It comes in the form of a survey of 100 CIOs by the investment bank J.P. Morgan. The firm finds that, on average, CIOs say they’re going to boost their IT spending by 2.7 percent this year, up from 2.4 percent in 2011. That may not seem like a big change, but here’s why its important: It’s the first time in a few years that the same survey has detected a directional change in sentiment. CIOs are at long last saying they intend to boost their spending on IT, rather than trimming it back and back and back as they have for the last several years. “In our prior CIO survey in September 2011, the directional movement indicated a reduction in planned spending growth, as at that time CIOs were starting to pare back on spending during more uncertain macroeconomic conditions,” the firm says in its report, which was shared exclusively with AllThingsD.

The optimism is a bit more pronounced when you see it expressed in the graphic below, which I grabbed from raw survey results. More than two-thirds of the CIOs surveyed said they planned to boost their overall IT spend this year, most of them by a modest 1-5 percent, but some by more than 10 percent. Last year, the figure was 58 percent, but it usually swings up by only 3 or 4 percentage points, analyst Mark Moskowitz told me.

“The overall tone we got in our conversations with these CIOs was more optimistic than it has been in a while,” Moskowitz said. “They have the green light to start projects that are going to take several quarters to get done. Most aren’t willing to do that when they’re worried their overall business is going to roll over.” A lot of that has to do with more confidence in the overall macroeconomic environment.

And where will that growth be? And, perhaps more importantly, where won’t it be? Software, storage and security are looking like big spending priorities among the CIOs surveyed. Business intelligence tools and getting mobile devices integrated are also high on the list — there’s that ongoing trend toward “bring your own device” (BYOD), rearing its persistent head once again.

Employee-purchased iPhones, iPads and Android devices are supplanting company-assigned BlackBerrys. “BYOD is real,” Moskowitz says. “And you have to assume that Apple is going to be the one that benefits the most from it.”

Other winners include EMC and NetApp, as they play strongly in networked storage. Server virtualization — making one physical server act like dozens of servers, using software to subdivide its resources — also has a lot of room to grow, the survey finds. That’s good news for VMware.

Losers? There are few. Intel’s new Romley chip isn’t going to be as big a deal in spurring spending on new servers: In fact,91 percent of CIOs surveyed said they don’t expect Intel’s new chip to drive new spending in the data center. Intel’s last big upgrade, Nehalem, did change the game, Moskowitz says. The trouble is, most of the companies using Nehalem-generation chips in their servers are happy with them, and are unlikely to bother with the expense of an upgrade, for now.

Nor is Windows 8 going to cause a new round of PC buying, as both Hewlett-Packard and Dell are hoping. “A new version of Windows hasn’t caused a PC upgrade cycle since 1995,” Moskowitz told me. Asked directly if Windows 8 was expected to drive a major PC upgrade cycle, 78 percent of the CIOs in the survey said no. In fact, at least 30 of the CIOs in the survey said they were still working on deploying Windows 7. Ouch. Perhaps it’s too much to ask for things to be looking up for everyone all at once.

(Image is a movie poster for the 1935 British film starring Cicely Courtneidge, but the title song in this case is, well, awful. What I really wanted was an image of Fred Astaire dancing with Joan Fontaine to the underappreciated George and Ira Gershwin tune of the same name, from the 1937 film “A Damsel in Distress,” but I could find nothing suitable. So — loving Gershwin tunes as I do — just for fun, I’ve embedded both Astaire and Billie Holiday singing the tune, below, courtesy of Grooveshark. Yes, I’ll admit, sometimes I have a little too much fun in this job.)

Reflecting on the Air’s strong sales back in early spring, analysts predicted its annual revenues might someday hit $3 billion. But with sales growing steadily stronger and the machine clearly evolving into a meaningful growth driver for the company’s Mac business, some are revisiting that prediction, and adjusting it upward.

Significantly.

In fact, J.P. Morgan’s Mark Moskowitz theorizes today that his prediction of $3 billion in annual Air revenue could be off by a multiple of two.

“Based on the continued momentum of the product and our conversations with industry participants, our view [of the MacBook Air] has become even more constructive,” Moskowitz says. “Over the next 12 months, we believe that the average quarterly run rate could reach 1.6 million units, which implies a $7 billion-plus revenue profile.”

Moskowitz’s rationale for that rather large number? Four straight quarters of accelerating sales growth, the most recent — the third — topping out with Air sales of 923,000 units. That’s 838.6 percent year-over-year growth. That’s some serious momentum. And with demand for the Air growing in newer markets like China, where Apple is extending its reach, it’s only going to increase.

In the end, $7 billion in annual revenue may not be such a stretch.

That’s the new theory being put forth by J.P. Morgan analyst Mark Moskowitz, who believes the Fire will end up being a catalyst for additional iPad sales.

Moskowitz met recently with Apple CEO Tim Cook and CFO Peter Oppenheimer, and came away with the impression that Apple isn’t much bothered by Amazon’s new lower-priced entrant in the tablet market.

“If anything, we think that Apple views the Kindle Fire as a device that stands to bring incremental consumers to the tablet market, and here, these consumers could gravitate to more feature-rich experiences,” Moskowitz said in a note to clients. “We think that Apple is not seeing much pressure from lower-priced tablets.”

In other words, the Fire may well expand the iPad’s addressable market by drawing more price-conscious customers into it — customers who might someday upgrade to the more capable and versatile iPad.

“Given all the investor interest in the Kindle Fire, competitive risk in tablets was one focal point of our meeting,” Moskowitz said. “[But there’s] not much concern in tablet town.”

In other words, the iPad juggernaut rolls on. And while the Fire may aspire to be the No. 2 player in the tablet market, it’s got a ways to go before it gets there.

And a battle to fight, one that may require a better weapon than the Fire — according to Moskowitz, anyway.

“We think that for any vendor to wrestle momentum longer-term from Apple, a fully loaded offering is a must, and here, the current revision of the Kindle Fire falls short,” Moskowitz says. “We think that, over time, consumers may come away disappointed with the Kindle Fire’s lack of functionality and smaller screen size. In our view, the Kindle Fire is the current netbook of the media tablet market.”

The netbook of the tablet market.

That’s a harsh analogy. Netbook sales, of course, have been in decline for a while now, with many claiming the iPad is partially responsible for their deterioration. And netbooks themselves have often been disparaged as cheaply made and underpowered, often by Apple, which has long taken a dim view of the devices.

