Apple to host October 23 event, iPad mini expected

Apple to host October 23 event, iPad mini expected Sat, Oct 13 08:28 AM EDT By Poornima Gupta SAN FRANCISCO (Reuters) - Apple Inc will host an event on October 23 where it is expected to unveil a smaller iPad that will take on the less expensive devices offered by Amazon.com Inc and Google Inc, a source familiar with the matter said on Friday. Wall Street analysts have predicted for months that Apple was planning a smaller, less costly version of its popular iPad to take on cheaper competing devices, a move that analysts say might hurt its margins, but prevent its rivals from dominating an increasingly important computing segment. The source did not specify what the product would be and an Apple spokesman declined to comment, but tech blog AllThingsD reported earlier on Friday that Apple would launch the mini iPad at the event. The device is expected by many experts to have a screen between 7 and 8 inches. A smaller iPad will directly compete with e-commerce company Amazon's Kindle Fire HD tablet and Google's Nexus 7. Both devices have 7-inch screens and sell for $199. The first Kindle Fire, launched last year, grabbed about a fifth of the U.S. tablet market. The consumer device company is gearing up to unveil a new product at a major October 23 event, said the source, who declined to be named, only days before Microsoft Corp unveils Windows 8 and its new Surface tablet on October 26. The Nexus 7, manufactured by Asustek Computer Inc, has also seen a successful start, with the tablet selling out soon after launch. One Wall Street analyst said he had seen the smaller tablet, dubbed iPad mini by the media, while visiting component suppliers in Asia. "We actually had the opportunity to play with a pilot iPad Mini used by one of the vendors," Topeka Capital analyst Brian White said. "This 7.85-inch iPad Mini fit our hands like a glove and we were easily able to tuck the device in our sport coat, offering consumers a more mobile iPad experience for certain use cases." Apple events are typically among the most-watched items on the industry calendar, monitored by consumers and technology investors alike. The event in two weeks, however, comes at a time of volatility for the popular technology stock. Apple shares closed up 0.25 percent at $629.714 on the Nasdaq market, barely recouping significant losses suffered over the past three weeks as investors cashed out after it touched an all-time high of $705.07 on September 21. While the stock is up 55 percent this year, it is currently down 10 percent from its record high. Wall Street analysts have cited concerns about disruptions of iPhone supplies after a riot in September at one of the plants operated by its main contract manufacturer, Foxconn Technology, and sharp criticism from consumers about errors in its Maps service. MARGIN RISK? Apple's fiscal fourth quarter financial results are scheduled to be released on October 25, two days after the event, offering analysts a rare opportunity to grill executives about a new product just after details are made public. A smaller iPad could be a risk to Apple's industry-leading margins, given that neither Amazon nor Google has been known to make much money from the smaller tablets. Amazon's first Kindle Fire just about breaks even, according to IHS iSupply estimates. But the internet retailer sells a lot of content - music, books - through the Kindle line. Google has said that its $199 Nexus 7 is being sold at cost and has no profit margin. Apple earned gross margins of 23 percent to 32 percent on its U.S. iPad sales between October 2010 and the end of March 2012, a court filing by Apple in a recent patent trial against Samsung Electronics Co Ltd revealed in July. The company's margins on U.S. iPhone sales are almost double those of the iPad, averaging between 49 percent and 58 percent. Sterne Agee analyst