Sterne Agee: Components, production looking up for Apple

Supply chain checks show increased production capacity, better component availability and cheaper component pricing for Apple, according to Sterne Agee analyst Shaw Wu. Cheaper parts in particular are forecast to help Apple in its third-quarter results, which will be announced on Tuesday. Wu is calling for $24.6 billion in revenue with $5.98 in EPS, based off a 39.8 percent gross margin, as compared with a consensus of $24.7 billion and $5.73 in EPS stemming from a 39 percent margin. Apple itself has only been guiding to $23 billion, $5.03 in EPS and a 38 percent margin.

Sterne Agee and the consensus are roughly in line when it comes to unit predictions, Wu comments. The analyst is anticipating 17 million iPhones, 6.8 million iPads, 3.9 million Macs and 8.3 million iPods. iPods have been on a continual decline since the introduction of the iPhone.

Consider Apple's fourth quarter, which wraps toward the end of September, Wu is estimating $27.7 billion in revenue and $6.57 in EPS versus a consensus of $27.6 billion and $6.37. "We see several potential product catalysts ahead including the launch of iCloud and its [Apple's] next-generation operating systems including Mac OS X Lion and iOS 5; further refreshes of its Mac line (MacBook Air, MacBook, Mac mini, Mac Pro) to the Sandy Bridge architecture; and an interim but important iPhone update in the Fall timeframe featuring dual-core processors and better cameras," he elaborates. Lion and new MacBook Airs are thought to be arriving next week.

by MacNN Staff

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RIM's Apple TV clone nicknamed Cyclone, may carry Netflix

RIM's BlackBerry Media Box has been given a name and preliminary features in a follow-up rumor. Internally codenamed the Cyclone, it's said to resemble a larger version of the BlackBerry Presenter (pictured). NerdBerry's source for the tips was told it would have Netflix and YouTube at a minimum for services.

The media hub would appropriately look for and share content from other devices on the network. Hardware details are scarce outside of HDMI output and Wi-Fi for networking.

RIM has been working on creating a more Apple-like ecosystem for some time and added the BlackBerry PlayBook as part of what may be a larger strategy to move beyond just its core phones. The Cyclone would help RIM improve media playback on its usually business-centric hardware as well as give it a footprint even in homes where no one owns a BlackBerry.

By Electronista Staff

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Kootol targets Apple, more on patent it doesn't own yet

Unknown software house Kootol on Friday sent notice to many companies claiming that they allegedly violate a messaging patent. It targets a wide swath of the industry that includes Apple, Amazon, Facebook, Foursquare, Microsoft, Nokia, RIM, Twitter, and others all allegedly violate a patent for "Method and System for Communication, Advertising, Searching, Sharing and Dynamically Providing a Journal Feed." Unusually, Kootol doesn't actually have the patent and is instead acting on a Notice of Allowance that lets it act on the patent but still requires that it pay for the patent later.

The allegations focus on "using one way or two way messaging and by subscribing to posts of other users of a network" and accordingly focus heavily on Twitter and its ecosystem. Twitterrific creator Iconfactory, UberSocial's designer UberMedia, Seesmic, and photo hosting site TwitPic are all included in the infringement notices.

The India-based company was established by Vijay and Yogesh Rathod just last year and is operating under questionable circumstances. Despite its claims of having a "Dynamic Communication & Real Time Search Engine," the company only has a vague description of the service and a short, generic presentation. Its front page prominently focuses on the lone patent and licensing, making it clear the main intent is to profit from royalties and lawsuits.

Kootol may face an uphill battle trying to act on its claimed ownership. It had filed for the patent only in December 2010, more than four years after Twitter was founded and further still after similar services from some of the older companies, such as BlackBerry Messenger. Many of the newer services like Foursquare and Yammer also existed before the patent was filed. A chance exists that the patent will be invalidated based on prior art.

By Electronista Staff

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Apple confirms seven-day app refund period in Taiwan

Apple has quietly confirmed reports that Taiwanese App Store shoppers now have access to a seven-day refund period, according to IDG News. Local App Store terms have been amended to reflect the change, which was demanded by the Taipei city government to comply with consumer protection laws. To qualify for a refund, a person must delete all of the copies of an app in question.

