Silicon Valley Watcher - reporting on the business of technology and media: Apple [AAPL] Archives

Friday Watch: Despite howls from the deathbed, SEO's days really are numbered; SVW fans out to cover the geek cons; more ...

by Tom Foremski for SiliconValleyWatcher

We had another scorcher of a week on the Watcher with coverage of two competing geek conferences. Nick Aster hit the ground running in Austin with this report on the SXSWi conference. And in San Diego, Richard Koman produced a veritable bit torrent of great copy from the O’Reilly Emerging Tech conference.

While folks like Odeo's Evan Williams made the SF-Austin-SF-San Diego circuit, the two cons neatly bifurcate geekspace. SXSW is the hipster and chickster web/UI/interaction design space, while ETech boasts a interesting mix of alpha geeks, A-list press (not counting SVW ;)), and unbuttoned biz types. One borg victim (black-clad, earpiece installed in head) paced the hallway near the pressroom yelling into his cell, "You would not believe the movers that are at this conference." And of course it was true.

One alphageek was heard to say, "This is the conference for business people who want to feel like they're at a hacker conference." But at $1250 a pop, all the geeks had speaking gigs and free passes.

Continue reading "Friday Watch: Despite howls from the deathbed, SEO's days really are numbered; SVW fans out to cover the geek cons; more ..." »

Posted by Tom Foremski on March 18, 2005 5:10 AM | Permalink | Comments (7)

Scoop! Brit chip designers score coup as Apple picks chips for next gen mobile multimedia device...the m-Pod?

By Tom Foremski for SiliconValleyWatcher

A British team of chip designers has won one of the most coveted of customers in the chip industry--Apple Computer. SiliconValleyWatcher has learned that Apple has contracted to use the powerful video, image, and music chips designed by Alphamosaic, in Cambridge, UK, in a future multimedia mobile device.

While the kudos goes to the Alphamosaic teams, the money from the deal goes to Broadcom, the US communication chips leader. Broadcom acquired the 57 person Alphamosaic for about $125m in September 2004.

v-Pod or m-Pod?

The branding for the Apple multimedia product is not yet known. Looking at the public specifications describing the Alphamosaic chips, it is clear that Apple could use it to build a family of mobile hand-held digital devices equipped with wireless communications that would be far more advanced than its current iPod family.

From press release dated September 20, 2004:

Building on the success of the VC01, Alphamosaic is now sampling VC02, the world's most advanced mobile multimedia processor. The VC02 can display video on 3.5 inch color LCDs and capture 8 megapixel images, making it ideal for watching TV, making videos or taking studio-quality photos on a cellphone.

Continue reading "Scoop! Brit chip designers score coup as Apple picks chips for next gen mobile multimedia device...the m-Pod?" »

Posted by Tom Foremski on April 5, 2005 10:24 AM | Permalink | Comments (3) | TrackBacks (14)

PSP-Pod? Could Sony's latest mobile gaming system beat out Apple's forthcoming multimedia "mPod"?

. . .communities of users are hacking into the PSP and creating a platform device

The big question about our story on Apple's "mPod" (our pet name for it) is, what exactly would it be capable of? In his analysis, Tom argues that just as they did with music, Apple could convince Hollywood studios and production companies to entrust Apple's DRM with their precious content -- an enormous coup for Steve Jobs.

The Broadcom Alphamosaic chip that Apple has ordered is capable of video, wireless and 3D gaming. Which makes it seem an awful lot like the Sony PSP. So folks at Apple might well be looking at what's happening with the PSP these days.

The PSP contains a movie player, game system, music player, a JPG image viewer -- and most importantly, a Wifi receiver. Hmm, Wifi and video on the same device? Can you say BitTorrent? Sites like PSPCrazy, PSP 411, and 8Bit Joystick have dozens of links to tutorials on hacking the PSP.

Continue reading "PSP-Pod? Could Sony's latest mobile gaming system beat out Apple's forthcoming multimedia "mPod"?" »

Posted by Richard Koman on April 7, 2005 7:29 PM | Permalink | Comments (5)

Apple says it will go after websites in trade secrets theft case

Stop Leak.jpg Apple will seek "full legal redress" against PowerPage and AppleInsider -- two of the websites that published purloined documents in the Apple v Does trade secret case -- the company insinuated in court documents filed last week.

