Showing posts with label microsoft. Show all posts
Showing posts with label microsoft. Show all posts
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Friday, December 16, 2011
5 Moves Microsoft Must Make In 2012
Microsoft CEO Steve Ballmer's to-do list for 2012 should include acquisitions, a strong tablet launch, and a move into services.
Microsoft remains the world's biggest software company, but it might not be for long unless it reestablishes itself, and its brands, as the products of choice for tech users in the consumer and enterprise markets. Once the unquestioned king of personal computing, Microsoft has become almost irrelevant in key markets like mobility and search, and even seemingly once unassailable franchises like Windows and Explorer are under threat.
Here are some moves the company must make next year if it hopes to regain some relevance.
1. Launch a tablet.
There may be no more pointed an indicator of what ails Microsoft than its fumbling when it comes to tech's hottest market--tablets. At the Consumer Electronics Show way back in January, 2010, CEO Steve Ballmer showed off a range of prototypes meant to assure the public that Windows would be a player in slates. But those efforts turned out to be so kludgy that even longtime ally HP ditched its plans for a Windows tablet and opted for webOS.
Two years later, Microsoft has yet to launch a legitimate entry. What's worse, there are indications that it could be another two years before a capable Windows tablet hits the mainstream.
By then, rivals like Apple and Google will have third-generation systems into the channel, and even peripheral players like Amazon and Barnes & Noble will have carved out solid niches. Forrester analyst J.P. Gownder believes that if Microsoft can't get a solid contender into the tablet market until 2013, it might be too late. "On tablets, Windows 8 is going to be very late to the party," said Gownder.
Microsoft needs to get a tablet out next year, not in 2013, or the race may be over.
2. Ship Windows 8.
On a similar note, Microsoft needs to get Windows 8 out the door next year. There can't be Windows 8 tablets without Windows 8, and the moribund PC market also could use the new OS in time for the 2012 holiday season. Consumers and even many business pros will only continue to purchase traditional desktops and laptops to the extent that they mirror the experience they have gotten used to on their smartphones and laptops, an experience that is all about touch and apps.
With its Metro interface, borrowed from Windows Phone, Windows 8 presents a more mobile look and feel, whether it's running on x86 or ARM chips. As Windows chief Steven Sinofsky noted at Microsoft's recent BUILD conference, many attendees who were given touch-based systems to play with continued to try to interact with their non-touch PCs by pressing the screen.
"People say touch is only for small devices or lightweight things. I promise you the minute you use a touch device with Windows 8, by the time you go back to your laptop or desktop you're going to be hitting that screen. You'll have fingerprints all over your monitor if it doesn't support touch," Sinofsky said
3. Jump into services.
Microsoft will ultimately need to come to terms with the fact that its customers are becoming less willing to pay for the type of software from which it makes most of its money--operating systems and desktop applications. Nobody buys an iPad because it runs iOS, they buy it for the Apple experience. Android does have some brand recognition as an OS, but it's free. Microsoft's other big software cash cow, Office, is also feeling pressure from free or low-cost offerings in the form of Google Apps and, to a lesser extent, from OpenOffice-based products like IBM's Lotus Symphony.\
o compensate, Microsoft needs to ramp up its efforts in enterprise tech services. The explosion in new computing form factors and architectures, from mobility to social networking and the cloud, means integration will remain a major challenge for IT shops for the foreseeable future, and they'll need help with all that heavy lifting and should be willing to pay for it. At the same time, all this Web 2.0 stuff has many companies rethinking their business models, a trend that provides an opportunity for high-end business consulting services.
IBM successfully made the transition to services and consulting once it saw that PCs were becoming a commodity. Microsoft needs to follow the same path now that software is becoming commoditized. It has the cash to pursue an acquisition of an Accenture, with whom it already has a services joint venture, or a Cap Gemini.
4. Lead With Xbox.
Despite its troubles over the past year, Microsoft has had one resounding success--the Xbox Kinect system. The company sold 10 million units in the four months after it launched the device on Nov. 4, 2010. Kinect features motion and speech recognition technologies that let users control the Xbox through physical gestures and vocal commands. In addition to filling Microsoft's coffers, Kinect has elevated the Xbox brand into the leading gaming and entertainment system.
