Apple v. Samsung: Why the Future of Ideas Is at Stake

That distant sound you hear is Apple and Samsung slamming into each other in a San Jose courtroom like two bighorn rams vying for dominance. Apple says Samsung stole its ideas; Samsung says it had similar ideas first.

For many, it’s a simple patent case that will be won or lost based on the evidence of inspiration. Yet what’s at stake is more than the $2.5 billion Apple wants from Samsung’s hide it’s the future of innovation, and maybe even the very definition of an idea.

Apple and Samsung’s multi-billion legal battle over curves, colors and button placement is easily one of the most compelling and important patent cases in recent history. It could decide the future of Samsung’s mobile business in the U.S., at least.

The revelations coming out of the trial (and outside of it) are nothing short of stunning. Court documents and purposely leaked product plans have revealed the road to the first Apple iPhone and the Samsung’s pre-iPhone plans to make a button-free, slab-style phone.

This tit-for-tat will go on for weeks, as both sides try to prove to a jury that they alone came up with the idea for a rectangular, curved edge, all black gesture-ready smartphone device. The jurors will sit there trying to be impartial, like they’ve never owned or used a smartphone like the iPhone or Samsung Galaxy S III.
Everyone knows these phones and handsets like them. Touchscreens are everywhere. Icon-based interfaces are the standard.

I worry that the argument in the jury room will quickly devolve into an iOS versus Android debate. And yet the kind of questions at stake are more about design: Who came up with the idea of a curve first? Who thought of making a phone black and button-free first?

Obviously, neither Apple nor Samsung invented the rectangular phone with curved edges or tablet-like gadgets. Touch-screen PDAs go all the way back to the 1990s. Tablets also existed, though they were pretty much useless. But these early products clearly influenced every company that has since built smartphones and tablets. How could they have not?

To know what works, you have to know what didn’t work and you also have to recognize the handful of good ideas in those failed enterprises.

Apple is seeking billions in damages because Samsung lifted its ideas. Apple is partially right. Samsung was clearly influenced by the iPhone. Samsung admitted this on day one of the trial, stating: “the iPhone was an inspiring product to everyone. Being inspired by a product is called competition. It’s not copying.”

Samsung to Apple: iPhone Was Only an Inspiration

As opening statements began in the latest legal tussle over whether Samsung has unlawfully copied Apple products, Samsung summarized its argument with this surprisingly gracious zinger.

“The iPhone was an inspiring product to everyone,” the Korean company’s attorneys told a federal courtroom in San Jose Tuesday. “Being inspired by a product is called competition. it’s not copying.”

Previously, Apple attorney Harold McElhinny had argued that Samsung’s move to iPhone-like touchscreen phones was not coincidental. “Whenever a customer sees an electronic device with these characteristics, they think they are seeing an Apple product,” McElhinny said.

Apple’s lawyers also claimed that Samsung’s own internal documents would show a decision to move in a touchscreen direction. But Samsung countered that this alone would not prove Apple’s patents had been breached pointing out that Apple itself was inspired by the design decisions of Sony.

The patent trial is one of several currently underway around the world, as the two tech giants battle it out over whose patents are more relevant to their smartphones and tablets. Apple has said that it wants $2.5 billion from Samsung as part of any settlement.

Another Apple Lawsuit: Taiwanese University Sues Over Patents

Apple is embroiled in yet another patent lawsuit  this time with a Taiwanese university.

Taiwan’s National Cheng Kung University filed a patent infringement suit against Apple in a U.S. court, according to court documents. The legal battle is over Siri, the iPhone’s “intelligent” personal assistant that uses a speech recognition system. Siri helps users finish tasks using voice commands.

National Cheng Kung, which is seeking undisclosed damages, alleges that Apple is infringing on two U.S. patents that the university was granted in 2007 and 2010.

“NCKU has suffered monetary damages in an amount not yet determined, and will continue to suffer damages in the future unless Apple’s infringing activities are enjoined by this court,” the documents said. Winston O. Huff, a lawyer for the university, filed the documents Friday.

Yama Chen, the university’s legal manager, told Reuters, “We filed that lawsuit in the Texas court because it processes faster and its rulings are usually in favor of patent owners and the compensations are usually higher.”

Apple and National Cheng Kung did not immediately respond to requests for comment.