"Apple seeks full legal redress against not only those persons who originally stole the trade secrets ... but against those individuals who wrongfully disseminated this information," the filing said.

At another point, the brief notes that the websites "have not yet
(italics added) been named as defendants." But they "may, in fact, be
one or more of the Doe Defendants named in the complaint."

Continue reading "Apple says it will go after websites in trade secrets theft case" »

Posted by Richard Koman on April 11, 2005 9:28 AM | Permalink | TrackBacks (1)

[publisher’s note] SiliconValleyWatcher joins amicus brief in Apple case

By Tom Foremski for SiliconValleyWatcher

The big California newspapers filed their amicus brief late last week, but if they hadn’t, the bloggers and journalist organizations have signed onto one of their own.

The Amicus brief mentions SiliconValleyWatcher's recent scoop on a story related to Apple's choice of a UK-designed chip to be used in a possible portable multimedia device, maybe the much anticipated video iPod. [ijusthopeitdoesnotattracttoomuchattentioniamnothomeand travellingforthenextthreeyears]

Continue reading "[publisher’s note] SiliconValleyWatcher joins amicus brief in Apple case" »

Posted by Tom Foremski on April 12, 2005 4:12 AM | Permalink | Comments (1) | TrackBacks (1)

Scoop! Sony has no plans for an iTunes for Hollywood says senior exec

By Tom Foremski for SiliconValleyWatcher

UPDATE: [Please see Sony clarifies online strategy]

A top executive at Sony America told SiliconValleyWatcher.com that it has no plans to create an "iTunes for Hollywood" saying that a senior Sony Pictures executive misspoke at a recent conference.

Steve Banfield, senior vice president at Sony Connect, the online music store, said that it had no plans to produce an online movie download store modeled along the lines of Apple Computer's iTunes digital music download store and software. He said that the Sony executive making the claim was not speaking about any Sony project in the works.

Continue reading "Scoop! Sony has no plans for an iTunes for Hollywood says senior exec" »

Posted by Tom Foremski on April 18, 2005 10:25 PM | Permalink | TrackBacks (2)

Is that Steve Jobs dissing the video iPod on slashdot?

You may recall that SiliconValleyWatcher broke a story a few weeks back that Apple had signed a deal for a production quantity of AlphaMosaic chips, a multimedia chipset readymade for wireless devices, digital cameras, video playback and 3D gaming apps.

Now comes a Slashdot post from As Seen on TV, who claims to be an Apple employee, saying that a video iPod is a totally stupid idea and not at all what Apple plans. The post was so vehement and seemed to indicate such holistic knowledge of Apple strategy that slashdotters soon suspected the poster of being Steve Jobs himself.

First, here's the gist of As Seen on TV's argument:

Continue reading "Is that Steve Jobs dissing the video iPod on slashdot?" »

Posted by Richard Koman on May 12, 2005 10:32 AM | Permalink | Comments (1)

Apple embraces Intel. The question is why. Steve to explain all Monday morning. Meanwhile, bloggers spin the news.

The big news of the weekend: Apple is dumping IBM as its chip supplier and has struck a deal with Intel, the Wall Street Journal reported.

While Apple is famously unhappy with IBM's difficulty in delivering chips, an architecture switch just as the Mac is achieving serious acceptance is certainly a risky move. Here's Nathan Brookwood, of Insight 64, quoted in the CNET article on the story:

If they actually do that, I will be surprised, amazed and concerned. I don't know that Apple's market share can survive another architecture shift. Every time they do this, they lose more customers" and more software partners.

So what's the point? The blogosphere has some ideas:

Continue reading "Apple embraces Intel. The question is why. Steve to explain all Monday morning. Meanwhile, bloggers spin the news." »

Posted by Richard Koman on June 5, 2005 9:00 PM | Permalink | Comments (1)

Live from WWDC: Apple switches to Intel. What does it all mean?

