MacRumors

RBC Capital analyst Mike Abramsky published a research note today regarding a meeting with several Apple executives, including Chief Financial Officer Peter Oppenheimer, iTunes VP Eddy Cue, and Mac Marketing VP David Moody, covering a number of topics related to Apple's business.

While the executives were tight-lipped as usual about the company's plans for the future, one interesting tidbit that came out of the meeting was the executives' apparent lack of enthusiasm for the "online book/newspaper market" while sharing views that video content would be the next big growth area in media. In both areas, however, licensing and other rights issues are seen as significant hurdles.

After music, video content is expected to be the next "exploding" opportunity, but requires overcoming industry rights dysfunctionality, competing with subsidies (cable box, video), and developing the right consumer "offer". Apple TV, while still a "hobby", is well positioned to benefit from evolving market dynamics. Apple was less enthusiastic about the online book/newspaper market, given unattractive industry structure.

The executives also confirmed comments made during the company's most recent earnings conference call claiming that Apple has managed to maintain its iPhone profit margins and subsidies received from carriers in markets that have transitioned from exclusive agreements to multiple-carrier models.

Despite intensifying competition (Android, RIM, etc.) Apple continues to enjoy strong global carrier interest in iPhone, given high ARPU, low churn. In markets (Canada, Europe) where distribution has expanded to multiple carriers, Apple has sustained its economics (subsidy, margins). 3GS remains popular while $99 iPhone addresses a competitive price point (free in some markets).

The news could temper concerns that Apple might be reluctant to pursue a multiple-carrier model in the United States once AT&T's exclusivity window closes for fear of sacrificing per-unit economics.

Among other topics of discussion highlighted in the report were Apple's view that the Windows 7 launch provides an opportunity for the company to attract new customers and the persistence of the integrated iPhone/iTunes/App Store model as an advantage over other up-and-coming competitors such as the Android platform.

The Associated Press reports on today's launch of the iPhone in China, noting several hurdles faced by the Apple as it attempts to tap into the world's largest market.

Among those hurdles is a lack of Wi-Fi functionality, a restriction that had been imposed by the Chinese government. The restriction was lifted earlier this year, but not until after the Chinese-specific iPhone lacking Wi-Fi had gone into production.

Unicom's iPhones lack WiFi because it was temporarily banned by Beijing, which was promoting a rival Chinese system, according to BDA. The ban was relaxed in May after manufacturing had begun.

A Unicom spokesman, Yi Difei, said the company hopes to have WiFi in the next batch of phones.

"We are talking with Apple and expect the problem to be solved by the end of this year," Yi said.

The lack of Wi-Fi connectivity also puts the spotlight on the new Chinese iPhone's relatively high price, which may result in the new device competing directly against unlocked iPhone 3GS models with Wi-Fi that have been brought in from other countries. An estimated 1.5 million to 2 million such iPhones are already operating on partner carrier China Unicom's network, and new unlocked imports are currently selling on the street for 20% less than the Chinese model when purchased without a contract.

Apple Inc. and Unicom also could face competition from an unusual source: unlocked iPhones brought in from abroad that have WiFi.

There are already an estimated 1.5 million to 2 million such phones in China using China Mobile 3G service that allows Internet access and other features.

Unicom's prices range from 4,999 yuan ($730) to 6,999 yuan ($1,025) for the high-end, 32-gigabyte iPhone 3GS. That is 20 percent above the 5,700 yuan ($835) charged by merchants at Chinese street markets for a 3GS with WiFi.

Apple has so far refrained from offering public sales targets for the Chinese market. An early report claimed that China Unicom had committed to purchasing 5 million iPhones for sale on its network, although the rumor was quickly denied by a spokesman for the carrier.

Apple today announced the launch of Apple TV 3.0 software, offering a redesigned user interface and compatibility with Apple's iTunes LPs and iTunes Extras, as well as Genius Mixes and Internet radio.

"The new software for Apple TV features a simpler and faster interface that gives you instant access to your favorite content," said Eddy Cue, Apple's vice president of Internet Services. "HD movies and HD TV shows from iTunes have been a huge hit with Apple TV customers, and with Apple TV 3.0 they get great new features including iTunes Extras, Genius Mixes and Internet radio."

The redesigned main menu offers direct access to recently rented and purchased movies, as well as a wide assortment of other content. iTunes LPs and iTunes Extras are available in full-screen, enhancing the viewer experience for audio and video titles.

