Today: Speculation reaches a fever pitch a day before Apple (AAPL) is expected to announce two new iPhone models, and perhaps more. Also, Yahoo (YHOO) gets a boost after unveiling mobile video app, and Tesla continues to descend from historic high.
The lead: Apple shares rise a day before anticipated iPhone announcement
Apple stock surged above $500 a share again Monday, as speculation over its media event Tuesday morning reached a fever pitch.
The Cupertino tech giant is expected to unveil two new iPhone models, and experts are debating whether the new products will make a big enough splash for Apple to regain its lost luster. Shares reached an all-time high of $705.07 after the iPhone 5 was unveiled last September, but in the past year have plunged as low as $385.10 amid reports of flattening sales, higher costs and the lack of a new "must-have" gadget.
"The wow-factor is wearing off at Apple," analyst Laurence Balter of Oracle (ORCL) Investment Research told the Mercury News' Patrick May last week. "Unless they pull one incredible rabbit out of the hat . . . the pressure is going to be even more intense on Apple to somehow surprise us all again."
The consensus seems to be that Tuesday's announcement might not carry much of a "wow" impact, but may be enough to impress investors and boost Apple's bottom line. A new, significantly faster iPhone -- possibly called the 5S -- is expected to be unveiled, featuring longer battery life and a better camera. It may also include a fingerprint scanner for improved security, which could open the doors to easier and more secure mobile payments. The 5S should also be the first device with Apple's new iOS 7, which is said to feature an entirely new look to its user interface.
While those additions may appeal to Apple's more tech-savvy customers, the bigger splash may be made with the so-called iPhone 5C. That device is expected to be cheaper, come with a plastic body and will be available in multiple colors. Based on the huge gains made in the past year by cheaper Android smartphones, Apple is hoping a lower-cost smartphone will help it expand its reach, much as the cheaper iPad Mini helped it sell more tablets. "A cheaper model will open up the market significantly for Apple," telecom analyst Chetan Sharma told the New York Times.
The 5C could also be the breakthrough device Apple has been waiting for to tap the immense Asian market. Rumors have indicated that Apple will announce deals Wednesday with the biggest mobile carriers in China and Japan. As Forbes notes, if it can capture just 10 percent of those carriers' market share, it would boost iPhone sales by 60 percent.
And while Apple typically likes to launch its products separately, there's always the chance of a surprise that doesn't involve the iPhone. "Apple needs a new 'hero product,' but I do not think it necessarily has to be a phone," Carolina Milanesi, a consumer-technology researcher with Gartner Research, told CNN. "With technology innovation slowing down, maybe they are better off turning iPhone into a market-share grabber and showing innovation in another product." Among the possibilities: A new Mac, a revamped iPod or iPad, or the long-rumored iTV or iWatch.
Apple shares rose $7.95, or 1.6 percent, Monday, closing at $506.17.
Go to siliconvalley.com on Tuesday morning for the latest Apple developments, as Merc tech columnist Troy Wolverton live-blogs from the Apple event starting at 10 a.m. PDT.
SV150 market report: Mobile video app boosts Yahoo, Tesla slides
The major stock indexes made strong gains Monday, led by the tech sector. The SV150 index of Silicon Valley's biggest companies surged by 1.29 percent, and the tech-heavy Nasdaq wasn't far behind, gaining 1.26 percent.
Sunnyvale-based Internet portal Yahoo was among the biggest gainers, jumping $1.07, or 3.8 percent, to close at $29.24, after announcing a new mobile video app called Yahoo Screen. The app will feature videos from eight exclusive new Yahoo comedy series, as well as full episodes of "Saturday Night Live" and clips from Comedy Central hits "The Daily Show with Jon Stewart" and "The Colbert Report." The Screen app will only work on Apple iPad and iPhone devices for now, but an Android version is in the works.
Google (GOOG) shares rose $8.30, or 0.94 percent, to $887.88 after the Mountain View Internet giant submitted new concessions to address antitrust concerns by the European Union. Palo Alto-based VMware surged 2.68 percent, closing at $87.08, after Mizuho raised its target price from $90 to $100. And Tesla Motors (TSLA) continued to slip from historic highs after Barclays downgraded its estimates for 2014 earnings. Tesla slipped $6.27, or 3.76 percent, to $160.70. The Palo Alto electric car maker has dropped from its all-time high of $173.70 in August as investors pull back on worries that the stock may be overvalued.
Up: Apple, Google, Oracle, Intel, Cisco, HP, Gilead, VMware, Yahoo, Juniper, Facebook, Zynga
The SV150 index of Silicon Valley's largest tech companies: Up 17.02, or 1.29 percent, to 1,334.03
The tech-heavy Nasdaq composite index: Up 46.17 , or 1.26 percent, to 3,706.18.
The blue chip Dow Jones industrial average: Up 140.62 or 0.94 percent, to 15,063.12.
And the widely watched Standard & Poor's 500 index: Up 16.54, or 1 percent, to 1,671.71.
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 Mike Murphy on Twitter at @mmmmurf.