By Damien Stolarz for SiliconValleyWatcher

I just attended the shorter-than-ever Apple keynote address (just an hour) at Moscone Center in San Francisco, where Apple computer finally came out and proclaimed its love for the Intel chip. Although the Wall Street Journal tried to out Apple over the weekend, it really hadn't sunk in for anyone until Steve Jobs spelled it out.

He said that OS X has been living a "secret double life" for more than 5 years - every single version of the OS X has run on Intel, "just in case" since OS X was first released. I got to hear Steve Jobs, the CEO of Intel, and the CEO of Adobe get up on stage and get chummy in that forced, unrelaxed way that CEOs do. It was subdued, understated, brief, and all the while a watershed event.

Continue reading "Live from WWDC: Apple switches to Intel. What does it all mean?" »

Posted on June 6, 2005 12:12 PM | Permalink

Mr. Unpredictable: Jobs Embraces Intel

Will wonders never cease? To the amazement of just about every analyst covering Apple, Steve Jobs announced this morning at Apple's Worldwide Developer Conference that future Macs will use chips from Intel - just like most other PCs in the world. Apple has been developing all versions of OS X since its inception to run on Intel and PowerPC chips, Jobs announced, according to
cnet. "Mac OS X has been leading a secret double life the past five years," he said.

The shift should be much easier than the one from Motorola to PowerPC. In the future, developers can create a universal binary that will work on both Macs and Windows-based PCs. In the meantime, Apple has developed Rosetta, a tool to allow PPC-based apps to run on Intel chips. "Every application is not going to be universal from day one," Jobs said.

Posted by Richard Koman on June 6, 2005 12:58 PM | Permalink | Comments (2)

600% growth in iPods leads to Apple's best quarter

by Richard Koman for SiliconValleyWatcher

Apple announced its best quarter ever at its conference call yesterday, reporting a net quarterly profit of $320 million, or $.37 per diluted share, and revenue of $3.52 billion. A year ago, Apple reported net profit of $61 million, or $.08 per diluted share, and revenue of $2.01 billion. It all comes out to revenue growth of 75 percent and net profit growth of 425 percent. International sales accounted for 39 percent of the quarter’s revenue.

Mac sales rose 35 percent to almost 1.2 million units, while Apple shipped more than 6 million iPods, which is more than six times the iPods sold a year ago.

Steve Jobs cited Tiger as a "tremendous success," and promised as he always does, "more amazing products in the pipeline."

Apple expects revenues to be slightly down from these numbers in the fourth quarter.

Posted by Richard Koman on July 14, 2005 9:37 AM | Permalink | Comments (0) | TrackBacks (0)

British chip designers behind v-pod

By Tom Foremski for Silicon Valley Watcher.com

This is what I expect Apple to announce today: a Video iPod with an iTunes library of music videos available for free. The music videos can be viewed and the music offered for sale. This fills the video library gap that Hollywood likely won't let Apple have, because it doesn't want Apple's DRM controlling two large markets.

Apple doesn't need a Hollywood for iTunes, a video store in the sky, stacked high with block buster movies. It wants to sell video iPods and the content will be provided by mostly music videos. And that's where Madona comes in...Jobs and she make a music video on stage, mashitup on a Mac, and its on the video iPod in seconds.

And that's just the beginning. The new content will come from you and me and the kids and the boss. You can mashup some video clips and images on a Mac no problem. Small digital movies and other image projects will be made by all of us, because they are not difficult, and are already being made by many people. The short videos are raw but they are fun--at least for you and your circle. Then there is TV content, and of course, content specifically made for the v-pod's 3 inch screen.

In early April Silicon Valley Watcher got the scoop on the key chip inside the video iPod, Alphamosaic from Broadcom. It is designed by British chip experts acquired by Broadcom. If you look at the specs of the chip, in the following story, you'll see what types of sophisticated devices it could be used to build.