The lawsuit is yet another in a growing number of Apple’s legal battles. Apple and Samsung are in an ongoing legal dispute over design patents. The companies are battling it out in a patent trial, which began Monday.

U.S. District Judge Lucy Koh in San Jose, Calif., banned sales of Samsung’s Galaxy Tab 10.1, after Apple filed a motion for preliminary injunction in May, claiming the Android tablet infringes on an iPad-related patent.

Koh also granted a preliminary injunction on the sales of Samsung’s Android phone, the Galaxy Nexus.

Shanghai Zhizhen Network Technology, a Chinese tech firm, filed a similar Siri-related claim against Apple in early July, according to reports.

Hulu Plus Comes to Apple TV

Good news for Apple TV owners: Hulu Plus was quietly added to the device’s list of options on Tuesday.

The service went live Tuesday morning, a Hulu rep confirmed. Apple TV currently offers streaming for Netflix, YouTube, Vimeo and Apple’s own array of movies, TV shows and podcasts. Hulu Plus costs $7.99 a month the same price as Netflix’s streaming-only service.

Though not as high-profile as the iPhone or the iPad, Apple TV has been a hit for Apple, selling 4 million units over the past fiscal year. Last quarter, Apple sold 1.3 million of the devices compared to Microsoft’s 1.1 million Xbox 360s.

Everything That Might Be True About the iPhone 5

Rumors of an upcoming iPhone 5 release have been running rampant in the blogosphere. Apple will reportedly debut the new iPhone, alongside the iPad mini and the new iPod nano, at a special event on Sept. 12, according to the blog iMore.

U.K.-based newspaper The Guardian also reported a release date of “mid-September.”

Further boosting buzz, Apple has previously referred to a mysterious “fall event.”

Recently, leaked photos of the alleged iPhone 5 popped up all over the Internet, tantalizing Apple fanboys. Check out the gallery below for the most complete pics yet, shot by Lab Factory, a repair shop that may have access to early prototypes of the new iPhone. Pics of components purported to be part of the phone, as well as a fully assembled case, have also surfaced online.

Apple’s last iPhone release was the iPhone 4S on Oct. 4, 2011.

Apple Considered Investing in Twitter [REPORT]

Apple isn’t currently in talks with Twitter to invest in the social-networking site, but according to a report from The New York Times, the two companies were previously in such discussions that would value Twitter at more than $10 billion.

“Apple has considered an investment in the hundreds of millions of dollars, one that could value Twitter at more than $10 billion, up from an $8.4 billion valuation last year, these people [briefed on the matter] said. They declined to be named because the discussions were private,” the Times reports.

Social media, so far, isn’t in Apple’s wheelhouse, and it’s had fragile relations with Facebook in the past. Things with Twitter, on the other hand, have been a little more friendly. As the Times points out, Twitter’s baked in to Apple’s operating systems.

“Those guys are a great partner,” Twitter CEO Dick Costolo said of Apple in a separate interview, according to the Times. “We think of them as a company that our company looks up to.”

In the paired-up world of tech giants and social media, Microsoft and Facebook have each other and Google (which owns Apple’s mobile competitor Android) has Google+. Could Twitter and Apple be the next hot couple?

Secret Pictures of Apple Prototypes Pop Up in Court

Court documents released during the ongoing Apple and Samsung patent battle show early pictures of what the iPhone and iPad could have looked like, and hint at what features we could see in the future.

According to images obtained by The Verge, early prototypes of the iPad featured kickstands and side handles.

Meanwhile, an image of an iPhone touted diagonal corners which resembles the Motorola Photon 4G, as well as one with an elongated 16:9 display (with only half of the display featuring touchscreen capabilities). Some of these features have even been rumored to be mock-ups of next-generation Apple models.

To add fuel to the fire, some of the prototype images have the name “Sony” emblazoned on the back.

The news comes one week after another released court document revealed early pictures of the iPad from as possibly far back as 2002. The prototype was visibly thicker than the iPad model that launched in 2010 likely due to tech advancements made within that period. A home button also doesn’t appear on the tablet.

Although the iPhone launched in 2007 three years before the iPad Apple CEO Steve Jobs once said during an All Things D conference in 2010 that the concept of a tablet came years before the iPhone.

