Questions about Apple CEO Steve Jobs are to be expected, and above all else, expect Apple to tiptoe around the subject. Ever since it was reported that the SEC was launching an official investigation into Steve Jobs’ recent health issues, the speculation has ramped up, and everyone with an opinion has made sure to chime in.

For Download: 2009 APPLE ANNUAL MEETING OF SHAREHOLDERS STATEMENTS

What items will be voted on at the Annual Meeting?

Shareholders will vote on five items at the Annual Meeting:
• the election to the Board of the eight nominees named in this Proxy Statement (Proposal No. 1);
• a shareholder proposal regarding a political contributions and expenditures report, if properly presented
at the Annual Meeting (Proposal No. 2);
• a shareholder proposal regarding the adoption of principles for health care reform, if properly presented
at the Annual Meeting (Proposal No. 3);
• a shareholder proposal regarding a sustainability report, if properly presented at the Annual Meeting
(Proposal No. 4); and
• a shareholder proposal regarding an advisory vote on compensation, if properly presented at the Annual
Meeting (Proposal No. 5).

What are the Board’s voting recommendations?

The Board recommends that you vote your shares:
• “FOR” each of the nominees to the Board (Proposal No. 1);
• “AGAINST” the shareholder proposal regarding a political contributions and expenditures report
(Proposal No. 2);
• “AGAINST” the shareholder proposal regarding the adoption of principles for health care reform
(Proposal No. 3);
• “AGAINST” the shareholder proposal regarding a sustainability report (Proposal No. 4); and
• “AGAINST” the shareholder proposal regarding an advisory vote on compensation (Proposal No. 5).

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NPD’s data explains that in when compared to last January, Mac unit sales were down 6%, while even less iPod units were sold dipping 14%. In comparison to what was expected by Wall Street, Piper Jaffray analyst Gene Munster estimated that Mac sales would fall 4%, and iPod sales 11%.

In a report issued to clients on Tuesday, Munster estimates that Mac sales for the March quarter should be between 2 and 2.2 million units, and expects Apple to sell between 9 and 10 million iPods. As a report over at Fortune notes, Munster sees the overall situation as “a neutral or slightly positive,” especially considering the entire economy’s current financial crisis.

Munster also found something to cheer about in the iPod numbers, even though he now expects unit sales to fall 6% to 15% by the end of the quarter. “Given concerns regarding iPod weakness,” he writes, “we believe the segment’s in-line performance relative to Street expectations is a positive.” He was also pleased by the average price for iPods in January, which was up 4%. He had expected it to fall 3%.

While explaining that some of the information may be hard to digest from NPD’s market research, Munster believes that higher priced iPod touches in Apple’s lineup, may help to “exceed our expectations in the March quarter.”

Munster’s data holds true to the belief that Apple has remained resilient through this tough time. “In a tough economy where headlines have been dominated by layoffs, cuts and downsizing, Apple has remained focused on securing its bottom line and treading lightly with product announcements. In terms of marketing Apple has maintained a mystique around the company and its products. Even though swarms of people are demanding cheaper devices, smaller notebooks and tiny iPhones, Apple has steered clear of entering new product categories. Which in terms of volatility from a shareholder’s perspective is a good thing. There’s no reason to gamble on a new product, or revolutionizing a new product category, when consumers just are not spending money.

Munster has pinpointed a $180 target for Apple shares, which at this point seem like a distant memory. His near $200 target is one of the highest on Wall Street, and the stock has just recently bounced back from hitting 52 week lows in the high-seventies.

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After meeting with Apple’s Chief Operating Officer, Tim Cook, who has taken over for Steve Jobs while on medical leave, Apple CFO Peter Oppenheimer and marketing chief Phil Schiller, Toni Sacconaghi of Sanford C. Bernstein & Co maintains that the trio had revealed a some interesting news to look out for in the future.

According to a report over at ITworld, Tim Cook had alluded to the fact that Apple has “ideas” for a netbook as well as changes in iPhone pricing, and new handsets.