Scoop! Brit chip designers score coup as Apple picks chips for next gen mobile multimedia device

Posted by Tom Foremski on October 12, 2005 5:36 AM | Permalink | Comments (1) | TrackBacks (0)

SVW scoop: iSuppli proves that we got the scoop on video ipod to use Broadcom chip earlier this year

This is what iSuppli, a chip market research company found when it took apart the new video iPod:

"iSuppli Video iPod Teardown Reveals a Key New Supplier for Apple"

"El Segundo, Calif., Oct. 21, 2005-A dissection conducted this week by iSuppli Corp.'s Teardown Analysis service of the new video-capable iPod reveals an important new supplier among Apple' s semiconductor partners: Broadcom Corp., which is providing its new BCM2722 VideoCore Multimedia Processor to handle the video functionality."

Continue reading "SVW scoop: iSuppli proves that we got the scoop on video ipod to use Broadcom chip earlier this year" »

Posted by Tom Foremski on October 21, 2005 10:47 AM | Permalink | Comments (0) | TrackBacks (0)

This is how the iPod reign could come to an end . . .

I'm new to Yahoo Music, I only recently got a subcription. And I've had an Apple iPod for several years. But now the iPod is on Craigslist and I'm searching for a new MP3 player.

Here is why I think that the Yahoo Music web service could become Apple iPod's Achilles's heel. And it is very disruptive to FM radio too, to boot.

Posted by Tom Foremski on January 14, 2006 6:20 PM | Permalink | Comments (1) | TrackBacks (0)

Apple Computer's CTO is leaving within days - SFGate scoop

SF Chronicle's blog supremo Al Saracevic, senior bus. editor over at SFGate.com's new tech blog The Tech Chronicles has a very nice scoop hot off the server!

It is Adios to Avadis "Ave" Tevanian, Apple Computer's Chief Technology Officer and operating system expert. He is heading out of the Infinite Loop for unknown pastures and his last day is March 31st. Bang on the April 1st 30 year anniversary for Apple.

Posted by Tom Foremski on March 27, 2006 6:05 PM | Permalink | Comments (0) | TrackBacks (0)

Apple moves ahead with assault on journalism

In a San Jose court room Thursday morning, Apple Computer's lawyers will launch the next stage in Apple's efforts to muzzle journalists and to remove journalist protections from prosecution.

Silicon Valley Watcher is part of the Amicus brief in support of the defendants in the Apple v Does case. SVW stands firmly against Apple's moves which are detrimental to society and its need for high-quality media.

Here is more information from Derek Slater, an activist at the Electronic Frontier Foundation (EFF) whose lawyers are in the front lines of this fight:

Continue reading "Apple moves ahead with assault on journalism" »

Posted by Tom Foremski on April 19, 2006 1:46 PM | Permalink | Comments (0) | TrackBacks (0)

Apple: iPod factory has a few problems but is basically doing a heckuva job

By Richard Koman for SiliconValleyWatcher

Apple has completed its investigation into alleged mistreatement of workers at its Chinese iPod plant and found the Chinese company was working employees harder than Apple rules allow. Other than that, there is no child labor or forced labor, the company said. In the official report on the Apple website, the company addressed several accusations.

Apple found no evidence of forced labor or child labor but was unhappy with the worker dormitories. Some of these, Apple said, were too "impersonal." Later, it is stated that "we believe in the importance of a healthy work-life balance." Are such touchy-feely sentiments a little out of place when dealing with the inherently inhumane work of snapping together iPod after iPod?

At Ars Technica, Jacqui Cheng note: "For a company like Apple who has a widespread reputation for being an environmentally and socially conscious company that even the hippest of hippies could love, it's extremely important for them to issue such a high-profile response to such accusations in order to save face with the general public."

Our audit of on-site dormitories found no violations of our Code of Conduct. We were not satisfied, however, with the living conditions of three of the off-site leased dorms that we visited. These buildings were converted by the supplier during a period of rapid growth and have served as interim housing. Two of the dormitories, originally built as factories, now contain a large number of beds and lockers in an open space, and from our perspective, felt too impersonal. The third contained triple-bunks, which in our opinion didn’t provide reasonable personal space.

Apple found that pay met local minimum standards but that the pay structure was too complex:

The pay structure was unnecessarily complex. An employee’s wage was comprised of several elements (base pay, skill bonus, attendance bonus, housing allowance, meal allowance, overtime), making it difficult to understand and communicate to employees. This structure effectively failed to meet our Code of Conduct requirement that how workers are paid must be clearly conveyed.