Taiwan is so far the only country in which an Apple App Store allows refunds. Had Apple not made the change, it faced the possibility of a fine up to $1.5 million NT, or about $51,988 US. Guo Tingguang, a spokesman for Taipei's Law and Regulation Commission, says the government's next task is to work with Apple to provide more Chinese translations for apps, since many descriptions are limited to English.

Google was also warned about the need for a refund system, but has taken a very different stance. It has so far refused to modify the Android Market, and has already been fined $1 million NT ($34,658 US) as a result. The company says it disagrees with the city's take on the consumer protection act and is appealing the fine.

Google and Taipei are nevertheless in talks about Market rules. The latter party has imposed a two-week deadline to comply with protection laws, although what might happen is unclear. "After two weeks, we will then determine what action to take, but right now we don't have a specific stance," says Guo.

by MacNN Staff

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Fox hopeful Apple, Disney will use UltraViolet media locker

Fox's executive VP of Global Research and Technology Strategy Danny Kaye was hopeful Apple and Disney would both use the new UltraViolet media locker copy protection system. He noted in an interview that all but Disney among the studios had signed on, and that just that it was holding out "doesn't mean that [Disney] won't." He was also convinced in speaking to Pocket-lint that Apple was going to sign onboard and that it was just being conservative before leaping in.

"From my perspective, when you're well established you sometimes take a 'wait and see," Kaye said.

The comments appeared to be based more on optimism than actual knowledge. He noted that Android was larger now than the iPhone because of the plurality of hardware and software makers. He presumed an automatic repeat of this in tablets and that Apple would have no choice but to use UltraViolet if it was the only one not using the cloud system, which lets users 'own' a movie even if they switch services.

Historically, Apple has preferred an all-or-nothing view of DRM, where either it controls the copy protection format or there's no protection at all. CEO Steve Jobs has noted that generic copy protection is often slower to react to hacking attempts and doesn't address the real problems of interoperability.

Apple's decision to hold out also worked to its benefit in music. It had been pressured by an industry that assumed locked-down Windows Media music would eventually win, but the iPod's popularity and Apple's push to remove DRM led to the ultimate failure of Windows Media as a format and genuine interoperability through unprotected music.

Disney has fewer arguments of its own for its Keychest system, which only works for its own movies.

By Electronista Staff

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New German, Californian Apple Stores en route

Two new Apple Stores have been confirmed. Coming this Saturday is the Valencia Town Center location in California. Regular hours will run 10AM to 9PM Monday through Saturday, and 11AM to 6PM on Sunday; a steady stream of workshops has already been scheduled. The outlet will be Apple's 49th in the state, representing the largest concentration of Apple Stores in the US. The next closest state, Texas, has only 17.

Still relatively distant in the future is another store for Frankfurt, Germany, as confirmed by a new job listing. The shop will be based in the Main Taunus Zentrum mall, technically in the small town of Sulzbach about 15 minutes west of Frankfurt's core. That puts it about the same distance from Frankfurt's original Apple Store.

Germany as a whole has only five Apple outlets to date. Outside of Frankfurt, these include ones in Dresden, Hamburg, Munich and Oberhausen. Normal Apple construction patterns suggest that the second Frankfurt store could be open in February.

by MacNN Staff

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Apple bulking up legal team for future patent battles

Apple has been bolstering its legal team with at least two new major recruiting drives. The iPhone maker's primary hunt is for a Senior Patent Litigation Counsel that would manage major patent issues and outside legal teams. Any new hire would more crucially be "formulating and driving strategy" for Apple's broader patent efforts, although what that meant was left open.

A more conventional Legal Counsel position would be "driving case strategies" on more general subjects that come up frequently. Antitrust, class action, copyright, product liability, and trademark would be some of the more common focuses.

The two new positions would come just as Apple is instituting a new head counsel and at a moment of peak activity for Apple's legal team. Apple has not only been engaged in lawsuits both against and from Android phone makers such as HTC and Samsung but has more recently been doubling up, adding one or more extra cases as new patents or products come under scrutiny. New senior counsel might help it decide how to pursue these cases or whether to pursue them at all.

New hires could also play a defensive role. Those Apple has targeted, Samsung included, have often launched countersuits. It may likewise be keen to avoid the long-term legal trouble it has faced from its approach to earlier cases, such as the large settlement with Nokia. As with other major technology firms, Apple is also a frequent tempting target for patent trolls and may want to help preempt these cases or better tackle them when they appear.