As CEO Tim Cook said in 2010: “I’ve been very clear about my view of netbooks. I think they are an experience most people will not want to continue to have. People were interested in their price, but when they got them home, they said, ‘Why did I buy this?’”

Which is not to say that consumers purchasing the Kindle Fire are asking themselves that question. The device has gotten some decent reviews, is selling well and, according to some analysts, will continue to do so throughout 2012. But it’s conceivable that the question might arise among those whose expectations were too high.

Even in a generally positive review, Walt Mossberg said of the device:

“To be clear, the Kindle Fire is much less capable and versatile than the entry-level $499 iPad 2. It has a fraction of the apps, a smaller screen, much weaker battery life, a slower Web browser, half the internal storage and no cameras or microphone. It also has a rigid and somewhat frustrating user interface far less fluid than Apple’s.”

Maybe “netbook” is a good analogy.

Early Monday morning, Apple announced that preorders of the iPhone 4S topped one million in the device’s first 24 hours of availability, easily surpassing the previous record of 600,000 for the iPhone 4.

That’s more than 67 percent year-over-year growth. (Caveat: Order and approval system malfunctions may have prevented Apple from selling as many iPhone 4s as it might have otherwise). Which is unprecedented. And while it’s obviously too early to say definitively, it’s already starting to look like fourth-quarter iPhone estimates are too conservative. According to analysts, demand for the 4S has essentially been unceasing since preorders began.

“Our conversations with industry contacts suggest that demand has not waned following the initial surge of preorders,” says J.P. Morgan analyst Mark Moskowitz. “There has been no tail-off in order activity with Apple now listing shipment wait times of 1-2 weeks on its Web site for all three SKUs of the iPhone 4S.”

In other words, the same scenario we’ve seen with past iPhone launches is unfolding once again. Only this year it promises to be a few orders of magnitude larger. Driving sales volume this year are not only a number of new carriers, including Sprint and KDDI, but the free-with-contract iPhone 3GS and $99 iPhone 4, which are sure to expand the addressable market for the device, particularly in countries like China. Says Moskowitz, “In our view, the new product momentum is just getting started.”

“The company did not announce a redesigned iPhone, which many were calling an iPhone 5 and which may disappoint some investors,” Piper Jaffray analyst Gene Munster wrote in a research note to clients. “That said, we believe the iPhone 4S will meet or exceed unit expectations, as it represents the first iPhone launch at two major US carriers (Verizon and Sprint) along with KDDI in Japan.”

J.P. Morgan analyst Mark Moskowitz also bemoaned the lack of the so-called iPhone 5.

“We had expected the company to announce two new devices, an iPhone 5 and a 4-plus,” he said in a note to clients. “We are disappointed that Apple did not introduce a thinner form factor, but we see the feature set improvements in the iPhone 4S and the broader pricing strategy as positives.”

Moskowitz was particularly impressed with Siri, Apple’s new virtual assistant, and views it as an advantage that will raise the 4S above the pack of rivals that perpetually pursue it. “Once investors dig into Siri, we think its addition will overshadow the lack of full iPhone form factor change,” he said.

Goldman Sachs analyst Bill Shope took a similar view, arguing that the big news of the day was really the software that was on display. “Siri represents a more significant platform enhancement than we anticipated,” he said in a research note. “We believe this, coupled with iCloud and iOS 5, suggests today’s event represented a critical positive inflection point for the iOS platform overall.”

UBS analyst Maynard Um echoed Shope and went him one better, suggesting that the addition of Siri to the iPhone is one of those watershed innovations that will again change the way we interact with our mobile devices. “While some may be disappointed by largely unchanged design, Apple used its owned ecosystem to embed the Siri personal assistant throughout its OS to change the way we interact with phones. We believe Siri, iCloud & other iOS 5 features will continue to drive the next wave of demand.”

And in all likelihood they will. Sure, Apple did not meet some of the market’s hardware expectations. But what the market sometimes forgets is that it is software that truly differentiates Apple from its rivals.

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“We are not impressed with Kindle Fire,” Moskowitz said in a research note to clients. “In our view, [it] is a stepping stone, at best, into the tablet market. We think that for any vendor to wrestle momentum from Apple, a fully-loaded offering is a must, and here, Kindle Fire falls short for now.”

In other words, raised on the iPad, the market has come to expect the feature-rich experience it offers. For a potential rival to offer it anything less is to let it down — even at that friendly $199 price point — which, by the way, is indicative of just how low-frills the Fire is.

Moskowitz again: “In our view, Kindle Fire’s low price point speaks to how there is much lacking in the device. At $199, we argue that the price point is not going to afford most users a tablet-experience, which is a problem if Amazon wants to become a major tablet vendor.”

Of course, the Fire is Amazon’s first take on the device and allegedly a bit of a rush job. There will undoubtedly be a second. Question is, will it be a souped-up 10-inch tablet intended to go head to head with the iPad, or will its design hew to that of the current Fire and be consistent with the second approach to the tablet market that Amazon CEO Jeff Bezos discussed earlier this week.

Shares in the company, which have been charting new all-time highs recently, fell $8.21, or 2 percent, to $396.09 in early trading following the report, which claimed supply chain vendors indicate a 25 percent cut for fourth-quarter iPad sell-in orders.

A nasty bloodletting, and unmerited according to a few other analysts. Piper Jaffray’s Gene Munster, for example, dismissed J.P. Morgan’s report as a misinterpretation of supply chain noise.

“Following our recent trip to Asia we remain confident in our iPad estimates for the September and December quarters of 10.0m and 12.0m, respectively,” he said in a note to clients. “While we heard chatter of supply chain order reductions, the absolute sell-in figures for 2H CY11 likely remain well above our estimates. We also note that previous calls based on sell-in or supply chain data have, for the most part, proven to have very little correlation with Apple’s results vs. consensus.”

Susquehanna chip analyst Chris Caso also raised an eyebrow over J.P. Morgan’s claims, arguing that what we’re seeing is a scheduling adjustment, not a cut.

