The Holy Grail of iPhone lovers – an official, Apple-sanctioned unlocked iPhone 3G – is now available in Hong Kong.

“Unlocked” means the iPhone can be used with the carrier of the buyer’s choice, an option Apple has resisted almost everywhere else it sells the iPhone. A few countries have the option of choosing between two Apple-sanctioned carriers but in most --including the United States -- customers have no choice.

Those who illegally unlocked the first version of the iPhone felt Apple’s wrath when a software update “bricked” the devices.

As a long-time advocate of an Apple-approved unlocked iPhone option, I’m pleased to see one appear, even if it is in faraway Hong Kong.

However, unlocked iPhones are not cheap. In Hong Kong an unlocked 8GB iPhone costs HK$5,400 ($695 U.S. dollars) while the 16 GB version costs HK$6,200 ($798 U.S.). Compare that to the AT&T subsidized prices in the United States: $199 for the 8 GB model and $299 for the 16 GB.

The prices are similar to those in Italy, where pre-paid iPhones – which also come unlocked -- cost €499 (8GB) and €569 (16GB), or $728 and $830 at current exchange rates.

Apple is promoting the deal, including free shipping, on the Hong Kong version of its online Apple Store: “iPhone 3G purchased at the Apple Online Store can be activated with any wireless carrier. Simply insert the SIM from your current phone into iPhone 3G and connect to iTunes 8 to complete activation.”

The iPhone has been available since July from Hong Kong carrier Hutchison Telecommunications, but with a two-year contract.

Unlocked iPhones, however, could easily be bought on the black market in Hong Kong. That’s probably what inspired Apple to sell an official version there.

Does this mean Apple might consider selling unlocked iPhones in the United States? Hard to say.

Back in July, AT&T issued a press release that stated, “In the future, AT&T will offer a no-contract-required option for $599 (8GB) or $699 (16GB).”

We're still waiting.

One can assume it is Apple, not AT&T, blocking the sale of contract-free iPhones in the United States. If and when it changes its mind is impossible to predict, but the shift in Hong Kong shows Apple might consider it, particularly if changes in the market forces its hand.

Posted by David Zeiler at 6:19 PM in iPhone | Permalink | Comments (3)
                       

Reflecting another lousy day for stocks, with the Dow down 372.75 points, Apple’s stock dipped $9.86 to close at $131.05 yesterday -- just $3.22 higher than last week’s low of $127.83.

Although Apple certainly is not alone in getting hammered in the midst of one of Wall Street’s worst crises ever, the company’s demonstrated resistance to the general economic slowdown should have provided some insulation. But not with a stock as notoriously volatile as AAPL.

AAPL already had been on a wild ride this year. After opening 2008 just under $200, the stock tumbled to a low of $119.15 on Feb. 26. By May 15 it had recovered to $189.73, but began to follow the general market slide through most of the summer.

Even so, AAPL stood at $174.67 as recently as Aug. 27.

Despite the prevailing sense of panic on Wall Street, the AAPL selloff makes little sense. The company has reported exceptional sales and profits throughout the year, and is expected to post more eye-popping numbers for the quarter that ends Sept. 30.

Consider: Apple had its best March quarter in company history, with revenue growing 43 percent year-over-year to $7.51 billion. Mac sales were up 51 percent year-over-year.

In the June quarter Apple revenue rose 38 percent year-over-year, led by a 41 percent increase in Mac units shipped. The iPod chipped in with a surprising 12 percent increase in sales year-over-year.

More importantly Apple appears likely to sustain its healthy growth with minimal impact from weakening consumer spending. It defies logic, but that’s what the numbers have been telling us.

Last week the NPD Group-owned DisplaySearch released data showing Mac notebook market share in North America rocketing 60 percent from the second quarter of 2007 to the second quarter of 2008 – from 6.6 percent to 10.6 percent.

As for the Sept. quarter, analysts who follow Apple have predicted yet more record-breaking sales. Last month Mike Abramsky of the Royal Bank of Canada predicted year-over-year Mac sales growth of 44 percent, which would translate to more than 3 million Macs.

Last week Piper Jaffray’s Gene Munster weighed in with slightly lower numbers (unusual, since Munster is typically the most optimistic Apple analyst). Nevertheless, he foresees year-over-year growth in the 30 percent range, with Mac sales hitting somewhere between 2.8 million and 2.9 million.

Though not as impressive as July’s numbers, Mac sales have grown so much over the past two years – 3 million Macs would nearly double the number sold in the September quarter two years ago -- that huge percentage increases will become ever more difficult to achieve.

In any case, Apple can’t help but break July’s record for the most Macs sold in a quarter when it reports earnings next month. I won’t be surprised if iPod sales are relatively flat, given that we just got the product refresh Sept. 9, but booming iPhone sales should more than make up for that. The iPod will make its greatest contribution in the December quarter, as usual.