“I’ll tell you a secret it began with the tablet,” he told attendees. “I had this idea about having a glass display, a multitouch display you could type on with your fingers. I asked our people about it. And six months later, they came back with this amazing display. And I gave it to one of our really brilliant UI guys. He got [rubber band] scrolling working and some other things, and I thought, ‘my God, we can build a phone with this!’ So we put the tablet aside, and we went to work on the iPhone.”

Apple Wins Stay On Samsung Non-Copy Notice Ruling

After ruling that Samsung’s tablet was not as cool as the iPad, the UK court considered that a proper way to compensate the South Korean manufacturer was, among others things, for Apple to post a message which publicly clears Samsung of any accusations that it copied the iPad’s design.

Apple has managed to score a stay in the case, at least until October, when the company can be heard in front of the court.

Those of you who hoped to see a huge “Samsung did not copy us” message while going to Apple’s website will have to wait a little bit more, at least until the beginning of Q4. Apple will undoubtedly try to make the ruling go away, one way or the other, and by that time the next iPhone will hopefully be out there to compete with the ever-so-popular Galaxy S III.

Should You Wait for the iPhone 5?

For most companies, selling 26 million of any product would be reason to jump for joy. For Apple, however, when it posted iPhone sales of just 26 million in the previous quarter, it was a disappointment.

Analysts had predicted Apple would sell about 29 million iPhones, a drop from the 35.1 million sold the last quarter, but a manageable one. But 26 million is more like a free-fall especially when you consider Apple’s iPhone sales increased over the same period in 2011, even though that year’s new model, the iPhone 4S, was still months away from being announced.

As CEO Tim Cook himself observed on Apple’s earnings call, speculation about the next iPhone the so-called “iPhone 5″ may have played a part. After all, if you’re thinking about buying an iPhone, and you’re convinced Apple will debut its latest and greatest smartphone in a few short months, why wouldn’t you wait?

It’s not quite that simple, though. The same thoughts surely occurred to buyers last year, but there was no drop in sales until the summer, even though rumors were arguably even more rampant. There are two greater forces at work here: 1) The technologies that are rumored to be coming to the next iPhone are generational leaps in mobile tech, not mere incremental upgrades. And 2) Android is offering those very technologies, giving competing phones a greater edge.

So if you’re in the market for a smartphone today, is it a good idea to still wait patiently for the iPhone 5 (which, based on past history, is due to launch in the early fall) or should you start eyeing the competition? And why not get an iPhone 4S anyway? It’s still relatively new. Here’s what you should be thinking about:
  
Leaps in Mobile Tech

Apple, of course, hasn’t said one word about what the next iPhone will be, or even if there’ll be one.

However, per usual, there are dozens if not hundreds of rumors and alleged leaks about what features the iPhone 5 will have. A couple of the most talked-about abilities the iPhone 5 might have are 4G LTE and NFC (near-field communication).

Anyone who’s used an LTE phone can tell you it’s a huge leap in connection speed over 3G technologies, which are what current iPhones all have (misleading indicators on the AT&T version be damned). There’s simply no way the iPhone 5 doesn’t have LTE. The connections give a speed boost to all data tasks from watching HD videos to downloading email attachments.

However, this doesn’t come free. In addition to buying the new phone, you may want to get a new data plan, since LTE phones, by their nature, eat up data much more quickly. Also keep in mind that the carriers are pushing for users to switch away from unlimited plans. The carriers haven’t said anything about what sort of plans will be available for the iPhone 5 either, but it seems doubtful any unlimited plans will be in the cards, even “grandfathered” ones.

Then there’s NFC, the extremely short-range wireless tech that enables mobile payments. This feature is becoming so commonplace on phones that it’s hard to see Apple ignoring it yet again. In addition, many see Apple’s introduction of Passbook in iOS 6 as its first step into the mobile-payments space. Apple needs to have NFC in the next iPhone if it hopes to have any real influence there.

Besides the addition of LTE and NFC, there looks to be a strong chance Apple will pump up the size of the iPhone’s screen to at least 4 inches and shrink the dock connector to a mini-size proprietary plug. Both upgrades have obvious advantages, although a smaller jack would present an issue for anyone who uses a lot of legacy iPhone accessories. While Apple would be crazy not to release an adapter, it might not be included with the phone and it’s not necessarily something you’d carry around with you in any case.

At the same time, a smaller dock connector would help Apple improve on one of the features it holds up high: its thin design.