“We believe chatter regarding iPad production cuts are misleading — we have seen pull-ins, not cuts,” Caso said. “We have noted recent comments by competitors discussing iPad production cuts for 4Q. Our recently published AAPL supply-chain checks noted a sequential decline in 4Q iPad builds from 17 mln-19 mln units in 3Q to 11 mln-13 mln units in 4Q. However, the 4Q sequential decline was accompanied by an increase in 3Q builds, leading us to conclude that production was likely pulled-in from 4Q to 3Q. We believe AAPL has attempted to accelerate production in 3Q to ensure product availability for the holidays. In addition, we expect AAPL will need to modulate production of iPad2 to prepare for iPad 3.”

In other words, don’t pay too much attention to supply chain noise. J.P. Morgan’s Apple analyst Moskowitz isn’t. He hasn’t changed his iPad numbers and, according to the note that inspired today’s sell-off, “does not expect the supply chain adjustments to result in downside to his estimates.”

UPDATE: Later Monday afternoon J.P. Morgan issued a second research note on rumored iPad production cuts, this one written by Moskowitz. Its gist: Apple is fine.

“A recent alert on Hon Hai Precision from our J.P. Morgan Asia colleague Gokul Hariharan has the equity markets worried about Apple,” Moskowitz wrote. “Mr. Hariharan’s report focuses on how Hon Hai could be impacted by potential iPad sell-in order cuts. This alert is not the view of the US IT Hardware team. As referenced at the end of the Hon Hai alert, our estimates for Apple remain unchanged, and we do not expect any downside risk.”

“In recent months, there has been rising investor speculation that a new iPad 3 would be launched for the holiday season,” Moskowitz wrote in a research note to clients. “Our latest research continues to indicate that there is no such device slated for production this year. … There are prototypes in the supply chain related to the next-generation device, but our conversations with industry participants suggest that a new device will not be available until sometime in calendar 2012.”

Which makes perfect sense, really. Remember, the iPad 2 launched in March of this year. Why bother updating a device that isn’t yet a year old — especially when it’s selling so well? According to the latest metrics from IDC, the iPad holds 68.3 percent of the tablet market. With that massive a share and no true rival to threaten it, there’s little reason to expedite the next version of the device.

Says Moskowitz, “We do not think Apple needs to be in a rush to unveil a new iPad. … The other tablet entrants have stumbled so far, and that trend-line could persist deep into 2012. Motorola Mobility and Research In Motion have been recent disappointments, and we expect more stumbles from others.”

So in all likelihood, 2011 will remain “the year of the iPad 2,” just as company Chairman Steve Jobs said it would earlier this year. And given Apple’s profound lead in the tablet market, chances are good 2012 will probably be the year of the iPad 3.

In a note to clients, J.P. Morgan analyst Mark Moskowitz said that Amazon’s digital media offerings and vast user base will position its tablet well against the incumbent iPad.

“We believe Amazon’s entry into the tablet market could provide a shot in the arm to the non-Apple tablet market,” Moskowitz wrote. “Amazon has hardware experience with the Kindle, and as it has shown with the successful e-book reader, the company is willing to sell hardware at a loss. Inputs from research contacts suggest that an Amazon tablet likely would be at a price point lower than an iPad. While the OS is likely to remain a weak spot on an Amazon device, we believe the brand name, content and distribution capabilities of Amazon pose risks to Apple’s dominance of the market.”

Or a challenge, anyway.

According to the latest metrics from IHS iSuppli, worldwide “media” tablet shipments will hit 60 million units this year. And of those 60 million tablets, 44.2 million will be iPads. In other words, 74 percent of the market this year will belong to Apple.

So Amazon’s got its work cut out for it. But it has also got a better set of tools than most to work with. The company’s tablet will almost certainly be built to tap in to media services like Kindle, Amazon Instant Video and Amazon Cloud Player. It will likely be built to support its Cloud Drive storage offering, as well. If Amazon gets the UI and form factor right — and early reports suggest it may have — this could be a compelling piece of hardware and a true iPad rival. Remember, Amazon, like Apple, has not only a big storehouse of mobile content, but a massive base of registered, credit-card-holding, trusting users to sell it to.

And those are tremendous advantages, particularly in a market that has seen so many comers without them struggle or fail, sometimes miserably.

Said Moskowitz, “Amazon’s entry into the marketplace could be interesting.”

If nothing else.

As J.P. Morgan analyst Mark Moskowitz wrote in a note to clients Wednesday evening, Apple’s deep executive bench is very much up to the tasks ahead of it.

“While the day-to-day contributions of Mr. Jobs will be missed, we believe that the level of creativity and intelligence assembled throughout the management team and legion of Apple employees can sustain the Apple model and its industry leadership,” Moskowitz said. “We do not expect too much to change within the organization. In our view, the far-reaching successes of the iPhone, iPad, iPod, and MacBook Air reflect the work of many, not one. We have a favorable view of new CEO Tim Cook. He has a proven track record. As COO, Mr. Cook has been integral to driving the company’s unprecedented revenue and earnings growth phase, limiting disruptions to the operations. We expect his knowledge of Apple and its rigid product cycles, supply chain, and partners to result in little change to the go-to-market strategy.”

Barclays analyst Ben Reitzes echoed those sentiments, remarking on Cook’s proven track record. “While we do not believe that Steve Jobs is replaceable, it is worth noting that Tim Cook is a proven executive who can handle the pressure and knows how to run the inner workings of Apple in Jobs’ shadow,” he said. “… While the economy remains a concern for all companies in our sector, we anticipate Apple to gain substantial share in smartphone and PC-related segments as the entire company executes its strategy.”

Piper Jaffray analyst Gene Munster described Cook as “the ideal candidate” to assume the role of the irreplaceable Steve Jobs. “Cook is capable of running Apple, but his rare combination of extreme humility and insatiable motivation make him uniquely suited to assume Jobs’ role as CEO and carry on his work with a peerless executive team,” Munster said. “While there may be concerns among investors as to whether or not Cook can continue Jobs’ streak of innovation, we believe there is no better candidate to assume the role. And in many ways, it will be Jobs and his deeply rooted vision that will always guide Apple and its leaders.”

And finally UBS analyst Maynard Um said he really doesn’t expect things at Apple to change much at all with Jobs no longer CEO. “We expect there to be no transition issues as Cook had been running daily operations as interim-CEO,” he said in a note to clients. “From a longer-term perspective, we believe Apple’s strategy is well laid out and believe Cook and his management team will continue to execute.”

