Fortune Tech: Technology blogs, news and analysis from Fortune Magazine » Apple 2.0

63% of iPhones were activated outside the U.S. last quarter

2012-02-10T12:06:54Z

And that percentage is likely to increase sharply now that China has the iPhone 4S

Click to enlarge. Source: Asymco.com

The chart at right from Horace Dediu's Asymco blog shows the U.S. share of iPhone activations growing last quarter due, he speculates, to the U.S. launch of the iPhone 4S and the addition of a third domestic carrier, Sprint (S).

But the long-term trend is clear. The U.S. is becoming a progressively less important market for sales of Apple's (AAPL) most valuable product line.

The company is likely to report a sharp uptick in international sales this quarter, reflecting the crushing demand for the iPhone 4S exhibited when the device went on sale in China last month. The spread will only get wider if China Mobile (CHL), the world's largest mobile carrier, begins selling Apple's next iPhone later this year.

Below: Another view of the same data, showing activations in units rather than market shares.

Source: Asymco

Filed under: Apple 2.0

Why did Apple pop Thursday?

2012-02-10T11:37:59Z

Investors search for reasons the company's market cap grew by $15 billion in one day

Charts: Richard Bloch. Click to enlarge.

The $16.49 Apple (AAPL) rose Thursday was only its sixth largest one-day dollar gain, according to AAPLInvestors, and in percentage terms, 3.46% doesn't even make the top 10.

But when the world's most valuable company rallies a few points, its market capitalization gets a whole lot bigger. According to the Bespoke Investment Group, Apple's one-day gain Thursday -- $15.4 billion -- was larger than the market cap of half the companies in the S&P 500.

Why Thursday? There are no definitive answers but plenty of theories. Among them:

The second-hand report in the Wall Street Journal's AllThingsD blog that Apple will introduce a new iPad the first week in March
Rumors that the company will announce its first dividend since 1995 at its Feb. 23 stockholders meeting
The positive remarks of Saudi billionaire Prince Alwaleed bin Talal made about Apple on Charlie Rose Tuesday night, which may have been taken as a green light by what one investor called "deep sovereign pockets in the Middle East"
Speculation (unfounded, as near as we can tell) that Warren Buffet has been buying into the company
The impact of Apple's blow-out Q1 2012 earnings finally sinking in among the broader investment community

One footnote: Richard Bloch points out on Seeking Alpha that most of the action Thursday was in the derivatives market, not the stock itself. Volume on the NASDAQ was high, but not record-setting. The options volume, however, was off the charts. See above.

Filed under: Apple 2.0

Apple is now worth more than the GDP of Sweden

2012-02-09T22:05:00Z

Also, the combined market caps of Google and Microsoft. Steve Jobs would be pleased.

GDP: $458 billion. Map: Tourist Destinations

Apple (AAPL) closed Thursday at a record high $493.17, up a whopping $16.49 (3.46%) for the day. That pushed its market capitalization (share price times shares outstanding) to nearly $460 billion -- more than any other company in the world and, as Apple Insider's Neil Hughes noted, greater than the value of Microsoft (MSFT) and Google (GOOG) combined.

What else is Apple worth more than? Let's see ...

Updating some of the links in the Things Apple Is Worth More Than tumbler, and adding a few of our own, we find:

The gross domestic product of Sweden ($458 billion)
All the gold in the Federal Reserve, and then some. ($350 billion)
All the illegal drugs in the world, and then some ($321 billion)
Six and a half years of global coffee consumption ($70 billion/year)
More than six years of U.S. beef consumption ($74 billion/year)
More than five U.S. Civil Wars ($74-$84 billion each)
More than 2.5 Apollo space programs ($145-$170 billion apiece)
Three times the entire U.S. clothing industry ($150 billion)
Fourteen National Football Leagues ($33 billion for all the teams combined)

Filed under: Apple 2.0

Highlights of Steve Jobs' (heavily redacted) FBI file

2012-02-10T00:19:09Z

We slogged through the 119-page document so you wouldn't have to

Jobs at NeXT. Source: TheStreet

In 1991, while Steve Jobs was at NeXT and before he returned to Apple (AAPL), the first President Bush considered him for an appointment on the White House's Export Council, triggering an FBI background check.

