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Apple's 'Special Event' Has Rumor Mill Churning

By Gene J. Koprowski MacNewsWorld ECT News Network
Sep 6, 2006 4:00 AM PT

Buzz is building over Apple Computer's forthcoming announcement, planned for 10 a.m. PDT on Sept. 12 at the Yerba Buena Center for the Performing Arts in San Francisco. The Cupertino, Calif.-based computer and digital device maker surprised technology journalists and Wall Street analysts Tuesday with an e-mail saying there would be a "special event" next week.

Apple's 'Special Event' Has Rumor Mill Churning

Nobody knows for sure just what Apple has planned, but it seems that every analyst has a guess.

Perhaps the company will make an announcement about the iPod or iTunes. Apple still has an advantage over other music companies, especially since many feel that selling their songs online risks devaluing their product, according to Mike McGuire, an analyst at Gartner. What's more, many music companies still harbor concerns over the number of users who obtain songs for free on illegal peer-to-peer networks.

Image Is Everything

Embedded within the Apple invitation is an interesting image of spotlights shining upon the Apple logo with the words, "It's Showtime," printed beneath it. This is giving many analysts a Hollywood kind of feeling.

There is some speculation that there will be a new movie section for the site -- perhaps accompanied by the long-rumored new video iPod that has been in development for several months. It's been a long time since Apple updated its iPod line. The company has been expected to introduce new video iPods and new iPod nanos for many months. Some are guessing that Apple will offer full-length movies, rather than shorts, via iTunes.

A Cautious Approach

Not everyone is bullish on Apple, though, despite the excitement over its forthcoming announcement. S&P Equity Research downgraded Apple Computer Tuesday from "Strong Buy" to "Buy" with a price target of US$83.

"We are taking a less bullish stance on shares, given their nearly 40 percent appreciation since mid-July," said S&P analyst Richard Stice. "We continue to believe the Mac line will gain market share -- in part on competitor missteps and also a stronger retail presence."

S&P expects that Apple will benefit from new iPod offerings, "which we expect to hit the marketplace before year-end and have a favorable impact on the seasonal December quarter," Stice explained. "However, we believe these potential catalysts are now being partially reflected in the current share price," he added.

Phones Instead of Movies?

Not surprisingly, Apple spokesperson Steven Dowling offered no comment as to what the company will showcase next week. Apple shares rose $2.10, or 3 percent, to $70.57 as word of the movie-themed announcement circulated on the Net.

The movie-related speculation might be premature, though. Problems have been worked out of a new Apple-designed smartphone, and it may be ready for production, according to American Technology Research analyst Shaw Wu. Maybe Apple is going to announce that it will release its new cell phone as early as the first half of 2007, he suggested.

Apple could possibly "disrupt" the cell phone industry the way it did the MP3 industry with its iPod player, claimed Wu.

"We encourage investors to get aggressive in purchasing shares of Apple prior to the potential revolution of the handset industry," he added.

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