Shaw Wu said that, if Apple prices the smaller tablet between $299 to $349, it could maintain the current margins. "The biggest cost in a tablet is the display," he said. "On a mini, the display will be a bit cheaper. If the tablet is priced below $299, Apple could still maintain a decent margin if it offers 8 GB of storage instead of the minimum 16 GB storage it has in the current iPad, Wu added. A mini version of the iPad marks a departure for the company that now has just one 9.7-inch iPad, although it does come with various storage options and starts at $499. Late Apple founder Steve Jobs famously derided the 7-inch screen as unwieldy for tablet applications, saying the devices should come with sandpaper so that users can file down their fingers to use them. But an internal email revealed during the patent trial showed that Internet chief Eddy Cue argued there was a market for a 7-inch tablet and that Apple should have one. The email, sent in early 2011 to top Apple executives, said Jobs had warmed up to the idea. Struggling Silicon Valley technology icon Hewlett Packard Co was among the first to show, albeit unwittingly, that there was indeed a healthy market for cheap tablets. Sales of the TouchPad took off after the company slashed the price to $99 from $399 and $499 after deciding to kill the product. (Reporting By Poornima Gupta and Jennifer Saba; Editing by Gerald E. McCormick, Marguerita Choy and Andre Grenon) ============ Apple's Cook fields his A-team before a wary Wall Street Wed, Oct 31 23:18 PM EDT By Poornima Gupta SAN FRANCISCO (Reuters) - Apple Inc Chief Executive Tim Cook's new go-to management team of mostly familiar faces failed to drum up much excitement on Wall Street, driving its shares to a three-month low on Wednesday. The world's most valuable technology company, which had faced questions about a visionary-leadership vacuum following the death of Steve Jobs, on Monday stunned investors by announcing the ouster of chief mobile software architect Scott Forstall and retail chief John Browett -- the latter after six months on the job. Cook gave most of Forstall's responsibilities to Macintosh software chief Craig Federighi, while some parts of the job went to Internet chief Eddy Cue and celebrated designer Jony Ive. But the loss of the 15-year veteran and Jobs's confidant Forstall, and resurgent talk about internal conflicts, exacerbated uncertainty over whether Cook and his lieutenants have what it takes to devise and market the next ground-breaking, industry-disrupting product. Apple shares ended the day down 1.4 percent at 595.32. They have shed a tenth of their value this month -- the biggest monthly loss since late 2008, and have headed south since touching an all-time high of $705 in September. For investors, the management upheaval from a company that usually excels at delivering positive surprises represents the latest reason for unease about the future of a company now more valuable than almost any other company in the world. Apple undershot analysts targets in its fiscal third quarter, the second straight disappointment. Its latest Maps software was met with widespread frustration and ridicule over glaring mistakes. Sources told Reuters that Forstall and Cook disagreed over the need to publicly apologize for its maps service embarrassment. And this month, Apple entered the small-tablet market with its iPad mini, lagging Amazon.com Inc and Google Inc despite pioneering the tablet market in 2010. Investor concerns now center around the demand, availability and profitability of new products, including the iPad mini set to hit stores on Friday.

"The sudden departure of Scott Forstall doesn't help," said Shaw Wu, an analyst with Sterne Agee. "Now there's some uncertainty in the management." "There appears to be some infighting, post-Steve Jobs, and looks like Cook is putting his foot down and unifying the troops."