In October 2011, MuckRock's Michael Morisy, a former journalist who has made a business of filing Freedom of Information Act requests, asked for copy. On Thursday, the FBI posted a heavily redacted version. You can read it here.

Among the highlights that jumped out at us:

Repeated mentions of his past drug use, including LSD, and his mistreatment of Lisa, the daughter born out of wedlock whom he initially refused to support.
Repeated characterizations of him as someone who "twists the truth and distorts reality."
Two individuals [names omitted] described him as "strong willed, stubborn, hardworking and driven, which they believe is why he is successful."
"They further stated, however, that Mr. Jobs possesses integrity as long as he gets his way."
A woman who was reluctant to discuss Jobs because she had "questions regarding his ethics and morality" described him as a visionary, charismatic but narcissistic individual who was "shallow and callous to people in his personal relationships."
In his interview with the FBI -- which he postponed for at least three weeks -- Jobs said he had traveled to the Soviet Union but was not a member of the Communist Party or any organization advocating the overthrow of the U.S. government. He was a member of the New York Athletic Club, but have never been there.
Jobs was the target of a bomb threat in February 1985, during his last months at Apple, according to a vague reference in the FBI's San Francisco files. Not much is known about this threat because one of the files that referred to it was missing and the other was hidden in a Pocatello, Idaho storage facility.
The FBI noted that Jobs graduated from Homestead High with a grade point average of 2.65 on a 4.0 scale.

Overall, not a flattering picture, but nothing we haven't heard before.

The biggest surprise: As near as we can tell, every one of the more than three dozen people interviewed by the FBI concluded -- no matter how dishonest, immoral or narcissistic they saw him -- that they would nonetheless recommend him "for a position of trust and confidence with the Government."

If you spot something juicy that we missed, let us know and we'll add it to the list (with credit, of course.)

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What's the point of those Apple price targets?

2012-02-09T14:55:56Z

Like the tortoise in Achilles' footrace, they may be perpetually unreachable goals

"There's scant evidence that the stock market itself has paid much if any attention to analysts' price targets in recent years," writes Needham's Charlie Wolf in a note to clients Thursday that raises his own Apple (AAPL) target $80 to $620.

He's got a point. the average target among the two-dozen analysts we sampled on October 19, the day after Apple's Q4 2011 earnings report, was $520. Yet that same day the stock fell from $422.24 to $398.62.

Now, with Apple's share price setting new records on a daily basis (it closed Wednesday at $476.68) the mean target, according to Thomson/First Call, has crawled ahead to just over $565.

"Pundits have written scores of articles that purport to explain Apple's tepid valuation," Wolf concludes. "In our opinion, all have failed. And so have we. But we continue to believe the valuation exercise is one worth undertaking if only to calibrate the difference between Apple's current share price and the fair price generated by our model."

Below: Wolf new model. Gotta love that Fudge Factor.

Source: Needham & Co.

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Chutzpah: Google also wants 2.25% of every iPhone sale

2012-02-09T12:04:00Z

It's not enough that Google borrowed the phone's look and feel to make Android?

From Google's IEEE letter. Source: FOSS Patents. Click to enlarge.

It took a Techmeme news cycle for the import of Google's (GOOG) letter to the IEEE -- the nonprofit organization that sets technical standards for everything from AC/DC converters to Wi-Fi networks -- to sink in.

Early reports praised the company for joining Apple (AAPL) and Microsoft (MSFT) in their calls for adherence to the "fair, reasonable and non-discriminatory" licensing terms that IEEE members promise to honor when they submit their patented technology for consideration as an industry standard.