Employees worked substantially more overtime than Apple policies allow and Apple says workers were allowed to refuse overtime without penalty.

[We] found that the weekly limit was exceeded 35% of the time and employees worked more than six consecutive days 25% of the time. Although our Code of Conduct allows overtime limit exceptions in unusual circumstances, we believe in the importance of a healthy work-life balance and found these percentages to be excessive.

If anything, workers said they wanted more overtime. Lack of overtime was the number one complaint. The other major complaint was inadequate transportation between factory and dorms.

Posted by Richard Koman on August 18, 2006 8:13 AM | Permalink | Comments (0) | TrackBacks (0)

Looking for meaning in GOOG's Eric Schmidt joining AAPL board - nothing much here...

By Richard Koman for SiliconValleyWatcher

The fun game yesterday was speculating on the meaning of Google CEO Eric Schmidt's joining Apple's board. After all, Google and Apple are two great tastes that go great together.

First, corporate speak: Steve Jobs (from Apple press release): "Like Apple, Google is very focused on innovation and we think Eric’s insights and experience will be very valuable in helping to guide Apple in the years ahead.”

Om Malik looks forward to integration between Google's advertising network and Apple's iTunes juggernaut. "Even though Google is being overtly aggressive about online video market, it is trying to leverage its advertising network more than download sales. Is it too hard to imagine - watch the video on Google Video, and download it on iTunes store? Both parties win? iTunes being included as part of Google software pack, or part of Google Toolbar? Google driving music-related searchers to iTunes store?"

Any of these scenarios is possible, even likely, but none of them require a seat on the board.

My initial take - especially after having posted about speculation that Jobs may have stock options problems at Pixar - was that Apple needed someone of Schmidt's stature as a potential CEO successor to Jobs. If you care to revisit the 1980s, you will recall that Apple simply doesn't run on MBAs. Apple requires vision, obsession and near-insane devotion to execution at the top. And ValleyWag points out that Schmidt has experience dealing with demanding personalities. But somehow, none of this really holds much water either.

Enter John Dvorak with the kicker: Schmidt is the set-up pitcher for a Sun-Apple merger.

Schmidt would quietly be Sun's inside man on the negotiations although technically he's be a neutral party since he doesn't actually work for Sun.

The way Dvorak sees it, Sun's server genius, Andreas von Bechtolsheim, a good friend of Schmidt's, may actually be behind the move. He's put Sun back on the map with AMD-centric servers that are fast, cheap and reliable. But Sun no longer has the marketing muscle of the glorious old days. Sun would get Apple's ad budget and Apple would get ... serious servers.

But does Apple still seriously care about the server market? This Sun-Apple business has been bouncing around for 20 years but since Jobs' return, Apple has substantially moved from a desktop manufacturer to a consumer company. When you look at long-term movements and you look at Apple, do you see a Microsoft-style company that wants to be dominant in every area?

Or do you see a design-centric appliance company that builds consumer lifestyle devices running robust software all tied together with proprietary lock-in and e-commerce opportunities? I see the latter, and while such a company might be an excellent company for Sun's servers, I don't see that they need to be Sun.

Last word to John Battelle: "I don't know what it means.

Tom Foremski here: What to expect from Eric Schmidt, Google's CEO joining the board of Apple Computer? Not much.

It certainly doesn't mean that Mr Schmidt will help bring about a Sun Microsystems and Apple merger, as John Dvorak speculates on MarketWatch. And it doesn't signify an Apple-Google alliance against Microsoft as GigaOm and others, have speculated.

BTW, it would be very unethical to bring in a director onto the board to facilitate an M&A deal.

And as for an anti-MSFT alliance, that isn't the case either. Mr Schmidt has already been there, and got his head handed back to him when he was CEO at Novell. GOOG doesn't need to engage MSFT anyway, the market is taking care of MSFT.

And as for MSFT's bid for iPod glory with its Zune music player? Again, what would Mr Schmidt bring to Apple? Apple has nothing to worry about, Zune will initially be competing against MP3 players from loyal Microsoft music player partners, and iPod would need to slide a long way down the hill to meet the Zune challenge.