The addition of Genius Mixes, a feature first introduced last month with iTunes 9, allows users to listen to automatically-selected playlists generated from their iTunes libraries, while the Apple TV 3.0 software also includes support for listening to thousands of Internet radio stations. Finally, the updated software includes additional enhancements for photo viewing, enabling the Apple TV to take advantage of the Faces and Events features found in Apple's iPhoto desktop application.

The impending release of the updated Apple TV software was suggested earlier today by an update to the iTunes Store Terms and Conditions mentioning the 3.0 software.

Update: Apple has also released iTunes 9.0.2, adding support for Apple TV 3.0, a new "dark" viewing option for Grid View, and additional accessibility support.

iTunes 9.0.2 adds support for Apple TV software version 3.0, adds an option for a dark background for Grid View, and improves support for accessibility.

Update 2: PreCentral reports that iTunes 9.0.2 once again breaks media syncing on the Palm Pre.

Here we go again. Apple has updated iTunes to version 9.0.2 and Palm Pre sync is dead again using webOS 1.2.1, despite Palm's Hurculean efforts to spoof nearly every aspect of USB identification known to mankind. As with previous breakages, iTunes does launch when you connect a Pre with Media Mode, but it doesn't appear as a device on the sidebar.

ifoAppleStore reports that Apple is tweaking several aspects of its retail store operations as it moves into the holiday sales season. Among the changes are an adjustment to color-coded t-shirts for various types of employees and a shift from using Windows CE-based EasyPay mobile checkout devices to iPod touches using barcode scanner accessories and custom point-of-sale software.

According to the report, Apple will abandon its existing policy of having its various classes of employees (such as concierges, specialists, creative, and geniuses) attired in different colors of Apple t-shirts and shift to a single color of t-shirt for all employees. The color of the t-shirt would change over time, but a consistent color for all employees at one time will likely make it easier for customers to identify store employees.

First, Apple will drop the aircraft carrier-like T-shirts that are color-coded to indicate the employees' skills. Visitors have reported that seeing orange, dark blue, light blue, medium blue and black T-shirts is simply confusing. Beginning soon, the entire store staff will wear the same color T-shirt, with that color changing from time to time.

MacRumors has separately heard that Apple is also planning to consolidate several of its retail store positions in order to allow more flexibility in the tasks handled by each sales floor employee.

Apple's switch to the iPod touch as a checkout device will address several issues, not the least of which has been reported frustration on the part of retail store employees over the performance of the current EasyPay devices. The new iPod touch-based systems will reportedly allow for a single pass of the barcode reader to register multiple codes present on many Apple products, speeding the checkout process. The new system will also reportedly allow sales staff to accept cash for transactions.

First, the iPod touch scanner will allow employees to capture data from products that have multiple barcodes using a single pass, including the UPC, Apple serial number and product code, cellular IMEI and ICCI numbers. Second, the new set-up will allow employees to accept cash for purchases without hiking to a central register position.

Apple has been taking several steps to alter the functionality of its retail stores as they remain popular with customers, many of whom are unfamiliar with the company's products. Last month, the company rolled out iPhone Activation Zones to assist iPhone purchasers with picking up and preparing their devices for use in what can be a crowded and confusing retail store setting.

Users attempting to make purchases in Apple's iTunes Store today are being presented with updated Terms and Conditions that they must agree to before conducting their purchases. While such updates are fairly routine, today's changes include mention of Apple TV software version 3.0, which is yet to be released.

The Terms of Sale have been revised to clarify that you can now use iTunes LPs and iTunes Extras on Apple TV with software version 3.0 or higher.

The Apple TV software was most recently updated in June, bringing the software to version 2.4. The Apple TV hardware was also quietly updated last month with the elimination of the 40 GB model and a price drop on the 160 GB model. Reports at that time indicated that Apple's new iTunes LP format is likely formatted specifically for the Apple TV, suggesting that a software update for the device may be near.

Apple today seeded Build 10C535 of Mac OS X 10.6.2 to developers. The release comes one week after the previous build was pushed to the developer community for testing.

The new 10C535 build reportedly focuses on graphics drivers, trackpad preferences and virtual machine creation while continuing to list no remaining known issues. This suggests that Apple is putting the finishing touches on the update and may roll it out to all users in the relatively near future.

Among the most notable changes in Mac OS X 10.6.2 is a fix for a serious bug involving guest accounts that has resulted in some users losing all data from their regular user accounts. The update will also provide full native support for Apple's new multi-touch Magic Mouse that began shipping today, although the company is also offering separate software updates to allow Snow Leopard and Leopard users to access the full functionality of the device without needing OS X 10.6.2.