It wasn't until FOSS Patents' Florian Mueller got his hands on the text and spotted the telling third paragraph that the tone of the news coverage changed. The paragraph states, in language it describes as "irrevocable," that when Google is through buying Motorola (MOT) and its 17,000 patents, it is prepared to ask for the same "maximum per-unit royalty of 2.25%" that Motorola is demanding of Apple for every iPhone sale

Apple has complained in European courts that Motorola's demand is unfair, unreasonable and totally discriminatory.

Mueller agrees. "2.25% of the selling price of the product as a whole," he wrote, "is absolutely out of step with the concept of FRAND and with industry practice."

To outsiders, 2.25% may not seem like a lot, but consider this: The online database maintained by the European Telecommunications Standards Institute lists 4,956 standards covering 117,964 patents filed by 175 companies. If each of them demanded 2.25% every time a competitor tried to build a compatible device, the industry would grind to a halt.

One can only imagine what Steve Jobs would say to Google's latest gambit. The proprietary technology he felt Google had "stolen" (his word) from Apple to build Android was original work, and not something Apple had asked to be made an industry standard. To try to create an equivalence with so-called essential patents -- at least one of which dates back to the age of the pager -- that Motorola promised at the time to share fairly with all comers may be the modern definition of chutzpah.

UPDATE: Pando Daily's MG Siegler reminds us what David Drummond, Google's chief legal counsel, wrote last August, before the Motorola acquisition plan was announced. In a blog post entitled "When patents attack Android," he took a firm, principled stance against per-unit royalty fees:

A smartphone might involve as many as 250,000 (largely questionable) patent claims, and our competitors want to impose a "tax" for these dubious patents that makes Android devices more expensive for consumers. They want to make it harder for manufacturers to sell Android devices. Instead of competing by building new features or devices, they are fighting through litigation.

Hmmm.

Filed under: Apple 2.0

Apple's $90 billion run

2012-02-08T23:53:25Z

The company has gained nearly one Facebook in value since Steve Jobs died

On Oct. 4, the day before Steve Jobs passed away, Apple (AAPL) shares closed at $372.50 and its market cap stood at $347 billion.

Four months later, the stock is up nearly $100 and its market cap is $437 billion. To put that $90 billion gain in perspective, it's nine tenths the value analysts have placed on Facebook in advance of its initial public offering.

Some believe that Facebook is being overvalued, but it's hard to argue that Apple is.

Erik Savitz in Forbes calculates that a Facebook worth $100 billion would have a P/E of 100x trailing earnings, or 27x trailing revenues. By comparison, he writes, Apple is trading at 3.4x trailing revenues and 13x trailing profits. Back out the nearly $100 billion Apple now has in cash, and the valuation drops to 2.6x revenues and 10x earnings.

Not that Apple can't get further squeezed. In fact, two prominent Apple bulls, Bullish Cross' Andy Zaky and Economic Timing's Jason Schwarz, have both made the case in the past week that Apple's shares are, in Schwarz's words, "ready for a sell-off."

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What's on Apple's iTV?

2012-02-07T16:52:27Z

Jefferies' Peter Misek takes a deep dive into the problem of acquiring quality content

Amid all the chatter this week about Apple's (AAPL) putative plans to build a standalone TV set -- from Best Buy's leaked customer survey to the Globe and Mail's report that Canadian telcoms are already testing the thing in their labs -- the 23-page report produced by Peter Misek's team at Jefferies International stands out.

Rather than get distracted by speculation about whether it would be controlled by voice, keyboard, arm waving or all three, Misek focuses on the nut that will be the toughest for any Web-TV manufacturer to crack: how to deliver a critical mass of the best content to its users when and where they want it -- which it to say, anytime, anywhere.

Misek raises and dismisses three approaches Apple's deal makers might take -- creating content, seeding content, buying exclusive access -- to zero in on what he believes will be the most likely: buying non-exclusive rights in a way that doesn't make Hollywood's content owners nervous.

