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WWDC 2008: Last Minute Round-up

San Francisco (CA) - The Apple WWDC 2008 rumor mill gets one final spin Monday morning with Steve Jobs expected to reveal several new products during his opening day keynote. Despite the fact that Apple has said zilch about a 3G iPhone the device is a sure bet, but there have been speculations about a new operating system, new iPods, a UMPC/MID and possibly new displays. We will report from WWDC 2008 and take a thorough look at what new products are likely to surface at the conference.

iPhone Upgrade - Thinner, lighter, 3G, GPS, video camera
Probability: Certain

The buzz surrounding the 3G iPhone is a phenomenon in itself. Apple hasn’t said a word about such a device, but virtually everyone expects this device to be announced. And if we trust our own sources, then such a device in fact will be unveiled by Steve Jobs.

Apple is now the world’s #3 smartphone maker (second in the U.S.), which is an impressive achievement for a newcomer in the mobile space. An upgrade to the current phone will correct some of the shortcomings of the original iPhone. Besides 3G support, expect a slightly redesigned and thinner casing, a front-facing camera for video recordings, GPS hardware new sensors, improved battery life and more memory.

3G support for UMTS/HSPA technologies will take the iPhone into the broadband age and outperform EDGE. 3G networks have been widely available in Europe and Asia while in AT&T just recently upgraded its 3G network in more than 275 U.S. metropolitan areas. 350 areas are planned to be supported by the end of the year. With, expect download speeds between 700 Kb/s and 1.7 Mb/s and upload speeds in the 500Kb/s to 1.2 Mb/s range.

We also expect dedicated GPS hardware (although it’s not a given) for precise geographical positioning. Although the iPhone already roughly calculates your location using Wi-Fi and cellular tower triangulation (a technology that recently was cracked), GPS will bring real-time positioning to location-aware applications, such as geophoto tagging.

It’s unclear whether the existing camera will be upgraded beyond 2 megapixels and if flash will be added, but an additional front-facing camera for video recording appears to be a done deal. We predicted some time ago that VoIP and videoconferencing are likely to become killer applications for the 3G iPhone, especially since there is now an application which adds a limited video recording option to the current iPhone.

Thinner and slightly redesigned casing will shave 2-3 millimeters and a new unknown sensor is probable, in addition to the existing ambient light, proximity and accelerometer. Apple is likely to kill the 8 GB mode and introduce 16/32 GB iPhones and 16/32/64 GB iPod touch versions. Industry sources told we that Apple will sell the iPhone at its retail stores for $399 for the 8 GB model. The 16 GB version will go for $499. The company is expected to agree to carrier subsidies and AT&T is expected to bring the iPhone price below the $200 mark for those who sign a two-year contract.

New iPhone Nano: Smaller, lighter, cheaper
Probability: 25%

It’s safe to assume that Apple will put an iPod-like product diversification strategy for the iPhone. Analysts have been predicting different iPhone models for some time now, which would enable the company to cover different market segments and price ranges. The first addition should be an iPhone Nano, a smaller, lighter and cheaper version of the iPhone with some features lacking, such as the video camera. Apple may need such a phone to get closer to RIM and Nokia on a worldwide basis.

We believe that it is rather unlikely that an iPhone Nano will be brought into the game at this time. Apple needs to expand into more geographies first, especially Asia, and meet its self-imposed goal of 10 million units by the end of the year. Macworld 2009 in January is a more likely event for such a smaller device. We wonder how much sense it would make for Apple to introduce such a model at all, since it call for a smaller screen, impacting the usability of third-part apps and contradicting Apple’ current market strategy. But don’t count on it yet, especially not at WWDC.

.Mac Improvements: Over-the-air iPhone syncing, reduced subscription price
Probability: 50%

Apple reportedly secured domain, which is, if we believe current rumors, planned for the re-branding of Apple’s costly $99 per year .Mac online services for Mac users. The service includes online features that can be found free of charge elsewhere, such as email accounts, photo galleries, basic website hosting, 10 GB of storage space etc. The company may re-brand the service under the domain, introduce new platform services and possibly reduce the annual membership price.

