Essential Apple News: Who's Following the iPhone to Riches?

With the way Apple (Nasdaq: AAPL  ) not only straddles the burgeoning tablet and smartphone markets but also holds sway across the computer, home-entertainment, and media fields, the moves it makes can have an impact on the future of hundreds of companies. With that in mind, we're taking a look at the week in Apple news to see how the latest activity affects the Cupertino giant, its suppliers, and even its competitors.

Apple and Verizon back in the news
After a brief lull, the iPhone-to-Verizon (NYSE: VZ  ) rumors came back to life this week, after The Wall Street Journal reported that Big Red will start carrying the phone early in 2011. With the need for a long lead time to produce the new components for a Verizon-capable iPhone, we can expect leaks about suppliers across the coming weeks. The obvious supplier to watch is Qualcomm (Nasdaq: QCOM  ) because of its expertise creating chipsets for Verizon's CDMA network.

An interesting subplot in the iPhone-to-Verizon saga is that other CDMA networks could benefit from Apple's creation of CDMA-compatible phones. Sprint (NYSE: S  ) would also enter the picture, and there are already rumors that China Telecom is in talks to get a CDMA-powered iPhone.

Read more analysis on the reports that Apple will hook up with Verizon.

The iPad's unstoppable momentum continues
Earlier this week, aspiring tablet rival LG announced that it's pushing back plans to release a tablet this holiday season and is now focusing on a 2011 release. The main culprit is a buggy Android operating system that's not optimized for tablets. To address the problem, Google (Nasdaq: GOOG  ) plans on releasing separate versions of Android for tablets and smartphones early next year.

Apple's decision to port its iOS from a smartphone to the iPad initially encountered a mixed reaction, but this news once again highlights how smooth the company's execution was. Apple's ability to release a largely bug-free tablet stands in stark contrast to the apparent difficulties Research In Motion (Nasdaq: RIMM  ) has had getting its PlayBook tablet to the market. Earlier this week, reports trickled out that because of problems with an initial design, RIM had to pull forward a second-generation tablet design. That move caused the company to miss out on releasing a tablet in time for the crucial holiday season.

LG's decision to hold off on its tablet debut because of Android bugs is bad news for Samsung, which still plans to roll out an Android-powered tablet in time for this holiday season. It's also bad news for chip companies such as NVIDIA (Nasdaq: NVDA  ) , which was counting on strong tablet sales to perk up its bottom line.

It looks as though the rush of competitive Android tablets will have to wait until the first quarter of next year. Meanwhile, Apple gets more time to continue building up a content advantage, as the number of iPad-specific apps exceeds 30,000 and the company gains more control and better pricing power over the supplies that tablet manufacturers provide. Semiconductor suppliers such as Cirrus Logic (Nasdaq: CRUS  ) , which has a long relationship with Apple and scores a design win with the iPad, should continue to benefit as the tablet's momentum continues unabated through the holidays.

Read more about Android's tablet woes.

iPhone supplies appear healthy
After persistent shortages that threatened to crimp holiday-season sales, it appears that iPhone production is catching up with demand. Fool analyst Rex Moore checked with several stores and found wide availability. In addition, Apple's online store now lists a wait of just five to seven business days, down from a 21-day wait after the iPhone 4 launched.

Read more about iPhone availability.

Looking ahead
In the week ahead, Microsoft (Nasdaq: MSFT  ) will unveil its completely revamped Windows Phone 7 mobile operating system. But even though the company is spending around $1 billion on the launch, it has quite a bit of catching up to do. Not only have handset makers rallied around Android's free operating system, but Microsoft will also be in a deep content hole, with Android and Apple both sporting app stores with more than 100,000 applications. Watch for the strength of handset-manufacturer and wireless-provider support as an indicator of Microsoft's ability to gain a foothold here. (See the Droid as an example of how a targeted campaign from a wireless company can make a product.) Without sufficient help on those fronts, Microsoft's own national campaign will struggle to make a dent in the share of the current market leaders.

That's it for this week's Apple news. If you're searching for other opportunities in the mobile world, we've created a special report featuring a mobile giant that The Motley Fool has put its own money behind. Get instant access to this report.

Editor's note: A previous version of this story incorrectly stated that Research In Motion's PlayBook tablet runs on the Android operating system. The PlayBook uses RIM's QNX operating system. The Fool regrets the error.

Interested in reading more about Apple? Add it to My Watchlist, which will find all of our Foolish analysis on this stock.

Eric Bleeker owns shares of no companies listed above. Google, Microsoft, and Sprint Nextel are Motley Fool Inside Value selections. Google is a Motley Fool Rule Breakers pick. Apple and NVIDIA are Motley Fool Stock Advisor recommendations. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Apple, Google, Microsoft, and Qualcomm. Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Motley Fool has a disclosure policy that's been bulking up thanks to vigorous use of its trusted Shake Weight.


Read/Post Comments (9) | Recommend This Article (15)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 09, 2010, at 12:28 PM, StockNewb wrote:

    You know I dont like Apple perse, just because the stock is to expensive for my 50$ a month budget. So I find troll like reasons to hate them.

    But god, they have this all in hand. No one is trying to create something new to take the game back and everyone is just playing catch up to Apple.

    Come on guys, Apple is good right now. But stop following the leader and be the leader. I expect Apple stocks will double again before anyone really starts to have innovative ideas to take them down with. (As per my stock watch list im pro Apple and negative everyone else.)

  • Report this Comment On October 09, 2010, at 12:29 PM, Aeoran wrote:

    Dear Mr. Bleeker,

    The section in your article about the stark contrast between RIM and Apple in terms of releasing a tablet, and the difficulties RIM seems to be having releasing a tablet, and RIM having to pull forward a second-generation design, really seems like complete speculation - right down to the references to unquoted Internet reports / rumours.

