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People know I have an insight into what Apple will do next.
It's not as hard to figure out what they will do as you think. This is what I think Apple will "release" as new products realted to the iPhone in 2008.
iPhone:
iPhone 1 will have a price drop
The iPhone you know now will come to be called iPhone 1. The model they are selling now will drop in price to around $230.
iPhone 2 will be announced:
They will introduce a version of the iPhone in that present size and shape (form factor) which we will call iPhone 2 and will have these improvements. It will sell at $399
a) it will sold in 16GB or 32 GB versions (remember the present iPod Touch is at 16GB so that will be a minimum - the NAND chip technology used for the on-board RAM is getting M-U-C-H cheaper) expect it to have 32 & 48GB by August/September 2008
b) it will have a longer battery life. The touch screen is the major energy user and a low energy version plus tweaking the brightness and contrast will add three more hours of non-standby use to the iPhone 2
c) it will have an easy to replace battery that plugs into the logic board instead of having to be de-soldered and soldered back in to replace it.
d) it will have a 3G/GSM radio transmitter. One of the problems Apple faces in trying to sell the iPhone 1 around the world is it's radio telephone only works at the 2.5G level. Apple will loose the Chinese market permanently without 3G/GSM technology immediately.
The Chinese government has made it pretty clear they will not allow this aging connectivity method to be re-instituted in their country. The fact is... China has a three widely different technologies in use for cell phone communication and the view is the 6 carriers they have wil be consolidated by government edict to 3, then over time the two older ones technologies will be killed off, (no one likes paying Qualcom royalities in cash, in an industry that prefers cross-licensing). The older technologies once replaced with GSM throughout the country will yield three compteting companies.
Apple has been lucky in one regard, even though the Olympics are being held in Beijing the Chinese government has not been able to build out their cell phone system to a world standard (GSM) in time for the Games and it left Apple some breathing room.
That breathing room will expire at the end of this year for them and the Chinese are working on their own cell phone operating system that wil include a touch interface and ditching the Qualcom connectivity so they can lead the planet in cell technology. Apple needs to get their phone to the GSM immediately or risk loosing the Chinese forever.
e) All iPhone front faces are determined by software, and Apple will allow you to determine which buttons and widgets you want on "your Mini iPhone" screen through settings. These settings will also you to add 3rd party widgets (utility programs) to the surface of the iPhone. You will come to think of the iPhone as "your desktop" and add the "shortcuts/aliases" in the form of buttons to your phone surface.
f)This will become known as the "Boy iPhone" because their will be WiFi games written for it within the next few months so it can be used in a "multi-player wireless mode". In time expect the multiplayer game
environment to use the telephone connection for a global game session. For the older guys, expect Ultimate Bet and Party Poker to write for this platform, which you will connect to their servers through the WiFi
connection. And of course another reason to own this model will be the larger screen for movie and TV show playback and the ability to have more "desktop chortcut/aliases".
Mini iPhone will be announced:
Apple will introduce a new iPhone form factor, the Mini iPhone, it will have many of the iPhone 2 features in a smaller size. This is the smallest size that you can come to expect and still be able to have the screen "understand" your finger. It will sell at $359
a) Size of device, not everyone needs all the touch buttons that are on the iPhone 1 and iPhone 2 (the iPhones with the larger "Primary iPhone Form Factor") . Frankly if you don't own stock why do you need the stock quote button on your screen. The Mini iPhone will the Secondary iPhone form factor. It will be 80% the width and 80% of the height of the iPhone 1 form factor and the same thickness. It will have a slimmer edge bezel on the face plate allowing the device to have 85% of the Primary form factor "touch real estate". So again 80% of the height and width which means it will be under 60% of the original Primary form factor's square inch surface.
All iPhone front faces are determined by software, and Apple will allow you to determine which buttons and widgets you want on "your Mini iPhone" screen through settings. These settings will also you to add 3rd party widgets (utility programs) to the surface of the iPhone. You will come to think of the iPhone as "your desktop" and add the "shortcuts/aliases" in the form of buttons to your phone surface.
b) it will have an easily replaceable battery using a plug, unfortunately it will have an aluminum frame around where the touch screen is mounted to and the back plate will use a push fit with small prongs making it near impossible to open up without destroying the backplate and marring the Black edge bezel on the front.
c) Battery life will be a nudge longer than the iPhone 2
d) Initially, it will come in a 16GB RAM model only, but that will be more than enough. At the end of 2008 that will be bumped to 32GB
e) it will have the 3G/GSM radio transmitter
f) it will have a re-configurable "desktop" allowing you to have the buttons and widgets you want on the touch screen
g) IT WILL PROBABLY BE THE ONE I FINALLY BUY, toward the end of 2008, when it's the 32GB model
iPods will be announced:
They will all be of the "Touch" variety, and they will very predictable
iPod Touch 1, the iPhone primary form factor model.