Apple declined to comment beyond Monday's announcement. Against that backdrop, Cook's inner circle has some convincing to do. In the wake of Forstall's exit, iTunes maestro Eddy Cue -- dubbed "Mr Fixit", the sources say -- gets his second promotion in a year, taking on an expanded portfolio of all online services, including Siri and Maps. The affable executive with a tough negotiating streak who, according to documents revealed in court, lobbied Jobs aggressively and finally convinced the late visionary about the need for a smaller-sized tablet, has become a central figure: a versatile problem-solver for the company. Ive, the British-born award-winning designer credited with pushing the boundaries of engineering with the iPod and iPhone, now extends his skills into the software realm with the lead on user interface. Marketing guru Schiller continues in his role, while career engineer Mansfield canceled his retirement to stay on and lead wireless and semiconductor teams. Then there's Federighi, the self-effacing software engineer who a source told Reuters joined Apple over Forstall's initial objections, and has the nickname "Hair Force One" on Game Center. "With a large base of approximately 60,400 full-time employees, it would be easy to conclude that the departures are not important," said Keith Bachman, analyst with BMO Capital Markets. "However, we do believe the departures are a negative, since we think Mr. Forstall in particular added value to Apple." TEAM COOK Few would argue with Forstall's success in leading mobile software iOS and that he deserves a lot of credit for the sale of millions of iPhones and iPads. But despite the success, his style and direction on the software were not without critics, inside and outside. Forstall often clashed with other executives, said a person familiar with him, adding he sometimes tended to over-promise and under-deliver on features. Now, Federighi, Ive and Cue have the opportunity to develop the look, feel and engineering of the all-important software that runs iPhones and iPads. Cue, who rose to prominence by building and fostering iTunes and the app store, has the tough job of fixing and improving Maps, unveiled with much fanfare by Forstall in June, but it was found full of missing information and wrongly marked sites. The Duke University alum and Blue Devils basketball fan -- he has been seen courtside with players -- is deemed the right person to accomplish this, given his track record on fixing services and products that initially don't do well. The 23-year veteran turned around the short-lived MobileMe storage service after revamping and wrapping it into the reasonably well-received iCloud offering. "Eddy is certainly a person who gets thrown a lot of stuff to ‘go make it work' as he's very used to dealing with partners," said a person familiar with Cue. The person said Cue was suited to fixing Maps given the need to work with partners such as TomTom and business listings provider Yelp. Cue's affable charm and years of dealing with entertainment companies may come in handy as he also tries to improve voice-enabled digital assistant Siri. He has climbed the ladder rapidly in the past five years and was promoted to senior vice president last September, shortly after Cook took over as CEO. Both Cue and Cook will work more closely with Federighi, who spent a decade in enterprise software before rejoining Apple in 2009, taking over Mac software after the legendary Bertrand Serlet left the company in March last year Federighi was instrumental in bringing popular mobile features such as notifications and Facebook integration onto the latest Mac operating system Mountain Lion, which was downloaded on 3 million machines in four days. The former CTO of business software company Ariba, now part of SAP, worked with Jobs at NeXT Computer. Federighi is a visionary in software engineering and can be as good as Jobs in strategic decisions for the product he oversees, a person who has worked with him said. His presentation skills have been called on of late, most recently at Apple annual developers' gathering in the summer. Then there's Ive, deemed Apple's inspirational force. Among the iconic products he has worked on are multi-hued iMac computers, the iPod music player, the iPhone and the iPad. Forstall's departure may free Ive of certain constraints, the sources said. His exit brought to the fore a fundamental design issue -- to do or not to do digital skeuomorphic designs. Skeuomorphic designs stay true to and mimic real-life objects, such as the bookshelf in the iBooks icon, green felt in its Game Center app icon, and an analog clock depicting the time. Forstall, who will stay on as adviser to Cook for another year, strongly believed in these designs, but his philosophy was not shared by all. His chief dissenter was Ive, who is said to prefer a more open approach, which could mean a slightly different design direction on the icons. "There is no one else who has that kind of (design) focus on the team," the person said of Ive. "He is critical for them." (Additional reporting by Alistair Barr; Editing by Edwin Chan and Ken Wills) ==================== U.S. judge tosses Apple vs. Google lawsuit over patents Mon, Nov 05 19:14 