"We think an iTunes-type model is the most likely scenario as Apple will pay less for non-exclusive content, provide access to a broader range of content (creating a better user experience) and package everything with a superior user interface and ecosystem. We believe Apple thinks it can win on a level playing field for content."

Sounds simple, but it gets pretty complicated. Below the fold: Misek's summary of five scenarios by which Apple could acquire non-exclusive content, with their pros and cons.

1) Partner with carriers who have a video offering: we believe the iTV is in the labs at AT&T, Verizon, Bell Canada, and Rogers. All these carriers have fixed line video offerings in addition to the wireless capabilities that Apple desires.
- Pros: simple to implement. High quality video with wide selection.
- Cons: the carriers' fixed line video footprint covers only a small part of the U.S.

2) Partner with MSOs: we are less sure if the cable companies will be involved in Apple's iTV plans.
- Pros: high quality video with wide selection.
- Cons: while many cable companies have wireless partnerships with a carrier (e.g., Comcast and Time Warner Cable recently linking with Verizon), a seamless hand-off between different devices would be more complicated.

3) Apple signs its own non-exclusive deals with content owners: while we believe this would be straight forward with older content (e.g., similar to a Netflix model), we believe the content owners will be recalcitrant to sell over- the-top rights to premium content. One factor is that the content owners fear that the MSOs would respond to a new video competitor (Apple) using their data pipes by degrading the speed of their data pipes, thus degrading the perceived quality of the content by users.
- Pros: Apple gains more content control.
- Cons: content owners hesitant. Quality of service depends on pipes owned by carriers and MSOs. The carriers' fixed line video footprint covers only a small part of the U.S.

4) Apple leverages the carriers' potential non-exclusive deals with content owners for over-the-top video service: Reuters reported in December that Verizon was negotiating for this type of service (i.e., offering video service outside of its FiOS footprint); however, Jefferies Telecom Services analyst Tom Seitz views this as unlikely.
- Pros: Apple does not have to pay anything.
- Cons: content owners hesitant. Quality of service depends on pipes owned by carriers and MSOs.

5) Combination of OTA broadcast TV and over-the-top IPTV catalog: while most people are addicted to cable and satellite TV, the transition of over- the-air broadcast television to high definition does allow for another option. Especially with the development of new low profile antennas (i.e., no big unseemly rabbit ears), oftentimes the picture quality is superior to pay-TV options though key cable channels like ESPN, Discovery, Food Network, etc., would be unavailable. This live TV content could be combined with archive TV and catalog movies for a fairly complete offering.
- Pros: inexpensive for Apple.
- Cons: broadcast reception, even with the new-generation antennas, can vary, and Apple usually insists on a uniformly excellent user experience.

Filed under: Apple 2.0

IDC: The iPhone is once again the world's No. 1 smartphone

2012-02-07T10:17:12Z

Regained the spot that it took from Nokia in June and gave up to Samsung in September

Click to enlarge. Source: IDC

It will come as no surprise to Apple (AAPL) watchers that the company sold 37 million iPhones last quarter. Tim Cook reported that number two weeks ago.

Getting comparable figures from Apple's competitors is a different matter, and that's where companies like IDC come in. Samsung, for example, used to report only the number of mobile phones it shipped -- which is not the same as selling them -- and in 2011 it stopped sharing even that.

So the report IDC publishes every quarter ranking the top smartphone manufacturers by its estimates of their worldwide shipments is a closely watched benchmark. Among the highlights of the press release it issued Monday: (I quote)

Apple climbed back into the market leadership position with the launch of its iPhone 4S worldwide, and in the process it reached a new shipment volume record for itself and for the entire industry for a single quarter.
Samsung marked a series of milestones for the quarter: breaking the 30 million units mark for the first time, posting the largest year-over-year increase among the top vendors, and finishing 2011 as the overall smartphone market leader.
Nokia posted the largest year-over-year decrease among the top vendors, but its smartphone strategy took another step forward with the release of its first Windows Phone smartphones.
Research In Motion finished the quarter with a mixed bag of results. Its new BB OS 7-powered BlackBerry smartphones reached additional markets, and total volumes for the quarter staved off a fourth consecutive quarter of sequential decline.
HTC: Despite the many high-profile launches during the quarter... the Taiwanese vendor still shipped lower volumes compared to the previous quarter.