Android’s Edge

So waiting for the iPhone 5 seems like a good idea, mainly for the high-speed LTE connection and larger screen, but NFC and a potentially slimmer phone are nice, too (again, all rumor). However, if you wanted all those features and aren’t yet an iPhone user, you can get them all today from any number of handsets on the Android platform.

Besides all those hardware features, Android phones have better native camera apps than the iPhone’s. Newer Android phones like the HTC One X and Samsung Galaxy S III are equipped with burst modes and the ability to snap pictures while shooting video. On top of that, with the latest OS software, Jelly Bean, Android phones can now match Siri in terms of voice abilities.

It’s with the software, however, where Android falls down. Fragmentation is a huge problem for the platform, meaning once you commit to a device, it’s a big question mark as to when the latest version of the Android OS or even the one before that will be available to you.

As for the other platform options, Windows Phone and BlackBerry, both Microsoft and RIM are planning major upgrades with new hardware in the next several months. As a first-time purchase, neither are really worth considering until then.

Waiting: Smarter Than Usual

While it’s generally a bad idea to wait for a mythical product with phantom features, the iPhone 5 is a special case. We can reasonably predict what some of the major upgrades will be over the iPhone 4S, and they are indeed major (LTE being the biggie).

The iPhone 4S is still a fine phone it’s thin, it has a well-performing processor in the dual-core Apple A5 chip and of course there’s Siri. But speaking as someone who reviews competing phones regularly, it’s starting to look, well, old. In addition to obvious advantage of LTE, competing handsets are thinner, faster, lighter and have bigger screens.

The iPhone 5 looks sure to have most, if not all of those things, too, but it won’t get here for a few months. Should you wait? If you were thinking about an iPhone 4S, I’d say yes at least for most people. But if you’re not yet married to Apple, the latest Android phones already have pretty much everything that will make the next iPhone special (probably).

Apple Must Deliver the iPad Mini

By now you know the story. When Steve Jobs and Jonathan Ive were designing the first Apple iPad tablet, they looked at almost two dozen size options. Quickly Jobs narrowed it down to the now very familiar 4:3 aspect ratio, 9.7-inch screen. The rest is, as they say, history. Jobs never cottoned to a 7-inch screen and I tended to agree with him. The iPad defined tablet screen size for me. Even now, with another 17 million iPads sold in the third quarter of this year, it’s hard to argue with Job’s soothsayer-like logic.Yet I must. It’s time for the iPad Mini.

I know, many believe that Apple is well on its way to delivering a 7-inch iPad. There are signs and whispers from all corners, but I have never believed it. As I saw it, the Apple screen size philosophy was thus: if you wanted a smaller touch screen than an iPad, buy an iPhone.


Since Apple introduced the iPad in 2010, we’ve seen an ever-growing array of tablet screen sizes from other manufacturers, but nothing really caught on. Even the size of the bloated, yet somewhat-popular 5-inch Samsung Galaxy Note did not convince me that there was a market for mid-sized tablets. Five inches is too big for a phone, yet not really large enough to gain more screen value than you’d find in a 4.3-inch display or even the iPhone’s 3.5-inch screen.

When the 7-inch Amazon Kindle Fire and Barnes & Noble Nook tablets arrived, I lauded them as better than most Android tablets, but still preferred my iPad’s larger screen and iOS interface. Though exact sales numbers for the Kindle Fire (and Nook) are almost impossible to come by, IDC said the 7-inch Fire, which launched late last year sold almost 5 million units and gobbled up 14% tablet marketshare. Impressive, though Apple sold more than three times that many iPads in its most recent quarter.

The Fire’s been acknowledged as the most successful Android tablet yet. At the time, I didn’t think its success had anything to do with size. Now I’m not so sure.

It was the arrival of Google’s Nexus 7 tablet that changed my mind. I’ve spent a few weeks with it and It’s easily the best Android tablet on the market. Not only is the Asus hardware top-notch, but it has something all other Android tablets lack: Android 4.1 (Jelly Bean) The popular Fire is still running Android 2.3 (same as the Nook). Jelly Bean has, at least for me, transformed the Android tablet experience. It instantly makes the Nexus 7 better than any Android tablet I’ve ever used and has started to convince me that at 7-inch tablet is not an odd duck, but a peacock among tablet hardware.

I’m clearly not alone. Google’s already sold out of initial Nexus 7 16 GB inventory. As much as I liked the Kindle Fire and Nook Tablet, I never imagined the kind of pent up demand I’m seeing for 7-inch devices.

