aries 1B

EXACTLY MY HOPE TOO!!!!!

[Aries 1B]

Originally Posted by Skwidspawn

Wow... that's an awesome idea. With the updated widget creation tools in the next release of OSX Leopard we can expect to see some pretty powerful widgets find their way into the Dashboard. If Apple went with this sort of idea for a phone we could expect some very cheap, extremely powerful application appear for the phone quickly. Writing a simple spreadsheet or text editing widgit that communicates with Office or Pages would be easy! Aries... you've gotten me all excited over here!

Egad!

Don't get too excited; I've been waiting for my Newton replacement since 1998. Keep a low pulse rate and enjoy life.

If the proliferation of Widgets to new Apple platforms is part of Steve's Plan, then when/if they launch Apple's Fabled Platforms (Video iPod, iPhone(s), and iTablet) there's already a significant software base AND, as you point out, the updated Widget creation tools which would lead to an unprecedentedly quick ramp-up of applications. Talk about hitting the ground running!

The topic of software that already exists for Apple's Fabled Platforms could well be a significant page in the next keynote!

V/R,
Aries 1B