All this appointment means is nothing much. CEOs of large companies spend time on the boards of other large companies--that's all there is to this.

A more interesting question might be in examining Mr Schmidt's track record as a CEO at Novell, and at Google. Let me know if you'd like to join me in exploring this question for a future post... :-)

Posted by Richard Koman on August 30, 2006 10:38 PM | Permalink | Comments (0) | TrackBacks (0)

Apple movie store to launch mid-Sept.

Apple will start selling feature-length movies on iTunes in mid-September, sources tell BusinessWeek. But only from one studio - Disney - where Steve Jobs just happens to be the largest shareholder after Disney's purchase of Pixar. Apple will charge $14.99 a flick, up from the $9.99 he wanted to charge. BW tackles the story from the Wal-Mart angle, though, and has Wal-Mart furiously pounding the studio corridors trying to stop Jobs from signing on any other studios.

With Wal-Mart CEO H. Lee Scott assigning his point man David Porter to roam the halls of major studios, skittish executives have for months delayed giving Jobs the rights to distribute their movies through his new service. ... News Corp.'s (NWS) Fox Entertainment Group may join in later, as might independent Lions Gate Entertainment (LGF), say Hollywood sources, but only if other studios come along, too. So far, other large studios have taken a pass, especially after Wal-Mart earlier this year threatened not to sell Disney's High School Musical for a time after Disney released it initially only on iTunes.

Wal-Mart, it seems, is planning its own movie download site. It wants marketing help from Hollywood for that site and it wants serious price cuts. Wal-Mart pays $17 a pop wholesale for DVDs. It wants prices slashed to $14. And Steve is getting pissed, too. He had a little meeting with Porter, in which he reminded him that Wal-Mart makes a ton of money selling iPods. Presumably they might find the wholesale price unexpectedly rising or supplies gettng thin. Few retailers are willing to play chicken with the boys from Arkansas. Is the video download biz that important to Apple? Probably yes, because Apple's game plan is to be the prime supplier of content, playback devices and software that puts the two together seamlessly. How many video iPods do they sell if Apple is just one of many movie sellers? Less.

But Wal-Mart is not Jobs' only competition. Amazon and Comcast are also forging deals with Hollywood for online video distribution. And don't forget about Netflix. Still, Apple had the hardware and no one else will have a solution that doesn't involve a) watching it on your laptop; b) copying it to DVD.

Posted by Richard Koman on September 1, 2006 10:27 AM | Permalink | Comments (0) | TrackBacks (0)

What's behind the curtain for Apple's big show?

By Richard Koman for SiliconValleyWatcher

Can there be any doubt that Steve Jobs will unveil Disney movies on iTunes this morning? No. Not with Apple's invite to the media event announcing "It's Showtime!" and spotlights criss-crossing over a gray background. It's well-known Steve has been commuting between Cupertino and LA trying to do a deal.

We related Business Week's intelligence on the matter a week or so ago:

Apple will start selling feature-length movies on iTunes in mid-September, sources tell BusinessWeek. But only from one studio - Disney - where Steve Jobs just happens to be the largest shareholder after Disney's purchase of Pixar. Apple will charge $14.99 a flick, up from the $9.99 he wanted to charge.

But what else will Steve say today? The rumor mill has it as a serious "blockbuster" event. AppleInsider cites insiders who say the event will show Apple pushing the envelope in a big, home entertainment kind of way. Besides the video download deal, will there be new video iPods and even a solution to stream movies from your computer to TV?

Last week, AppleInsider claimed:

Jobs many months ago commissioned an elite group of Apple engineers to get the ball rolling on an intuitive hardware solution that would more closely tie the company's digital media strategy to the living-room. And so AppleInsider has been told, Apple has been quietly developing a video streaming device that will interface with an updated version of its iTunes jukebox software.

Hmm, that would be cool. But the details are extremely sketchy. Still, it's a rumor with some legs. Dave Caola at the The Unofficial Apple Weblog says the grand finale will be ...

One More Thing....TubePort. A $99 2-piece set that includes a dongle that connects via USB to your mac, and another dongle that connects via included HD cables or regular Component cables to your TV. The movie is accessed on your Mac via an iDisk-like storage component hosted by Apple.