And in all likelihood, that’s exactly what will happen. Because in the end Apple has one of the deepest and strongest managerial benches in the business, and it has been crafted by one of the most innovative minds in the industry. As I wrote back in 2009, “Yes, Jobs’s sensibility pervades Apple’s culture and its products, but that culture and those products are not tethered to his health or day-to-day presence at the company. And Apple’s deep executive bench is more than capable of running it — and running it well — in his absence.”

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Moskowitz’s rationale for this is simple: The Air’s sales rose 2.9 percent sequentially in the first quarter, significantly outpacing the Mac’s overall. Add to this the fact that Apple shipped 432,000 MacBook Airs during that period, up 412.9 percent year over year at a time when the broader PC market was down 10.1 percent, and it’s not hard to see that the machine is building up quite a bit of traction in the market.

“Our conversations with industry contacts, coupled with our team’s recent Asia tech food chain trip, indicate that the MacBook sell-in trend continues to exhibit increasing momentum,” Moskowitz says. “Over the next 12-18 months, we think that the average quarterly run rate of the device could reach 700,000 units, which implies a $3 billion-plus revenue opportunity.”

Which, frankly, isn’t that hard to imagine. Certainly not now with the impending launch of iCloud, which will temper the average user’s need for high-capacity hard drives and give the Air storage to match its performance characteristics.

FURTHER READING:

• Apple Reaching for the Cloud With MacBook Air and N.C. Data Center
• iCloud: The Mother of All Halos
• Apple’s Invisible iCloud: The Promise of Simple, Seamless Sync

]]> http://allthingsd.com/20110616/the-macbook-air-apples-3-billion-baby/feed/ 0 http://allthingsd.com/20110418/apple-earnings-expect-another-barn-burner/ http://allthingsd.com/20110418/apple-earnings-expect-another-barn-burner/#comments Mon, 18 Apr 2011 13:30:35 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=60548 A last-minute forecast ahead of Apple’s second quarter earnings report Wednesday, and one that suggests it will be another barn burner.

With consensus estimates for the quarter hovering around $5.38 earnings-per-share on $23.26 billion in revenue, J.P. Morgan analyst Mark Moskowitz broke away from the pack, raising his projections on strong iPhone and Mac sales. Come Wednesday, he’s looking for Apple to post an EPS of $5.39, up from $5.21 he’d previously expected. And for revenue he’s looking at $24.42 billion, up from an earlier prediction of $23.83 billion. 

Why the 11th hour increase? Though Moskowitz dropped his quarterly estimate for the iPad 2 to 5.4 million from 6 million citing a “temporary stall-out” in shipments, he raised his iPhone projection to 18.4 million from 16.6 million on continuing sales momentum.

“Our research inputs indicate that iPhone shipments were stronger than expected,” Moskowitz says. “The Verizon launch helped, in addition to broader channel fill related to the GSM model. While investors have been concerned over a quicker plateau effect in the Verizon iPhone demand picture, we think that the quarterly run rate still can be 2 million units or higher. We do not believe sales momentum eased as much as investors have feared exiting the quarter.”

]]> http://allthingsd.com/20110418/apple-earnings-expect-another-barn-burner/feed/ 7 http://allthingsd.com/20110413/apples-cdmazing-iphone-opportunity/ http://allthingsd.com/20110413/apples-cdmazing-iphone-opportunity/#comments Wed, 13 Apr 2011 11:05:45 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=60297 The Verizon iPhone was likely just the first step in Apple’s broader push into the CDMA handset market. And while the company stands to reap the most benefit from that first partnership, there are plenty of other opportunities abroad for CDMA market success.

J.P. Morgan analyst Mark Moskowitz figures Apple could rake in as much as $6 billion from CDMA iPhone sales through Verizon, and half that through carrier partners overseas, particularly in the Asia-Pacific region.

“We expect the iPhone’s relative growth to moderate over time, but in the next 18-24 months, we see incremental growth opportunities in both Asia- Pacific and the U.S., specifically in CDMA-based networks,” he writes. “Apple just began to penetrate this opportunity with its Verizon iPhone launch in February, and we think that the incremental CDMA market penetration can be a multi-year phenomenon for the company.”

I’d say so, considering there are some 564 million CDMA subscribers worldwide, of which Verizon’s 95 million comprise just 17 percent. So where will Apple bring the CDMA iPhone next? Moskowitz thinks the company will focus its efforts where CDMA adoption rates are highest: China, India, Japan, and South Korea. And, in all likelihood, it’s probably close to hammering at least a few of these deals out.

Apple is widely rumored to be negotiating a CDMA iPhone deal with China Telecom. It’s also said to be in talks with Reliance and rival CDMA carrier Tata Teleservices in India. Assuming Apple finalizes some, if not all, of them in the next year, what kind of sales and revenue can we expect from them? Moskowitz expects Apple to sell 10 million CDMA iPhones through Verizon in calendar 2012 for $6 billion in revenues. Overseas, he expects the company to capture about 10 percent of the CDMA market in 2012, which would generate approximately $3 billion in revenue.

That’s a nice boost to Apple’s bottom line and to the iPhone’s growth trajectory, which may well continue to outpace that of the broader smartphone market–if Moskowitz’s numbers pan out.

[Image credits: iFixit and JP Morgan]

]]> http://allthingsd.com/20110413/apples-cdmazing-iphone-opportunity/feed/ 3 http://allthingsd.com/20110404/the-macbook-air-a-2-2-billion-a-year-quasi-tablet/ http://allthingsd.com/20110404/the-macbook-air-a-2-2-billion-a-year-quasi-tablet/#comments Mon, 04 Apr 2011 15:54:57 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=59714 With all the chatter over the iPad 2, the iPhone 4 and its successor, it’s easy to forget that Apple has another ultra-portable device that’s doing quite well at market: the MacBook Air.

Nearly six months after it launched, the device continues to be a strong seller that is quickly evolving into a meaningful growth driver for the company’s Mac business.

Apple shipped some 420,000 Airs in the fourth quarter of calendar 2010, 326.8 percent more than it did in the preceding quarter and 333 percent more than it did in the quarter a year ago. And, according to J.P. Morgan analyst Mark Moskowitz, that growth was not an anomaly, but the beginning of a trend.

With it’s instant-on capability and diminutive size, the Air has evolved into “a quasi-tablet” device for the productivity user, potentially defining a new category, says Moskowitz. And in the process it’s helping to cement Apple’s leadership in ultra-portable devices.