It appears that .Mac will get new features, most notably over-the-air syncing capabilities for the iPhone. The upgraded service would provide seamless syncing of your contacts, calendars, settings, email accounts and other settings between Mac, PC and iPhone. Users who subscribe wouldn’t have to worry about backing up their contacts and other iPhone data. The handset would securely sync your iPhone over-the-air with Apple servers and keep the data in sync between your iPhone/iPod touch, Mac and PC.

Read on the next page: iTunes, Mac OSX 10.6, Newton 2

iTunes: Premium TV programming, subscription-based music, mobile TV/IPTV delivery
Probability: 50%

The iTunes software for Mac and PC is certainly going to be updated to enable for registration and syncing of the new iPhone but the cloud service could also bring a few new features. True, the five year old multimedia online store is still on a roll and overtook Wal-Mart to become #1 music retailer in the U.S. earlier this year. But rivals match iTunes’ content pricing (some are actually cheaper) and deliver higher-quality and more DRM-free music. Plus, we recently heard chatter about flat-fee based subscription services. Apple clearly needs to do add some spice to iTunes.

In fact, we believe that Apple is serious about the rumored subscription-based service, which would be a perfect fit for the Wi-Fi iTunes Store on the iPhone. At the very least, we expect that the company will enable iPhone ringtones and music purchases over the 3G mobile network, not just over Wi-Fi. There a lots of variables. For example, we don’t know how far the negotiations are along and how such a ringtone-music-download feature would collide with similar features AT&T offers.

If we focus on iTunes, it makes sense to enable iPhone owners to access all iTunes content, not just videos. Now that the handset supports 3G, expect Apple to enable movie rentals or iPhone-optimized movie purchases on the handset. The ability to watch streaming video programming from iTunes over the mobile network can only be bettered by another killer feature: Mobile TV.

There is a reasonably high chance that mobile television is coming to the iPhone in the near future. After all, being a great multimedia player, the iPhone is well-equipped for viewing TV while on the go. Actual TV programming from networks could be delivered to the iPhone via the iTunes Store. It would be a natural evolution of the store that would effectively turn Mac, PC, Apple TV and iPhone into IPTV devices capable of playing premium television programming in real-time.

Of course, an unknown variable, especially if we are looking at broadband use of the iPhone, is service plan pricing. There has been zero information how much AT&T will charge for a 3G iPhone plan, if pricing will remain the same or if prices will increase. But if AT&T is too optimistic about the value of its 3G service, it is clear that the company single-handedly could kill the 3G iPhone.

OS X 10.6: Multi-touch UI, reliability and security improvements
Probability: 75%

June seems to be a sensible time frame to announce OS X 10.6 to the developers which fits into proclaimed 12-18 months OS X development cycle, anyway. Reports indicated that the software is code-named Snow Leopard and is slated for a January 2009 delivery. Although TUAW thinks 10.6 will sport no new user-centric features besides some under the hood changes, security and reliability enhancements, we think it will deploy multi-touch functionality throughout the operating system, resolution independence and a few flashy features to justify a new version number.

Expect Steve to show a new cat during the keynote, reveal the code-name and shipping date and actually show some of the key features to make some headlines. Developers may get the beta code to have a head-start and optimize their applications before the OS is released - and play with a new desktop-mobile platform that will consist of iPhone 2.0 and Mc OS X.

Newton 2: 7" multi-touch display, handwriting recognition, content creation
Probability: 50%

Analysts believe there is a 1-in-2 chance that Apple will introduce a multi-touch handheld tablet at WWDC. We agree. The success company had with multi-touch user interface on the iPhone and small form-factors clears the way for another portable device powered by OS X and hand gestures. Unlike the iPhone, a Newton 2 could feature much better battery life and a larger screen with higher resolution, creating a portable content creation device positioned well below the company’s notebooks.

Even though we would like to see such a device at WWDC, we have to be realistic and admit that, if a Newton 2 really exists or is in development, it is much more likely to be introduced at the consumer-oriented Macworld Expo in January 2009. On the other hand, a WWDC introduction would make sense for Apple to get early support from the developers who are likely to create applications for the device. We think the most probable outcome is a WWDC announcement and a January 2009 introduction.

To us, a Newton-like multi-touch tablet looks like it could be the "one more thing" announcement in Jobs’ keynote.