In the current environment, few companies match Apple’s potential to keep raking in money. Throw in Apple’s lack of debt and staggering $21 billion in cash and you wonder why anyone would sell the stock, particularly as it gets cheaper.

But then again most Wall Street muckety-mucks aren’t looking particularly shrewd these days, are they?

Posted by David Zeiler at 8:17 AM in AAPL stock news | Permalink | Comments (9)
                       

Apple beefed up its market-leading iPod line of portable music players at its “Let’s Rock!” media event today, but had no major surprises to spring.

In fact, the only real surprise had nothing to do with hardware or software – it was the announcement that Apple has settled its yearlong feud with NBC Universal.

Such favorites as “Monk,” “The Office,” “Heroes,” and “Battlestar Galactica” are all back, available in both HD format (for $2.99) and the standard format. It’s about time.

Apple CEO Steve Jobs, still looking a bit thin but otherwise fine, delivered almost all of the one-hour presentation.

He elicited chuckles from the audience when he walked on stage with the phrase “Reports of my death are greatly exaggerated,” projected on the giant screen behind him, a reference to a canned obit on him that Bloomberg News mistakenly transmitted a couple of weeks ago.

Jobs showed off new models of the iPod Nano and the iPod Touch, as well as a new version of its free iTunes software, iTunes 8. While the new models offer some nice enhancements, what Apple offered today can’t compare to the dramatic announcements at last year’s event, which overhauled the entire line and introduced the Touch.

Much of the emphasis was on the iPod Nano, which sits in the sweet spot in the middle of the iPod product line. The Nano gets a new form factor, returning to its previous long, thin shape from the stumpy version introduced last year, just as many of the rumor sites had predicted.

However, this version has a display twice as deep – it takes up half of the front face. The aluminum case is also thinner and curvier than the second generation Nano’s. Viewed from the top or bottom edges, the case looks like an elongated oval.

Though the new Nano didn’t get a touch screen, Apple has added the Accelerometer technology that allows the screen to change its orientation when you tilt the device. With help from the Accelerometer, you can now simply shake your Nano to shuffle your songs.

The Nanos also come in more colors than any iPod model ever – virtually every color in the rainbow from red to purple. Only black and white are missing.

Apple CEO Steve Jobs emphasized the more environmentally friendly composition of both the Nano and the new iPod Touch. The new iPods contain no BFR, mercury or PVC, use arsenic-free glass and are now “highly recyclable.”

The new Nanos come in two models, 8GB ($149) and 16GB ($199), doubling the capacity of those it replaces while keeping the prices the same. The changes solidify the Nano’s place as the iPod suited to the most consumers.

Apple made less substantive changes to the iPod Touch. It’s lighter with a slightly smaller contoured case. New features include integrated volume control buttons and, get this, a built-in speaker.

The new Touch also has a built-in receiver for the Nike shoe sensor (as well as the software needed to operate it) so owners can use it to monitor their workouts. You still need to buy the shoe sensor ($19) separately.

Jobs brought Apple Senior Vice President of Worldwide Product Marketing Phil Schiller on stage to demonstrate a few new iPod Touch games. Apple must think gaming is important to Touch buyers; the headline on the iPod Touch press release calls it “the funnest iPod ever.”

Apple dropped the prices on the Touch models but kept the capacities the same. So now the 32GB model is $399 (down from $499), the 16 GB model is $299 (down from $399) and the 8 GB model is $229 (down from $299).

I had for a 64GB Touch at the $499 price point, but perhaps Apple determined too few customers are willing to pay that much. (It’s a touch too much, as it were.)

Apple only tweaked the iPod Classic, raising the capacity of the 80GB model to 120GB while holding the price at $249. The 160GB model is history.

Apple probably wants to phase out the Classic line, but still needs a large capacity iPod for those who desire huge mobile music and video collections. When larger capacity flash memory gets cheap enough, expect the Classic to die altogether.

Conspicuous by its absence was the iPod Shuffle, which Jobs didn’t even mention. However, a visit to the online Apple Store shows the Shuffle now comes in brighter colors, though still in the same 1GB ($49) and 2GB ($69) versions.

On the software side, Jobs demonstrated a new version of iTunes that added a new way to browse your collections and a “Genius” feature that generates playlists of songs that “go great together.” I obviously haven’t had time to test it yet, but it sounds similar to “The Filter.”

Jobs also announced the Friday availability of the desperately needed iPhone 2.1 firmware update, which he said should result in fewer dropped calls, better battery life and fewer app crashes, among other improvements. The download is free to all iPhone owners.

Posted by David Zeiler at 3:23 PM in iPod | Permalink | Comments (2)
                       

Owing to its influence over how it has changed the way people use mobile phones and its potential as a mobile ad platform, the iPhone made Adweek’s Digital Hot List for the first time.