The company needs to leverage that brand recognition across its other lines. It could start by launching a line of consumer phones and tablets that, even if they run Windows under the hood, carry the Xbox livery. That could be the beginnings of a strategy under which Xbox is the face of Microsoft's consumer products, while Windows remains the brand for the enterprise. In the consumer space, Windows has become your father's Oldsmobile, but in business it remains a trusted name that implies security and compatibility.
5. Take the Yahoo plunge.
Microsoft has toyed with acquiring Yahoo for the past several years, at one time making an offer as high as $33 per share. The Web portal could now be acquired for less than half of that. Reports indicate that Redmond may in fact be part of a consortium, which also includes Silver Lake and TPG Capital, that is looking to acquire a chunk of Yahoo.
Microsoft should go all the way. It already handles search for Yahoo via Bing, and despite Yahoo's missteps over the past couple of years, it remains the Web's most popular portal. Microsoft's own MSN, meanwhile, is an also ran. Yahoo could give Microsoft a much needed (and far less confusing) platform to pitch cloud services such as e-mail and apps to consumers and small businesses.
The new year is just around the corner Mr. Ballmer--have at it.
Thursday, December 15, 2011
New operating system for space: High-tech tycoons
SEATTLE (AP) — The tycoons of cyberspace are looking to bankroll America's resurgence in outer space, reviving "Star Trek" dreams that first interested them in science.
Microsoft co-founder Paul Allen made the latest step Tuesday, unveiling plans for a new commercial spaceship that, instead of blasting off a launch pad, would be carried high into the atmosphere by the widest plane ever built before it fires its rockets.
He joins Silicon Valley powerhouses Elon Musk of PayPal and Jeff Bezos of Amazon.com Inc. in a new private space race that attempts to fill the gap left when the U.S. government ended the space shuttle program.
Musk, whose Space Exploration Technologies will send its Dragon capsule to dock with the International Space Station in February, will provide the capsule and booster rocket for Allen's venture, which is called Stratolaunch. Bezos is building a rival private spaceship.
Allen is working with aerospace pioneer Burt Rutan, who collaborated with the tycoon in 2004 to win a $10 million prize for the first flight of a private spaceship that went into space but not orbit.
Allen says his enormous airplane and spaceship system will go to "the next big step: a private orbital space platform business."
The new system is "a radical change" in how people can get to space, and it will "keep America at the forefront of space exploration," Allen said.
Their plane will have a 380-foot wingspan — longer than a football field and wider than the biggest aircraft ever, Howard Hughes' Spruce Goose.
It will launch a space capsule equipped with a booster rocket, which will send the spacecraft into orbit. This method saves money by not using rocket fuel to get off the ground. The spaceship may hold as many as six people.
"When I was growing up, America's space program was the symbol of aspiration," said Allen, who mentioned his love of science fiction and early human spaceflights. "For me, the fascination with space never ended. I never stopped dreaming what might be possible."
For those attracted to difficult technical challenges, space is the ultimate challenge, Allen said.
"It's also the ultimate adventure. We all grew up devouring science fiction and watching Mercury and Gemini, Apollo and the space shuttle. And now we are able to be involved in moving things to the next level," he said, adding that he admires people like his former Microsoft colleague Charles Simonyi who have gone into space to experience it.
Allen is not alone in having such dreams, and the money to gamble on making them come true.
Bezos set up the secretive private space company Blue Origin, which has received $3.7 million in NASA startup funds to develop a rocket to carry astronauts. Its August flight test ended in failure.
"Space was the inspiration that got people into high-tech ... at least individuals in their 40s and 50s," said Peter Diamandis, who created the space prize Allen won earlier and is a high-tech mogul-turned space business leader himself. "Now they're coming full circle."
Diamandis helped found a company that sends tourists to space for at least $25 million a ride, and seven of the eight rides involved high-tech executives living out their space dreams. Simonyi paid at least $20 million apiece for two rides into orbit and attended Allen's Tuesday news conference, saying he wouldn't mind a third flight.
"Space has a draw for humanity," not just high-tech billionaires, Simonyi said, but he acknowledged that most people don't have the cash to take that trip.
Space experts welcome the burst of high-tech interest in a technology that 50 years ago spurred the development of computers.
"Space travel the way we used to do it has a '50s and '60s ring to it," said retired George Washington University space policy professor John Logsdon. "These guys have a vision of revitalizing a sector that makes it 21st century."
