Apple's Retail Engine Keeps On Rolling
Look for up to 50 new Apple stores to open up around the world in 2010. The company plans to keep putting energy behind its profitable retail locations. Apple also scored a win in the courtroom, and a new Qualcomm chip could give added versatility to future iPhone models. Meanwhile, the Android platform looks to be shaping into a serious smartphone contender.
Apple's retail push shows no signs of slowing, and much of its momentum in the coming year will be directed to markets outside its domestic turf.
The company plans to open 40 to 50 new retail stores in 2010, said Ron Johnson, its senior vice president of retail, at a recent store opening in New York. More than half of these will be outside the United States; some will be in London, Paris and Shanghai.
That speaks to the continuing strength of Apple in an uncertain market and the burgeoning demand for its products. Apple now has 280 retail stores in 10 countries. They saw almost 46 million visitors in the third quarter, up 7 percent year over year. The stores chalked up revenues of nearly US$1.88 billion in the quarter, a new record that was 9 percent higher than the previous year's figure.
Annual revenue per store is about $26 million, or roughly $4,300 per square foot, Johnson said.
Highly profitable stores and a company that plans to open more make for a heady mix, and the fumes seem to be attracting investors. "I remain extremely positive on Apple and the outlook for its shares," Brian Marshall, an analyst at Broadpoint AmTech, told MacNewsWorld. "It's still the best technology company on the planet, in my opinion."
Shares for Apple closed at $206.54 Tuesday. That was down 9 cents for the day, though the value remains within a few dollars of its 52-week high.
The Clone Wars Won
Another bit of good news for the company came last week, when Apple won a summary judgment against Mac cloner Psystar for copyright infringement and violation of the Digital Millennium Copyright Act (DMCA).
Some issues still have to be decided, but the court ruling made it clear that Apple has the upper hand. Few options remain for Psystar. Apple filed suit in 2008, weeks after Psystar began shipping its own assembled PCs with copies of Mac OS X pre-installed. Apple alleged several violations in its lawsuit.
A big win against Psystar will not only close the door on third-party clones of Macs, but could also open the door to Apple going after other people who create "hackintoshes." A hackintosh is a computer built by some other PC maker on which its owner has installed, and is running, Mac OS X. One relatively popular method of creating hackintoshes lately has been to install OS X on a low-cost netbook computer running Intel's Atom chip. The latest update that Apple issued to OS X, however, doesn't work with Atom chips. This update was issued about a week before the recent court judgment.
Clones and hackintoshes that mimic the look and feel of Apple could be seen as a threat to Cupertino, since Apple focuses so strongly on a unique, branded customer experience. Anything that dilutes this experience -- for example, problems encountered when mixing its software with hardware it wasn't designed to run on -- could damage Apple's reputation, or so the reasoning goes.
A Little Chip of This, a Little Chip of That
In another development, Qualcomm announced that it's sampling hybrid chipsets that can handle HSPA+ and multi-mode 3G and LTE. That should interest investors, as it makes possible what some customers have been demanding for some time -- that Apple add Verizon as a second carrier for the iPhone in the United States
HSPA+, also known as "Evolved High-Speed Packet Access," is a 3G wireless broadband standard that allows for fast download speeds. AT&T is rolling out an HSPA 7.2 network, which will theoretically double downlink speeds on its 3G network.
The 3G/LTE side of this hybrid chip opens the door to running the iPhone on Verizon's wireless network. LTE is a 4G wireless technology, and Verizon, AT&T and T-Mobile all are planning to roll out LTE networks. Verizon will likely insist that the iPhone run on LTE but be compatible with 3G as well so that it won't leave any money on the table.
"Clearly Apple is interested in Qualcomm's technology with regards to CDMA and LTE networks, and I would expect them to become a customer of Qualcomm's in the second half of 2010," Broadpoint AmTech's Marshall said. "Such a deal could begin as early as July because AT&T's exclusive contract expires in June," he added.
Where's the Flash?
On Tuesday, Adobe announced pre-release betas of both its Flash Player 10.1 and Air 2 technologies. These will make it easier to create and run videos on anything from home television sets to mobile devices.
The focus is on mobile devices because "mobile is the fastest growing platform, growing at a double-digit pace," Tom Barclay, senior product marketing manager for Adobe Flash Player, told MacNewsWorld. Flash 10.1 conserves mobile devices' batteries by offloading some of the workload to run videos, rich Internet apps and animation from their CPUs to their hardware decoder chips and graphics processing units (GPUs), Barclay added.
Later this year, Adobe will publicly release Flash CS5. This will let developers build standalone iPhone apps that they can put on the app store.
Many smartphones currently run Flash natively in the Web browser rather than through specific apps. The iPhone, however, does not. That could cost Apple in the long run.
"The iPhone is so successful that content continues to flow to it," commented Rob Enderle, principal analyst at the Enderle Group. "However, if Android or any of the other platforms separately or collectively start to dominate with Flash, Apple could find itself the odd man out and have serious market problems." That problem, however, is several years away, Enderle told MacNewsWorld.
"I don't think not running Flash will have a big impact on the iPhone, at least in the short term," remarked Julien Blin, principal analyst and CEO at JBB Research. "Apple has been doing just fine without Flash, and it's likely to do so for a while." Apple does not want to adopt Flash because the technology could be a threat to its iTunes App Store, Blin told MacNewsWorld.
The Specter of Android
One other thing that interests Apple watchers is the success of the Android mobile operating system. The Motorola Droid, which was introduced last week, is selling well, and some forecasts have Verizon selling between 400,000 and 600,000 units by the end of the year.
Meanwhile, Android developers got a boost Tuesday when ARM launched the Solution Center for Android. This is a resource for designers and developers of ARM technology-based products running Android. More than 35 ARM partners have signed up for the center. They include Archos, America Megatrends, iWave Systems, Texas Instruments and Wipro.
Could news of strong sales for the Motorola Droid and the launch of the Solution Center for Android be worrying Apple? Cupertino is reportedly planning to offer sizable discounts on software, hardware and accessories for this year's Black Friday sale, according to the Boy Genius Report.
"I am comfortable Android won't have much impact on Apple and the iPhone," Broadpoint AmTech's Marshall said. "I think it will take share from RIM and other smartphone players like Nokia and Samsung."
So Apple's probably safe from the Android threat for now, but we need to keep a close eye on things to see how the situation shapes up.