PM EST By Dan Levine and Alexei Oreskovic (Reuters) - An Apple lawsuit against Google's Motorola Mobility unit over alleged patent abuse was thrown out on Monday just hours before trial, a setback for the iPhone maker in its efforts to gain leverage in the smartphone patent wars. The two rivals were set to square off in a Madison, Wisconsin federal court over the library of patents Google Inc acquired along with Motorola for $12.5 billion in May. Apple Inc claimed Motorola's licensing practices were unfair. However, late last week District Judge Barbara Crabb questioned whether she had the legal authority to hear Apple's claims, and on Monday she dismissed the case. A Google spokeswoman said the company was pleased with the order, while an Apple representative declined to comment. In a legal brief filed after Crabb's ruling, Apple contended that the judge does indeed have the authority to hear its claims. Lea Shaver, an intellectual property professor at Indiana University School of Law, said a ruling against Google would have diminished Motorola's patents as an effective bargaining chip in settlement negotiations. "This puts Apple back into the position it was before," Shaver said. Apple and Microsoft Corp have been litigating in courts around the world against Google and partners like Samsung Electronics Co Ltd, which use the Android operating system on their mobile devices. Apple contends that Android is basically a copy of its iOS smartphone software, and Microsoft holds patents that it contends cover a number of Android features. Microsoft is set for a trial against Motorola in Seattle next week in a case with similar issues as the Apple matter in Wisconsin. Apple and Microsoft accuse Google of demanding too high a royalty for some of its so-called standard essential patents. Motorola promised to license those patents on fair terms, they argue, in exchange for Motorola technology being adopted as an industry standard. In Wisconsin, Crabb had ruled during the run-up to trial that she might decide what a fair royalty for Motorola's patents should be. However, in a court filing last week, Apple argued that it would not consider itself bound by Crabb's rate if it exceeded $1 per Apple phone. Given Apple's position, Crabb questioned whether she had the power to issue merely an advisory opinion. "It has become clear that Apple's interest in a license is qualified," Crabb wrote on Friday. Microsoft, by contrast, has agreed to live with whatever terms U.S. District Judge James Robart sets at the Seattle trial. In Wisconsin, the trial was scheduled to begin Monday afternoon in Madison, but Crabb dismissed the case during a morning hearing. If Apple cannot convince Crabb to reconsider, then the matter could be appealed. In its statement, Google said Motorola has long offered licensing at reasonable rates. "We remain interested in reaching an agreement with Apple," the company said. The case in U.S. District Court, Western District of Wisconsin is Apple Inc. v. Motorola Mobility Inc., No. 11-cv-178. (Reporting By Alexei Oreskovic in San Francisco; Additional reporting by Dan Levine in San Francisco; Editing by Leslie Adler and Tim Dobbyn) =========== Apple and HTC settle global patent battle Sat, Nov 10 22:01 PM EST 1 of 2 By Dan Levine (Reuters) - Apple Inc and HTC Corp announced on Saturday a global patent settlement and 10-year licensing agreement that ends one of the first major conflagrations of the smartphone patent wars. Apple sued HTC in 2010, accusing the Taiwanese handset company of infringing on the iPhone maker's patented technology. It was Apple's first major legal salvo against a manufacturer that used Google's Android operating system. Apple and HTC did not disclose specific terms of the deal. In a joint statement, Apple chief executive Tim Cook said he was glad to reach a settlement. "We will continue to stay laser focused on product innovation," Cook said. HTC chief executive Peter Chou said his company was pleased to resolve the dispute so it could "focus on innovation instead of litigation." Since Apple first sued HTC, its smartphone patent war has engulfed competitors like Samsung Electronics Co Ltd and Google's Motorola Mobility unit. The iPhone maker won a $1.05 billion verdict against Samsung in August, while litigation against Motorola has failed to produce any decisive wins. However, Apple had the most success against HTC when it came to using litigation to actually disrupt the flow of products into the crucial U.S. market. Late last year, the U.S. International Trade Commission ruled that HTC had infringed upon one of four patents Apple had disputed and imposed a sales ban on some of the Taiwanese maker's phones. Though HTC said it had devised a technical workaround to Apple's patents, the company announced in May that shipments of its phones were being held up by U.S. customs officials. Once one of the industry's high flyers, HTC has been badly hit by competition from Apple and Samsung. Last month HTC forecast a 14.5 percent fall in revenue in the fourth quarter from the third, worse than analyst forecasts and the second straight quarterly decline this year. (Reporting By Dan Levine; Editing by Peter Cooney and Todd Eastham) ==============