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MacEdition: Apple

A Few More Words on All Those iPhones · 2008-02-19

Last month we mentioned that we were not too concerned about the 1.4 million “missing” iPhones. One analyst, who we dubbed Toni Sacc went so far as to say that Apple might have stuffed the channel with phones to pump up its sales numbers, much like console makers do. The press, who apparently couldn’t sit back and think about this issue for more than 30 seconds, picked up on this, and suddenly the iPhone was a big disappointment. We have always maintained that there are areas where the iPhone can improve, but we still believe it is a very strong product overall.

Over the last few weeks, news outlets have changed memes. No longer is Apple stuffing some Area 51 warehouse with half a million iPhones. Instead, people talk about the iPhone black market. BusinessWeek interviewed the creator of TurboSIM and even the New York Times wrote an article about it.

Suddenly, 1.4 million bootleg iPhones is not really a stretch of the imagination. Of course, the story doesn’t stop there. Over at Seeking Alpha, Todd Sullivan describes the “real” problem with unlocked iPhones, namely that Apple is not receiving any revenue from AT&T or other official carriers when they are purchased to be unlocked. We have no real problem with Todd. It is troubling that he mentions that Apple cut component orders, not because it is a sign of slowed growth, but because the article he links to states Apple’s reduction in component is largely expected because they don’t expect to sell as many products after the holiday quarter.

While Apple’s loss of AT&T revenue might hurt the bottom line initially, the success of the iPhone is partly based on how large of an ecosystem Apple can form around the product. Apple really only loses when nobody is buying iPhones at all.

— Joe Fahs

iPhone and iPod Touch Receive Updates As World Waits for New MacBook Pros · 2008-02-05

As the news media focuses in on Super Tuesday and what all of those in-play delegates mean for the fortunes of the free world, Apple decided to sneak in a few updates to their lineup, adding a 16GB iPhone and 32GB iPod Touch. These updates are nice and show that Apple probably bought a generous portion of flash memory, but I think people would rather see the price come down than the storage going up.

— Joe Fahs

Yet Another Report Warns of Impending Malware Doom for Apple · 2008-01-31

I am not one of the people who thinks that Mac OS X is so inherently secure that people using Macs will never have to worry about a virus. Apple, like every other computer manufacturer, has security issues, but I do think Apple does as good a job as any at identifying these vulnerabilities and taking care of them. However, it is annoying to read about how every new malware threat demonstrates how you have to be careful even if you are running Mac OS X. And more importantly, how you should think about buying some security software to make sure you are safe.

The latest report comes from Sophos, which takes things up a notch by stating that cybercriminals are finally starting to target Mac OS X. And we all know that one a cybercriminal gets involved, things are 10.736 times as dangerous because they are looking to steal your money, not just make life annoying for you. And it’s not just your Mac that could be vulnerable, but your iPhone and iPod Touch! And if you think Linux makes you safe, think again! The criminals are catching on!

Like we’ve stated before, you should take computer security seriously, especially with identify theft becoming such a huge problem. However, the same rules apply to most any computer user out there. Be careful with your names, passwords, credit card information, and anything you download from the internet. We do want to thank Sophos for being so concerned, but the next time they want to warn people about cybercriminals, they should quote some people besides their own software engineers.

— Joe Fahs

iTunes Overtakes RealPlayer Among Streaming Media Users · 2008-01-31

A new report from mentions how iTunes surpassed RealPlayer for the number of unique visitors during the middle of 2007. We file this under “Why Did It Take This Long”. With iPods being installed on so many PCs, iTunes is available to just as many users. Although it is nice that iTunes streaming media has growth, you can see from the numbers that stand alone streaming media player growth overall is fairly flat. It doesn’t take a genius to realize that the real streaming growth is on the web, and Flash is still king in that arena. We hate to kick Real Networks while they’re down and their stock can be bought for less than some of the items at Starbucks, but we have to wonder how they plan on staying relevant in the future.

— Joe Fahs

The iPhone or: How I Learned to Stop Listening to Pundits and Love Steve Jobs · 2008-01-25

During Steve Jobs’ keynote, we had some questions about Apple’s iPhone numbers. After all, saying Apple sells 20,000 iPhones a day is stretching the truth a little — a large portion of those were sold during the first week. Still, from the amount of iPhones we see every day, there is no reason to believe that Apple is missing its sales targets… or is there?

Toni Sacconaghi of Bernstein Research is trying to figure out what happened to 1.4 million iPhones. That number comes from the discrepancy between the number of iPhones Apple has said it sold and the number of iPhone activations AT&T claimed for the quarter. Toni Sacc (writing Sacconaghi multiple times is going to get annoying and I miss the Sopranos) estimates that even if 20% of iPhones were purchased to be unlocked, that still leaves almost 700,000 uncounted for.

So, are the analysts on to something, or is this another case of Apple trying to kick people when they are down? Toni Sacc says that 20% of iPhones going to people SIM unlocking their iPhones is a “generous” number because the iPhone 1.1.3 jailbreak has been out only a few days. But anybody who follows the iPhone knows people have been trying to hack it since the first day. And in AT&T’s Q3 conference call the company estimated at least 15% of iPhones were being sold to be unlocked. Back in those days, hacking the iPhone was a much more dedicated affair, and the device was still new.

The process to unlock the iPhone is much easier these days, so we wouldn’t be surprised if the percentage of people buying one to unlock it has gone up significantly in the last three months. The percentage of people unlocking iPhones would have to hover around 30%, but we know there is a a huge black market in China as well as Singapore, India and a lot of other places. And, even though the iPhone has been officially blessed in several places in Europe, the exchange rate still benefits people who buy them here in the United States. All of those numbers add on to the “unofficial” sales numbers.

It is possible that Apple has a huge warehouse somewhere with a million iPhones, or they were counting units shipped to stores, but not yet sold (a method the video game console manufacturers like). We surely wouldn’t be surprised to see another iPhone price drop before the end of the year; some say a price cut is imminent. I am not going to buy into this conspiracy just yet, but I’ll definitely keep listening to what Tony Sacc has to say, and maybe that is what he really wanted in the first place.

— Joe Fahs

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