Joe Wilcox

Clearly Apple is preparing for such a circumstance, or that's my interpretation of last night's fiscal 2010 second quarter earnings call. The question isn't if iPad will cannibalize Mac sales but when. If the cannibals are coming, they'll first strike during back-to-school buying season.

Apple CFO Peter Oppenheimer tipped off the company's thinking early in the conference call: "We expect gross margins to be about 36 percent down from 41.7 percent in the March quarter and reflecting approximately $36 million related to stock based compensation expense. We expect about 25 percent of the sequential gross margin decline to be driven by the first quarter of iPad sales." Whoa, one-quarter?

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Can nothing stop Apple?

The Cupertino, Calif.-based company's quarterly earnings again rose high above Wall Street consensus, which already was $600 million to $1 billion above guidance. Today, after the bell, Apple reported $13.5 billion revenue and net profits of $3.07 billion, or $3.33 a share, under the new reporting method implemented last quarter. A year earlier, Apple reported revenue of $9.08 billion and $1.62 billion net quarterly profit, or $1.79 per share. Fiscal 2010 second quarter ended March 27, 2010.

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Gizmodo was wrong to acquire a lost iPhone prototype -- quite likely a nearly finished version 4 design -- let alone pay to obtain it. Perhaps this marks the distinction between bloggers and journalists. I would have contacted Apple about returning a device so obviously stolen. There is grave difference between obtaining secret information for the public good and what Gizmodo did: Obtain property containing trade secrets belonging to a public company. Gizmodo has violated the public trust and broken the law. Free speech isn't a right to pay freely for something clearly stolen.

I typically reserve this kind of treatise on journalistic ethics for my Oddly Together blog, where in late March I posted "The Difference Between Blogging and Journalism." Betanews founder Nate Mook asked me to write something here about the journalistic and legalistic ethicacy of Gizmodo's actions. I simply couldn't refuse.

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On Friday night, I bought an iPad nearly three months after giving 12 reasons why I wouldn't. An unexpected reason came up: My wife's MacBook Pro died. I reckoned she could temporarily use the tablet (which cost way less than any new Mac laptop) and give me a chance to better test the device (than using the Apple Store display models). I'm not among Apple's inner circle of reviewers, nor on any of its other reviewers' lists. I'd have to buy an iPad to test one and pay the restocking fee should I decide not to keep it. The MacBook Pro failure presented reason to join the iPad Generation.

Before getting to those 10 questions to ask, first it's the story of the failed MacBook Pro. I bought the computer used -- somewhat scratched and nicked but in excellent operating condition -- in summer 2009. Early last week, the laptop started acting strangely, with scrolling display or pixelated frozen screen that required reboot. Thursday, the computer rebooted to kernel panic -- Apple's version of the Windows blue screen of death -- every other reboot before freezing up again. So I hauled the ailing laptop into the local Apple Store, expecting prognosis that the graphics chip had failed; I'd already read on the InterWeb that generation of nVidia graphics chip was defective.

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Pundits are chattering about some, ah, aggressive moves by Apple with customers and partners over the last couple of weeks. Rather than opine on the subject, I'd like to ask you to do so. I'm looking to write a future post with Betanews reader reactions about Apple's recent actions and to a surprisingly active CEO Steve Jobs -- he sure sent out lots of email responses lately; from iPad, perhaps, :).

I'm most interested in responses from developers and content creators, which are two groups most affected by Apple's action. I ask anyone who wants to comment anonymously but to be taken seriously -- or those people wanting to open a larger dialog -- to contact me by email: joewilcox at gmail dot com. Everyone else, please feel free to comment below.

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Last month I asked: "Will the smartphone replace the PC in three years?" The answer looks more like five years, or about a half-decade sooner than predicted by Pew Internet in December 2008. I also asked Betanews readers: "Has your smartphone changed your life?"

In preparation for readers' answers (coming in another post), I offer something meaty: Three indicators about what might happen by 2015 -- from the Morgan Stanley "Internet Trends" Webinar, Intel Developer Forum and the Nokia "Everyone Connect" event; all three conferences happened this week. If you're one of the iPhone-obsessed, either open your mind to fresh ideas or read something else. This post probably isn't for you.

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PC shipments are briskly growing again, in yet another small sign that economic recovery is possible. Today, Gartner and IDC both released preliminary shipments for first quarter. Gartner put shipment growth at 27.4 percent year over year, while IDC growth figures came in a little lower at 24 percent.

But the numbers are mixed, surprisingly. While sales soared in EMEA (Europe, Middle East, Africa) and Asia-Pacific "the U.S. and Latin America were slightly lower than what we had expected," Mikako Kitagawa, Gartner principal analyst, said in a statement. Respectively, PC shipments grew by 24.8 percent, 36.9 percent, 20.2 percent and 35.4 percent. China posted strongest growth -- 45.4 percent.

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Today, Apple upgraded MacBook Pros across the line -- 13.3, 15.4 and 17 inch -- but I'm not weeping with excitement. Could new MacBook Pros be any less inspiring? The hardware improvements are marginal, "Me-too" upgrades against Windows 7 laptops. New MacBook Pros, like older models, are perceived premium brand at premium pricing delivering maximum margins for Apple. It's the price people pay to be cool.

