It’s Apple’s Call at Macworld

In the Star Trek shows, the spaceship’s shields always seem to be under attack and buckling, but they never break. The same might be said of Apple CEO Steve Jobs’ famous reality distortion field.

With the Macworld Expo gearing up, traditionally the scene of major Apple product roll outs, Jobs finds himself part of the buzz this time, thanks to the options backdating scandal that’s bedeviled Apple and hundreds of tech firms. So far, he’s holding up under the heat shields.

After a recent internal company investigation acknowledged Jobs was aware of favorable, back-dated grants to executives, the Apple board gave Jobs its support and a pass as to any wrongdoing.

The Securities & Exchange Commission, which is still investigating Apple, might not be as forgiving, but so far Apple hasn’t been hit with any of the sanctions and fines imposed on other companies. Apple’s stock is up and the company is gearing up for its Macworld Expo product intro and previews. There are plenty of rumors as to what Apple will be up to next week at Macworld, but the company, par for the course, is saying nothing in advance.

The latest rumor, generated by analyst Steve Arnold, is that Jobs will announce some kind of deal with Google, whose CEO Eric Schmidt sits on Apple’s board.

Arnold, who heads Arnold-IT based in Kentucky, said he doesn’t have any inside knowledge of an Apple/Google alliance, he’s just connecting the dots.

He notes Google now owns YouTube and has the expertise and technology resources to move huge amounts of video files, a good match for Apple’s ambitions with iTunes for both music and video delivery.

“Google is architected as a server company best suited for global delivery of bits anywhere in the world,” said Arnold. “It could be one helluva combination; a new type of global, multimedia content network, worth hundreds of billions of dollars,” Arnold told internetnews.com. He also notes Job’s role as an executive and major stockholder at Disney could play a role in any Apple/Google alliance.

The hottest and most consistent rumor is that Apple will introduce its first cell phone, a significant move for the pioneering personal computer company.

But What Would They Call It?

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If Apple’s history is any guide, an Apple-branded phone would include some innovative technology, not just the Apple logo plastered on some other company’s design. The most obvious move in the consumer-oriented phone would be to include iPod functionality and ready access to Apple’s vast iTunes music catalog.

Apple already has experience here via its work with Motorola. But the Motorola iTunes-branded phones haven’t sold well. Critics point to the phone’s limited storage and the requirement that music be downloaded via a USB cable, rather than wirelessly. These are areas where Apple can innovate with an offering.

Apple would also join a very crowded field of phone providers, and have to count on its loyal user base to jump-start sales.

“I would love an Apple phone; it’s an exciting concept to me,” said Lynda Weinman, a Mac enthusiast and head of computer training concern Lynda.com, which will be exhibiting at the show. “The Windows-based smart phones don’t work really well, and I’ve become dependent on the Mac.”

Analyst Tim Bajarin notes that Apple’s iPod already faces competition from cell phones that offer music download capabilities. “Apple needs to tread lightly,” Bajarin told internetnews.com. “It’s a very tough, cutthroat and competitive market for anyone to get into.”

Speaking of competitive moves, long-time Mac supporter Adobe   plans to re-enter a part of the Mac market it left. Adobe announced it would preview Premiere Pro video-editing software for the Mac at the show, with a full release planned for mid-year.

Adobe dropped Premiere for the Mac in light of competition from Apple’s own Final Cut software. “I was very happy to see Adobe bringing it back because competition is good,” said Weinman. “And I think it helps Adobe because it distinguishes them as a cross-platform company that serves both Mac and Windows customers.”

One company focused squarely on the Mac market, for now at least, is Axiotron, which plans to beat Apple to the punch with the first Macintosh tablet computer. The Modbook from Axiotron will be sold in the U.S. and shown by Other World Computing at Macworld.

Axiotron president Andreas Haas, who once worked at Apple, said he sees the market for Modbook as very different than what Microsoft and its partners are going after with Windows-based tablet PCs.

“That approach is about going to hospitals and other vertical markets where you tie the device to what those users do,” Haas told internetnews.com. “We want to reach artists, photographers and other creative people that can take advantage of being able to use a pen on a portable computing device.”

The Axiotron ModBook features WACOM Pen-abled hardware for “true pen” input and is fully compatible with Apple’s Inkwell, a Mac OS X Tiger feature that provides system-level handwriting and gesture recognition to all Mac applications.

Haas declined to provide more details on the Modbook before its official rollout, other than to say it has a slim, slate-style form factor and should be thought of a Mac accessory or companion, rather than a replacement.

As for potential competition from Apple? “I think we’re addressing a niche market that’s too small for Apple to go after,” said Haas.

One company Apple’s never been shy about going after is sometimes-partner Microsoft . Take the move it pulled at its developers conference last year. Apple tweaked the software giant with a huge banner that read “Vista 2.0 Preview,” referring to Apple’s next-generation operating system, code-named Leopard. Apple officials gave a sneak peak of some of Leopard’s features at the event, and Jobs is likely to show more during his Macworld keynote.

Due out this Spring, Leopard will include “Time Machine,” a slick, easy-to-use feature for retrieving deleted files. A newer iChat videoconferencing feature lets users add video backgrounds and other custom effects to make it appear, for example, you’re speaking from in front of the Eiffel Tower or a race track with cars whizzing by.

“I hope they update us on Leopard because it’s very important in light of Microsoft’s consumer launch of Vista later this month,” said Bajarin.

Technology forecaster Paul Saffo thinks Apple is moving at a different pace than Microsoft and puts far more emphasis on innovation than compatibility with its installed base.

“Apple still makes the best computers on the planet, but it is now a consumer electronics company,” Saffo told internetnews.com. “That means you rev like crazy and you put out new products like crazy. Apple’s racing flat out into its future.”

But the road ahead has a few unexpected pitfalls for Apple. For one, Apple faces several shareholder lawsuits over the backdating issue that has bedeviled numerous tech firms.

“The irony is, I don’t think know what [the shareholders filing lawsuits] are asking for,” said Bajarin, analyst with Creative Strategies and longtime Apple observer. “If a lawsuit pulls Steve Jobs out of Apple for any reason, he’s the vital force behind this company. Otherwise it’s just another PC company.”

Saffo agreed.

“There’s no company without Jobs,” he said. “The people that care about this are the ambulance chasers who file a suit and hope to make money. Steve jobs is not [former Enron CEO] Ken Lay. He is not gutting the company of money, he’s creating huge value.”

Many facets of that value will be on public display at Macworld Expo.

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