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iPad Pep Rally Pumps Up AAPL

By Richard Adhikari MacNewsWorld ECT News Network
Mar 24, 2010 5:00 AM PT

Apple stocks shot up Tuesday to close up 1.62 percent at US$228.40, perhaps due in part to smattering of good news for Cupertino. That's nearly $2 above the record $226.60 level they hit on March 12.

iPad Pep Rally Pumps Up AAPL

For one thing, Cupertino is ramping up efforts to tap a huge source of revenue: video games.

On the iPhone front, Apple's widely expected to release a new device in June, and one rumor is that it will have a much better camera.

Meanwhile, Apple's rivals have been humbled -- some of the iPhone's main competitors are in trouble, and both Amazon and Barnes & Noble have released their e-reader apps for the iPhone, despite the fact that both also sell branded e-reader devices.

The one possible fly in the ointment is the iPad, around which questions continue to swirl as its April 3 launch nears. How many have been presold, will it have enough apps ready in time, and will it have content?

It's Playtime!

Apple controlled 5 percent of the U.S. video game software market by revenues in 2009, according to Flurry Analytics.

Developers have released more than 30,000 games in the iTunes App Store since that was launched in July 2008, and many game titles dominate the top paid and top grossing lists in the store, Flurry said.

Flurry's estimates show iPhone game revenue totaled $115 million in 2008 and $500 million in 2009. More importantly, the iPhone will probably dominate the portable gaming market in the United States, Flurry predicted. As prices come down for the iPod touch, and for games sold through the App Store, more young gamers may switch from Sony PlayStation Portable and Nintendo DS consoles to Apple devices, it said.

Apple took nearly 20 percent of the portable games market in 2009, mainly at the expense of the Sony PlayStation Portable, Flurry said.

The iPad may further disrupt the U.S. gaming industry when it hits the market. "The iPad has the potential to take additional share from consoles primarily because it has a bigger screen and better processor than the iPod touch," Peter Farago, Flurry's vice president of marketing, told MacNewsWorld.

That's good news for investors, as it could send Apple shares even higher.

However, the iPad won't replace the iPod touch. "We see them as complementary," Farago explained. "The iPod touch is priced better to compete with portable gaming devices."

That lets Apple cut a wider swathe in the video game market than it could if the iPad were to replace the iPod touch as a gaming device.

Smile, It's the New iPhone Camera

The installed base for the iPhone is large, and it might get larger when Apple releases a new model in June, as is widely expected.

This new iPhone may have a better camera than existing ones. "The rumor is the iPhone that will be launched in June will have a 5 MP camera," Michael Hepp, director of marketing at InVisage, told MacNewsWorld. "Every new iPhone Apple introduces will have a higher-resolution camera because the way consumers understand quality today is by looking at the camera's resolution."

The new iPhone could also be a 4G device and and be launched on the Verizon Wireless network. Verizon has just unveiled its 4G LTE (long term evolution) network, while AT&T is still working on its 4G network.

Bandwidth-hungry users -- whose ranks are led by iPhone users -- would love a 4G iPhone. So would investors, as that should translate into more sales, at a higher average selling price.

Crushing the Competition

Meanwhile, Apple's competitors are hitting rough patches.

Palm, whose webOS devices were touted as iPhone killers when they were launched only last year, is rumored to be switching the devices over to Android from webOS.

Google's Nexus One, also touted as an iPhone killer, is not selling well, and its manufacturer, HTC, is embroiled in a patent battle with Apple.

On the e-reader side, both and Barnes & Noble have launched iTunes App Store versions of their e-readers, possibly because they're bowing to the inevitable. Many iPhone owners also use their devices as e-readers. About 37 percent of potential iPad users plan to use that device as an e-reader too, according to a comScore survey.

In competition, less is more.

The iPad Saga

Finally, there's the iPad. Although we're just two weeks away from the device's debut on retail shelves, its future continues to remain murky. No one quite knows how many have been presold, for starters.

Some put the figure in the hundreds of thousands, but many of those suppositions are based on less-than scientific methodologies; plus, those sales don't require potential buyers to provide their credit card numbers. Low sales could impact Apple's share prices.

Meanwhile, questions about whether or not Apple can muster enough content for the iPad remain unanswered. Reports indicate some significant newspaper, magazine, textbook and television content owners are not keen on striking deals with Apple for fear this might impact their existing revenue streams.

Perhaps Apple could get around that with the and Barnes & Noble iPad apps, although it would have to split revenues with those competitors.

Since the iPad will live or die by the amount of content it offers, let's hope Apple gets its act together here.

Whether it can do so remains unnervingly uncertain. Apple has reportedly turned down many developers who wanted to create apps for the iPad, including Flixster, Evernote and Digital Chocolate. and has imposed strict security measures on those it picked.

That could lead to early iPad apps being buggy because developers couldn't test them on the hardware. This, in turn, might impact Apple share prices.

Let's hope they don't.

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How do you feel about accidents that occur when self-driving vehicles are being tested?
Self-driving vehicles should be banned -- one death is one too many.
Autonomous vehicles could save thousands of lives -- the tests should continue.
Companies with bad safety records should have to stop testing.
Accidents happen -- we should investigate and learn from them.
The tests are pointless -- most people will never trust software and sensors.
Most injuries and fatalities in self-driving auto tests are due to human error.