About once a year I stir up this price-vs-value debate, mainly because of entry-model display resolution, system memory and harddrive capacity, for which MacBook Pros are arguably deficient compared to Windows laptops. Apple's iLife suite is one of the Mac's main benefits, but the `09 version launched in January 2009. The digital media suite isn't even keeping feature pace with third-party apps for iPad, iPhone or iPod touch. The point: I expect more from Apple? Shouldn't you, given what Mac laptops cost?

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Today's KIN phone launch should not be compared to iPhone. Anyone doing so should be whacked aside the head. Microsoft isn't trying to directly compete with Apple's smartphone but cater to a specific customer segment -- Millennials and younger Gen Ys who use technology to socialize with friends or follow celebrities. Microsoft describes KIN as "an experience for the social generation."

KIN "knits together a tight community of kindred spirits...who broadcast their lives all the time," said Robbie Bach, president of Microsoft's Entertainment and Devices division. Bach introduced KIN during an event early afternoon East Coast time. So there would be no confusion, he made the distinction of Windows Phone 7 being "everything on the phone." It's more multipurpose. By comparison, KIN is customized for social media consumers and pulls data from cloud services. "We're going to crank social up to 11," Bach said.

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Microsoft has made the right decision to temporarily turn off Hotmail's vacation (e.g., out-of-office) reply feature. Flip the switch off permanently, I say.

"In our fight against spam, we sometimes have to make hard choices, and we had to make one this week. We discovered that spammers were using Hotmail's automatic vacation reply feature to send spam from their Hotmail accounts," Krish Vitaldevara, Windows Live Hotmail lead program manager, blogged late yesterday. I missed the post because of Apple's iPhone OS 4 launch (I blogged "Apple shows developers the money" and "Clash of the titans: Apple, Google battle for the mobile Web"). I spotted the announcement first at LiveSide about an hour ago.

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Earlier today, Apple unveiled its iAd advertising platform as part of iPhone OS 4. Over the next couple of days pundits will rail about Apple competing with Google in advertising. As I explain in the previous post, "Clash of the titans: Apple, Google battle for the open Web," there is a more fundamental, worldview war underway. Apple isn't trying to compete with Google so much as make its mobile platform more appealing. The right approach is simple: Make lots of people rich.

Apple is building out a mobile platform around iPhone OS and extended services. There are right ways to make a platform more appealing, and Apple did just that with today's announcement. Successful platforms share five common traits:

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Today marks the beginning of the great Apple-Google war. Contrary to what some other people will write, it's not advertising competition but something more fundamental. This clash of the titans is about competing worldviews -- whether the future mobile Web will be about the browser or applications.

There have been skirmishes over these opposing worldviews, but Apple's iAd platform is finally a declaration of war -- not because it could compete with Google's search-based advertising platform but because it provides a better way for mobile applications to make money. Somebody has to pay for all those free mobile apps. Apple will offer developers the advertising platform and give them a 60-percent cut.

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You could be among them, but don't delay.

Months of hype built up your expectations -- like one of those Internet romances. There's what you imagined the iPad to be, and now there is the reality. Can you annul this sorry relationship? Yes, within 14 days of purchase and by coughing up a 10-percent restocking fee.

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If you believe Mid-March job postings, Microsoft is preparing to launch two new retail stores, in Denver and San Diego, bringing the count to four. That's not exactly rapid expansion, given two other stores opened in October -- Mission Viejo, Calif. and Scottsdale, Arizona. Microsoft has to move more aggressively into retail, if it's going to rebuild its brand image and establish an appealing digital lifestyle for the twenty-tens.

The company has an image problem that smart marketing and savvy retailing can repair. Yesterday, at MSNBC, Bill Briggs called Apple "fresh" and Microsoft "frumpy". The nut graph: "Microsoft, to some, appears a tad flabby in the middle -- a Chrysler Town & Country driver with a 9 p.m. bedtime. Apple, in some eyes, looks sleeker and younger -- a hipster in ragtop Beemer packed with chic friends sporting mobile toys."

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Apple's "Get a sneak peak into the future of iPhone OS" event, in two days, is reason enough to re-raise the thorny topic of multitasking on smartphones. Apple's iPhone OS 3.x -- on iPad, iPhone and iPod touch -- limits running background applications. Microsoft is taking a similar approach with Windows Phone 7 (Thank God, the company dropped "Series" from the name).

Here's where I whack aside the head my former analyst colleague, Michael Gartenberg -- or you can whack me (in comments) if you agree with him. Gartenberg and I are polarized on the topic of mobile multitasking. He thinks it's unnecessary, I say it's a necessity. In March 25 post "Windows Phone 7 Series imitates Apple's iPhone in the worst ways," I asserted: "People take multitasking for granted on the PC, which will make its absence more noticeable on the smartphone." I'd argue that because of applications' or features' contextual appeal, running background applications will increase in appeal over time. There are reasons why Google, Nokia or Palm operating systems allow multitasking, and seem to do so without any major hit on battery life (I've tested Android, Maemo and Symbian devices, but not WebOS).

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