Sacconaghi went on to note that, “Tim Cook stated that since Steve Jobs announced his leave of absence, he was spending more time on new products, how Apple could take the iPhone into new markets and examining iPhone’s business model.”

The Sanford C. Bernstein & Co analyst is known to be the highest ranked computer analyst by Institutional Investor magazine and further added that, “Several interesting tidbits point to new iPhones, potentially with different pricing/price points this year.”

Apple fans have been clamoring for a netbook for some time now. The explosion of netbook sales over the last 12-16 months has really made the market seem like it’s here to stay, and not just fade away into the low-powered underworld. Apple COO Tim Cook has previously explained that, “We [Apple] are watching the space,” Cook explained. But currently Apple does not think that the hardware and software offerings in this space are something their customers would appreciate. “Smaller screens, cramped keyboard.” Furthering their stance, CEO Steve Jobs has remained adamant about the company’s offerings in this space.

There has recently been some speculation regarding AT&T’s rate plans, and that they are considering tiered pricing plans. However, the notion that these “considerations” would hold up the release of an upcoming iPhone is not so accurate. We have previously covered the future of AT&T’s cell network and how they are testing speeds up near 14 Mbps, which they hope to have ready by the third quarter in 2009. It makes much more sense that AT&T would wait on securing and stabilizing the future of its network before Apple releases another iteration of the iPhone, which could swamp AT&T’s 3G network even more.

Additionally, Sacconaghi believes that Apple shares will outperform the S&P 500 over the next 12 months, and expects new iMacs as early as next month, and new iPhone models in the summer.

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A video tutorial explaining how to use the new service can be seen here. “The process is a simple matter of going to iDisk on me.com, selecting the file you want to share, and clicking the Share File button.”

We’re pleased to announce that you can now use your MobileMe iDisk to share files with others simply and easily. Instead of attaching a large document to an email and hoping it’s not too big to be received, you can place the file in your iDisk and use the new Share File command in the iDisk web app. It lets you send your friends, family, or colleagues a link they can click to download the file directly. You can password protect the link if you choose to and even set how long it will be available.

Analyst Shaw Wu Speculates Over AT&T Tiered Rate Plans

Shaw Wu, who’s “notes to clients” sound more like a study of different opinions from websites on the internet, has apparently released another speculative suggestion pertaining to the future of AT&T’s iPhone rate plans.

Primarily he claims that Apple has held off on the release of a new iPhone because AT&T cannot solidify new rate plans. As we mentioned back in November alongside some of the first iPhone tethering information, AT&T has definitely been considering some changes to its rate plans. However, Wu’s analysis that these considerations are holding up the debut of a new iPhone is preposterous.

“Our sources indicate what’s holding up new iPhones are not technology issues but rather fine-tuning of its go-to-market strategy,” Wu explains. “Due to fear of lower profits, [AT&T] is more open to developing tiered data plans that fit more in line with today’s environment.” — “Apple, along with AT&T and its carrier partners, is in the midst of figuring out how to position a second and potentially even a third iPhone model that would be complimentary and minimize cannibalization with the current 3G iPhone.”

Wu believes that regardless of Apple COO Tim Cook’s statements that Apple is not making a cheaper iPhone, they indeed are working on such a device. Interestingly, images claiming to be a new unreleased iPhone began floating around the web yesterday. The images depict a similar sized device, only the exterior finish is a black matte, not shiny glossy black.

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Abramsky’s report cites “checks” as his sources for the information. What stands out is that Abramsky is expecting a slimmed down version of the iPhone with less features and certain connectivity abilities left out. He expects the $99 iPhone to come with 8GB of storage, and the 16GB and 32GB iPhones to fetch around $199 and $299, after a hefty $400 subsidy.

The chart below shows Abramsky’s expectations from Apple come June/July 2009.