    What is not speculation and is in fact completely incorrect, is your statement that RIM's tablet is Android-based.

    Do you know something that the rest of the planet doesn't? I'm pretty sure the "QNX" has been blasted all over the planet - even into the rarified blogosphere of Apple worshippers.

    I'm not sure where that came from, but it's hard to trust the logic and the integrity of an article when it contains even one obvious factual error that no authoritative voice would have made.

  • Report this Comment On October 09, 2010, at 12:53 PM, TMFRhino wrote:

    Not sure if my last comment posted... So this might be a double post.

    Aeoran,

    The "Android-powered" reference was added by an editor trying to clarify my statement. Obviously, it's incorrect, as you're right in pointing out that the PlayBook is based on QNX's OS. I'll get that changed.

    Second, the source of the speculation was in the original post I linked to. However, you don't need speculation to see that RIM will be missing a pretty crucial holiday season. Regardless of whether RIM really had problems with Marvell's chip and had to pull a second generation PlayBook forward, they'll be releasing next year while Apple keeps their tablet momentum rolling.

    Thanks for posting!

    -TMFRhino (Eric Bleeker)

  • Report this Comment On October 09, 2010, at 1:51 PM, Henry3Dogg wrote:

    "But even though the company is spending around $1 billion on the launch, it has quite a bit of catching up to do."

    If Phone 7 matches the sales of MS's previous phone launch, the kin, widely believed to have sold less than 500, then that will be over $2 million per phone in marketing budget.

    If MS is really spending that much on launch marketing then bluntly the must be desperate.

  • Report this Comment On October 09, 2010, at 1:58 PM, TMFRhino wrote:

    Henry,

    No doubt they're desperate... Although, for what it's worth I think the "500 phones" rumor later turned out to be false. I think Microsoft later clarified they sold something along the lines of "in the thousands, but less than 10,000."

    Still a spectacular failure.

    What I find the most odd about WP7's release is that Microsoft's communications director Frank Shaw has tweeted that it won't be released on CDMA networks until 2011. Now, I won't claim to be some technical wiz on this, but I don't get how differing chipsets has that kind of effects on the application layer. Strikes me that MSFT is having some problems with Verizon and Sprint, which is a *very* big problem for the company.

    Best,

    Eric

  • Report this Comment On October 09, 2010, at 2:15 PM, Aeoran wrote:

    Hi, Eric,

    Thanks for the clarification - that makes sense re: the editor making an unfortunate error there; most of the time one would expect the editor to be improving and not diminishing the article.

    Re: the Christmas season... I'm just not sure that having the PlayBook out for Christmas makes a material difference to a company that had been pretty specific in establishing a claim to the enterprise for its product. Companies don't tend to buy IT products as discretionary Christmas presents. Discretionary Q4 purchases tend to be "use up the budget" purchases; budgets get set for Q1.

    Re: the "second generation" rumour - apologies, but I've read through the links and cannot find what you're speaking of. The closest thing I see is the reference to Ashok Kumar's postulating that the PlayBook is based on a TI processor, and not a Marvell Armada processor. If this is the correct post, then I would have to say that the post does not at all seem like support for a thesis that "RIM is advancing a second-generation design because it couldn't execute on a first-generation design, unlike Apple."

    My gratitude if you could clarify. Thanks!

  • Report this Comment On October 09, 2010, at 2:44 PM, TMFRhino wrote:

    Hey Aeoran,

    I think the enterprise aspect of that does make sense, and you'd expect that enterprise adoption wouldn't skew too heavily with regards to launch.

    However, I would point out that RIM is now something like 70% consumer sales (I think this was the number from their recent earnings call). You'd figure the PlayBook wouldn't be substantially different from their overall sales picture.

    Most importantly, any delays allow Apple's continuing content lead/scale in buying out and getting better prices on necessary components like displays, touch screen controllers, etc.

    Here's the original source re: the Armada swap out and second generation pull forward:

    http://blogs.barrons.com/techtraderdaily/2010/10/04/rimm-rep...

    As someone who's recommended Marvell, it's definitely not exciting news. However, you're right in that it hasn't been verified. We'll have to wait for a tear down to see what actually made it inside the PlayBook.

    Foolish best,

    Eric

  • Report this Comment On October 09, 2010, at 11:06 PM, jrmart wrote:

    What will all the other ME TOO IPHONE product companies do when Apple comes out with an indestructible IPHONE or IPAD made out of LIQUID METAL.

    In an 8-K filed on August 9, 2010, it was disclosed that Apple (AAPL) secured specific intellectual property rights from Liquidmetal Technologies (LQMT.) in exchange for a licence fee. This gives Apple exclusive rights to commercialize the product in the field of consumer electronics, while Liquidmetal will retain the right to market it in all other fields. The product is Liquidmetal, and it could help make an extremely sleek and aesthetically pleasing IPhone that is virtually indestructible.

    Once again Apple has invested in a leading edge technology.

    Hey StockNewB, you might be able to afford LQMT, but be careful because it is a penny stock.

    Check out their site at http://www.liquidmetal.com/

  • Report this Comment On October 10, 2010, at 2:23 AM, Aeoran wrote:

    Ashok Kumar's credibility is questionable - for example,

    http://daringfireball.net/2010/09/kumar_track_record

    Specifically to his claims on PlayBook, the one about "QNX Neutrino software platform was not ready for prime time" seems unbelievable. The only RTOS kernel in the world entrusted for decades to run nuclear reactor systems, military aeronautics, tanks, missile guidance systems, braking systems, entertainment systems, etc. is likely to be a lot more "ready for prime time" than Mr. Kumar gives it credit for.

    To strictly put it, QNX gives RIM the only real-time operating system in the smartphone / general computing environment.

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