Dave notes that TubePort is a really lame name, and Jason O'Grady says votes for AirShow but in any case, think AirPort Express.

Think of it as Airport Express (APX) with an HDMI port on it. Just like AirTunes allows you to stream iTunes to any speakers in your house the APXV will allow you to stream video from your Mac to any television in your house. Short-range wireless HDMI transmitters using ultra-wide bandwidth (UWB) signals are coming in November, so this is very feasible. My favorite name: AirShow.
HDMI was chosen because it supports HDCP encryption. This was a concession to the Hollywood movie studios to get them to license the content and to the MPAA. The Airport Express Video will be the first device to allow the output of digital video.

Stay tuned. Steve's show is expected to be streamed from the Apple site later in the day.

Posted by Richard Koman on September 11, 2006 9:42 PM | Permalink | Comments (0) | TrackBacks (0)

Apple clears Jobs, Anderson leaves board without explanation

Apple has completed its internal investigation of stock-options improprieties and concluded that Steve Jobs knew about backdating of options but that he didn't knowingly receive any backdated options and didn't understand the accounting repercussions.

But the company also said that two former officers' dealings "raised serious concerns" and Fred P. Anderson, Apple's CFO during the backdating period, abruptly resigned from Apple's board without explanation. He said it was in Apple's "best interest" that he leave the board.

The Times reports, though, that spokesman Steve Downling said there may have been some "irregularities" in stock options granted to Jobs, but he wouldn't elaborate.

In its official statement, Apple listed the investigation's key findings:

No misconduct by any member of Apple's current management team. But "the investigation raised serious concerns regarding the actions of two former officers in connection with the accounting, recording and reporting of stock option grants. The company will provide all details regarding their actions to the SEC. " Would that include Anderson?

The most recent problematic stock grant occurred in January 2002. grant. But to whom?

There were 15 backdated stock option grants between 1997 and 2002.

In a few instances, Jobs was aware of backdating but he did not receive or benefit from these.

In the statement, Jobs says:

I apologize to Apple's shareholders and employees for these problems, which happened on my watch. They are completely out of character for Apple. We will now work to resolve the remaining issues as quickly as possible and to put the proper remedial measures in place to ensure that this never happens again.
By Richard Koman - October 5, 2006 | Permalink | Comment on this post | Apple [AAPL]
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Posted by Richard Koman on October 5, 2006 9:31 AM | Permalink | Comments (0) | TrackBacks (0)

Stock options take down two more execs: Cnet, McAfee CEOs quit

By Richard Koman for

Cnet chairman and CEO Shelby Bonnie and McAfee boss George Samenuk resigned today, both victims of the stock options backdating scandal that is roiling the Valley. McAfee president Kevin Weiss was flat-out fired, the company said.

Both companies recently completed internal investigations of backdating from 1996 to 2003, The Washington Post reports.

"I apologize for the option-related problems that happened under my leadership," said Bonnie. Samenuk said he was retiring "in the best interests of the company, its shareholders and employees. I regret that some of the stock option problems . . . occurred on my watch."

Meanwhile the Times' Laurie Flynn writes that Apple's Fred Anderson may have lost his place at Apple to save Steve Jobs'. Anderson left after an Apple investigation found options problems from 1997-2003, a time when he served as CFO.

“I would say that Jobs and the Apple board threw Fred under the bus to keep it from hitting them,” said Lynn E. Turner, a former chief accountant at the Securities and Exchange Commission and a managing director at Glass, Lewis & Company, which advises institutional investors on corporate governance.

Apple's disclosures left the financial community (and certainly the SEC) dissatisfied, Brian Foley, an independent compensation consultant, said.

“You don’t know what the scope of the problem really is. They told you the number of grant dates, but not the number of grants. They told you that (Jobs) was in the know on a few instances, but those could be a huge number of shares.
...Mr. Foley questioned why the company had not yet quantified the potential impact for investors. “After three months, you don’t know what the number is,” he said. “Come on.”

And Reuters reports that Andrew McKelvey resigned as chairman and CEO of Monster Worldwide, the parent of Monster.com, saying he could “no longer dedicate the number of hours required” for the company’s review of its stock option grants.