“While still representing a small percentage today, we expect the MacBook Air to become an integral part of the Mac business over time,” Moskowitz writes. “C4Q10 was the first quarter in which the MacBook Air accounted for greater than 10 percent of total Apple PC units. More importantly, the MacBook Air accounted for 15 percent of total notebook unit sales during the quarter, versus 5 percent in the prior year. Even with the MacBook Air’s strong performance in C4Q10, it represented only roughly 5 percent of total Apple Mac units and revenues for C2010. We see ample opportunity for this percentage to increase over time, given the improved tech specs and more attractive pricing of the second-generation MacBook Air.”

And if Apple can sustain a quarterly run rate of 420,000 units and keep pricing stable, annual MacBook Air revenues could hit to $2.2 billion or better.

]]> http://allthingsd.com/20110404/the-macbook-air-a-2-2-billion-a-year-quasi-tablet/feed/ 25 http://allthingsd.com/20110315/who-will-take-a-bath-with-mr-tablet-bubble/ http://allthingsd.com/20110315/who-will-take-a-bath-with-mr-tablet-bubble/#comments Tue, 15 Mar 2011 10:30:04 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=58711 Other tablet vendors may want reconsider their build plans for 2011, given the iPad 2′s opening weekend stock-outs. Because the disparity between market adoption rates for the iPad and its rivals suggests the tablet bubble could burst before the end of the year. And if it does, tablet market hopefuls could find themselves with an ugly oversupply.

To wit, J.P. Morgan expects some 81 million tablets to be manufactured in 2011, with just under 48 million being shipped to retailers. That’s a massive discrepancy. Lop 20 percent off that manufacturing projection and you still get a surplus of 17.2 million units.

That’s nearly 36 percent oversupply. And it’s J.P. Morgan’s base-case scenario. The firm’s best-case scenario is a surplus of 7.6 million units and 13.2 percent oversupply. Worst-case scenario: A 51 percent oversupply of 21.9 million units.

In all three versions, the tablet bubble pops and more than a few manufacturers new to the market take a financial bath, leaving Apple’s massive lead relatively unshaken this year.

“The iPad 2’s early success is a warning sign of a global tablet bubble,” J.P. Morgan analyst Mark Moskowitz said. “There are many competitive tablet entrants expected, but so far, we think that both Samsung and Motorola have experienced disappointing adoption curves. We expect more of the same from other entrants. Meanwhile, Apple’s iPad 2 technical and form factor improvements, coupled with opening weekend stock-outs, point to a widening gap in market share ownership potential. We expect Apple to own at least 61 percent of units in 2011, but there is likely upside to this estimate given the early-stage momentum of iPad 2.”

Attrition in the tablet market was inevitable, particularly given the sheer number of devices announced earlier this year. But if Moskowitz is right, this is shaping up to be a real bloodbath.

[Image Credit: Audiophile & Synergy Industries]

]]> http://allthingsd.com/20110315/who-will-take-a-bath-with-mr-tablet-bubble/feed/ 5 http://allthingsd.com/20110228/tablets-eating-pc-market-share-with-some-fava-beans-and-a-nice-chianti/ http://allthingsd.com/20110228/tablets-eating-pc-market-share-with-some-fava-beans-and-a-nice-chianti/#comments Mon, 28 Feb 2011 17:23:07 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=58443 Driven by steep adoption rates and a proliferation of new devices, tablets will evolve into a $35 billion market by 2012, posting 171.8 percent year-over-year growth this year and 66.2 percent the next. That’s according to J.P. Morgan, which sees the tablet as a meaningful revenue opportunity for PC makers and an emerging threat, as well.

In 2010, the research outfit estimates, tablet-related cannibalization of PCs was about 18.9 percent. And in the next two years it will nearly double.

“We expect tablets to have an increasingly negative impact on PC shipments,” analyst Mark Moskowitz wrote. “We are modeling more than 35 percent of tablets sold in 2012 to cannibalize PCs. More specifically, we expect that tablets will have the largest impact on the netbook market, which had represented about 20 percent of the notebook PC market prior to the tablet’s arrival. As a result of our assumptions, we estimate that the cannibalization rate of PCs gradually will trend close to 10 percent of notebook PC units (including standard notebooks and netbooks).”

Lousy news for PC makers without a strong tablet offering, and great news for the company with the strongest tablet offering of them all: Apple. Moskowitz expects the iPad to sustain the company’s competitive advantage in the tablet market for at least the next few years. In 2011, for example, he sees Apple shipping 29.1million tablets–about 60.8 percent of the tablet market. The following year, however, that percentage will decline. Apple will account for 44.6 percent of tablet unit shipments, a sizable decline in share from the prior year, but one tempered by the unit sales and the great margins the company so often claims. Moskowitz believes about 60.5 percent of tablet market revenues in 2012 will go to Apple.

]]> http://allthingsd.com/20110228/tablets-eating-pc-market-share-with-some-fava-beans-and-a-nice-chianti/feed/ 15 http://allthingsd.com/20110210/analysts-dub-hp-touchpad-a-legitimate-contender-for-second-place/ http://allthingsd.com/20110210/analysts-dub-hp-touchpad-a-legitimate-contender-for-second-place/#comments Thu, 10 Feb 2011 21:51:35 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=57612 It might lack a firm launch date and hard pricing details, and its application and content ecosystem might need further work, but Hewlett-Packard’s forthcoming TouchPad looks like it’s got a real shot at becoming the frontrunner in the massing horde of tablet hopefuls trailing Apple’s iPad.

Certainly the hardware and OS seem formidable enough to at least differentiate the device in an increasingly crowded market. And if HP’s integration story proves to be as good in practice as it sounded on stage in San Francisco yesterday (printers, phones, PCs and tablets all connected via webOS), the TouchPad could mount a decent challenge to the iPad–even if it doesn’t arrive at market until after the debut of the iPad 2.

Though he feels the summer ship date is just too late, Barclays analyst Ben Reitzes was impressed by the TouchPad’s hardware and OS. “[The TouchPad] appears to have very good software and syncing capabilities (HP Synergy feature) and some promising features,” he said in a client note today. “Also we point out that HP is clearly still investing not just in tablets but its smartphone business, which provides a good link between products for the future. Along with a nice OS, we believe that HP’s channel strength, link to its printing franchise, and overall brand strength could enable it to be one of the few relevant tablet players far behind Apple over the long-term.”

