Correct
prediction 
Kevin Chang of JPMorgan
July 9, 2007
We believe that iPod Nano will be converted into a phone because it's probably the only way for Apple to launch a lower end phone without severely cannibalizing iPod Nano.
We believe it's a strong sign that Apple could potentially convert every iPod nano into a nano phone.
The global introduction of this model should be much faster than iPhone, given the former's limited functionality and lower customization requirement.
It makes sense to seek patent protection for every possible aspect of such a device whether or not Apple actually plans to use it — just to prevent competitors from doing something along these lines."
iPod
nano was not converted to a phone.
Taiwan's Catcher Technology will be the "major source of metal casing" for the new phone, according to Chang.
Bill Shope of JPMorgan says a near-term launch of a lower-priced iPhone would be "unusual and highly risky":
Not all consumers want a combined phone and music player, so Apple is likely to keep the iPhone and iPod as distinct business segments for as long as this makes economic sense."
8GB
iPhone price lowered to $399, same price as the new 16GB iPod touch announced
on September 5.
Bill Shope of JPMorgan
January 8, 2007
The iTV device, and the widescreen iPod, will serve as the hardware component in Apple’s downloadable movie business model. Leopard will integrate the company’s Boot Camp software as a utility, which we continue to believe represents a critical positive catalyst for the Apple story.
Apple may finally launch the video-centric iPod, which will fit nicely with its iTV launch, and further solidify the company’s early lead in the paid movie download market.
March 28, 2006
Regarding a French law whichwould force Apple to open its iPod/iTunes ecosystem in the country:
The U.S. Commerce Secretary Carlos Guiterrez recently stated his agreement with Apple’s stance, suggesting France’s sentiment is not shared by U.S. lawmakers. At this point, Denmark is the only other country that has exhibited support for the French law, and it appears the E.U. does not yet share this opinion.
In the past four years, discussions of customer lock-in have become taboo, as post- bubble IT consumers seem to avoid lock-in like the plague. As a result, the lock-in provided by DRM can actually be seen as a source of weakness for Apple’s digital music business, and a classic sign that Apple is once again foregoing long-term market dominance in favor of short-term barriers to entry. But we believe this is a popular misconception driven by faulty analogies with the history of the PC industry. Apple’s iPod is actually quite 'open,' and it supports MP3, AAC, and WAV music compression formats.
None of this content is protected by FairPlay, and as a result, the lock-in we have discussed does not apply. Any iPod customer that feels uncomfortable with DRM lock-in or purchasing music online can simply buy their music in CD form or download music from P2P sites.
Though the company's proprietary music store greatly increased demand for iPods, we believe the openness afforded by support for MP3 files has also been an important driver of the iPod’s success. The apparent failure of Sony's Network Walkman NW-HD1 and VAIO Pocket VGF-AP1L devices, both purported iPod killers, provides important support for this argument.
If the French law passes, we believe the online music providers will either choose to exit France, or they will end up with very limited content offerings in the region.
We would prefer that Apple sell the iPod and iTunes content into as many markets as possible, but as we mentioned above, the legal environment in France may force Apple to reduce its iTunes presence in France. Apple does not disclose its exposure to individual countries in Europe, but we suspect France accounts for less than 1-2% of Apple’s total music revenues. Even if Apple discontinued its online music store in France, the company would still continue to sell iPods, Macs and other products."
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