a) The memory will be bumped in the primary iPhone form factor, call it "the iPod Touch 1" with two models 32GB selling for $229 and a 64GB model selling for $370
b) The battery will be plug replaceable
c) battery life will get a bump from a lower energy consuming touch screen
d) The reason to own this model will be the larger screen for movie and TV show playback and the ability to have more "desktop chortcut/aliases" of games and widgets that will be available from third parties. This will be "the boys" model as it becomes a small game platform using the WiFi connectivity
e) this model will have an SODIMM socket allowing the device to have a RAM upgrade at a later time, in fact the 64GB model will come with the SODIMM socket populted with an additional 32GB memory card.
f) It will have Bluetooth and WiFi connectivity
g) IT WILL NOT HAVE A MICROPHONE. Even though there will be third party applications that could find a microphone useful, think voice memos, this device will not have a mic built-in. Apple doesn't want you to come to think of it's WiFi capability as an opportunity to make this a "Skype phone" Also read below about the AT & T revenue stream
h) it will have a re-configurable "desktop" allowing you to have the buttons and widgets you want on the touch screen
Mini iPod Touch
This is the smallest size that you can come to expect and still be able to have the screen "understand" your finger.
a) a second model with the same size reduction that occurred to make the Mini iPhone will be in place for Mini Touch. It will be the same device without the telephonic radio transmitter
b) Initally this will be a 16GB model only, but will 32GB installed by October-ish toward the end of the year. The RAM on this model will all be soldered down and not upgradeable.
c) It will have a plug replaceable battery and the same battery life in active use as the Mini iPhone in active use (non-standby mode).
d) It will have Bluetooth and WiFi connectivity
e) IT WILL NOT HAVE A MICROPHONE. Even though there will be third party applications that could find a microphone useful, think voice memos, this device will not have a mic built-in. Apple doesn't want you to come to think of it's WiFi capability as an opportunity to make this a "Skype phone" Also read below about the AT & T revenue stream
f) it will have a re-configurable "desktop" allowing you to have the buttons and widgets you want on the touch screen.
A T & T Revenue Stream
Remember Apple's fiscal year starts October 1st, so the end of their first quarter is December 30th. It has been widely held that Apple has been able to do certain things related to the iPhone only because they were part of the At & T revenue.
When the iPhone was product released last January, (six months before it shipped) reverse engineering put the cost of manufacture at about $750 a unit.
Even during that 10 weeks when Apple was getting $599 for them... "someone" was subsidizing the cost of each unit. The way it was worked out was this..... in fact by the time that iPhones were actually being manufactured in late May and June, because of quantities made and materials cost reductions (tech is always cheaper over time) the nit cost to manufacture was placed closer to $290 a unit.
But Apple had already extracted a concession from A T & T, the specifics are known to just a few and they are sworn to secrecy but almost everyone believes Apple is getting between 11% and 15% of each iPhone users monthly service contract bill given to them to maintain the "Apple/A T & T bundling". For A T & T this has been good they got 460,000 new cell customers within 8 weeks of iPhones selling.
We are never going to know the exact revenue split, but in the middle of January Apple has to come out with first quarter profitability numbers.
On that Income Statement will be a line that will indicate something like "Payment received for Outside Services" or "Payment received for Outside Services - A T & T" (and it will have no labor cost offsetting a part of it in the expense portion).
This will be what Apple received as part of the revenue share from the July-August-September period (Apples 4th quarter 2007).
To figure out the revenue per phone more exactly at that time, divide the revenue from A T & T services by the roughly 950,000 actually activated phones during that period.
You can then forcast what each new phone sale should add in near net-profitability to the Apple Subsequent Earnings Statements
Remember, it is also believed that Apple has extracted similar concessions/revenue splits from their sales partners in England and Germany (T-mobile) and France so the per phone revenue will grow "per phone sold".
Apple Stock:
I have been predicting Apple's stock should hit $205 by the second week of January. It will stall in that area for a period of time. With the A T & T revenue share now known by the middle of January it will still be trading at roughly 29 times earnings. Since 16 or 17 times is more in keeping with Return On Investment reality, stock owners will be betting the business is going to get bigger and grow into that 29 times earnings profitability.
It will, but much slower than it has been.
I expect it to get near $230 a share by May, but it will be it's highest for several months at $205 just before the first quarter earnings report and before Mac World Expo - both in mid-January and probalby dip back to $190 by the end of January.
What product is Apple missing?
Apple jumped the shark with the release of the 3rd Generation Nano. The Nano is intended to be the "solid state, Sports enthusiast" iPod. The large color screen on the 3rd Gen Nano isn't needed because you don't watch an iPod while it's on your arm at the gym. The thin flexible case with the large "In-Flexible" LCD screen are going to broken pretty easily.
Apple needs a small screen "Pico iPod" for the sports enthusiast that will also work with the Nike + iPod transmitter/receiver.
I'm in Sonoma County... Northern California wine country.
If you live nearby, are traveling through or live in the San Francisco Bay Area bring your iPod to me and I can do the work while you wait or go wine tasting for a while. Send me an
email just to make sure I have on hand whatever parts your repair will require.
Call or email me
with questions or to set up a repair. You can also call, I am here most days from 8am to 8pm
Toll Free 1-877-iPod-Pro (1 - 877 - 476-3776)
Send the device to:
Frank Walburg
2145 Service Court
Santa Rosa, Ca 95403-3139
Methods of payment
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