Bloomberg: Samsung in race with Apple to get wristwatch to market

We’ve heard a lot of talk in recent months that Apple is working on a wristwatch-like device. And it could be ready to launch as soon as this year. We’ve also seen some alleged leaked screenshot images that suggest Samsung is working on a similar product.

Tonight, Bloomberg is out with a new report that adds significant weight to both rumors, claiming that not only are both companies preparing wearable devices that perform similar functions as smartphones, but they’re both racing to get them to market…

From Bloomberg’s Jungah Lee:

“Samsung Electronics Co. (005930) is developing a wristwatch as Asia’s biggest technology company races against Apple Inc. (AAPL) to create a new industry of wearable devices that perform similar tasks as smartphones.

“We’ve been preparing the watch product for so long,” Lee Young Hee, executive vice president of Samsung’s mobile business, said during an interview in Seoul. “We are working very hard to get ready for it. We are preparing products for the future, and the watch is definitely one of them.”

Although there was no indication of what features the watch might have, or what its price will be, the fact that a Samsung executive confirmed that the company is working on one is interesting. You’d never hear an Apple exec talk about future product plans.

But you can bet that if Samsung is working on one, Apple is too. In anticipation of the inevitable saturation of the handset market, both companies are looking for other product lines. And if that’s not enough proof the iWatch is real, Bloomberg reiterates it:

“Apple seeks to introduce its wristwatch device as soon as this year, said one of the people familiar, who asked not to be identified because the plans aren’t public.

The features under consideration by the Cupertino, California-based company include letting users make calls, see the identity of incoming callers and check map coordinates, one of the people said. It would also house a pedometer for counting steps and sensors for monitoring health-related data, such as heart rates, this person said.”

Previous reports claimed that Apple has a team of over 100 designers working on the wristwatch-like device. It’s said to run a reworked version of iOS, and the company is looking to get its battery life up to 4-5 days, although it’s been struggling to get it past 2 or 3.

Keep an eye on this space because it’s about to get really interesting. Both Samsung, with its S Health software, and Apple, with the likes of Jony Ive in its corner, have the abilities and the resources to do some impressive things with smartphone-connected watches.

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Tim Cook may be asked to testify in e-book pricing fixing suit

 

 

Apple CEO Tim Cook may be required to testify in an antitrust lawsuit the United States Department of Justice filed against it and major e-book publishers over an alleged price fixing of e-books. Cook’s eventual testimony might be risky and could be potentially damaging to his company, now the main target of the suit after all named publishers had settled with regulators.

On the other hand, the CEO could take the opportunity to make a public case for a so-called agency model that the government claims has had anti-competitive impact. The agency model regulates the relationship between Apple and digital content owners who get to pick their iBook prices freely as long as they agree not to offer lower pricing to competitors than they do to Apple.

Business-wise, publishers prefer Apple’s policy over Amazon’s wholesale model where the online retailer sets prices as it sees fit, often hurting publishers’ bottom line by engaging in selling books at a loss just to draw shoppers to its online store…

Bloomberg reports that Cook’s possible testimony was disclosed yesterday in a brief order by U.S. District Judge Denise Cote in Manhattan, who is overseeing the case.

 

 

In a three-sentence order, Cote set a telephone conference for March 13 after the U.S. asked her in a letter on March 6 for “assistance in settling a discovery dispute” with Cupertino, California-based Apple over Cook’s deposition. The March 6 letter wasn’t part of the publicly available court file.

As you know, DoJ alleges Apple conspired with major e-book publishers to fix prices on the iBookstore by demanding they don’t undercut iBookstore pricing on competing stores. Publishers who agreed to Apple’s policy simply raised e-book prices on Amazon, prompting DoJ to intervene and file an antitrust lawsuit in April 2012.

The government settled in September 2012 with three of the nation’s top five book publishers, HarperCollins, Simon & Schuster and Hachette. It didn’t help that the iPhone maker publicly accused Amazon of assisting the government’s agenda: last December, DoJ settled with the publisher Penguin and last month announced a similar settlement with Macmillan, leaving Apple as a lone holdout in the lawsuit.

In a prepared statement, DoJ pledged to “continue to litigate against Apple for conspiring with Macmillan and four of the other largest U.S. book publishers to raise e-book prices to consumers.”

The trial against Apple is scheduled to begin in June 2013. The European Union ended its antitrust probe into Apple’s e-book pricing terms in December 2012 after Apple had offered concessions to appease regulators.

Per fresh stats Apple released last week, the iBooks app has been downloaded 130 million times worldwide. And just last week, Apple rolled out paid e-books on its iBookstore in Japan, with popular local content including popular manga graphical novels, but also fiction, light novels and other content.

 

 

Independent analyst Horace Dediu pegged the iBooks revenue at about $1.8 billion assuming a conservative $9 average selling iBook price (many best sellers are $13 or $14) and assuming a 70 percent share for the publisher. The pie chart above shows the download rate of books relative to apps and songs.

Per Apple, it sold 130 million and 400 million iBooks as of June 2011 and October 2012, respectively. In other words, the company moved some 270 million iBooks in 16 months, amounting to an average of 17 million iBooks each month. The iBookstore has an estimated share of the worldwide e-book unit sales of about 24 percent.

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