Below the fold: IDC's Q4 2011 spreadsheet.

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Video: Grading the Apple analysts on a scale of A to F

2012-02-07T08:37:41Z

Two ways of seeing how well (or badly) the pros and amateurs predict Apple's earnings

Green = Amateurs, Yellow = Pros Source: Dediu, PED

We've been trying for several years to find the best way to show how much better the so-called amateur analysts (some of whom have since gone pro) are at estimating Apple's (AAPL) quarterly revenue and earnings than the Wall Street professionals who do it for the big banks and brokerage firms.

Now Asymco's Horace Dediu, who is a master at these things, has come up with an elegant solution. Using the data we've been collecting since 2008 for our quarterly Earnings Smackdowns (see here for the most recent), he's assigned grades to each analyst, where 0% error gets an A and 33% gets an F).

The image above, with pros in yellow and amateurs in green, is a static representation of the results. The YouTube video below shows the same data in motion.

Both versions make it clear that Q4 2011, the only quarter in which the pros beat the amateurs, was the exception that proved the rule.

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Android's original standard bearer -- HTC -- falls from grace

2012-02-06T11:42:05Z

Squeezed by Apple and Samsung, it had a bad quarter and expects the next to be worse

There was a time when HTC and Android were practically synonymous.

The Taiwanese manufacturer built the first commercially available Android phone -- the HTC Dream -- in 2008, and two years later collaborated with Google (GOOG) to build the Nexus One, the flagship of the Android line. Last November, it edged past Samsung, Apple (AAPL) and Research in Motion (RIMM) to take the lead in the U.S. market for smartphones.

How the mighty have fallen.

On Monday, HTC reported a 26% drop in fourth quarter profits and warned that revenues could drop 36% this quarter. Despite promises that the company would bounce back on the strength of four new models to be introduced at the Barcelona Mobile World Congress, the stock closed 5% lower in Asian trading.

"Our weakness in first-quarter guidance ... comes from facing competition in the U.S. from iPhone and Samsung," CFO Winston Yung told analysts in a conference call. He declined to provide unit sales numbers.

According to IDC, Samsung is now the No. 1 maker of smartphones in terms of shipments, both in the U.S. and worldwide (see here). But Apple is taking an ever larger share of the profits. In the December quarter, according to Asymco's Horace Dediu, Apple's iPhone captured 75% of worldwide profits in mobile phones -- smart or dumb -- with only an 8.7% market share, leaving precious little on the table for companies like HTC.

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Charlie Wolf: The launch of the iPhone 4S sent Apple Store sales 'into the stratosphere'

2012-02-05T12:35:59Z

In terms of revenue per sq. ft., think Tiffany's (its nearest rival) multiplied nearly threefold

iPhone 4S launch in Beijing. Photo by Feng Li/Getty Images

Apple Stores are always busy places, but they tend to go crazy when a major new product is launched. With the arrival of the iPhone 4S, writes Needham's Charlie Wolf in his tenth annual report on the state of Apple's (AAPL) retail empire, they went absolutely nuts.

The numbers for the quarter that ended Dec. 31:

Revenue per store: a record $17.08 million, $5 million better than Dec. 2010
Same store sales: up 42.6% year over year
Sales per square foot: $2,033 for the quarter, or an annualized rate of $8,133 (Tiffany's: $2,974 per sq. ft.)
Visitors per store: up 15.3% annualized
Share of Apple's worldwide revenue 13.2%
International sales: 58% of Apple's worldwide total
Stores at the end of the quarter: 361
Square feet per store: 8,400, up from 6,000 ten years ago
Stores planned for fiscal 2012: 40 total, about 30 overseas
Stores planned for China: 25 over the next 3 years, up from 5 today

Below: Wolf's chart of quarterly store revenue over the past 9 years. The spikes, he says, correspond to the "exploding popularity" of the iPod, the introduction of the iPhone, and the launch of the iPad, respectively.

