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Apple (Nasdaq: AAPL) shares sank US$2.34 to close at $259.41 in volatile trading Tuesday, dipping below the $260 mark they had held onto since Aug. 2 after slipping below it in late June.
Perhaps investors were uncertain because of a slew of bad news, perhaps the most significant piece of which was that the United States and European Union are apparently investigating Apple's policies for mobile software developers.
Security issues are becoming a concern, in the wake of the Library of Congress' ruling that jailbreaking the iPhone is not illegal.
Meanwhile, predictions that Android will overtake Apple's iOS operating system within two years hit the headlines.
On the plus side, analysts seem to be confident in Apple's future, while RIM's new BlackBerry Torch failed to make an explosive impression on its debut.
Finally, rumors that Apple will finally debut an iPhone on the Verizon Wireless network are ramping up -- again.
The Really Big Brother
Earlier this year, Apple sparked anger when it banned developers from using third-party tools, especially Adobe's (Nasdaq: ADBE) Flash cross-compiler, to create apps for its iOS mobile operating system Adobe filed a complaint against Cupertino's stance with the Federal Trade Commission.
It's now strongly believed the FTC is indeed looking into the matter because it denied a Freedom of Information Act request by Wired for documents related to Adobe's complaint.
On Tuesday morning, The New York Post quoted an unnamed source as saying that European Union regulators are joining the probe.
The U.S. government and the EU can impose penalties separately on Apple if they find it has engaged in anticompetitive practices. It remains to be seen whether or not the market will shake off the news about the joint investigation.
You Got My Back There?
A ruling by the Library of Congress just over two weeks ago -- which held that jailbreaking iPhones to run apps not approved by Apple on the devices is not a violation of the DMCA -- appears to be another source of trouble for Apple.
Germany's Federal Office for Information Security has warned that iOS has two critical vulnerabilities. These can let remote attackers take over a victim's device, McAfee Avert Labs' Dave Marcus wrote.
One is caused by a memory corruption error when processing Compact Font Format data within a PDF document, according to Marcus. The other is caused by an error in the kernel. The JailbreakMe website, which lets owners of iOS devices jailbreak them by just accessing a Web page, uses both these exploits, Marcus wrote.
Meanwhile, the iPhone Dev Team has created a hack that unlocks a jailbroken iPhone so it can be used on any wireless carrier running GSM. The solution, called "ultrasn0w," works with the iPhone 3G, 3GS and 4. The group earlier released a jailbreak program for the iPhone 4.
Apple is preparing to patch the security holes.
The question shareholders have to ask is, will investors be skittish about Apple now because of possible security threats, or will they remain loyal?
Standing on the Corner Watching Android Phones Go By
On Tuesday, Motorola (NYSE: MMI) and Verizon Wireless jointly announced the Droid 2 smartphone, which will hit stores later in the week. This is the second Motorola smartphone running Android that Verizon has released within less than a month. Motorola is reported to have yet another Droid phone in the pipeline, the "Droid Pro."
Demand for Android devices will surge, and Android devices will outstrip their iOS counterparts by 2012, iSuppli predicts. There will be 75 million Android smartphones and 62 million iOS smartphones in 2012, iSuppli said.
That will give Android 19.4 percent of the global market for smartphone operating systems in 2012, iSuppli forecast. Its market share in 2009 was 2.7 percent. Apple's iOS devices show a markedly slower growth rate. They had 13.8 percent of the market in 2009, and iSuppli predicted this will hit 15.9 percent in 2012.
Things will get worse by 2014, when Android will have 22.8 percent of the smartphone market worldwide and iOS will have only 15.3 percent, iSuppli predicted.
"This is no longer 2007, where the iPhone was the only game in town," Ramon Llamas, a senior analyst at IDC, told MacNewsWorld. "The Droid devices pack a powerful punch and are rather competitive with other devices out there."
Bear in mind that Apple isn't going to sit still and take a beating. If its past actions are any indication, it is quite likely to come up with yet another game-changer in the smartphone or mobile device markets. Still, it would be wise to keep an eye peeled for statistics on the smartphone and mobile device markets, as that's where the growth will be over the next few years.
Out on the RIM
The other major Apple competitor in the smartphone market -- the Research In Motion (Nasdaq: RIMM) BlackBerry platform -- appears to be losing ground and doesn't seem able to make it up.
It launched its latest smartphone, the BlackBerry Torch, and version 6.0 of the BlackBerry mobile operating system to muted response.
"RIM almost nailed it with the BlackBerry Torch," Maribel Lopez, principal analyst and founder of Lopez Research, told MacNewsWorld. "It's just a little slow to the touch and you can't have a touchscreen phone that's slow to the touch ... but the operating system is really nice," Lopez added.
"RIM is finally transitioning these devices to the world of serious smartphone browsing," Al Hilwa, a program director at IDC, told MacNewsWorld. "The new Torch phone will appeal to existing BlackBerry users or those who are focused on corporate messaging integration."
Hilwa said RIM's launch of BlackBerry OS 6 is "a defensive strategy more aimed at retaining corporate users from defecting to other devices than really winning consumer share."
Is the iPhone Coming to VZW?
Apple is buying up CDMA processors as it prepares to launch the iPhone on Verizon's network, TechCrunch claims. A CDMA iPhone will be available from Verizon in January, according to the site.
"There's almost a consensus that Verizon Wireless will get the iPhone, but the question is when," Harry Wang, a director of research at Parks Associates, told MacNewsWorld. "Some put it at early next year, but I see it coming in a little later than that, especially if the iPhone CDMA version will support LTE."
He puts the likelihood of Verizon's getting the iPhone at 90 percent.
When and if it happens, expect a flood of new sales.