But Logsdon said the size of the capsule and rocket going to space seemed kind of small to him, only carrying 13,000 pounds. It didn't seem like a game-changer, he said.
Stratolaunch's air-launch method is already used by an older rocket company, Orbital Sciences Corp., to launch satellites. It's also the same method used by the first plane to break the sound barrier more than 50 years ago.
Stratolaunch, to be based in Huntsville, Ala., bills its method of getting to space as "any orbit, any time." Rutan will build the carrier aircraft, which will use six 747 engines. The first unmanned test flight is tentatively scheduled for 2016.
NASA, in a statement, welcomed Allen to the space business, saying his plan "has the potential to make future access to low-Earth orbit more competitive, timely, and less expensive."
Unlike its competitors, Allen's company isn't relying on startup money from NASA, which is encouraging private companies to take the load of hauling cargo and astronauts to low Earth orbit and the International Space Station. The space agency, which retired the space shuttle fleet earlier this year, plans to leave that more routine work to private companies and concentrate on deep space human exploration of an asteroid, the moon and even Mars.
Allen said his interest comes not just because of the end of the shuttle program or changes in government funding for space, but he does see an incredible opportunity right now for the private sector to move the needle on space travel.
Allen's company is looking at making money from tourists and launching small communications satellites, as well as from NASA and the Defense Department, said former NASA Administrator Michael Griffin, a Stratolaunch board member who spoke at a Tuesday news conference.
Just three months ago, Griffin was testifying before Congress that he thought the Obama administration's reliance on private companies for space travel "does not withstand a conventional business case analysis."
This is different because it's private money, with no help or dependence on government dollars, said Griffin, who served under President George W. Bush.
Allen and Rutan collaborated on 2004's SpaceShipOne, which was also launched in the air from a special aircraft in back-to-back flights. Sir Richard Branson's Virgin Galactic licensed the technology and is developing SpaceShipTwo to carry tourists to space. But Allen's first efforts were more a hobby, while this would be more a business, Logsdon said.
SpaceShipOne cost $28 million, but this will cost much more, officials said.
Allen left Microsoft Corp. in 1983, and has pursued many varied interests since then. He's the owner of the Seattle Seahawks football team as well as the NBA's Portland Trailblazers. He also founded a Seattle museum that emphasizes science fiction.
Allen said this venture fits with his technology bent.
"I'm a huge fan of anything to push the boundaries of science," Allen said.
Ap.org
Wednesday, December 14, 2011
Nokia Exec: 'Kids Today Fed Up With iPhone, Confused by Android'
Kids today! You just can't satisfy them. Well, Apple and Google can't--but, apparently, Nokia can.
According to the Nokia Director of Portfolio, Product Marketing and Sales, Niels Munksgaard, the youth of today are fed up with Apple's iPhone and confused by Google's Android platform. Er…yeah, okay.
"What we see is that youth are pretty much fed up with iPhones," Munksgaard told Pocket-lint in an interview Tuesday. "Everyone has the iPhone. Also, many are not happy with the complexity of Android and the lack of security."
Sure, Niels, because what kids today are really interested in is…smartphone security. That's why people who jailbreak their iPhones or root their Android devices are usually middle-aged.
Munksgaard goes on to say that the youth that "wants to be on the cutting edge and try something new are turning to the Windows phone platform." This of course explains why everyone is jumping on the Windows Phone 7 ship and totally rejecting phones that offer little "cutting edge" improvement, such as Apple's iPhone 4S. And why Android has such a small, shrinking percentage of the smartphone marketshare.
That's all sarcasm, of course. While Windows Phone 7 sales have been dropping precipitously, the iPhone and Android OS continue to shine--Apple sold over 1 million pre-order iPhone 4S's in less than 24 hours, while Android has been the best-selling smartphone OS since the fourth quarter of 2010.
Still, Munksgaard believes that Nokia has something different to offer the market, such as the brightly-colored designs of the Nokia Lumia 800 and the Nokia Lumia 710, Nokia's first Windows Phone 7 phones. Munksgaard says that Nokia wants to deliver services and phones that are different--"The marketplace is extremely crowded. I refer to it as a sea of sameness. When you walk up to a retail shelf at Phones4U and see the number of black mono-blocks sitting on the shelf, it is very confusing to the consumer."