Source: Needham & Co. from company reports

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What Motorola wants: 2.25% of Apple's iPhone sales revenue

2012-02-04T23:36:10Z

A blogger uncovers the $2 billion dispute behind Friday's bizarre back and forth

Source: FOSS Patents

Apple (AAPL) watchers were shocked Friday when the company, in response to a court-ordered injunction, removed the iPhone 4 and 3GS from its online Apple Store in Germany.

The injunction was suspended before the end of the day -- and the products restored -- but the bizarre incident left analysts and investors wondering what the hell was going on.

FOSS Patents' Florian Mueller thinks he's found the answer in an obscure legal brief filed in late January by Apple in the Southern District of California. The brief reveals -- perhaps inadvertently -- something that is usually a closely guarded industry secret: the terms of a royalty agreement to license a key piece of patented technology.

Apple needed the technology. Motorola (MOT) owned it. And it was asking, according to the document Mueller discovered, 2.25% of Apple's iPhone sales up to and including the iPhone 4.

According to Apple's SEC filings for fiscal years 2007 through 2011, revenue from those iPhone sales totaled $92.64 billion, of which Motorola seemed to be demanding a $2.08 billion cut.

It's unclear, says Mueller, whether this covered just one patent or all of Motorola's so-called standards-essential intellectual property but, he writes, "the amount still seems excessive to me."

Apple apparently agrees, and it has filed a series of discovery motions aimed at finding out how much Motorola charged Nokia, HTC, LG and Ericsson for the same technology.

If Motorola was trying to squeeze more out of Apple than its competitors, it could be in trouble. The patent in question is covered by the so-called FRAND rules. These require that technology that has become part of an industry standard be licensed under terms that are "fair, reasonable and non-discriminatory." Samsung is currently being investigated by the EU for just such an alleged FRAND violation.

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Canalys: Apple led the way as smartphones overtook PCs

2012-02-03T16:49:14Z

Total annual global shipments exceeded PCs (including tablets) for the first time in 2011

Source: Canalys

Canalys singled out Apple (AAPL) for special mention Friday when it announced that by its count, shipments of smartphones in 2011 overtook those of client computers, even when tablets are included.

"Apple's impressive end to the year resulted in it becoming the leading smart phone and client PC vendor in Q4 2011, with shipments of 37.0 million iPhones, 15.4 million iPads and 5.2 million Macs. It also smashed the record for the most smart phones shipped globally by any single vendor in one quarter, beating Nokia's previous record of 28.3 million shipped in Q4 2010. Moreover, Apple's performance meant that it displaced Nokia, for the first time, as the leading smart phone vendor by annual shipments. Apple shipped 93.1 million iPhones in 2011, representing growth of 96% over 2010. The iPhone 4S benefitted from pent-up demand resulting from the launch coming in October rather than June, but Apple's overall volume was also buoyed by continued shipments of the now more aggressively priced iPhone 4 and 3GS models."

For the year, according to the analytics firm, total smartphone shipments reached 488.0 million units, up 63% on the 299.7 million shipped in 2010. By comparison, the PC market grew 15% in 2011 to 414.6 million units, with 274% growth in tablet shipments. Tablets, which Canalys calls "pads," accounted for 15% of all client PC shipments in 2011.

Below the fold: Two more Canalys spreadsheets showing Apple's smartphone growth in fourth quarter and the year against that of Google's (GOOG) Android.

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iPhone patent wars: What's going on in Germany?

2012-02-06T21:37:54Z

Apple forced to pull older iPhones off its online store, faces an injunction on push e-mail

Yanked from the virtual shelves

UPDATE: Sales of Apple's iPhones resumed Friday. See here.

- - -

It was a crazy day for Apple (AAPL) in Germany.