• The main cost reductions would come from fewer features — not a crappy ‘iPhone nano’ or something without a multi-touch screen. Abramsky thinks it might have a lower-resolution camera, no 3G Internet access or GPS, and a cheaper data plan (~$15/month) with a usage cap. We agree that lowering the monthly bill would help drive iPhone sales, but carriers won’t be thrilled.
• Meanwhile, the iPhone 3G will get feature upgrades, such as a better camera, video capabilities. (See chart below.)
• He thinks Apple could sell 20-30 million of these cheaper iPhones in fiscal 2010, boosting Apple’s smartphone market share to almost 20%.
• Cheaper iPhone will eat into iPhone 3G and iPod sales. And a lower subsidy and lower margins means Apple will have to sell three times as many to make the same gross profit from one iPhone 3G. He expects fiscal 2010 iPhone gross margins to shrink to 35%-37% from 50%+.

As 9to5mac notes, we already know that Apple COO Tim Cook has completely disregarded a cheap iPhone as something Apple is working on. Cook has explained that Apple isn’t hear to make “the cheapest phone around,” they’re hear to make “the best phone.” The mere thought of an iPhone nano makes us cringe, and aside from analysts over-analyzing the iPhone’s future, we think its pretty cut and dry. But who really knows how analysts analyze things to get their analysis?

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AppleInsider reveals that a recent research report given by Munster, the analyst states, “We expect Apple to design a connected television over the next two years (launching in 2011) with DVR functionality built in…These recorded shows could then sync with Macs, iPhones and iPods over a wireless network.”

A product of this nature and magnitude has been discussed and debated for quite some time. While Apple has openly denied such claims, many have negated the company’s disinterest in this market. Former co-founder of Weblogs Inc, GM of Netscape and current CEO of Mahalo, Jason Calacanis had previously alluded to claims that Apple had already begun work on HDTV sets. In an October interview with Cnet UK writer, Nate Lanxon, Calcanis reported that, “These LCD HDTVs will be fully networked, with the ability to stream all your iTunes content from your Mac or PC…they’ll function like a standard TV with an Apple TV box, only without the need for the box.”

A device such as this would undoubtedly provide consumers with a complete in-home entertainment experience, providing interactive TV, movies, music, and gaming in one centralized location. Using magnitude of iTunes and the ability to streamline entertainment in one nifty little package without requiring a set-top-box or additional device attachments, Apple could create a device that would be sure to stand out from the crowd.

Munster adds, “With the use of a CableCARD for digital HD TV signal, Apple could effectively replace the home entertainment system (including a music stereo, cable box, Blu-ray/DVD player, and gaming console) with an all-in-one Apple television.” In essence, he feels that an all-in-one setup could leverage Apple to command a premium among the competition, by using their software to provide a simple and cohesive system. Munster believes that Apple will setup the groundwork for such a device by the end of the year, by releasing an updated Apple TV that will support DVR functionality through the inclusion of a coaxial line-in.

AI reveals that Munster and his team provide 5 distinct reasons of why they believe we will see an Apple device such as this including:

1. Indications From Management: The company appears to be determined to capitalize on its opportunity to bring the iTunes ecosystem to the living room. On the Q1′09 conference call, interim CEO, Tim Cook, said, “We’re going to continue to invest in [the Apple TV], because we fundamentally believe there is something there for us in the future.”

2. DVR And TV-Related Patent Filings: Patents filed in October 2006 and published in March 2008 indicate that Apple is exploring DVR functionality, which would require updated Apple TV hardware (with a TV input) and software.

3. LG Partnership For LCDs: Apple recently announced a five-year, $500 million agreement with LG Electronics for supply of LCD screens. While this agreement likely covers LCDs for Macs, displays, and portable devices, it could also include LG’s larger LCD TV displays.

4. The Addressable iTunes User Base: Apple’s addressable market for Apple TVs is strong and growing. As of September 2008 Apple has over 65 million iTunes users, and as of December 2008 Apple has sold over 32 million iPhones and iPod touches, which can already be used as remote controls for the Apple TV.