Nokia also plans to offer different services, such as Nokia Mix Radio,Nokia Drive, and Nokia Maps. Nokia Mix Radio, for example, will deliver 15 million music tracks, sorted by genre or taste, that can be downloaded for offline listening. With Nokia Mix Radio you can skip six tracks per hour--so it's a lot like a built-in Pandora. The good news, of course, is that it works out of the box and costs nothing extra.
Pcworld.com
Wednesday, December 7, 2011
Windows Store For Windows 8: Your Questions Answered
As Microsoft readies the debut of Windows 8 beta code for February it's sharing more about one of the biggest additions to the upcoming operating system, a brand new app store. Microsoft is calling it Windows Store and it will feature what are called Metro-style apps designed for both Windows 8 tablets, laptops, and desktop PCs. Metro-style apps are primarily for managing photos, entertainment, social networking, and messaging on Windows 8 devices.
The Windows Store, Microsoft said Tuesday, will be the only way for consumers to purchase and install Windows 8 Metro-style apps.
In other words, Microsoft will have complete control over what you can put on your PC when using apps in the new touch-friendly Metro interface. This is a dramatic departure from Microsoft's previously more open philosophy that let anyone download to their PC any software they wanted from any source they wanted.
Microsoft is making this change to ensure Metro-style apps are better protected from malware, bugs and other typical PC problems. The end result, however, is that you must rely on Microsoft's judgment about which apps are and are not appropriate when using Metro-style apps. But in a nod to Microsoft's past, traditional PC software applications for Windows will still be available from third parties in the same way they are available today for Windows 7.
Microsoft's new app store will be similar to Apple's Mac App Store launched in January and available for OS X 10.6 Snow Leopard and 10.7 Lion. Although Apple still allows users to download Mac apps from outside sources.
Here's what you need to know about Microsoft's Metro-style walled garden inside Windows 8.
When Will The Windows Store Be Available?
Microsoft plans to ship the first version of the Windows Store with the public beta release of Windows 8 in late February. Microsoft had previously been cagey about when the Windows 8 beta was coming.
During the beta period only free apps will be available in the Windows Store. Microsoft plans to roll out its app payment platform at a later date.
Which Apps Will Be Available At Launch?
Microsoft didn't offer many details about apps saying only a select number of developers have been invited to offer apps during the Windows 8 beta period. On Tuesday at a Microsoft event announcing the Windows Store, the company demoed Metro-style apps such as Evernote, eBay, Cut The Rope (a popular mobile game by ZeptoLabs), and digital books from Disney. It's a good bet that at least some of these apps will be part of the Windows Store during the Windows 8 beta.
The software giant is also running a developer contest that will put eight apps from smaller app makers in the Windows Store during the beta period.
How Much Will Apps Cost?
The Windows Store will include free, and paid apps starting at $1.49.
Will There Be Trial Versions Of Apps?
Yes. Microsoft will allow app trials in its store. Developers can set trials to be time-based such as a 7-day trial period. App makers can also offer a feature-based trial that limits the app's functionality until you upgrade to the paid version.
Will The Windows Store Have In-App Purchases And Subscriptions?
Yes. But unlike Apple's iOS store, Microsoft will allow app makers to use their own payment platforms if they prefer. So newspapers could sell subscriptions using their own payment systems without going through Microsoft.
How Will The Windows Store Be Organized?
Microsoft says the Windows Store is "designed for discovery." In other words, the company claims it will be easy to find the apps you want in its app store. But the Windows Store doesn't appear to be organized all that differently from other app stores.
The Windows Store will let you browse apps by category, ranked lists, editorial curation and search. Windows Store app lists will include latest apps, most popular apps, and fast rising. You will also see personalized recommendations for apps based on your download history.
Is The Windows Store Web Based?
No, the Windows Store is a Metro-style app inside Windows 8; however, Microsoft will offer a web-based catalog of Windows Store apps for web browsing. Currently dubbed Windows Store Preview, the web version will be indexed by search engines, and display a complete catalog of apps. Clicking on a link from search results will bring you to the online app catalog. If you are running Windows 8, you will then see a button prompting you to open the Windows Store app to install the program.
App developers can also add a line of code to their sites that will create a "Get the app" button inside Internet Explorer 10 that links directly to the Windows Store. It's not clear if other browser will be able to display these links. Apple offers similar links that open the iTunes application in Windows or Mac, but these links work in almost all major browsers.