First it removed the iPhone 4 and 3GS from its German online store -- the first time, as far as we know, that the company has been forced to stop selling a product because of alleged patent infringement. Then a judge in Mannheim Regional Court granted Motorola (MOT) a permanent injunction that would prevent Apple's customers in Germany from using the push e-mail services of iCloud or MobileMe.

There are workarounds in both cases.

Push e-mail will still work until Motorola tries to enforce the ruling (to do so it must first post a 100 million Euro bond). If it does, users can set up their iPhone clients to check for new mail every few minutes.
The iPhone 4S is still available for sale online, and Apple has apparently stockpiled enough older iPhones in advance of Friday's action to meet demand. "Customers should have no problem finding them at one of our retail stores or an authorized reseller," a company spokesperson told several news outlets.

Meanwhile, Apple is headed back to court. "Apple believes this old pager patent [in the e-mail case] is invalid and we're appealing the courts decision," a spokesperson told PaidContent. And the patent that forced Apple to pull the older iPhones offline is for the kind of industry standard technology that got Samsung in legal hot water for refusing to license under so-called Fair, Reasonable and Non-Discriminatory (FRAND) terms.

According to FOSS Patents' Florian Mueller, who as usual has the most detailed coverage of these matters (see here and here), one of the reasons Motorola has been doing particularly well in the Mannheim court is because it is represented by Quinn Emanuel, which, he says, "has an incredible track record in commercial litigation in general and IP litigation in particular."

In any event, the financial impact of today's actions should be minimal, according to RBC Capital's Mike Abramsky:

"We estimate that Apple's online sales of iPhone 3G/4 and iPad in Germany account for 90% of iPhone sales (Germany accounts for 4-5% of global iPhone and iPad sales, and we estimate online <33% of German sales). iPad3 expected in March may not be subject to the ban, if it moves to a Qualcomm baseband (like the iPhone 4S)."

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With 8.7% market share, Apple has 75% of cell phone profits

2012-02-03T16:08:34Z

Between them, Samsung and Apple are sucking up 91% of the winnings

Click to enlarge. Source: Asymco.com

Asymco's Horace Dediu on Friday updated his quarterly review of mobile phone profits, and the news for everybody but Apple (AAPL) just gets worse.

As the iPhone's share of the market in terms of units shipped has grown from 3% in second quarter of 2010 to 8.7% last quarter, Apple's share of the profits has swelled from 39% to 75%.

Dediu's chart of the eight largest manufacturers above shows this most clearly.

Only five are seeing any kind of profit at all in mobile telephony. Samsung, with a 16% profit share, comes closest to Apple. Nokia (NOK), Research in Motion (RIMM), and HTC are just scraping by. Motorola (MOT), LG and Sony (SNE), which bought out Ericsson last month, are still in the red.

Remember: We're talking about all mobile phones, not just smartphones. And the entire worldwide market, not just the U.S. This doesn't bode well for the manufacturers who have hitched their wagon to Google's (GOOG) Android or Microsoft's (MSFT) Windows Mobile 7.

For more of Dediu's charts, click here.

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Heavenly Steve Jobs ad spawns hellish flame war

2012-02-03T12:03:50Z

A Taiwanese impersonator brings out the worst in Apple's critics and fans

Homage or sacrilege?

It's hard to say which is worse, the tasteless appropriation of Steve Jobs' trademark jeans and black turtleneck -- with added halo and angel wings -- to hawk a technology he famously dismissed as "shit," or the kinds of things people are saying to one another on YouTube, where the Taiwanese TV ad at the center of the storm has gone viral.

As of Friday morning, "Action Pad Taiwan commercial" had drawn more than 100,000 views, 445 "likes," 787 "dislikes" and 310 comments in which Apple's (AAPL) critics and defenders hurl unprintable insults in a rapidly escalating flame war.

The company that sponsored the ad -- Action Electronics -- defended its use of a Taiwanese impersonator named Ah-Ken to promote its Action Pad, a combined tablet PC and multi-language dictionary that runs on Google (GOOG) Android operating system.