5. Apple Could Win In A New Market: Piper believes the television market is increasingly moving towards a connected TV environment where software will be the key differentiator. Despite the ~70% price declines in the overall TV market in the past three years, Apple could enter this high volume (~10m US units a year) market at a premium price point because of its ability to deliver hardware and software that work well together. Apple has indicated that it only wants to participate in categories it feels it can make a difference (and win) in, and like the smart phone market, we believe connected TVs fit the company’s criteria.

While Apple insists that the current Apple TV acts a mere hobby for the company, Munster states, “While 3x growth may seem aggressive, on the December 2008 quarter conference call Apple indicated that Apple TV sales were up ‘almost 3x’ year-over-year in the quarter,” adding, “If we apply this growth rate throughout calendar 2009, it would indicate Apple TV units of over 6 million in calendar 2009.”

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The Imminent Netbook Boom

There is no denying the fact that the netbook market has seen a recent surge in popularity. In difficult economic times, it can be tough to allocate a higher budget for tech devices, that many would feel to be luxury items. So, in comes the netbook, boasting cheaper price tags and subdued power, providing many with a sound option more attuned to their needs. While there is undoubtedly a large population of people that require higher performance equipment, there may just be an even larger audience that doesn’t. ABI Research analysts forecast the shipment of 35 million netbooks in 2009, rising to an astonishing estimate of 139 million by 2013.

Practice director, Kevin Burden, assesses this evolution as, “PDA’s began our reliance on instant accessible data while traveling. When PDA functionality converged with cellular voice, smartphones became the new darling of mobile professional technology that many expected to evolve into the hub for all data and communication needs for travelling professionals. Today, with a better understanding for what a smartphone is, is not, and may never be, along with a reality check on the usefulness of UMPCs, the market remains open for new device types.”

Apple’s iPhone had more than just a hand in raising the bar of the smartphone market, so why do they still appear so hesitant to enter into the netbook market? As many are aware, Steve Jobs & Co. have maintained their disinterest in stepping foot in what they believe to be a bargain-bin market. Even as recently as last week, at Apple’s Q1 financial earnings call, COO Tim Cook expressed their views on the subject noting, “We are watching the space,” Cook explained. But currently Apple does not think that the hardware and software offerings in this space are something their customers would appreciate. “Smaller screens, cramped keyboard.”

Moreover, Steve Jobs has remained adamant about the Cupertino-based company’s stance on the matter, claiming the iPhone to be the device that they offer in this space. In performing any simple search of common netbook prices, one can determine that there are several, well equipped devices that fall into the $300-$500 range. This margin compared to Apple’s most inexpensive model MacBook remains quite high, where the price is more readily comparable to the iPhone itself. This would presumably lead to a conflicting product line that could become a problem should Apple begin work on a comparably priced netbook.

What Can Apple Do?

So how can Apple effectively enter into this space? After repeated assurance that the company has no interest in what they believe to be a niche market, it wouldn’t seem plausible to expect anything like this in the near future. Yet how much are they missing out on here? Even if ABI’s figure’s may be a bit bloated, there is still no reason to believe that the netbook market is necessarily “niche”. Burden further argues that despite the appearance of low-cost, power stingy x86 and ARM processors, which were the technical keys to netbooks, industry and consumer expectations need to further evolve in order to meet market acceptance. Burden states, “In recent years, the industry still expected the smartphones to be more than they turned out to be, and most recently, MIDs were thought to be the next big mobile devices segment, but an unclear usage model continues to confuse the market. So today, netbooks’ time has come, and ABI research expects them to enjoy very strong market growth.”