Microsoft's Windows Store sounds promising for the software giant and is likely to convince many developers to create Metro-style apps for Windows 8. Not only is Windows the largest consumer software platform in the world, but Microsoft also plans to offer developers an 80 percent cut of app revenue after their app makes $25,000. Most app stores including Apple's App Store and Google's Android Market offer developers a 70 percent cut of app sales.
Pcworld.com
The Windows Store, Microsoft said Tuesday, will be the only way for consumers to purchase and install Windows 8 Metro-style apps.
In other words, Microsoft will have complete control over what you can put on your PC when using apps in the new touch-friendly Metro interface. This is a dramatic departure from Microsoft's previously more open philosophy that let anyone download to their PC any software they wanted from any source they wanted.
Microsoft is making this change to ensure Metro-style apps are better protected from malware, bugs and other typical PC problems. The end result, however, is that you must rely on Microsoft's judgment about which apps are and are not appropriate when using Metro-style apps. But in a nod to Microsoft's past, traditional PC software applications for Windows will still be available from third parties in the same way they are available today for Windows 7.
Microsoft's new app store will be similar to Apple's Mac App Store launched in January and available for OS X 10.6 Snow Leopard and 10.7 Lion. Although Apple still allows users to download Mac apps from outside sources.
Here's what you need to know about Microsoft's Metro-style walled garden inside Windows 8.
When Will The Windows Store Be Available?
Microsoft plans to ship the first version of the Windows Store with the public beta release of Windows 8 in late February. Microsoft had previously been cagey about when the Windows 8 beta was coming.
During the beta period only free apps will be available in the Windows Store. Microsoft plans to roll out its app payment platform at a later date.
Which Apps Will Be Available At Launch?
Microsoft didn't offer many details about apps saying only a select number of developers have been invited to offer apps during the Windows 8 beta period. On Tuesday at a Microsoft event announcing the Windows Store, the company demoed Metro-style apps such as Evernote, eBay, Cut The Rope (a popular mobile game by ZeptoLabs), and digital books from Disney. It's a good bet that at least some of these apps will be part of the Windows Store during the Windows 8 beta.
The software giant is also running a developer contest that will put eight apps from smaller app makers in the Windows Store during the beta period.
How Much Will Apps Cost?
The Windows Store will include free, and paid apps starting at $1.49.
Will There Be Trial Versions Of Apps?
Yes. Microsoft will allow app trials in its store. Developers can set trials to be time-based such as a 7-day trial period. App makers can also offer a feature-based trial that limits the app's functionality until you upgrade to the paid version.
Will The Windows Store Have In-App Purchases And Subscriptions?
Yes. But unlike Apple's iOS store, Microsoft will allow app makers to use their own payment platforms if they prefer. So newspapers could sell subscriptions using their own payment systems without going through Microsoft.
How Will The Windows Store Be Organized?
Microsoft says the Windows Store is "designed for discovery." In other words, the company claims it will be easy to find the apps you want in its app store. But the Windows Store doesn't appear to be organized all that differently from other app stores.
The Windows Store will let you browse apps by category, ranked lists, editorial curation and search. Windows Store app lists will include latest apps, most popular apps, and fast rising. You will also see personalized recommendations for apps based on your download history.
Is The Windows Store Web Based?
No, the Windows Store is a Metro-style app inside Windows 8; however, Microsoft will offer a web-based catalog of Windows Store apps for web browsing. Currently dubbed Windows Store Preview, the web version will be indexed by search engines, and display a complete catalog of apps. Clicking on a link from search results will bring you to the online app catalog. If you are running Windows 8, you will then see a button prompting you to open the Windows Store app to install the program.
App developers can also add a line of code to their sites that will create a "Get the app" button inside Internet Explorer 10 that links directly to the Windows Store. It's not clear if other browser will be able to display these links. Apple offers similar links that open the iTunes application in Windows or Mac, but these links work in almost all major browsers.
Microsoft's Windows Store sounds promising for the software giant and is likely to convince many developers to create Metro-style apps for Windows 8. Not only is Windows the largest consumer software platform in the world, but Microsoft also plans to offer developers an 80 percent cut of app revenue after their app makes $25,000. Most app stores including Apple's App Store and Google's Android Market offer developers a 70 percent cut of app sales.