J.P. Morgan’s Mark Moskowitz had good things to say as well. “Our initial take on the TouchPad: better than expected,” he said. “Beyond Apple’s iPad, we previously had not been impressed with the other tablet entrants. HP’s TouchPad moderately changes this view.”

Interstingly, Moskowitz doesn’t seem quite as concerned about the device’s launch date. His feeling is that with the TouchPad, HP isn’t taking on Apple as much as it is the conga line of vendors chasing it. “For HP,” he said, “we believe the initial mission is to capture meaningful share among the non-iPad tablets, i.e., Android and Windows-based devices.”

Which is an interesting way of looking at the company’s strategy. Perhaps HP isn’t trying to out iPad the iPad–it’s trying to out iPad the iPad’s imitators, a far less daunting task.

]]> http://allthingsd.com/20110210/analysts-dub-hp-touchpad-a-legitimate-contender-for-second-place/feed/ 1 http://allthingsd.com/20110207/hps-webos-app-ecosystem-is-uncertain-and-thats-a-good-thing/ http://allthingsd.com/20110207/hps-webos-app-ecosystem-is-uncertain-and-thats-a-good-thing/#comments Mon, 07 Feb 2011 23:01:23 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=57318 Hewlet-Packard CEO Léo Apotheker says he doesn’t think the company has been telling its story as well as it could have over the past few years. On Wednesday, he’ll have his first chance to begin retelling it when HP’s Palm division holds an invitation-only event in San Francisco, at which it’s expected to introduce its long-rumored webOS tablet. This will be our first look at HP’s new ecosystem–smartphones, connected devices, apps and the OS that ties them all together–and likely be the beginning of a slow untethering from Microsoft’s Windows OS. And if Palm has done it right, webOS could finally become a viable challenger to iOS and Android–particularly the latter, which has had a mixed reception in the tablet market. But that means coming to market with not just a compelling tablet OS and hardware, but a burgeoning applications and content ecosystem–something not easily achieved. As J.P. Morgan analyst Mark Moskowitz wrote today, the ubiquity of HP’s related app ecosystem is uncertain. Whatever hardware the company rolls out on Wednesday needs to spur developers to embrace webOS. “Otherwise,” said Moskowitz, “there is risk that HP introduces a suitable device with a strong operating system, only to be deficient in attracting end users’ ‘eyeballs’ because of a weak applications and content ecosystem.”

The caveat here is that HP’s new tablet (or tablets) presents developers with an enormous opportunity precisely because its app ecosystem is uncertain. It’s going to be a lot easier to score a hit there than it is in Apple’s App Store, where developers must compete for users’ attention with hundreds of thousands of apps. And if you do score a hit there, it might even set the stage for you to translate that success to larger mobile platforms that are generally tougher to break into.

]]> http://allthingsd.com/20110207/hps-webos-app-ecosystem-is-uncertain-and-thats-a-good-thing/feed/ 7 http://allthingsd.com/20110131/intel-says-sandy-bridge-support-chip-has-design-errors/ http://allthingsd.com/20110131/intel-says-sandy-bridge-support-chip-has-design-errors/#comments Mon, 31 Jan 2011 19:02:03 +0000 Arik Hesseldahl http://newenterprise.allthingsd.com/?p=2602 Shares of Intel are taking a bit of a drubbing today as the company announced it had discovered a design error in a chip supporting its Sandy Bridge generation of microprocessors. The chip is called Cougar Point, and it’s involved with the data connection to other devices within or outside the computer–hard drives or internal optical drives–using SATA connections. Intel says the performance of these connections could degrade over time. The systems affected have Core i5 and Core i7 quad-core chips.

The company has already stopped making the chip with the problem, but as is always the case with the incredibly complex process of semiconductor manufacturing, doing so is a costly process. Intel said it will reduce its revenue forecast for the first quarter by $300 million as it ends production of the old chip and gets volume of the new one ramped up. Total cost to repair and replace affected materials and computers already sold with the problem chip will be $700 million.

Those with long memories will recall Intel’s Pentium bug in the mid-1990s, which caused a big crisis of confidence in Intel chips, jokes from late-night TV hosts and a drop in the company’s stock price. This error is nothing like that. The company says the processor itself is unaffected.

Analysts are telling investors not to overreact. “Assuming pent-up demand for Sandy Bridge and mild competition, we think impact of this problem will be relatively small,” Standard & Poor’s analyst Clyde Montevirgen told clients in a note today. Mark Moskowitz of J.P. Morgan said it is likely that only a small number of end consumers are affected.

Meanwhile, Intel closed its $1.4 billion deal to acquire the wireless chip division of the German chipmaker Infineon, and said it expects to finally close its $7.7 billion acquisition of McAfee by the end of the quarter.

The combination of those two deals plus the chip trouble caused Intel to issue new guidance for the first quarter. It now expects first-quarter sales in the range of $11.3 billion to $12.1 billion, which is slightly higher than previous guidance. However it shaved three points off its gross margin forecast: The mid-point of the range is now 61 percent, down from 64 percent.

Intel shares are down more than one percent at the moment, while shares of rival Advanced Micro Devices are surging by more than five percent.

]]> http://allthingsd.com/20110131/intel-says-sandy-bridge-support-chip-has-design-errors/feed/ 1 http://allthingsd.com/20110118/apple-shares-down-but-for-how-long/ http://allthingsd.com/20110118/apple-shares-down-but-for-how-long/#comments Tue, 18 Jan 2011 16:57:22 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=55892 No big surprise here: Apple’s stock is slipping this morning following news that CEO Steve Jobs is taking another medical leave of absence. The company’s shares dropped some 6.5 percent this morning as the market mulled Jobs’s health issues and the potential timing of his return to the company. But how long they stay that way is up for debate. Consensus seems to be they’ll come under short-term pressure and then gradually resume trading on results. Fueling that view, Apple’s history as an innovator and the blowout quarter it’s expected to report this afternoon.

“Apple’s stock could face headwinds for several weeks as the media feeds on a yet-to-be-determined mix of speculation and disclosures about Jobs’ future role at Apple,” Oppenheimer analyst Yair Reiner said in a note to clients today. “At the same time, Apple’s investors will theorize and worry about what Jobs’ status will mean for future innovation at Apple. But this worry stage will likely run out of fuel relatively quickly, because convincing evidence of how Jobs’ presence or absence is impacting Apple’s fundamentals won’t present itself for years. Lacking evidence, investors will shortly go back to trading AAPL’s stock based on measurable fundamental performance.”