Several MacRumors readers have reported receiving shipping notices from Apple indicating that their Magic Mouse orders have been shipped. At its introduction, Apple announced that while the new multi-touch Magic Mouse is bundled with Apple's new iMac models, the mouse would not be available for standalone purchase until the end of October. The new shipping notices suggest that Apple will be meeting that goal, although customers are still waiting for the device to appear in retail stores.

Apple yesterday released a pair of software updates that will allow Snow Leopard and Leopard users to access the full range of functions on the Magic Mouse. Full support for the Magic Mouse is also apparently being built into Apple's forthcoming Mac OS X 10.6.2 update, which will eliminate the need for future mouse purchasers to install the separate mouse update once that Snow Leopard update is released.

AppleInsider has received word from TomTom that the company's iPhone Car Kit, just now starting to become available, will not be compatible with the iPod touch or first-generation iPhone. There is some uncertainty, however, over the exact status of the situation.

Since it appeared for order on the Apple Store last week, the hardware's Web page has read: "Note: The TomTom app for iPhone is not included with this TomTom Car Kit. The Car Kit dock is compatible with all iPhone models, but the Car Kit app only works with iPhone 3GS and iPhone 3G."

When asked whether the application could be updated to allow it to work with the iPod touch and first-generation iPhone, a company spokesman simply said that TomTom has not made any "public announcements."

It is not entirely clear whether the reference to "Car Kit app" in the Apple Store listing refers to the paid TomTom navigation software sold separately or the free Car Kit tool [App Store] released today that provides diagnostic information on the car kit. The Car Kit tool's App Store description, however, does indicate that it is compatible with all iPhone models. Regardless, TomTom's comment does not appear to entirely rule out the possibility of adding compatibility with the iPod touch in the future.

Many iPod touch users had been hoping that the car kit, which utilizes a built-in GPS receiver, would bring turn-by-turn navigation to their devices, and comments from a TomTom public relations manager had previously suggested that the functionality would in fact exist. There is also no word on the claimed car kit support for third-party GPS applications, although TomTom may not specifically need to offer any such support, as the burden likely simply falls on the developers of other applications to utilize the features offered by the car kit.

iPod touch users may ultimately have to rely on other solutions such as the PosiMotion G-Fi router coupled with GeoLife's forthcoming Navmii application in order to obtain GPS navigation capabilities on their devices.

Update: Several readers have pointed us to videos showing users taking advantage of the TomTom Car Kit to utilize Google Maps and Navigon GPS compatibility with the original iPhone, which lacks built-in GPS functionality. The demonstrations agree with TomTom's claim that the Car Kit is compatible with all iPhone models and does support the claim that other developers' GPS applications can take advantage of the car kit's functionality, but we have yet to see evidence of the iPod touch exhibiting similar functionality with GPS applications from TomTom or other developers.

In its 10-K annual report (PDF) filed with the U.S. Securities and Exchange Commission and posted yesterday, Apple notes that it plans to "vigorously" defend itself from a lawsuit filed last week by Nokia claiming infringement of multiple cellular and Wi-Fi patents by Apple's iPhone.

The complaint alleges that these patents are essential to one or more of the GSM, UMTS and 802.11 wireless communications standards, and that the Company has the right to license these patents from plaintiff on fair, reasonable, and non-discriminatory ("FRAND") terms and conditions. Plaintiff seeks unspecified FRAND compensation and other relief. The Company's response to the complaint is not yet due. The Company intends to defend the case vigorously.

In its press release announcing the lawsuit, Nokia noted that approximately 40 other companies, including "virtually all the leading mobile device vendors," has licensed the intellectual property but that Apple and had refused to agree to "appropriate terms" for licensing.

Analysts have claimed that Nokia could be seeking up to $1 billion in damages from Apple in what is likely to be a protracted and costly legal dispute, regardless of outcome.

Google today announced a free, turn-by-turn GPS navigation application for the new Android 2.0 smart phone platform.

This new feature comes with everything you'd expect to find in a GPS navigation system, like 3D views, turn-by-turn voice guidance and automatic rerouting. But unlike most navigation systems, Google Maps Navigation was built from the ground up to take advantage of your phone's Internet connection.