Pcworld.com
Saturday, February 12, 2011
Apple Said to Work on Cheaper IPhones to Ward Off Android-Based Handsets
Apple Inc. is working on new versions of the iPhone that are aimed at slowing the advance of competing handsets based on Google Inc.’s Android software, according to people who have been briefed on the plans.
One version would be cheaper and smaller than the most recent iPhone, said a person who has seen a prototype and asked not to be identified because the plans haven’t been made public. Apple also is developing technology that makes it easier to use the iPhone on multiple wireless networks, two people said.
Chief Executive Officer Steve Jobs, who remains involved in strategic decisions while on medical leave, would use lower prices to widen the iPhone’s appeal and keep it from losing further ground to Android devices. Less expensive iPhones may also ratchet up pressure on Nokia Oyj, whose handsets are especially popular in Europe and some developing markets.
“Instead of targeting 25 percent of the global mobile- phone market, Apple would be going after 100 percent,” said Charlie Wolf, an analyst at Needham & Co. in New York, who has a “buy” rating on Apple shares.
Google’s share of the global smartphone market more than tripled to 32.9 percent in the fourth quarter, eclipsing Apple’s 16 percent, according to Canalys. Apple will face another challenge as Nokia and Microsoft Corp. join forces in smartphone development, a partnership announced today.
Natalie Kerris, a spokeswoman for Cupertino, California- based Apple, declined to comment.
Apple added $1.30 to $355.84 at 9:59 a.m. New York time in Nasdaq Stock Market trading. The stock had climbed 9.9 percent this year before today.
Smaller, Cheaper
Apple has considered selling the new iPhone for about $200, without obligating users to sign a two-year service contract, said the person who has seen it. Android phones sell for a range of prices at AT&T Inc., Verizon Wireless and other carriers, and typically come with agreements that include a fee for broken contracts. The iPhone 4, sold in the U.S. by AT&T and Verizon Wireless, costs $200 to $300 when subsidized by a contract.
While Apple has aimed to unveil the device near mid-year, the introduction may be delayed or scrapped, the person said. Few Apple employees know the details of the project, the person said. Apple often works on products that don’t get released.
The prototype was about one-third smaller than the iPhone 4, and it had no “home” button, said the person, who saw it last year.
Apple would sell it at a low price mainly because the smartphone will use a processor, display and other components similar to those used in the current model, rather than pricier, more advanced parts that will be in the next iPhone, the person said. Component prices typically drop over time.
Dual-Mode Phone
Apple is also working on a so-called dual-mode phone, two people said. This device would be able to work with the world’s two main wireless standards -- the global system for mobile communications, used by AT&T and overseas carriers such as Vodafone Group Plc, and code division multiple access, used by Verizon Wireless. It couldn’t be determined whether Apple intended to include this capability in the cheaper iPhone.
Apple is working on a technology called a universal SIM, which would let iPhone users pick from a variety of GSM networks without having to switch the so-called SIM cards that associate a phone with a network, according to one person. Having universal SIM capability built-in would help cut the cost of distributing and managing millions of SIM cards.
The new features could also give Apple an advantage over mobile carriers in influencing customers. The device would be affordable without a carrier subsidy, so buyers wouldn’t need to agree to terms, such as termination fees, that carriers demand in exchange for lowering the cost of the phone.
Global Appeal
A cheaper iPhone would help Apple make deeper inroads in markets such as China and India, where many shoppers opt for lower-priced devices that don’t carry long-term contracts, Wolf said.
Apple has also worked on redesigned iPhone software that would let customers choose a network and configure their device on their own, without relying on a store clerk or representative of a carrier, according to the person.
Apple has gone down-market before. In 2004, when sales of the original $299-plus iPod were still rising, the company introduced the $249 iPod Mini. In 2005, when the iPod Mini was still a bestseller, Jobs discontinued it in favor of the cheaper iPod Nano. Apple began selling the last version of the iPhone, the 3GS, for just $49 in January -- though it required a two- year contract.
Price cuts and the absence of a carrier subsidy may put Apple’s margins under pressure.
Still, Apple is able to get big discounts from suppliers because of the large volume of iPhone sales and by signing long- term contracts. The company said in January that it has executed long-term agreements totaling $3.9 billion in recent months.
