Verizon’s new iPhone deal with Apple is a blow to Google and its Android phone ambitions. Given a choice, most consumers would opt for iPhone over Android devices. So, the availability of a new iPhone model at Verizon sales will cut into Android sales at a crucial time — just as Google’s gaining traction in the market. That said, the recent growth in Android phones from the likes of Motorola, Sony Ericsson and HTC suggests Apple shouldn’t take its market dominance for granted. A blend of smart functionality and appealing pricing is all a user needs to opt for an Android-based model over the iPhone. Check out this article from ChannelWeb, and this one; also have a look at an article in PCWorld, which shows that Google’s got big plans for Android.
Apple is now a $50+ billion revenue company on an annualized basis. The numbers investors will be scrutinizing are much bigger than originally expected because Apple has changed the way it accounts for certain revenue. It used to defer revenue from sales of iPhone and Apple TVs over a period of time under accounting rules that are in the process of changing Apple had until 2011 to adopt the new rules but did it today. The new rules have you book the sales completely up front. So, in the fourth quarter of last year (ended in September) it originally reported sales of $9.87 billion. That’s now been revised to $12.2 billion. There will likely be a lot of speculating about why Apple did it now rather than wait until the last minute. Like all of the speculation around a big product launch on Wednesday. CEO Steve Jobs all but confirmed today the talk of a tablet-sized computer.
“The new products we are planning to release this year are very strong, starting this week with a major new product that we’re really excited about,” Jobs said.
It started out as a bad day for Research In Motion. The maker of the popular Blackberry SmartPhones had a major crisis on its hands – Blackberry Internet Service users were without service for many hours. These are the non-corporate folks (read consumers) who contract through AT&T and Verizon, for example, to use their Blackberries. And this is just the market RIM has been going after – The Toronto Star said about half of Blackberry owners are consumers and it is the area it sees growth; nearly 80% of its new accounts in the second quarter came from consumers. It’s never great to have a service outage but the timing wasn’t great – the same day the company planned to release third-quarter earnings. After a disappointing second quarter report several months ago, the outage today could have been an ominous sign for skittish investors. But it wasn’t. RIM reported very strong earnings and a nice increase in sales that sent its shares up more than 11% in after-hours trading. The company earned $428.4 million on sales of $3.92 billion. In the 2Q, it disappointed with earnings of $475 million on sales of $3.53 billion. Many were wondering if Apple and its iPhone were stealing grabbing Smartphone share away from RIM. But RIM reported strong new account numbers today as well. It will be interesting to see if this means a slowdown for Apple or rather Smartphones cutting more broadly into traditional handheld phone sales, like those made by LG, Nokia or Motorola. The chart on the next page shows new account growth at RIM.