Apple Stock Takes a Wild Ride After iPad Unveiling

Apple’s stock soared after the iPad, a hybrid iPhone and netbook computer, was unveiled Wednesday and then plunged with the rest of the market Thursday morning. That shows the best and worst aspects of investing in Apple, all in less than 24 hours.

Apple is a phenomenal company, but it has to do business in the same fragile economy and stock market as everyone else. No matter how brilliant Steve Jobs, Apple’s chief executive, is, the stock is vulnerable to a second dip into recession; $499 for the basic iPad will attract a lot of buyers, but fewer if the economy tanks anew.

The share price could also fall victim to perhaps the biggest threat that any asset faces: excessive expectations.

For the last decade Jobs has managed to do everything right, from the various iterations of the Mac to Pixar to iTunes and the iPod and the iEverything else. He has a knack, maybe better than anyone else does, for identifying a need in the marketplace, often one that consumers never realized they had, and designing a product or service to fill it.

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But nobody’s perfect. Jobs has made mistakes, although not lately. It doesn’t look as though the iPad is one, but it’s way too early to tell for sure. And then there is his health to consider.

As the MoneyWatch house contrarian, I’m supposed to express disdain for anything as successful as Apple. But while the stock is close to all-time highs, it doesn’t look expensive.

By one popular valuation measure, the PEG ratio (the price-earnings multiple divided by the annual earnings growth that analysts expect over the next five years), Apple appears cheap. Its PEG (lower numbers are better) is 1.06, while those of Hewlett Packard, Dell and Microsoft range between 1.16 and 1.46.

But the ratio is susceptible to changes in circumstances. The five-year earnings growth estimate may prove to be way too optimistic if a new rival comes along and shakes up one of Apple’s markets or if an old rival proves more adept at fending off its competitive threat.

Apple is the kind of company that investors either love or hate, marveling at its success or awaiting its comeuppance. The true contrarian play might be just to leave the stock alone.

iPad Prices, Features and Tech Specs

Display

• 9.7-inch (diagonal) LED-backlit glossy widescreen Multi-Touch display with IPS technology
• 1024-by-768-pixel resolution at 132 pixels per inch (ppi)
• Fingerprint-resistant oleophobic coating
• Support for display of multiple languages and characters simultaneously

Capacity

16GB, 32GB, or 64GB flash drive

Processor

1GHz Apple A4 custom-designed, high-performance, low-power system-on-a-chip

Wireless and Cellular

Wi-Fi model

• Wi-Fi (802.11 a/b/g/n)
• Bluetooth 2.1 + EDR technology

Wi-Fi + 3G model

• UMTS/HSDPA (850, 1900, 2100 MHz)
• GSM/EDGE (850, 900,1800, 1900 MHz)
• Data only
• Wi-Fi (802.11 a/b/g/n)
• Bluetooth 2.1 + EDR technology

Sensors

• Accelerometer
• Ambient light sensor

Size and weight

Location

• Wi-Fi
• Digital compass
• Assisted GPS (Wi-Fi + 3G model)
• Cellular (Wi-Fi + 3G model)

Battery and Power

• Built-in 25Whr rechargeable lithium-polymer battery
• Up to 10 hours of surfing the web on Wi-Fi, watching video, or listening to music
• Charging via power adapter or USB to computer system

Prices

iPad (Apple Tablet) announced: GPS, WiFi starting from $499

Prices start at $499 for the sleek, full-color, half-inch thin gadget that is designed for a variety of media, from videos to games to electronic books and newspapers.

Apple is using the first chip to come out of its PA Semi acquisition in its new iPad, a processor called the Apple A4. Apple CEO Steve Jobs made the announcement at the media event Wednesday where the iPad was unveiled, according to Engadget’s coverage of the event, where he said, “It’s powered by our own silicon. The 1GHz Apple A4 chip. It screams.”

AT&T lowering cost of unlimited voice and data for iPhone users

The battle of snarkiness between AT&T and Verizon is resulting in benefits for subscribers.

Yesterday, AT&T announced a new unlimited voice and data plan for smartphone owners, including those who use the iPhone, that offers unlimited voice and data service for $99.99 per month. The change was the result of Verizon lowering the cost of its unlimited plans earlier in the day, and consumers are the beneficiaries of the battle of the cell phone titans.

Prior to the announcement, iPhone users paid $100 monthly for unlimited voice, then tacked on another $30 a month for unlimited data. Starting on Monday, January 18th, 2010, a combined unlimited voice and data plan is available for $99.99. That’s a savings of $30 per month. For a Family Talk plan with two iPhones, the deal is even better — $179.99 per month.