If Apple were to change their attitude that they simply cannot find a way to fit in this market, and instead attempt to revolutionize it as they did with the smartphone market, who knows where the possibilities could lie. And with over $25 billion in cash, there doesn’t seem to be much impeding the way of R&D. It is to the understanding of many that Apple has no interest in “tarnishing” the brand, by putting out junk, but just because the price points and capabilities of netbooks are lower, that does not make them junk. In fact they can be very useful to a large populous of people that would otherwise not have been turned on to Apple. Many could argue that selling the iPhone at Walmart would have a negative effect on the brand’s image, yet the company has chosen to pursue the partnership. Bottom line, Apple will probably not attempt to enter this market and instead opt to beef up their already existent touch devices, yet the netbook market is nothing to scoff at, and may just be an area that Apple needs to take a closer look at.

With netbook sales estimates such as these, Apple needs to lose their phobia of small keyboards and less adequate processing power to create a device that can lend itself to this demographic. Forget about the Intel Atom, it’s too slow, and forget about ARM Cortex. Isn’t this why they bought PA Semi?

The Actual Device

So maybe Apple could offer a netbook-like device that would sit perfectly in their product lineup after all. Imagine this: The device has NAND flash storage palettes slightly higher than the iPhone and iPod touch. If customers are looking for storage options higher than the iPhone, they will be pointed to the netbook. This device wouldn’t be married to the AT&T network, however if you own an iPhone, it’s an added perk and a SIM card slot would let you utilize your AT&T connection at any time. Take it another step further and make the iPhone a mouse that recognizes all of the swipe and touch gestures that users have become used to over the last few years.

Integrate a custom designed chip that isn’t as slow as the Intel Atom, and doesn’t need as much processing power as ARM. This way Apple would finally be making use of their P.A. Semi acquisition. The device could be priced anywhere between $399-$650. Obviously, the feature sets will vary with lower priced models housing less storage and slower processors. And the higher priced models having more options, superior features, processors and more memory. The iPhone and netbook don’t need to be clumped together. The two separate devices can be married and coexist in Apple’s ecosystem nicely by playing features off of each other. There is absolutely no reason why Apple can’t offer devices at this level, keep up their brand reputation with high-end devices and tap into the netbook boom that is happening right in front of their face. Even though the device wouldn’t be in place for extended periods of productivity, at a certain point, the masses determine the truth, and netbooks don’t seem too small for everyone.

Image credit: Flickr

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MacNN reports that Kaufman Bros., who had once estimated revenue to hit the $10 billion mark, are now expecting $9.76 billion with an EPS ahead of Apple’s guidance of $1.06 to $1.35. By holding back on price reductions and making use of cheap component pricing, Kaufman Bros. is expecting high margins on Apple’s hardware at around 31.7 percent, where Apple has typically predicted between 30 and 31 percent. Shipments are thought to be divided between 2.55 million Macs, 19 million iPods and 5.5 million iPhones.

UBS analyst Maynard Um shares a corresponding judgement, as he predicts a more general revenue estimate between $9 and $10 billion and an EPS on the high end of Apple’s guidance. UBS maintains a $110 price target, under Kaufaman’s $120 estimate.

Overall, Kaufman is said to be modeling a revenue estimate of $7.8 billion for the March quarter, with an EPS of $1.08, below the consensus levels of $8.3 billion and $1.13. Yet, the “situation is said to be more optimistic for 2009 as a whole, as while FY09 revenue forecasts are being dropped from $35.2 to $34.9 billion, EPS is slated to remain at $5.05.”

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“The stock is not going to recover until people see Steve Jobs, and see how he looks.” Finerman claimed on CNBC today. Analysts are clamoring for Jobs to make an appearance either informally on television, in an exclusive interview, or at the upcoming Macworld Expo. “Knowing how focused the market is on his health, they [Apple] should have had him introduce the new keynote speaker at Macworld.”

All around the web analysts and publications of all shapes and sizes are weighing in with their own opinions and speculation concerning the situation. Much of Wall Street’s reaction though, is focused on one thing in particular, the current health of Steve Jobs.