Among the features included in the application:

- Up-to-date map data: Automatically includes latest map data from Google, which is constantly being refined by Google and by users submitting corrections
- Plain English search: Locate destinations by entering business business name or landmark; no address needed
- Voice search: Speak destinations and Google Maps Navigation will automatically interpret and plot routes
- Live traffic data: Indicator warns of upcoming traffic issues
- Search along route: Find businesses along path of travel
- Satellite view: 3D view of route to aid in understanding directions
- Street View: first-person perspective of route and destination images

A video preview of Google Maps Navigation has also been posted.

The first device to carry Google Maps Navigation for Android 2.0 will be the Motorola Droid. The first in a series of "Droid" phones, the initial device will launch on November 6th and be priced at $199.99 with a two-year Verizon agreement after a $100 mail-in rebate.

CNET notes that Google and Apple are in fact working to bring the application to the iPhone, although no details of a launch timeframe have been released.

However, Google is working with Apple on bringing it to the iPhone, and it's not ruling out licensing the software to makers of portable navigation devices used in cars throughout the world, said Gundotra, vice president of engineering at Google for mobile and developers. The process involving Apple is slightly different from the usual App Store submission process, because Maps is a built-in iPhone application, he said.

Apple today released a pair of software updates to allow Mac OS X Snow Leopard and Leopard users take advantage of the advanced mouse features of the company's new multi-touch Magic Mouse.

- Wireless Mouse Software Update 1.0 for Snow Leopard (63.92 MB, Requires OS X 10.6.1)
- Wireless Mouse Software Update 1.0 for Leopard (36.22 MB, Requires OS X 10.5.8)

The Magic Mouse has been shipping with Apple's new iMacs, which presumably already carry the update in order to allow the mouse to function out of the box. The standalone mouse, however, has yet to arrive in retail stores or begin shipping from the company's online stores, although Apple indicated that it would become available at the end of October and is currently listed as shipping in 5-7 business days in Apple's U.S. online store.

The Magic Mouse user guide notes that either the mouse software update or Mac OS X 10.6.2 is required for full Magic Mouse functionality, suggesting that Apple has been planning for a release of OS X 10.6.2 around the time the Magic Mouse becomes available. Users who purchase a Magic Mouse after upgrading to OS X 10.6.2 when it becomes available will not be required to install the separate mouse software update.

Market research firm ChangeWave today released its latest quarterly Consumer Smart Phone survey, which includes survey data taken in mid-September highlighting market share trends for Research in Motion, Apple, and Palm.

In the horserace among manufacturers, the release of the iPhone 3GS has led to a big jump in smart phone market share for Apple and has placed them within striking distance of Research In Motion -- whose slew of models are still number one but have fallen to their lowest level in two years.

The report is an expanded analysis of data touched upon in September that showed Apple's smart phone market share rising from 25% to 30% between June and September. The new analysis compares iPhone market share to the performance of Research in Motion, which has trended slightly down to currently stand at 40%, and Palm, which appears to be stabilizing at approximately 7% of the market after a steep decline from its leadership position earlier this decade.

Overall, smart phone growth continues, with 39% of surveyed mobile phone owners reporting owning a smart phone, up from 37% in the previous quarter, and a continuation of a clear trend extending back many years as smart phones have continued to gain more enticing capabilities at lower price points.

Apple also appears poised to continue to eat into Research in Motion's lead in the smart phone market, with 36% of survey respondents planning to purchase a smart phone in the next 90 days looking to purchase an iPhone, with only 27% of those interested in Research in Motion's BlackBerry. The numbers represent a decline from the 44%-23% advantage held by Apple in the previous quarter, but as the report notes, the decline is due to a natural tapering off of enthusiasm after the iPhone 3GS launch and is actually a much smaller decline than was observed after the launch of the iPhone 3G last year.

The Android 2.0 platform was officially unveiled today, introducing a number of enhancements to the open source smartphone operating system. Among the notable new features:

- Enhanced contact synchronization options and a "Quick Contact" widget to allow convenient integration of contact access into applications
- Combined inbox to allow viewing of messages from multiple e-mail accounts simultaneously
- Support for Microsoft Exchange
- Increased support for camera features, including flash
- Improved virtual keyboard layout and performance
- New browser features, including double-tap-to-zoom, thumbnailed bookmarks, and support for HTML5
- Minor tweaks to calendar functions, including tools for inviting and viewing the status of guests for events

A video preview of Android 2.0 has also been released.

Android 2.0 has been featured as the operating system behind the Motorola Droid being touted by Verizon for its capabilities that in some respects rival or surpass the iPhone's.