Font ResizeToday: The iPhone 4S is no longer the country's best-selling smartphone, but Apple expects to be No. 1 again as it prepares to release the iPhone 5. Also: Facebook drop to a new low, but has it hit bottom yet? And: Amazon gains ground on Netflix, and Nokia challenges Pandora.
Apple (AAPL) banks on iPhone 5 to regain smartphone crown
Samsung's Galaxy S3 is the country's new smartphone king -- but expect a short reign.
For the first time since its release last fall, Apple's iPhone 4S is not the top-selling smartphone in the U.S. Samsung's flagship device claimed that honor based on August sales, according to a regular retail report by Canaccord Genuity analyst T. Michael Walkley. But experts said that's likely because prospective iPhone buyers are holding off until Apple releases its latest model, the so-called iPhone 5, later this month. "Our checks indicated strong consumer interest and likely demand for the iPhone 5, and we believe Apple will return to strong number one smartphone share in the U.S. post the iPhone 5 launch," Walkley said, according to a report by Apple Insider.
A new survey backs that up -- CNet reports that 74 percent of iPhone 4 owners plan on upgrading to the iPhone 5, based on a poll from TechBargains. That survey also found 32 percent of people
All will apparently be revealed next week, as Cupertino-based Apple sent out media invitations Tuesday for an event in San Francsico on Sept. 12. "It's almost here," read the invitation, under a shadow of the numeral 5. Though Apple prefers to be cryptic about such events, there has been widespread speculation that the iPhone will be unveiled then and go on sale the following week, and further rumors that an iPad mini will be announced under similar circumstances in October.
Apple's invitation excited investors, and shares rose 1.46 percent, or $9.73, to close at $674.97.
The news wasn't all good for Apple though, as hackers exposed what they claimed were 1 million Apple device IDs taken from an FBI laptop. The group AntiSec, loosely related to the LulzSec and Anonymous hacker collectives, claimed to have downloaded 12 million 40-character UDIDs for Apple devices -- which contain users' names, telephone numbers, addresses and ZIP codes -- from the FBI, and released 1 million of those to draw attention to their claims that the government is tracking people using that data, according to the Los Angeles Times. After releasing an online statement announcing the hack, AntiSec has refused further comment, and the FBI is mum as well. It's unclear how that data -- if confirmed -- was acquired from Apple, and why the FBI would have that data to begin with.
Facebook freefall continues; has it hit bottom yet?
Facebook stock again closed at a record low Tuesday, dipping below the $18 mark.
Shares in the Menlo Park-based social network fell almost 2 percent, closing at $17.73, after Morgan Stanley, the lead underwriter of Facebook's $10 billion IPO, cut its price forecast over mobile advertising worries. Morgan Stanley analyst Scott Devitt wrote that users of Facebook's desktop site see 30 times more ads than those on its mobile site, according to Bloomberg News, and he downgraded Facebook's 12-month forecast from $38 a share to $32 a share.
While that would be a vast improvement over the stock's current performance, it would still be well below the $38-a-share IPO price. Analysts estimate Facebook stock will remain depressed for the next several months, as more than 1.5 billion shares may flood the market as "lockup" periods expire and company insiders are allowed to sell for the first time.
In a separate report, JPMorgan Chase analyst Douglas Anmuth warned Facebook is likely to see less revenue than anticipated from online games. "The dynamics around social gaming have changed, leading to lower monetization for Facebook," Anmuth said, according to Bloomberg. Anmuth cut his price target to $30 a share by the end of 2013, according to the Wall Street Journal. Anmuth's predictions weren't all bleak though, as he believes sponsored story ads will boost Facebook revenue in the second half of the year and into 2013.
Investors, hoping Facebook shares have finally hit bottom, boosted the stock in after-hours trading, where it was up 30 cents, or 1.7 percent, as of 2 p.m. PDT.
Streaming competition heats up for Netflix, Pandora
A pair of Bay Area streaming media companies found themselves in the crosshairs of rivals Tuesday.
Seattle-based Amazon announced a new streaming-video deal with Epix, the Hollywood studio partnership that includes movies from Paramount, MGM and Lions Gate. Los Gatos-based DVD-rental and streaming-video company Netflix (NFLX) had been paying $200 million a year for exclusive rights to Epix content, which includes such hits as "The Hunger Games" and "The Avengers," but that deal expires this month. Though Netflix won't lose that content -- it still has non-exclusive rights through September 2013 -- it puts Amazon on more equal ground, as it adds about 3,000 movies to its on-demand library.
Amazon's announcement comes two days before the expected unveiling of its new Kindle Fire tablet. Since debuting the Fire last year, Amazon has doubled the number of titles available on its Prime streaming service, according to a Bloomberg News report. "The goal for Amazon with tablets is to keep people in their ecosystem," analyst Edward Williams told Bloomberg. "It removes some of the uniqueness of the Netflix content and makes the Amazon offering more competitive."
Losing Epix exclusivity was expected, and Netflix CEO Reed Hastings blew off concerns about it when second-quarter earnings were announced in July. "Epix is not a particularly large source of total viewing," he said at the time, and he "wouldn't expect (Netflix) to be affected significantly" by Amazon airing the same content, according to Reuters.
Investors, though, expressed concern Tuesday, as Netflix shares tumbled 6.35, percent, or $3.79, to close at $53.93.
Meanwhile, Oakland-based streaming radio service Pandora found itself with new competition from Finnish mobile phone giant Nokia, which announced it would equip its upcoming Lumia line of smartphones with its streaming music service. Nokia Music will provide free access to 150 playlists and radio stations to users of its new line of smartphones, which will run on Microsoft's Windows 8 mobile operating system. Those phones are expected to be unveiled Wednesday.
That news didn't shake Pandora much; shares rose 2.34 percent, or 28 cents, to $12.27. Its stock has been upgraded to "buy" by a number of brokerage firms in the past week after beating expectations with last week's quarterly earnings. Though Pandora has never made a profit, it expects to break even next quarter, and investors are bullish that it will continue to be an industry leader as its market share expands.
Silicon Valley tech stocks
Up: Apple, HP, Gilead, Yahoo (YHOO), Juniper, Zynga
Down: Google (GOOG), Oracle (ORCL), Intel (INTC), Cisco (CSCO), eBay (EBAY), VMware
The tech-heavy Nasdaq composite index: Up 8.10, or 0.26 percent, to 3,075.06.
The blue chip Dow Jones industrial average: Down 54.90, or 0.42 percent, to 13,035.94.
And the widely watched Standard & Poor's 500 index: Down 1.64, or 0.12 percent, to 1,404.94.
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Follow Mile Murphy on Twitter at twitter.com/mmmmurf.