Google’s Android operating system also may suffer if Apple makes the iPhone more versatile and affordable. The Google- backed operating system benefited when Apple wasn’t available from Verizon Wireless. Verizon Wireless began selling the iPhone yesterday.
Bloomberg
One version would be cheaper and smaller than the most recent iPhone, said a person who has seen a prototype and asked not to be identified because the plans haven’t been made public. Apple also is developing technology that makes it easier to use the iPhone on multiple wireless networks, two people said.
Chief Executive Officer Steve Jobs, who remains involved in strategic decisions while on medical leave, would use lower prices to widen the iPhone’s appeal and keep it from losing further ground to Android devices. Less expensive iPhones may also ratchet up pressure on Nokia Oyj, whose handsets are especially popular in Europe and some developing markets.
“Instead of targeting 25 percent of the global mobile- phone market, Apple would be going after 100 percent,” said Charlie Wolf, an analyst at Needham & Co. in New York, who has a “buy” rating on Apple shares.
Google’s share of the global smartphone market more than tripled to 32.9 percent in the fourth quarter, eclipsing Apple’s 16 percent, according to Canalys. Apple will face another challenge as Nokia and Microsoft Corp. join forces in smartphone development, a partnership announced today.
Natalie Kerris, a spokeswoman for Cupertino, California- based Apple, declined to comment.
Apple added $1.30 to $355.84 at 9:59 a.m. New York time in Nasdaq Stock Market trading. The stock had climbed 9.9 percent this year before today.
Smaller, Cheaper
Apple has considered selling the new iPhone for about $200, without obligating users to sign a two-year service contract, said the person who has seen it. Android phones sell for a range of prices at AT&T Inc., Verizon Wireless and other carriers, and typically come with agreements that include a fee for broken contracts. The iPhone 4, sold in the U.S. by AT&T and Verizon Wireless, costs $200 to $300 when subsidized by a contract.
While Apple has aimed to unveil the device near mid-year, the introduction may be delayed or scrapped, the person said. Few Apple employees know the details of the project, the person said. Apple often works on products that don’t get released.
The prototype was about one-third smaller than the iPhone 4, and it had no “home” button, said the person, who saw it last year.
Apple would sell it at a low price mainly because the smartphone will use a processor, display and other components similar to those used in the current model, rather than pricier, more advanced parts that will be in the next iPhone, the person said. Component prices typically drop over time.
Dual-Mode Phone
Apple is also working on a so-called dual-mode phone, two people said. This device would be able to work with the world’s two main wireless standards -- the global system for mobile communications, used by AT&T and overseas carriers such as Vodafone Group Plc, and code division multiple access, used by Verizon Wireless. It couldn’t be determined whether Apple intended to include this capability in the cheaper iPhone.
Apple is working on a technology called a universal SIM, which would let iPhone users pick from a variety of GSM networks without having to switch the so-called SIM cards that associate a phone with a network, according to one person. Having universal SIM capability built-in would help cut the cost of distributing and managing millions of SIM cards.
The new features could also give Apple an advantage over mobile carriers in influencing customers. The device would be affordable without a carrier subsidy, so buyers wouldn’t need to agree to terms, such as termination fees, that carriers demand in exchange for lowering the cost of the phone.
Global Appeal
A cheaper iPhone would help Apple make deeper inroads in markets such as China and India, where many shoppers opt for lower-priced devices that don’t carry long-term contracts, Wolf said.
Apple has also worked on redesigned iPhone software that would let customers choose a network and configure their device on their own, without relying on a store clerk or representative of a carrier, according to the person.
Apple has gone down-market before. In 2004, when sales of the original $299-plus iPod were still rising, the company introduced the $249 iPod Mini. In 2005, when the iPod Mini was still a bestseller, Jobs discontinued it in favor of the cheaper iPod Nano. Apple began selling the last version of the iPhone, the 3GS, for just $49 in January -- though it required a two- year contract.
Price cuts and the absence of a carrier subsidy may put Apple’s margins under pressure.
Still, Apple is able to get big discounts from suppliers because of the large volume of iPhone sales and by signing long- term contracts. The company said in January that it has executed long-term agreements totaling $3.9 billion in recent months.
Google’s Android operating system also may suffer if Apple makes the iPhone more versatile and affordable. The Google- backed operating system benefited when Apple wasn’t available from Verizon Wireless. Verizon Wireless began selling the iPhone yesterday.
Bloomberg
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