Like the Kindle Fire and Nook device, the Nexus 7 is primarily a consumption device. It’s effective for e-mail, movies and especially books. The high resolution screen makes most magazines look lovely, but you’ll end up reading the stories in text form. Web browsing with the new browser interface is about as good as it is on every other 7-inch device, which is to say just okay. In landscape mode, I’m often painfully aware of how much screen real estate is eaten up by tabs and the URL. Games and movies look excellent on the high-resolution screen and the whole interface has a fluidity and intuitive nature lacking in most other tablets. I love, for example, that it places often used apps on my home screen.

By the way, it’s not a small thing that 7-inch tablets are about consuming content. Take a look around. The world is filled with consumers, not creators.

Google Play is in some ways almost as good as Apple’s App Store. It certainly looks better than the old Android Marketplace. Still, Google has done little to improve the app organization and help me find apps specifically designed for tablets (Can someone tell me what’s so hard about fixing this?).

Even so, I’m now somewhat smitten with the Nexus 7 and realize that, if the iPad never existed and this was the first truly consumer tablet, I might have fallen in love with it.

And that’s the point: For millions of consumers the Nexus 7 is (like the Kindle Fire before it) their first tablet. They don’t know from the iPad and the Apple ecosystem. Obviously, they’ve seen the iPad (there are nearly 100 million of them now in consumers hands), and have an awareness of the platform, but their hands are now holding these light, powerful, do-everything Android devices that are as effective as the iPad and, guess what, more affordable, too ($199 is the magic price Steve Jobs once said so himself).

Are they better than the iPad? Not by my measure (I think I’ll always gravitate to the larger screen and Apple iOS ecosystem), but the writing is on the wall. The iPad Mini can no longer be a speculative product. To compete, Apple simply must deliver a $199, 7-inch iPad and it needs to do it before the end of this year.

Still a Hobby? Apple Sells 4 Million Apple TVs in Fiscal Year

Apple sold 1.3 million Apple TV devices in its third quarter, CEO Tim Cook said on Tuesday’s earnings call. That was up more than 170% year over year.

According to Cook, Apple has now sold more than 4 million Apple TVs in the fiscal year. While Cook still says that this is “still at a level that [the company] would call a hobby,” he says the company is continuing to “pull the string to see where it takes us.”

Cook also acknowledged that Apple “isn’t one to keep around projects that it doesn’t believe in,” noting that the Apple TV has a lot of support at Apple.

Of course, most analysts expect that the Apple TV will serve as a stepping stone for Apple’s more broad TV plans.

It’s remarkable just how much the Apple TV business has improved for Apple over the last few years. The company famously refused to break out sales figures for the product at conference calls only acknowledging more sizable sales figures, like 1 million units sold markers and not being more specific on a quarterly basis.

As Tim Cook said on the call, “four million is not a small number. It’s small relative to iPhones and iPads perhaps, but it’s not a small number.”

Apple’s most recent revision of the Apple TV was released in March. It supports playback of 1080p content and integrates with AirPlay.

OS X Mountain Lion which is available now allows users to share the screen on their Mac with an Apple TV seamlessly.

Is Apple Gearing Up for Another Blowout Quarter?

Apple has proven a master of setting expectations low for its quarterly earnings and then zooming past them, so anything less than a blowout is viewed as a disappointment. Will Apple’s streak hold for Tuesday’s fiscal third-quarter earnings?

If the company’s stock price is any indication, analysts are pretty confident: Apple’s stock price was up slightly in pre-market trading on Tuesday. Over the past month, Apple’s stock has risen close to 4%. Since the beginning of the year, Apple’s stock price is up 49%.

That optimism comes despite an expected drop in iPhone sales for the quarter. Apple sold 35.1 million iPhones in the last quarter. In 3Q though, analysts expect that number to be smaller as consumers wait for the iPhone 5 to be announced and hit the market in October. How many iPhones will Apple have sold? It depends on whom you ask: Andy Hargreaves, an analyst with Pacific Crest Securities in Portland, Ore., expects Apple to post sales of 25.4 million iPhones; Morgan Stanley analyst Katy Huberty pegged the figure at 31 million. A list of projections by institutional analysts compiled by Philip Elmer-Dewitt at Fortune, meanwhile, revealed a consensus of 28.9 million.

