Apple’s reality distortion field

I know the iPhone looks like a cute gadget, but this is ridiculous. Good Morning Silicon Valley has been reading the vapourings of stock-market ‘analysts’ who are ostensibly employed to give detached advice to investors. It’s an embarrassing spectacle. “This goes beyond smart phones and should be given its own category called ‘brilliant’ phones,” said Tim Bajarin, principal analyst with Creative Strategies. “The iPhone is the most beautiful and functional phone I have ever seen,” writes Jupiter analyst Michael Gartenberg. ” First time I held it, I was speechless for more than a few seconds.” At Bank of America Equity Research, Apple analyst Keith Bachman was slightly more judicious. “We believe [the iPhone] is a major evolutionary step, given that it has effectively eliminated keyboard keys and plastic input keys and is using a touch interface with software as its strength,” he wrote in a research note to clients. “Apple indicated that they expect to sell 10 million units in calendar year 2008. … Given the nature of the device as well as the ‘wow factor,’ we believe that the number sounds low.”

Oh come on, guys. Your supposed to put your brains into gear before advising clients. The iPhone looks good, but there are some awkward questions. GMSV picks up a few — for example:

  • How resilient is the iPhone’s screen? Is it more scratch resistant than those of its iPod predecessors; can it stand up to real-life use?
  • When the iPhone arrives in June, it will support only EDGE, the “poor man’s” data transmission technology. When will it support 3G?
  • Given past issues with the iPod’s “unreplaceable battery”, why does the iPhone feature a built-in battery? Who the hell wants to send their phone back to Apple Service every time it needs a new battery?
  • How robust is the mobile version of OS X?
  • And finally, there are the omissions — some of them glaring: No expandable memory. No support for WiFi syncing to your PC?
  • Can I toss in a few more?

  • Who wants to be stuck with Cingular — the mobile operator chosen by Apple?
  • How reliable/robust will it be? Given our household’s experience with flaky iPods and Nanos, I wouldn’t bet on the iPhone being as rugged as my BlackBerry.

    And then, hanging over Apple despite the reality distortion field centred on Steve Jobs, there’s the looming cloud of the stock options scandal. GMSV was admirably clear-headed about it this morning, reporting that

    last week San Francisco legal newspaper the Recorder reported that Apple recently sacked Wendy Howell, an in-house lawyer responsible for options paperwork. Howell is reportedly the author of fabricated board meeting minutes that were used to support CEO Steve Jobs’ tainted 2001 grant of 7.5 million options. And she’ll have a great deal to say to investigators, I’m sure, as will former chief financial officer and director Fred Anderson and former general counsel Nancy Heinen, who are also believed to be implicated in the company’s financial chicanery. But will they offer enough information to prove wrongdoing by Jobs? And if they do, will it be damning enough to unseat him? It’s hard to be sure.

    “Fabricated board meeting minutes”? If true, I can’t see the SEC letting up. This could go the distance.