Wall Street’s destructive obsession with Jobs’ health affects the company’s bottom line tremendously. Among those hit hardest are shareholders and investors. Inspired by MacDailyNews, CNBC’s Jim Goldman reiterates why an uptick rule (Wikipedia) should be brought back into play by the SEC.

Consider that this company continues to excel even in the face of recession. But any momentum Apple enjoys is quickly, electronically dashed by those betting against the company. The web lights up with concerns about Steve Jobs’ health; whether he’s dying; or will be incapacitated; or will be resigning or retiring. And shares get destroyed, no matter how fundamentally solid Apple might be.

The fact is, posting “gaunt,” or “frail,” or “Steve Jobs is ill” is the financial equivalent of yelling fire in a crowded movie house. And if that kind of thing is going to be tolerated, government should step in and either investigate the manipulators, or bring back the Uptick Rule.

I have personally reached out to both shareholders, and investors that hold sizable positions in Apple (AAPL). The overall concern remains consistent, and the fundamental request is for an appearance by Jobs himself.

Interestingly, we were able to get in touch with a Macworld Expo representative today who confidently stated “He will be there, he’s just not giving the speech.” Based solely on the representative’s comments, we cannot completely confirm Jobs’ attendance at Macworld. But some reassurance may be needed in order to assure Wall Street that everything is under control.

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First, a few truths:
• Apple has only 14% market share.
• People won’t stop buying phones, computers.
• Mac OS X exclusive to Apple.
• $25 Billion cash in the bank.

Only 9.5% of new computers are Apple
Even if this recession causes consumer spending to decrease 10-20%, there is still vast market share for Apple to gain. Currently, Apple has 14% of the market, compared to Microsoft’s 80%. Mac sales grew 37% in 2007, more than double the industry-wide rate of 15%. With new Macbooks debuted in November, new desktops expected in 2009, all while having the highest rated computers in the industry, Apple growth is not expected to relent.

People won’t stop buying phones, computers
Phones and computers have become increasingly essential to society and consumers will still buy them if the recession turns into a depression.

Cell phones especially have very inelastic demand. Even if someone loses their job, has their house foreclosed on, and loses their life savings in the stock market – their cell phone would be one of the last things they would give up. At $199, the iPhone is more expensive than free phones that come with new service contracts, but inline with most other smart phones. It also adds another $30/month for data, but that is less expensive than most Blackberry plans. The added value of advanced internet browsing, the App store, iTunes, visual voice mail, push email, and highly rated user friendliness goes a long way in making up for the increased price tag. Additionally, cell phones have an average life of one year.

This recession will cause some people to delay new computer purchases, but given the speed technology changes and the limited life of hardware, people will continue to buy new computers. Apple computers are more expensive than low end PC’s and netbooks and this will surely slow the PC-to-Apple adoption rate. But, as said earlier, with Apple currently selling only a tenth of what Windows does, that leaves many potential customers with the money to buy them. Other reason’s for Apple computer sales growth: iPod’s halo effect, the Mac’s popularity in pop culture (Lloyd!!), and 40% of college students plan on buying a Mac.

Mac OS X exclusive to Apple
Mac OS X Leopard is the best operating system you can buy says authoritative Wall Street Journal tech writer, Walt Mossberg. Apple’s user agreement allows you to only have it by purchasing an Apple computer. Psystar, a Florida electronics company, currently sells computers preloaded with with Mac OS, but is currently facing a lawsuit by Apple to shut them down that will go to trial December 2009. Psystar’s countersuit, claiming monopolistic and antitrust behavior by Apple, was thrown out last month. Not to mention, attack of the clones, part two.

$25 Billion cash in the bank
With $25 billion debt-free, Apple has more cash in the bank then giants Microsoft, Intel, Google, Walmart, and General Electric. With credit tightening world wide, Apple doesn’t have to worry about borrowing money. They can increase their R&D budget, advertising, hire more people, get good deals from suppliers by paying cash, build more stores around the world, and buy other companies.

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