J.P. Morgan’s Mark Moskowitz was similarly optimistic. “While not knowing the details behind the current medical leave, we point out that Mr. Jobs has demonstrated a great resolve to improve his health previously, emboldened by the attitude and philosophy that helped him lead Apple’s remarkable rise over the past decade,” he writes. “In our view, Mr. Jobs and his team have made Apple become the primal force in shaping consumers’ technology-driven ‘way of life.’ While the competition is increasing in the areas of smartphones and tablets, we do not expect Apple’s technology and user experience leadership to fade.”

PREVIOUSLY

• Steve Jobs’s Finest Product–Apple–Won’t Break Down
• Steve Jobs Asked for Privacy–and He Deserves It This Time
• Apple Shares Down Nearly 8 Percent in Frankfurt on News of Jobs’s Medical Leave
• Citing Health, Steve Jobs Steps Away From Apple, Again
• Deutsche Bank Joins the Running of the Apple Bulls
• Jobs: “I’m Vertical, Back at Apple and Loving Every Day of It”
• Apple Investors Are Wusses
• When Steve Jobs Said “Stay Hungry. Stay Foolish,” He Did Not Mean This Foolish
• AAPL Sauce
• Apple’s Steve Jobs: “I Have Decided to Take a Medical Leave of Absence”
• The Entire Letter: Steve Jobs Explains His Health Problem: “Hormone Imbalance”–Predicts Recovery by Spring and Will Stay On as CEO
• Ain’t Nobody’s Business If Jobs Is or Isn’t

]]> http://allthingsd.com/20110118/apple-shares-down-but-for-how-long/feed/ 0 http://allthingsd.com/20110111/analysts-go-out-on-limb-predict-verizon-iphone-will-be-big-for-apple/ http://allthingsd.com/20110111/analysts-go-out-on-limb-predict-verizon-iphone-will-be-big-for-apple/#comments Tue, 11 Jan 2011 19:41:57 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=55594 Verizon’s announcement of the forthcoming debut of Apple’s iPhone on its network this morning was met with a flurry of analyst notes all saying exactly the same thing: 2011 is going to be a very, very strong year for the iPhone.

After all, the CDMA iPhone Apple’s built for Verizon promises to expand the company’s addressable market domestically and abroad. The device isn’t exclusive to Verizon, which means Apple’s almost certainly going to pursue additional partnerships with CDMA carries in other parts of the world– China Telecom and SK Telecom, for example.

“We see this as the single biggest lever Apple has to pull in calendar 2011,” said Piper Jaffray analyst Gene Munster, who raised his iPhone unit estimates by 2.5 million because of the Verizon deal.

JP Morgan analyst Mark Moskowitz took a similar view, suggesting that the Verizon iPhone could boost Apple’s EPS by at least $1.25 per annum. “For Apple, we believe that this new carrier relationship will be a major catalyst for U.S.-related iPhone sales over the next 18-24 months,” he wrote. “In our view, Verizon’s wireless network offers a higher quality user experience compared to AT&T’s. We expect that this dynamic will drive a significant numbers of subscribers to switch to Verizon, in addition to the adoption rate of the iPhone by existing Verizon subscribers.”

At Standard & Poor’s, Clyde Montevirgen wrote that the deal more than doubles Apple’s U.S. market opportunity and said he expects incremental unit sales of 7 million via Verizon in calendar 2011.

UBS analyst Maynard Um issued this bullish call: “Apple has set itself up for a solid year of iPhone sales. Today’s agreement with Verizon Wireless should provide additional momentum to already strong iPhone unit growth. We also expect the company to launch the iPhone 5 this summer which would serve as another catalyst for this product segment. We currently expect AAPL to ship 67.3mn iPhone units in CY11.”

And finally, over at William Blair, analyst Brian Nugent offered a few observations about the Verizon iPhone’s effects on other industry players (beyond AT&T), specifically Research in Motion and Qualcomm. For RIM, he views it as a clear negative. “While dependence on Verizon has declined significantly in the last year, Verizon still accounts for roughly 10% of RIM’s sales (by our estimate),” he said. “An iPhone at Verizon will further pressure RIM’s market share and net subscriber additions in the United States, and could hurt its average selling prices and gross margin.”

But for Qualcomm, it’s a boon. “Although we view the introduction of the iPhone at Verizon as positive for Qualcomm (which we believe is the baseband provider in the iPhone), given that Qualcomm has over 95% of Verizon baseband share, today’s announcement may not be material to the company in the near term,” he said. “On a longer-term basis, we view today’s announcement as the beginning of a closer working relationship between Apple and Qualcomm that may potentially extend beyond the Verizon handset deal.”

PREVIOUSLY:

• AT&T: Verizon iPhone? Whatever.
• Verizon iPhone: What, AT&T Worry?
• Why Verizon’s iPhone Won’t Be So Bad for RIM
• How Might the Verizon iPhone Differ From the iPhone 4 (Besides Being Able to Make Calls)?
• Tired: Speculating About Verizon iPhone. Wired: Speculating About Verizon iPhone Sales.
• Verizon iPhone to Debut With Unlimited Data Plan
• Apple CEO Likely to Appear at Verizon iPhone Event
• Verizon Event Set for Tuesday–iPhone Time

]]> http://allthingsd.com/20110111/analysts-go-out-on-limb-predict-verizon-iphone-will-be-big-for-apple/feed/ 2 http://allthingsd.com/20101217/apple-to-dominate-tablet-market-until-2012-at-least/ http://allthingsd.com/20101217/apple-to-dominate-tablet-market-until-2012-at-least/#comments Fri, 17 Dec 2010 12:00:38 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=54501 In 2011 tablet revenues will rise to $24.9 billion, and by 2012 they’ll reach $34.1 billion. And Apple will claim the lion’s share of both, according to J.P. Morgan analyst Mark Moskowitz. Which isn’t all that surprising, really. As Moskowitz observes, while the concept of the tablet has been around for more than a decade now, it wasn’t established and mainstreamed until Apple introduced the iPad in January 2010. And Apple set the bar so high with the device that rivals are finding it tough to match it, let alone surpass it.

