I dream of the day when my iPhone’s sync cable lies dusty and neglected in the back of a cabinet somewhere, and that day is getting closer and closer, thanks to iPhone OS 3.0. Yet another new feature discovered last week suggests that iPhone owners will have one less reason to connect and sync their devices come June. The feature in question is the ability to buy and download video content via iTunes.
The discovery came via “leaked” official Apple ad spots in the app Twitterfon (although I have trouble believing Apple would inadvertently be this sloppy) for iTunes TV, iTunes Movies, and iTunes Movie Rentals.
According to Twitter users, the source of the news, and commenters on this post, tapping on the ads redirected users with iPhone OS 3.0 installed on their phone to a previously unknown subsection of the built-in iTunes app, where movies and TV shows are listed. Movie links aren’t active yet, but it otherwise seems to be nearly ready for public consumption.
A variety of screenshots are available, thanks to the post by blogger KwameJones, and one commenter posted a link to the store that would work when accessed using an iPhone running OS 3.0, but the link has since ceased to be active. Lists of shows and movies with polished artwork include very recent titles like “Kings” and “The Wrestler”, which would indicate that Apple is indeed prepping this for a June launch, rather than just beta testing an early build of a video store to be added much later.
At this point, nothing is known about pricing, conditions of rental/purchase, or interaction/syncing with your iTunes library on your computer, but I’d love some sort of Kindle-like function that allows you to pick up watching video where you left off regardless of what platform you use to view it. Since this wasn’t announced at the iPhone 3.0 announcement event, I’m also guessing it’s a recent addition, possibly in answer to Microsoft’s upcoming “xYz” device, which is said to have similar features.
After the recent news that the Slingplayer app for iPhone would only be able to stream over Wi-Fi, I think it’s probably safe to assume that video downloads won’t be allowed over a 3G connection. On the other hand, it is possible that the only reason Apple imposed the Slingplayer restriction to begin with was to make this upcoming service a more appealing choice to iPhone users. If it did offer downloading regardless of connection type, and maybe even streaming content once you’ve begun your download, I think the customer response would be overwhelmingly positive.
The hype machine started months ago. Opening weekends are upon us. High up in executive suites, the hope is that this summer’s new releases will cause lines to snake around the block.
The cellphone industry looks a lot like the movie industry nowadays. Some highly anticipated phones — including the Palm Pre, an updated iPhone and new phones using the Android operating system from Google — have focused the industry’s efforts on the crucial months between Memorial Day and Labor Day.
In the past, “nobody gave a darn about mobile phones — they weren’t headline grabbers,” said Charles Wolf, a cellphone industry analyst with Needham & Company. “This summer will be really interesting. It could be potentially the most exciting time in this market.”
The season’s releases began last week, when T-Mobile announced the introduction of the Sidekick LX and AT& T unveiled the Samsung Jack, ballyhooing it as “another hit crossover smartphone in the tradition of the Blackjack and Blackjack II.”
But the season’s most compelling phone drama will start the first week in June, when Sprint will begin selling the Palm Pre, people briefed on the company’s plans said.
Palm, a once-iconic device maker that has fallen on hard times, has been hyping the Pre for months as an iPhone killer, but the company has given few peeks to analysts and reviewers. Analysts say the stakes are high for Sprint Nextel, which has exclusive rights to the phone in the United States, but even higher for Palm, which is based in Silicon Valley.
“This is make or break for Palm,” said Mr. Wolf, noting that Palm, also the maker of Treo and Centro phones, lost about $98 million in the last quarter, consistent with losses in other recent quarters. “It’s not make or break for Sprint, but clearly Sprint is in trouble, too, and needs a hit.”
Lynn Fox, a spokeswoman for Palm, played down the importance of the Pre itself, saying it was the first “in a long line” of devices that will use Palm’s new mobile operating system. “The Pre isn’t a bet-the-company device,” Ms. Fox said.
Because the smartphone market still has room to grow (according to Google, it is estimated that out of the four billion mobile devices in the world, only 100 million are smartphones), manufacturers hope there is room for more than one winner.
How is success measured for cellphones? A flop will sell fewer than 100,000 units, a hit at least one million, and a runaway success five times that or more, analysts say. In July 2007, the iPhone’s first month on the market, 80,000 people bought one. Apple went on to sell iPhones, including the 3G version, to more than five million Americans, according to comScore.
Big phone releases happen year-round, but there is a concentration in the summer. That way, phone carriers and manufacturers can take advantage of two crucial selling seasons: back to school and the holidays, said Mark Donovan, an analyst with comScore. As soon as June 8, just a few days after the expected release of the Pre, Apple may introduce a third version of its iPhone at the company’s annual conference for software developers. The phone could become available a month later, though analysts and Apple rumormongers say it might also come later in the summer.
Analysts generally agree that the phone will have an upgraded camera, a faster processor and better location services. Apple, of course, has less risk than other phone makers; its iPhone is already a blockbuster. That said, if the company fails to keep innovating, it risks losing its buzz. Jennifer Bowcock, an Apple spokeswoman, declined to comment on the company’s plans for a new phone.
Also in June, Samsung has said, it plans to release the i7500, its first phone based on the Android operating system, but it has not said when that phone will come to the United States. HTC recently released the Android-equipped Magic in Europe. And Motorola says it plans to start selling several Android phones this summer, phones the company is counting on, given its desperate need for a hit. Trickling into the market — though release dates are uncertain — are a host of phones using a new mobile operating system from Microsoft. Microsoft’s current mobile platform has not met expectations. The hope is that a new operating system, Windows Mobile 7, will reboot the franchise.