Since the iPhone accounts for more than 50% of Apple’s revenues and profits, analysts expect Apple’s overall sales and revenues to be down. Elmer-Dewitt’s consensus found pro investors predict earnings of $10.32 per share on sales of $37 billion compared to $12.30 per share on revenues of $11.6 billion last quarter.

Meanwhile, the consensus on iPad sales is 15.6 million, a big jump over last quarter’s 11.8 million, which was viewed as a slight disappointment. The difference, however, can be attributed to the fact this 3Q was the first full quarter in which Apple’s new iPad was available. Recall that the new model was introduced just a few weeks before the end of Apple’s 2Q.

As for Mac, the much-lauded introduction of the MacBook Pro is expected to have a small impact on sales for the segment: institutional analysts predict sales of 4.4 million vs. 4 million last quarter.

Just Buy a Mac? Upgrade to Mountain Lion for Free

If you purchased a new Mac after June 11, you’ll be able to claim a copy of Mountain Lion through Apple’s Up-To-Date program.

When Mountain Lion officially launches in the Mac App Store, simply visit Apple’s Up-To-Date page. Fill out a short form with basic contact information and the serial number of your new Mac. Once the information is verified, Apple will email you a redemption code to claim a copy of Mountain Lion in the Mac App Store.

The new version of OS X is expected to be released following Apple’s Q3 earnings call scheduled for July 24. You will have 30 days from the release date to take advantage of this free upgrade.

Mountain Lion’s core features are inspired by iOS to bring a more unified experience across all Apple devices. New features such as Messages and Notification Center will give you a taste of iOS on your Mac, while enhancements like Gatekeeper will help keep your system secured.

New iPhone Will Have a Smaller Dock Connector [REPORT]

Apple’s next generation iPhone will have a 19-pin dock connector instead of the current 30-pin one, Reuters reports, citing two sources familiar with the matter.

While Apple has declined to confirm this, the report is in line with earlier rumors that go as far back as February 2012, claiming the iPhone’s dock is about to go on a diet.

The smaller dock connector will “make room for the earphone moving to the bottom,” Reuters’ sources say.

While a smaller dock connector would ultimately benefit users, it will cause problems for owners of various iPhone, iPod and iPad accessories which will not work with the new connector at least not without an adapter.

Apple’s new iPhone is also rumored to have a larger (but thinner) screen, though none of this has been officially confirmed.

Apple: Bernstein Fears Q3 Results, Q4 Outlook Both Miss

apple logo

There’s a slightly worrisome note this morning from Bernstein analyst Toni Sacconaghi about the near-term outlook for Apple.

He writes that there is “a reasonable probability” that the company will miss consensus estimates for the fiscal third quarter ended June doe to macro weakness in China and Europe, a lull in the iPhone product cycle, a later-than-expected introduction of the new iPad in China and the late quarter introduction of new Mac notebooks.

His forecast: 28.5 million iPhones (down from 29.9 million), 15.1 million iPads, 4 million Macs, 6.3 million iPods. He cuts his FY Q3 revenue projection to $35.4 billion from $37.1 billion; consensus is $37.3 billion. For profits he goes to $10.24 a share from $10.53, below consensus at $10.37.

Sacconaghi is actually a little more concerned about the fiscal fourth quarter ended September.

“While many buyside investors understand that FY Q3 results may be weak, we worry that FY Q4 guidance may be significantly lower than consensus’s current forecast – we believe that Q4 EPS guidance could be as low as $8 to $8.25 in EPS (vs. consensus at $10.29, we’re at $9.47), with revenue guidance in the $33 $34 billion range, well below consensus at $38.2 billion (we’re at $34.3bilion),” he writes.

Sacconaghi says he expects iPhone 5 will be launched in the December quarter.

“Consensus revenues assume that Apple’s revenues and EPS increase sequentially in [fiscal] Q4, which we believe is highly unlikely, unless the iPhone 5 is launched during the quarter,” he cautions. “We note that last year, Apple’s revenues and EPS both declined sequentially in Q4 preceding the iPhone 4S launch. We believe that an iPhone launch in the quarter is unlikely, given historical precedence, commentary from Qualcomm, and supply chain chatter.”

For the September quarter, he sees 24.2 million iPhones, 15.9 million iPads, 5.3 million Macs and 5.6 million iPods

So what to do with the stock here?