“Our assumption is that Apple’s dominance will remain firmly intact in the near to mid-term, but gradually, technology improvements and component cost declines will enable the laggards to offer ‘good enough’ solutions to loosen some of Apple’s grip,” Moskowitz says. “Of note, we expect a host of competitive tablets in 2H 2011, following the release of Android 3.0 this coming spring. The upgraded Android operating system should gradually improve the competitiveness relative to Apple’s iOS. Our conversations with industry contacts indicate that the current version of Android does not provide a computing rich experience, which is a requisite of tablets.”

But a gradual improvement in the competitiveness of Android tablets isn’t nearly enough to slow the iPad juggernaut. Presumably, a lot of those first-generation Android 3.0 tablets will arrive at market about the same time as the second generation of the iPad. That alone should allow Apple to maintain a comfortable lead, but the company has iOS and the iTunes content ecosystem working in its favor as well.

“With tablets, we view form factor, operating system robustness, and content ubiquity as critical demand enablers, and here, we expect Apple to dominate,” Moskowitz concludes. “Similar to the iPhone, the iPad reflects Apple’s ability to introduce unrivaled technology experiences for the customer. The key factor driving the separation from other tablet vendors stands to be Apple’s content ecosystem. With tablets, we think that offering a trove of applications, as is industry practice in smartphones, will not be enough. The ability of the user to access content, such as movies and TV shows, is increasingly important for tablet users. This dynamic is where Apple has fought hard to secure access to content, and we think it will take time for other vendors to establish a similar content ecosystem.”

]]> http://allthingsd.com/20101217/apple-to-dominate-tablet-market-until-2012-at-least/feed/ 0 http://allthingsd.com/20101009/tk-apple-will-control-half-of-the-tablet-market-tk/ http://allthingsd.com/20101009/tk-apple-will-control-half-of-the-tablet-market-tk/#comments Sat, 09 Oct 2010 15:10:30 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=50390

[On weekends, we will be re-posting some pieces from the previous week that we wanted to call attention to again that some readers might have missed.]

Acer chairman J.T. Wang recently predicted that Apple’s share of the tablet market would decline precipitously as new rivals emerge, falling from nearly 100 percent to 20 to 30 percent.

But J.P. Morgan analyst Mark Moskowitz isn’t so sure. While a number of new tablets will hit the market over the next year, inevitably claiming some market share, it’s unlikely that they’ll whittle the iPad’s down to 20 percent or even 30 percent.

They may get it down to 50 percent, though, says Moskowitz.

“The iPad’s sales momentum out of the gate has been unprecedented for a new product, and there appears to be no boundaries to the use case for the device, meaning the adoption curve could remain steep beyond the near term,” he theorizes. “We think that the iPad’s form factor, technology, and content ecosystem could help the company retain 50 percent of the tablet market next year, and anything above that number could represent a significant source of upside to our estimates.”

Which is good news for Apple (AAPL), which stands to sell a hell of a lot of iPads next year. For fiscal 2011, Moskowitz estimates iPad unit sales could hit 22.2 million, assuming Apple retains 50 percent share of a tablet market of approximately 45 to 50 million units.

One last point worth noting here. As slick as some of these rival tablets might prove to be, they’re still likely to have a hard time stealing market share from the iPad because of Apple’s broad app and content ecosystem. Says Moskowitz, “With tablets, we think that offering a trove of applications, as is industry practice in smartphones, will not be enough. The ability of the user to access content, such as movies and TV shows, is more important for tablet users, and this is where Apple has fought hard to secure access to the content. We think it will take time for other vendors to establish similar access to the content.”

[Image credit: Gizmodo commenter rootyb]

]]> http://allthingsd.com/20101009/tk-apple-will-control-half-of-the-tablet-market-tk/feed/ 0 http://allthingsd.com/20101001/hps-own-ceo-candidates-unlikely-to-seek-freedom-after-passover/ http://allthingsd.com/20101001/hps-own-ceo-candidates-unlikely-to-seek-freedom-after-passover/#comments Fri, 01 Oct 2010 16:43:09 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=49862 Hewlett-Packard’s decision to name Léo Apotheker as its new CEO hasn’t gone over particularly well with investors, who dragged the company’s stock into the mud this morning. At $40.50, HP shares are down 3.76 percent as I write this. So how is it going over internally, particularly with those execs who’d been internal candidates for the job?

This is, after all, the third consecutive time that HP has gone outside to pick a leader, previously hiring Carly Fiorina from Lucent and Mark Hurd from NCR (NCR). And before deciding on Apotheker, the company was known to be considering three CEO-caliber candidates from its own roster–Todd Bradley, executive VP of HP’s personal systems group; Ann Livermore, vice president of HP’s $54 billion Enterprise Business; and Dave Donatelli, executive VP of Enterprise Servers and the guy who helped lead HP’s successful bidding war for 3Par. Donatelli is a relatively new hire and may not have had strong CEO aspirations (yet), but Livermore has been passed over the the top job three times now, and sources at HP say Bradley had been “hopeful” about becoming the company’s next CEO.

Has Apotheker’s appointment made these three execs flight risks?

J.P. Morgan analyst Mark Moskowitz doesn’t think so. “Livermore has been an HP-lifer and credited with integrating the enterprise services and hardware practices,” he wrote in a note to clients today. “We think [she] will want to stick around as the enterprise solutions mantra continues. Meanwhile, Bradley has been instrumental in augmenting the personal systems business, and we think he will be focused on next leveraging the Palm acquisition into a potential disruptive force in mobile communications environments. Lastly, Dave Donatelli is still relatively new to HP, and we expect him to be busy integrating the 3Par and 3Com assets, both deals of which he was the chief architect, based on our conversations with industry contacts.”

Makes sense, right? Livermore is a veteran and her hopes for the CEO spot couldn’t have been too high after being passed over for it twice. Donatelli has been at the company only a little over a year, reports to Livermore and is still making his mark at the company. And Bradley, though surely disappointed, has HP’s developing webOS-based device business in which to take solace. That said, if there is a flight risk among these three, he seems the most likely. Jokingly introduced as the CEO of HP at the TechCrunch Disrupt conference earlier this week, Bradley quipped, “Not yet.” And it seems clear he had his eye on the job. But will losing it to Apotheker inspire him to hop trains? Tough to say. In any event, were he to threaten to leave, HP (HPQ) would surely do all that it could to keep him (maybe it already is). Losing him at this point would be terrible for the company’s consumer business.

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