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R&D, travel expenses suggest Apple plans big 2008 - report

post #1 of 17
Thread Starter 
The sheer amount of money spent by Apple on research -- as well as maintaining chief executive Steve Jobs' private jet -- suggests that the company is working feverishly on international iPhone releases and new products, according to a new research note from Morgan Stanley.

In her report, analyst Kathryn Huberty notes that the last calendar quarter of 2007 was one of Apple's busiest ever for developing technology and conducting business deals, with spending on research and development jumping by 34 percent year-over-year and the cost of maintaining Jobs' company-granted aircraft surging by 170 percent.

The spikes are not just isolated incidents, Huberty suggests. Research has been up consistently by roughly 32 percent for the past three quarters, while the $550,000 spent on Jobs' air travel is three times as much as the average amount spent over the past year and a half.

As the company's chief executive is "integral" to any negotiations with foreign cellular service providers for iPhone contracts, the extra travel is likely to discuss and finalize the release of the iPhone in new countries, according to the note. The analyst cites "industry discussions" which point to a potential iPhone release in Canada as well as expected launches in Asia and additional European countries.

"The last spike in [Steve Jobs'] plane expense was in the March 2007 quarter, ahead of the iPhone launch," Huberty says.

Regarding the stepped up research efforts, the Morgan Stanley analyst suggests that it may not be just the release of upgraded iPhone and iPod touch models in 2008 that will require the added expenses. The Cupertino-based electronics firm may be spending more of its efforts on software for its computers and handheld products, such as social networking components or more business-minded features to branch out from Apple's familiar home user segment.

While welcome, this growth may be needed to sustain Apple's momentum. The company may encounter difficulty justifying its explosive growth if the rate of new developments slows down in the near future, according to the note, and may be hindered if either the manufacturing chain or offerings from rivals undermine the company's ability to introduce new products on time.

However, Apple is now in the unusual position of seeing its foreign markets outpace those at home: the company's latest quarterly results saw profit margins increase outside of the country. The shift makes sales in some once-unfriendly markets suddenly appear more lucrative than domestic business, as a poor US dollar has increased margins in other nations.

"We’ve always thought of the US market as [Apple's] most profitable segment," Huberty told investors. "Given improved [product] demand and mix, Europe and Japan are now as, or more, profitable than Apple’s US and retail segments."
post #2 of 17
Quote:
The analyst cites "industry discussions" which point to a potential iPhone release in Canada as well as expected launches in Asia and additional European countries.

Canada, eh? We'll see... I'm buying an iPhone in May- one way or the other!
post #3 of 17
Too late Appleinsider! I already reported about the article in the future hardware section's "So....what do we get next tuesday" thread. So there!
post #4 of 17
It is nice to see some actual analysis of what is happening at Apple based on trends in how they behave. There are a lot of "professionals" following Apple results but they only parrot one anothers basic analysis of the few numbers Apple feeds their way.
20" Intel iMac - Airport eXtream N - 16gb Black iPhone - Apple TV
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20" Intel iMac - Airport eXtream N - 16gb Black iPhone - Apple TV
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post #5 of 17
The problem I see with foreign iPhone deals is the governments.

In Europe/Australia the government competition watchdog will disallow exclusive contracts, and in Asia the governments do not respect IP and will let local companies sell unlocked iPhones en masse.
post #6 of 17
Quote:
Originally Posted by ascii View Post

The problem I see with foreign iPhone deals is the governments.

In Europe/Australia the government competition watchdog will disallow exclusive contracts, and in Asia the governments do not respect IP and will let local companies sell unlocked iPhones en masse.

Well that is NOt a problem here in Canada. March 18th anyone??
post #7 of 17
I thought Japan has always been profitable for Apple???

You have to imagine that Apple HAS to slow down in the innovation department. They have been going non-stop for almost 10 years, since the introduction of the first iMac.

Just wait, Apple will bring out something huge again by 2010.
post #8 of 17
Quote:
Originally Posted by stuhowe View Post

Well that is NOt a problem here in Canada. March 18th anyone??