“We are a bit torn on Apple’s stock, but on balance believe that it risks treading water or underperforming coming out of earnings,” he writes. “That said, we underscore that the near term risks are timing related and there is no fundamental change to our investment thesis in AAPL.”

Ergo, he is sticking with his Outperform rating and $750 target price.

“Despite the possibility of sluggish performance in the near term, we remind investors that Apple is a very difficult stock to time, and that the stock’s outperformance over the last 2 years has been concentrated in short time periods,” he writes. “Moreover, we note that the issues we highlight are principally related to the timing and the launch of iPhone5, and other than enhanced seasonality, our thesis and outlook for Apple remain unchanged. Moreover, once visibility into the timing of the iPhone 5 launch becomes apparent, we believe that investor sentiment will become meaningfully positive.”

Apple Will Sell A Smaller iPad Or Be Disrupted From The Bottom Up By Google's Nexus 7

Apple watcher Ryan Jones, who blogs at IAmConcise, has an interesting graphical argument for a smaller, less expensive iPad. In his post today, The Reason for the iPad Mini, Jones refers to Tim Cook’s recent statement that Apple will “not leave a price umbrella for competitors” in the tablet space. A price umbrella is the cover that a market leader provides other companies by establishing a premium price for their products. Competitors can enter the market at lower price points and disrupt the leader’s dominance, in Jones words, “from the bottom up.”

Apple has effectively defended itself from bottom up competition twice before, Jones points out, with the iPod and iPhone. In the case of the iPod, it filled the bottom niche with the Nano and Shuffle. With the iPhone, Apple has been able to get the price down to $0 by continuing to sell the 3GS with its $400 price tag fully subsidized by the carriers.

So Jones has identified the three strategies that Apple has used to close the price umbrella in the past: 1) create a new product line 2) keep selling old hardware and 3) get someone else to subsidize the product. With the iPad, Apple has already played the old hardware card by selling the iPad 2 at $399. But the price umbrella is still open down to the $199 price of  the Google Nexus 7 and the Kindle Fire. It’s worth noting that Google makes exactly $0 on each Nexus 7 and Amazon loses money on each Fire.

The difference between the iPhone and the iPad, in terms of the third strategy, is that many iPads are sold WiFi only, without a data plan. In this way they more closely resemble the iPod Touch in terms of the price umbrella. So that really only leaves  Apple with the first strategy, creating a new product line.

Jones makes his point by charting every current model of iPhone, iPod, and iPad by price (see above). It’s a very compelling visualization because he lets the datamthe missing triangle in the iPad clustermmake his argument for him.

Beyond the questions of if and when is the question of what. In a post last week, I argued that the narrower 7″ form factor of the Nexus 7 and the Kindle Fire might be preferable in many use cases than the scaled down “iPad mini” that is being widely reported on. Apple wants to close the price umbrella while maintaining its dominant position. It may see the continuity with the larger iPad as important for brand identity and software compatibility.

But if the next iPhone is indeed an elongated version of the current 4S, then Apple could scale that form factor up like a super-sized iPod Touch and still maintain the connection to its existing product lines. If they go the way they are reported to be going and consumers turn out to want a $200 tablet they can grasp in one hand, Apple “iPad mini” may close the umbrella but get rained on by the more “handy” Android tablets.

Apple Must Advertise That Samsung Didn’t Copy the iPad

Today a UK judged ordered that Apple must issue a notice stating that Samsung did not copy its design for the iPad.

Apple’s statement must be published on its UK website for six months and be distributed throughout several British magazines and newspapers, Bloomberg reports.

Judge Colin Birss mandated that the notice must detail the July 9 ruling in which he dismissed Apple’s lawsuit over Samsung’s Galaxy Tab. According to Birss, the design for the Galaxy tablets doesn’t infringe on that of Apple’s product. He even went as far to say the Samsung designs weren’t as distinctively “cool” as the iPad.
“[The Galaxy tablets] do not have the same understated and extreme simplicity which is possessed by the Apple design. They are not as cool,” Birss said.

The order means that Apple will essentially have to run advertisement for Samsung in the UK, a move that may be inherently bad for business. “No company likes to refer to a rival on its website,” Apple lawyer Richard Hacon told the court.