Unfortunately, AT&T still charges for text messaging separately, so if you want to add on an unlimited texting plan it’ll be another $20 per month. Beginning on Monday, existing AT&T customers can change to the new plans without penalty or a contract extension by using the online account tools at www.att.com/wireless.

iPhone apps lose $450 million to piracy

Apple has made an absolute fortune from its iPhone range and downloads from the App Store, but it’s also lost a small fortune to piracy.

Figures from financial site 24/7 Wall St suggest app piracy has cost the platform holder and iPhone developers over $450 million since July 2008.

Over three billion apps have been downloaded from the App Store to date but it’s estimated that for every legitimate, paid download, three illegal app downloads have been made.

A number of game developers, including Rally Master Pro creator Fishlabs and Tap Fu studio Smells Like Donkey have been stung by iPhone piracy, leading them to question whether Apple’s doing enough to combat the problem.

AT&T will finally provide MMS for iPhone on September 25.

AT&T said it would finally be providing iPhone 3G and iPhone 3GS customers with multimedia messaging capabilities via a software upgrade Sept. 25.

The MMS capabilities were one of the most-heralded features of the iPhone 3.0 software because it plugged a nagging hole in Apple’s mobile platform. Rivals like Research In Motion (NSDQ: RIMM)’s BlackBerry, Windows Mobile, and many entry-level phones have been able to send MMS messages for years.

AT&T didn’t offer this messaging capability when the 3.0 software was released in June because it wanted to ensure its network could adequately handle the traffic. This has garnered ill feelings from some iPhone owners, as well as a class-action lawsuit that alleges the second-largest U.S. carrier misrepresented the iPhone’s capabilities.

“The unique capabilities and high usage of the iPhone’s multimedia capabilities required us to work on our network MMS architecture to carry the expected record volumes of MMS traffic and ensure an excellent experience from day one,” AT&T said in a statement. “We appreciate your patience as we work toward that end.”

While AT&T technically will miss their “end of summer” deadline by a few days, the move may help it squash growing complaints about the carrier’s quality of service from a small, but vocal, group of iPhone owners. AT&T has been investing heavily to improve its 3G network, and it is also deploying 850-MHz spectrum to improve coverage in major metropolitan areas. Improvements in service could help AT&T retain iPhone subscribers even after it loses exclusivity of Apple’s popular smartphone.

The Sept. 25 software update will be available through iTunes, and it will not be available for the iPod Touch or the original iPhone. The carrier also said it would be offering tethering in the future, but did not get into specifics about the launch date or pricing.

SDK 3.1 beta is out

Only two weeks after launching the 3.0 software update for iPhone and iPod Touch, Apple is now working hard to deliver an update to the iPhone OS. The iPhone SDK 3.1 beta was pushed out to developers on 1st of July, and the recipients report the software already has a few new features and refinements.

Apple has not mentioned specifically the improvements in the iPhone 3.1 beta update, but numerous developers have downloaded the software and reported on forums and blogs some of the new things they discovered within the update.

At a first glance, reports say that the iPhone 3.1 improves Voice Control functionality (introduced with the iPhone 3GS), which now works over Bluetooth as well. Video editing on the iPhone 3GS will be improved also, as users will be able to save a copy of the original video before they start trimming.

Other visible user interface improvements reported include tactile feedback (vibration) when moving applications icons on the screen and paste capabilities in the dialer application. The dialer app will also convert alphanumeric numbers (such as 1-800-MY-APPLE) into regular phone numbers when pasted in.

Developers also found a few under-the-hood changes in the iPhone 3.1 software beta to the OpenGL and Quartz engines and an Video Editor Controller API, which allows third-party applications to call up the video editing interface.

The MMS functionality is enabled by default say developers, but it still doesn’t work for AT&T users (although the AT&T profile was updated to 4.2). It is yet unclear whether this change signals that AT&T will enable MMS messaging as soon as the iPhone 3.1 software update is widely available to the public.

Apple has not said when a final version of the 3.1 software will be released to all iPhone users or whether this update addresses the latest iPhone 3GS overheating reports.

iPhone version of Skype will be available on Tuesday

Skype is set to launch its iPhone application Tuesday, bringing its much-anticipated Net-based phone service to Apple’s mobile platform. With the Skype iPhone app, users will be able to make free calls using Wi-Fi to other Skype users as well as use their Skype accounts to make reduced price calls to traditional landline phones. Skype announced its iPhone application will be available on Tuesday for free, with a version for the BlackBerry available in May. Mobile versions of Skype are already available for Nokia, Windows Mobile, and Google Android phones.