Mr. Wolf of Needham said that the concept of sexy phones equaling or superseding network quality as a selling point for consumers started in earnest in 2006. By then, carriers realized, most adults already had cellphone service and needed to be inspired to buy new phones or seduced into switching carriers.
An early example came in July 2006, when Verizon Communications introduced the LG Chocolate, which was preceded by a teaser advertising campaign that promoted a release date. In November 2007, Verizon began another big campaign, called “Next phones now,” that included the LG Voyager, LG Venus, Blackberry Pearl and Samsung Juke (not to be confused with the Jake, or the Jack).
Brenda Raney, a spokeswoman for Verizon, argued that blockbuster phones cannot exist without a great network. “Consumers know if you don’t have a good wireless experience, what good is the phone?”
Mr. Donovan of comScore disagreed. “No one’s out there saying the Palm Pre is going to be a hit because the call quality is magnificent,” he said. Consumers are increasingly focused on the latest devices, he said, and manufacturers have only a short time to draw consumers’ attention.
“Phones don’t stand the test of time,” Mr. Donovan said. “I look at my personal handset museum, and the coolest thing I had in my pocket eight years ago is laughable.” When it comes to phones, he added, “there are no ‘Citizen Kanes’ out there.”
Wal-Mart, the giant discount chain and unofficial barometer of consumer spending, posted flat year-over-year earnings in its most recent quarter — an accomplishment in this economy.
Most retailers — even discount stores, which have been faring relatively well — are not expected to report year-over-year sales growth in the first months of their fiscal year.
Several chains including Bon-Ton, Saks, Sears and Dillards are not even expected to make a profit, according to Retail Metrics, a research firm.
For the three months ended April 30, Wal-Mart, the country’s largest retailer, had a profit of $3.02 billion, or 77 cents a share, compared with $3.02 billion, or 76 cents a share, for the period a year ago. In earlier reports, Wal-Mart had warned that results would be hurt by currency exchange rates.
Revenue fell 0.6 percent to $93.47 billion, from $94.04 billion a year earlier.
Last week, the company said for the first quarter, sales at stores open at least a year, a measure of retail health known as same-store sales, increased 3.7 percent, not including fuel. Same-store sales in April rose 5.9 percent.
Indeed, Wal-Mart has had good results of late. Its low prices on everything from generic prescription drugs to frozen pizzas have helped it take market share from ailing and bankrupt retailers, as well as supermarkets and grocery stores. More people are shopping its stores, and they are spending more.
Eduardo Castro-Wright, vice chairman of Wal-Mart’s United States operations, said in a recorded conference call for investors that about 17 percent of Wal-Mart’s customer traffic came from new customers. He added that their average basket size is 40 percent higher than Wal-Mart’s average — proof that shoppers were trading down.
Bob Drbul, a retailing analyst with Barclays Capital, estimated that 27 percent of Wal-Mart’s sales growth in February came from new households.
“When economic conditions improve, we believe customers who shop Wal-Mart today will stay with us, because of the business improvements we’re making and continue to make,” Michael T. Duke, Wal-Mart’s president and chief executive, said in a statement.
Declining gas prices, compared with last year, also helped drive customers to Wal-Mart. And the retailer’s efforts to be the go-to destination for holiday gifts and decorations paid off: comparable sales of Easter-related merchandise grew 7.6 percent from a year ago.
Wal-Mart said it expected to earn 83 to 88 cents a share in its current quarter, and that same-store sales at its United States and Sam’s Club stores will each be flat to up 3 percent.
Also on Thursday, Kohl’s, the discount apparel chain, reported that for the three months ended May 2, its profit fell to $137 million, or 45 cents a share, compared with $153 million, or 49 cents a share, a year ago. That was better than what retailing analysts had been expecting.
Despite the decline, Kohl’s has been a favorite of many analysts who think it is well-positioned to thrive when the economy turns around. Analysts have praised Kohl’s management team, its investments in technology, even its marketing.
And the company is proving to be adept at hooking consumers on its exclusive name-brands, which account for 44 percent of Kohl’s sales. In February Kohl’s rolled out a clothing line by Dana Buchman that executives said has been selling better than they expected. In July, in time for back-to-school shopping, the MUD children’s apparel brand will become exclusive to Kohl’s. And in October, a line of clothing by Lauren Conrad — the star of “The Hills,” MTV’s popular reality series — will reach stores.
While other retailers are cutting back, Kohl’s has bought stores once occupied by the bankrupt Mervyn’s chain, and is moving into new areas of the country.
“We are focused on gaining market share in this difficult environment,” Kevin Mansell, president and chief executive of Kohl’s said in a statement. In a conference call Thursday with analysts and investors, Kohl’s executives said the company should able to capitalize on even more real estate opportunities and continue to steal market share as the industry consolidates. For the three months ended Aug. 1, the company expects to earn 56 to 64 cents a share. Kohl’s also updated its guidance for its fiscal year 2009. It is now expects to earn $2.19 to $2.42 a share, up from its previous guidance of $2 to $2.30 a share.
“The consumer mindset has changed,” Mr. Drbul said, noting that both Wal-Mart and Kohl’s have earned the trust of shoppers in need of low prices. “These are two retailers that are both very mindful of that consumer.”