 SEE ALSO: The Earliest Photos of Apple’s iPad Hit the Web

The UK lawsuit isn’t the only legal battle the Cupertino, Calif.-based company is fighting. Similar disputes between Apple and Samsung are still unsettled in Germany, the Netherlands and the U.S. Also this month, Apple paid a cool $60 million for the “iPad” name in China.

The Earliest Photos of Apple’s iPad Hit the Web

Apple may have debuted the iPad in April 2010, but according to newly surfaced photos, the company started working on a tablet prototype in the early 2000s.

Thanks to released documents from an ongoing patent battle between Apple and Samsung, early pictures of the iPad from as possibly far back as 2002 have hit the web.

First discovered by NetworkWorld.com, the prototype is visibly thicker than the iPad model that launched in 2010 likely due to tech advancements made within that holding time. Although a home button also doesn’t appear on the tablet, Apple’s logo is emblazoned on the back.

In a deposition from December 2011, Jonathan Ive senior VP of industrial design at Apple was asked by Samsung if he had previously seen an iPad prototype referred to as “035.” [Check out the gallery above for the mockup images].

“My recollection of first seeing it is very hazy, but it was, I’m guessing, sometime between 2002 and 2004,” he said. “I remember seeing this and perhaps models similar to this when we were first exploring tablet designs that ultimately became the iPad.”

 SEE ALSO: Apple to Use In-Cell Tech to Keep the iPhone Screen Thin

Ive was asked more questions about the prototype, such as whether an internal or third-party group made the prototype, but he said he couldn’t recall specifics.

“I actually don’t know which model shop made this, but I recognize this as a model that was produced during our exploration,” he added.

Although the iPhone launched in 2007 three years before the iPad Apple CEO Steve Jobs once said during an All Things D conference in 2010 that the concept of a tablet came years before the iPhone.

“I’ll tell you a secret — it began with the tablet,” he told attendees. “I had this idea about having a glass display, a multitouch display you could type on with your fingers. I asked our people about it. And six months later, they came back with this amazing display. And I gave it to one of our really brilliant UI guys. He got [rubber band] scrolling working and some other things, and I thought, ‘my God, we can build a phone with this!’ So we put the tablet aside, and we went to work on the iPhone.”

Apple to Use In-Cell Tech to Keep the iPhone Screen Thin

Apple will use so-called in-cell technology to keep the screen of the next iPhone thin, the Wall Street Journal reports.

According to WSJ‘s sources, three companies are currently hard at work producing the next iPhone’s screen: Sharp, LG and Japan Display.

Most rumors point to the next-gen iPhone having a larger screen than its predecessor 4 inches, most probably but in-cell technology, which incorporates the touch screen sensors into the LCD screen itself, will reduce its thickness.

Regardless of the overwhelming amount of rumors surrounding the next iPhone, there’s no official confirmation that it will actually have a larger screen, and no firm facts about its design have been revealed. The next iPhone, which follows iPhone 4S, is likely to be officially revealed in the fall.

Apple Wins Patent for Noise-Reducing iPhone Case

Apple has won a patent for a removable iPhone case that cuts down on background noise.

Touting what the company is calling a “windscreen” design, the concept aims to reduce distracting sounds picked up by the device’s microphone that may make it hard to hear a phone conversation.

“The windscreen is designed to reduce wind noise, air blasts, vocal plosives and other noise,” Apple said in its patent application. “This may enable the speech of a user of the device to remain intelligible despite the presence of such noise during a call, and without requiring the user to shout into the device’s microphone.”

Although the patent was filed on Jan. 11, 2011, the U.S. Patent and Trademark Office approved the application last week. The patent is good for all portable electronic devices that enable users to participate in a real-time two-way conversation.

As shown in the image above, device calls for a windscreen sealed across an opening of the case that aligns with a microphone port built into the device (number 11). This would allow the passage of sound to go through the internal microphone and not pick up surrounding sound.

It is unknown if and when Apple will launch the windscreen case. Meanwhile, since the patent was filed before the launch of the current iPhone 4S and judging by the rendering, it looks like the iPhone will stay the same shape and size for some time.

SEE ALSO: Apple Developing Smaller iPad While Amazon Works on a Bigger Kindle Fire [RUMOR]

“Handheld mobile communications devices, particularly mobile phones, have enabled users to engage in real-time two-way conversations while walking, running, riding in a car or during other activities,” Apple noted. “In a number of these situations, a user may be conducting a conversation in a noisy environment, such as outside in the wind or inside a moving car with its window down.”