"Steve Jobs always promoted things that were good for people, Apple products, so his image can also promote other things that are good," a spokesperson told Reuters.

"Steve Jobs turning over in his grave?" asked the headline in the Los Angeles Times.

Apple, as usual, had no comment, but a cease-and-desist order would not be out of character.

Below the fold: The YouTube video.

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Conan O'Brien finds humor in suicides at the iPhone factories

2012-02-02T16:13:04Z

Team Coco's video bits can be hit or miss. The one about Apple's iNett was a miss.

Source: The Conan O'Brien Show

Maybe it was because I just got back from the return engagement of Mike Daisey's The Agony and Ecstasy of Steve Jobs at The Public Theater of New York.

Or maybe the details in the New York Times series on working conditions in Shenzhen, China, hit too close to home.

But for me the video sketch about iNett -- Apple's supposed solution to the cluster of suicides among Foxconn's factory workers that Conan O'Brien aired Wednesday night -- fell, if you'll pardon the expression, a bit flat.

Team Coco has done better in the past torturing iPhone prototype thieves, ridiculing Final Cut Pro X and spoofing Jony Ive.

But if you don't mind making light of self-destruction, you can get their latest video here.

Filed under: Apple 2.0

IDC: iPhone is No. 3 worldwide

2012-02-02T13:18:47Z

Apple's mobile phone shipments nearly doubled in 2011, overtaking LG and ZTE

Click to enlarge. Source: IDC

On the strength of sales of the iPhone 4S last quarter, Apple (AAPL) jumped two spots in IDC's ranking of the world's five largest manufacturers of mobile phones -- smart or otherwise.

In a press release issued Wednesday, IDC reported that weakness in the demand for so-called feature phones dragged down market growth in the Christmas quarter -- usually the biggest -- to a mere 6.1% year over year, its lowest point in more than two years.

By contrast, smartphone sales continued to grow sharply, according to IDC's Kevin Restivo, who pointed to Apple's newest model as a key driver. iPhone shipments grew 96.2% in 2011 and 128.4% last quarter.

Although Apple's 6% share of worldwide shipments in 2011 trailed far behind Nokia's (NOK) 27% and Samsung's 21.3%, the company continues to capture a disproportional share of the profits. The last time Asymco's Horace Dediu surveyed the field -- in July 2011, before the release of the iPhone 4S -- Apple had a 5.6% share of units shipped but was sucking up nearly two-thirds of the world's mobile phone profits. See here.

Filed under: Apple 2.0

ChangeWave survey: Demand for Kindle Fire slipping

2012-02-02T11:26:59Z

Chief complaints: lack of volume control or camera and that the battery life's too short

Click to enlarge. Source: 451 Research

They liked the price, the color screen and the selection of books on Amazon (AMZN). They wish it had a volume control button and a camera and that the battery lasted longer.

Those are some of the results of a survey of 254 Kindle Fire owners conducted in January by ChangeWave Reserach, a service of 451 Research.

54% said they were very satisfied with their new tablet, which is better than the 39% "other tablet devices" got in a November survey, but considerably less than the 74% of Apple (AAPL) iPad owners who said they were very satisfied.

Moreover, the percentage of early adopter types who told ChangeWave they were "very likely" to buy a Kindle Fire fell from 4% in December, when the initial excitement was at its peak, to 2% in January. The number who were "somewhat likely" to buy one fell from 13% to 10%.

But the finding ChangeWave found most interesting -- and which they highlighted in a release to the public Thursday morning -- was that nearly three-in-ten consumers who own a Kindle Fire (29%) said they will spend more money at Amazon over the next 90 days, compared with 19% of non-owners.

Given that Amazon is selling the Kindle Fire at a loss, that may be the result that matters most to CEO Jeff Bezos.

For more on the ChangeWave findings, click here.

Below the fold: More charts from the January survey.

Filed under: Apple 2.0