“At this stage in my life, I simply can no longer dedicate the number of hours required by Monster’s rapid global growth and the additional demands of time associated with the ongoing historical stock option grant review."

The options review will prevent Monster from stating comparative quarterly results for the quarter ending Sept. 30, 2005.

Posted by Richard Koman on October 11, 2006 10:37 AM | Permalink | Comments (0) | TrackBacks (0)

12.15.06: Gizmodo: iPhone on Monday

At Gizmodo, Brian Lam says he "knows" the iPhone will be announced on Monday. In its entirety, the post says:

I guarantee it. It isn't what I expected at all. And I've already said too much

Just the kind of tease to guarantee traffic galore. Om says it's BS:

Just pointing out that the teaser doesn’t mention Apple. And no, Steve Jobs & Co. are not crazy to release what could be a hot device mere nine days before Christmas. In other words don’t expect an iPhone from Apple. In fact, I am confident enough to bet another 10-pounds on it.

Actually, here are some detailed rumors from Doug Berger at Gadgetell:

Morgan Stanley analyst Rebecca Runkle has added to the mess of rumors by revealing more pricing possibilities. She says the 4GB and 8GB models of the new Apple Phone will cost $599 and $649 respectively and will be wider than the iPod nano, but narrower than the 5G iPod. She also added it will have a 3.5 inch screen and come in multiple colors like the new nano. Her prediction is it will launch in the first half of 2007.

Personally if I were to shell out hundreds for a phone (and I've never had a phone that didn't come free from the cellphone company), I'd go for this one (found on iliketotallyloveit:

Posted by Richard Koman on December 15, 2006 10:26 AM | Permalink | Comments (0) | TrackBacks (0)

1.2.07: Apple probe focuses on Anderson, GC Heinen

While Apple has taken pains to clear Steve Jobs of any wrong-doing in its option backdating troubles, the company's internal investigation focused on two unnamed executives who may have fraudulently altered documents. But everybody knows who those executives are - they were forced out during an earlier phase of the investigation: former general counsel Nancy Heinen and CFO Fred Anderson. So says The Wall Street Journal today (and read it today, while the online Journal is free).

WSJ: Apple Probe Spotlights Two

Within the clubby circles of Silicon Valley, Apple's allegations have caused a stir among people who know the former Apple executives. A person familiar with the matter says Apple may argue that, as financial chief, Mr. Anderson should have been responsible for proper accounting of backdated options. In Ms. Heinen's case, Apple believes it has evidence that Ms. Heinen, as board secretary, was aware of improper documentation that said a board meeting occurred in October 2001 to approve a big option grant to Mr. Jobs, when no such meeting occurred.

Anderson joined Apple in 1996 during the dark, pre-re-Steve days and survived a purge of Apple's horrendous management team. During his tenure, he resolved a major liquidity crisis, executed a massive restructuring that returned the company to sustainable profitability, and reenergized Apple’s revenue and profit growth, his his bio says. He joined the board in 2004 after leaving the CFO post.

After Apple found preliminary evidence of irregularities in past option grants last year, Mr. Anderson spent considerable time at the company's headquarters helping an independent investigative team comb through company records to more closely examine past options grants, people familiar with the matter say. It shocked him when Apple's lawyers later indicated to him that he might become a target of the investigation, these people say. As a result, Mr. Anderson resigned from Apple's board in October.

Heinen is an old Jobs hand, serving as GC at NeXT before following him to Apple. She oversaw a legal department of 40 attorneys and 100 total employees.

Rich Gray, a friend of Ms. Heinen's who worked with her at a small Silicon Valley law firm two decades ago, said he found it hard to believe she did anything wrong at Apple. "She's very smart and she has tremendous personal integrity," said Mr. Gray, a senior vice president and general counsel at Internet marketing company Claria Corp. "I just don't see it happening."

Her friends say she left for reasons unrelated to the stock scandal. Neither Anderson nor Heinen grabbed unreasonable wealth from the company. She sold $85 million in shares and he sold $76 million.

Posted by Richard Koman on January 2, 2007 10:13 AM

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