The iPhone placed third behind No. 1 Google and No. 2 Facebook.

Here’s what Adweek had to say:

“Yes, it's a piece of hardware. But the iPhone makes the Hot List for single-handedly elevating an entire medium and potentially -- finally -- delivering a robust platform for mobile ads. To date, mobile advertising has been all potential and little payoff, with the average consumer still using his or her cell for calls and texting. Then, this past July, the 3G smartphone model sold 1 million units in its first weekend. With 82 percent of iPhone users accessing the Web, per Nielsen, and 37 percent watching video --10 times the average for mobile users -- more brands are paying attention to the medium, all because of this single, remarkable little machine.”

Adweek’s primary criteria for selection are Web traffic statistics, but it also considers factors such as “influence on the world of digital media, as well as the culture at large; ad innovation and results; and the informed judgment of our best contacts in the ad business.”

This latest accolade indicates Apple is making headway in establishing the iPhone as a dominant mobile computing platform. When the advertising industry takes notice, we’ve moved into new territory.

Others now see moneymaking potential in iPhones that has nothing to do with the selling of the devices and everything to do with how they are used.

Here’s the entire Adweek Digital Hot List:

1. Google
2. Facebook
3. iPhone
4. Hulu
5. Glam
6. YouTube
7. Xbox Live
8. The Huffington Post
9. imeem
10. Stardoll

Posted by David Zeiler at 1:58 PM in iPhone | Permalink | Comments (0)
                       

Microsoft’s first commercial in a campaign intended to reinvigorate the public’s perception of its Windows operating system debuted Thursday night. In it comedian Jerry Seinfeld helps recently retired Microsoft Chairman Bill Gates pick out a pair of shoes at a discount shoe store in an ordinary mall.

Don’t you feel better about using Windows now?

Apparently a belated answer to Apple’s two-year “Get a Mac” campaign starring John Hodgman (PC) and Justin Long (Mac), the Seinfeld-Gates ad left many viewers scratching their heads.

Reaction from both the tech and ad worlds ranged from bewilderment to outright ridicule.

Unabashed, Microsoft claimed the campaign’s first ad achieved its goal. Bill Veghte, senior vice president of Microsoft's Windows and online services business, told the Wall Street Journal on Friday the ad is merely a "conversation starter, an ice breaker.”

Another Microsoft spokesman also spun the widespread negative reaction to the ad as part of the plan, telling the Journal its intent was to “drive buzz.”

Both promised more substantive ads in the future. No doubt future ads will be better; one almost couldn’t do any worse.

A press release even references the “classic Seinfeld sense of the word” nothing in describing the ad.

As a huge fan of Seinfeld’s TV show, I was shocked at how flat and unfunny Seinfeld was. And Gates, who has shown he can poke fun at himself successfully, looked too self-conscious.

There’s zero chemistry between the two men. That doesn’t bode well for subsequent installments.

Microsoft isn’t talking specifics about future ads in this campaign, but a press release it issued Thursday offered a mind-numbing overview:

“The new campaign will highlight how Windows has become an indispensible part of the lives of a billion people around the globe -- not only on PCs but also now online and via mobile devices. It will illustrate how Windows integrates consumer experiences across PCs, online and on mobile phones through Windows Vista, Windows Live and Windows Mobile. “

Did that whet your appetite for what future ads might bring? Try reading the entire release, which manages to inflate a few thin paragraphs of information into a three-page screed. It appears the operating system isn't the only thing at Microsoft that suffers from bloat. Must be company policy.

From the hints Microsoft is giving, future ads will give consumers few if any concrete reasons to prefer Windows. Each of Apple’s ads, on the other hand, portrays a specific reason why consumers should choose a Mac over a Windows PC. That’s why they’ve worked so well.

And that’s why Microsoft can’t get too specific. What sort of advantages could they talk about with Vista?

Despite six years of development, Vista brought few compelling new features. But its steep system requirements and early troubles with driver incompatibilities persuaded many Windows users to stick with XP.

This campaign shows Microsoft is looking over its shoulder, even though Apple’s share of the U.S. computer market is just in the 8 percent range. But that share grows every year, and shows no signs of slowing.

Microsoft’s history reveals it as the sort of company that takes all competition seriously, and hates to lose even a tiny portion of market share (remember its attacks on Linux a few years ago?)

Think about it: Even with Vista’s launch more than 18 months behind us, and the next version (tentatively Windows 7) at least two years away, Microsoft felt the need to blow $300 million on an ad campaign to shore up consumer confidence in an operating system that runs 95 percent of world’s PCs.

I smell fear.

Posted by David Zeiler at 8:55 AM in Taunting Microsoft | Permalink | Comments (18)