From what we can tell, the Skype for iPhone looks great; but it has some drawbacks. One disappointment is that users won’t be able to place calls over cellular networks, but only via Wi-Fi. Still, for international callers especially, Skype’s iPhone app will save callers money by allowing them to avoid AT&T’s traditional wireless phone network and adds the convenience of allowing Skype users to use their iPhone handset for Skype calls.

Looking more like a traditional iPhone app rather than the desktop Windows counterpart most of its 400 million users are used to, Skype for iPhone features five tabs at the bottom of the screen, displaying contacts, chats, a calling panel, call history, and your profile (with Facebook-style status).

Skype for iPhone will use phone numbers directly from your phone’s address book, so no more nasty duplicated contact lists. It even displays your contacts’ photos (if they have one set up on Skype). Conference calling is available, but for the moment you can only take part in one if someone invites you.

You can also chat with your Skype friends, but unfortunately this is the only thing (besides seeing who’s online) you can do over a cellular network. Skype for iPhone places calls only via Wi-Fi, not differentiating itself much from the other voice apps in the App Store (Skype for T-Mobile G1 can place calls over 3G).

Skype for iPhone is still a young app and is short on some of the features its desktop counterpart has. SMS, video and proper conference calling, file transfer, and voicemail are missing from this first version, but let’s hope they will make their way in future versions.

iPod Touch users will also be able to enjoy Skype, but this would require them to purchase a microphone, or headphones with built-in microphones (like the iPhone’s).

Internet Tethering in iPhone

Months before the iPhone OS 3.0 is released to the masses, one entrepreneurial developer has managed to crack into the phone’s Internet tethering capabilities. Steve Troughton-Smith unearthed the iPhone’s tethering preferences pane, connected his iPhone to his Mac via USB, and was allowed to use the phone as a modem. Problem is, he has no idea how he did it. From Twitter, he says, “To all: I have no idea how I did it. Sorry! I was hacking around with APNs in the Carrier.bundle itcc file.”

Internet tethering was rumored to be a feature on OS 3.0, and during the iPhone OS 3.0 conference, Senior VP for iPhone Software Scott Forstall said the OS 3.0 supported Internet tethering. Despite the iPhone’s capability, tethering was never made into an option.

The question now is whether carriers want to shoulder the burden tethering would create on its networks — and the burden is huge. Earlier this week iPhones practically crippled AT&T’s 3G network at Austin’s SXSW festival, and that was just the phone. Imagine hundreds of thousands of computers connected to that same network and the damage it’d wreak.

If you have a jailbroken iPhone, Internet tethering is readily available. When OS 3.0 rolls around, Apple will kick all jailbreakers out of the party — temporarily. The Dev-Team announced that 3.0 is definitely “jailbreakable” but that those using Yellowsn0w — a software-based jailbreaking system — should exercise restraint and wait for the “official” set of keys.

iPhone OS 3.0 revealed

For nearly two years, the iPhone was a must-have device with one very conspicuous missing feature: copy and paste.

Not anymore.

Apple unveiled the next generation iPhone and iPod Touch software – version 3.0 – at its Cupertino, Calif., campus Tuesday – and, proving the rumor mill true, announced that the sought-after function will at last appear on the groundbreaking gadget, according to multiple online reports.

Copy and paste – long a baffling omission from the iPhone’s operating system – wasn’t the only highlight of Tuesday’s event, though. Here’s what iPhone owners also have to look forward to:

• MMS support: Now iPhone users can send and receive multimedia messages to other phones instead of just standard text messages. Up until now, users were limited to emailing photos or uploading them via the Web.
• Push notification: In previous versions of the iPhone software, if users closed an application – other than built-in apps like Mail or iPod – the apps would stop running. Now, through push notification, apps can alert users to updates, new messages, etc., even when the app isn’t open.
• Turn-by-turn apps: Another long-awaited feature, Apple will now allow developers to create map features that provide turn-by-turn directions.
• “In-App” purchases: Users can now download features from inside of applications – like additional game levels or eBooks.
• Peer-to-peer connectivity: Using Bluetooth, iPhone users can link up to play games – or pass along their business cards.

Unfortunately, iPhone 3.0 software won’t be available until the summer – but you’ve waited this long, what’s another few months