We'll see. Those new data rate numbers that are being speculated for March 18 certainly aren't in line with the AT&T iPhone flat rate south of the boarder- but perhaps Apple has finally recognized that Canada's special market environment (stupid monopoly of GSM and crazy data rates) is going to require a slightly modified iPhone plan here in Canada. Here's what the new data thingy looks like:

Quote:
Effective March 18th 2008 (Preliminary updates:
-
Unlim WAP = $7
Unlim Vision WAP = $7 - 3 yr term with DECF (Data Early Cancellation Fee)

Non-Rogers & WM Data & Tethering - 3 yr term with DECF
$15 - 20MB ~ Tier 1
$30 - 20MB to 60MB ~ Tier 2
$50 - 60MB to 500MB ~ Tier 3
$65 - 500MB to 1GB ~ Tier 4
$75 - 1GB to 2GB ~ Tier 5
$85 - 2GB to 3GB ~ Tier 6
$100 - 3GB to 5GB ~ Tier 7
$0.03 per additional MB
*Note: Everyone starts off at the $15 plan and based on usage, you move up the tiers

ALL OLD PLANS GRANDFATHERED - ALL PLANS WILL NOT CONFLICT WITH $20 COMM PACK

So, with judicious use of WiFi, I guess you could conceivably use an iPhone and expect to pay $30-$65 in data charges if you're a heavy web user. But I'm not sure what the stats are on the average data usage is for iPhones... anyone?

So I guess a total package for voice and data might run you around $70-$90? It's NOT wonderful, but hey... this is Canada.

A March 18th date would make me very happy. Even if it's just an announcement. Just so long as I know which way the wind is blowing before my May buy date.
post #9 of 17
Several patents filings within the past few years indicate that much of that R&D might be for the Multi-Touch interface, software, and hardware.

I hope we'll see something more bold in the coming months, something bolder than the recent "There's Something in the Air" thingie, like a Multi-Touch computer or monitor. Or maybe just a darn minitower already!
post #10 of 17
Quote:
Originally Posted by Restalot View Post

It is nice to see some actual analysis of what is happening at Apple based on trends in how they behave. There are a lot of "professionals" following Apple results but they only parrot one anothers basic analysis of the few numbers Apple feeds their way.

At least this kind of analysis looks a bit more creative than reading the entrails of parts suppliers.
post #11 of 17
[QUOTE=AppleInsider;1221346]The sheer amount of money spent by Apple on research -- as well as maintaining chief executive Steve Jobs' private jet -- suggests that the company is working feverishly on international iPhone releases and new products, according to a new research note from Morgan Stanley.

Regarding the stepped up research efforts, the Morgan Stanley analyst suggests that it may not be just the release of upgraded iPhone and iPod touch models in 2008 that will require the added expenses. The Cupertino-based electronics firm may be spending more of its efforts on software for its computers and handheld products, such as social networking components or more business-minded features to branch out from Apple's familiar home user segment."

Clearly, Apple is doing a ton of research and many of the examples I cite below have come to fruition. I also believe we'll see a new "min-Mac" which may be a competitor to the new Xbox in 2010:

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digg_url = 'http://digg.com/apple/Apple_applies_for_trademark_protection_on_gaming_d evices'; We're not gonna read too much into this just yet, but when everyone's favorite fruit-flavored consumer electronics company files to protect its trademark...
post #12 of 17
Quote:
Originally Posted by KindredMac View Post

I thought Japan has always been profitable for Apple???

You have to imagine that Apple HAS to slow down in the innovation department. They have been going non-stop for almost 10 years, since the introduction of the first iMac.

Just wait, Apple will bring out something huge again by 2010.

Forget 2010 dude I'm interested in 2008! From this report it would seem that apple is wholeheartedly diving into mobile devices. And we should see in the coming months a whole slew of iphones and ipod touches of different shapes, capacities and sizes for multiple purposes.
Its going to get increasingly exciting at Apple headquarters this year! Oh, and for us too.
post #13 of 17
Quote:
Originally Posted by Olternaut View Post

Forget 2010 dude I'm interested in 2008! From this report it would seem that apple is wholeheartedly diving into mobile devices. And we should see in the coming months a whole slew of iphones and ipod touches of different shapes, capacities and sizes for multiple purposes.
Its going to get increasingly exciting at Apple headquarters this year! Oh, and for us too.

I personally would like to see an "iPod Touch Classic" -- all the Touch features in a 80/160 HDD packagewhich would still be slim enough for me. My iPod photo's feeling long in the tooth, but having all my music and podcasts (and some data) in my pocket is still more important in my primary music playing device, and video, while neat, is still not enough to get me to buy the current classic while my three year old device is still working perfectly and is a poetent jukebox in my car and at parties,

An iPhone, a Leatherman and thou...  ...life is complete.

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An iPhone, a Leatherman and thou...  ...life is complete.

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post #14 of 17
[QUOTE=mosqueda;1221466]
Quote:
Originally Posted by AppleInsider View Post

Clearly, Apple is doing a ton of research and many of the examples I cite below have come to fruition. I also believe we'll see a new "min-Mac" which may be a competitor to the new Xbox in 2010:

Apple patent hints at Surface-like research

Apple patent applications reveal updated multi-touch system

Revenge of Apple patent attack: giant laptop touchpad

Apple patent attack: the multi-touch gesture dictionary

Apple patent app reveals back-side interface for handhelds

Apple patent app reveals intelligent keyboard

Apple patent app describes force-sensitive touchpads

Apple applies for trademark protection on gaming devices


I think you're wrong...in a good way. Look at the list. We've seen one or two of these manifest in the phone. I think there is something else they are working on that will be a rather large bomb to drop in the not-too-distant future.

I also think this device will not have any moving parts.
post #15 of 17
If Apple is serious of increasing its market share in the rest of the world it will have to look at it's pricing. It sources its manufacturing in Asia and some in Europe. There is, in my opinion, no reason for the company to charge more for its products in other countries above the prices it charges in the US, except for the obvious VAT tax charges.

Apple should also dramatically increase its Apple stores in all major cities abroad, as they are an effective way to increase awareness of its products. What about advertising and targeted publicity in foreign countries?

Apple does not take full advantage of its superiority in design and user friendliness. Apple has the resources and the skill, but is too focused on the US market to make real inroads abroad.
post #16 of 17
Quote:
Originally Posted by 11thIndian View Post

We'll see. Those new data rate numbers that are being speculated for March 18 certainly aren't in line with the AT&T iPhone flat rate south of the boarder- but perhaps Apple has finally recognized that Canada's special market environment (stupid monopoly of GSM and crazy data rates) is going to require a slightly modified iPhone plan here in Canada. Here's what the new data thingy looks like:



So, with judicious use of WiFi, I guess you could conceivably use an iPhone and expect to pay $30-$65 in data charges if you're a heavy web user. But I'm not sure what the stats are on the average data usage is for iPhones... anyone?

So I guess a total package for voice and data might run you around $70-$90? It's NOT wonderful, but hey... this is Canada.

A March 18th date would make me very happy. Even if it's just an announcement. Just so long as I know which way the wind is blowing before my May buy date.

I assume this is for Rogers Canada, where did you find the details of these speculated changes? I have been holding off on purchasing a new phone for a bit now, and this type of data package would be far more attractive than current offerings...
post #17 of 17
Quote:
Originally Posted by Chagi View Post

I assume this is for Rogers Canada, where did you find the details of these speculated changes? I have been holding off on purchasing a new phone for a bit now, and this type of data package would be far more attractive than current offerings...

This is pulled from a post on Howardforums, from the same individual who leaked the recent "unlimited" data info, so it has a high probability of being true. Though a recent post by the same individual has stated that the release date for these new rates has been pushed back by one week. Note that those rates require a 3 year contract.

Considering the tariff rates announced for Ireland, perhaps it's not insane to imagine that these new Rogers rates will somehow be incorporated into a forthcoming iPhone data package, like one that's forthcoming for the Blackberry.

All these developments are fine by me. The more that happens on the iPhone front by May the better, as I'm using my birthday as the cutoff date to finally satiate my technolust. If an official Rogers announcement is made before then- great. If not... it's off to Buffalo for me!
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