Apple Said To Plan Overhaul Of iPhone With Bigger Screen

Apple Inc. (AAPL) is preparing to overhaul the look of its iPhone, three people with knowledge of the plans said, refreshing the company’s top-selling product amid competition from rivals such as Samsung Electronics Co. (005930)

Apple, based in Cupertino, California, has placed orders from suppliers in Asia for screens that are bigger than the 3.5- inch size now on the smartphone, said one of the people, who asked not to be identified because the plans aren’t public. Apple co-founder Steve Jobs had worked closely on the redesigned phone before his death in October, one person said. The design change will be Apple’s first for the iPhone since 2010, when it introduced the iPhone 4. Electronics makers, led by Samsung, are moving toward bigger screens, as consumers use handheld devices for a broader array of tasks, including watching video, playing games and browsing the Web.

Apple is girding against competition from rivals such as Samsung, which have made Google Inc. (GOOG)’s Android the most widely used smartphone software. Samsung regained the lead in smartphones in the first quarter using screens of many sizes.

A new iPhone could be released by October, analysts have predicted. Apple has been working on the new device since before the current iPhone 4S model was introduced last October, said one person with knowledge of the project. Jobs, who had gone on medical leave from Apple starting last January, played a key role in developing the phone, this person said.

Natalie Kerris, a spokeswoman for Apple, declined to comment.

Popular Product

The iPhone, introduced in 2007, is Apple’s most-popular product, accounting for 58 percent of its sales in the fiscal second quarter. The product, along with the 2010 debut of the iPad, has helped catapult Apple past Exxon Mobil Corp. (XOM) to be the world’s most valuable company. Since Jobs unveiled the iPhone, the company’s stock has risen more than fivefold.

Apple fell 2.9 percent to $530.12 at the close yesterday in New York. The shares have risen 31 percent this year.

The Wall Street Journal reported earlier this week that Apple would be adding a 4-inch screen. The company is working with several screen makers on the new iPhone, including LG Display Co. (034220), Sharp Corp. (6753) and Japan Display Inc., the Journal reported, citing people familiar with the plans. Production could begin as early as next month, the report said.

Apple’s rivals have been introducing devices with bigger screens than the iPhone. Samsung sells at least 13 smartphones with screens ranging from 2.8 inches on the Replenish to 5.3 inches on the Galaxy Note. HTC Corp. (2498)’s One X has a 4.7-inch screen. Apple, which has always favored a limited number of models, offers only a 3.5-inch display on the iPhone.

Faster Wireless Network

Piper Jaffray Cos., Barclays Capital and Sterne Agee & Leach Inc. are among securities firms that have predicted Apple would introduce a new iPhone in the fall.

In addition to the larger screen, analysts including Gene Munster at Piper Jaffray have predicted the next iPhone will be compatible with the new wireless networks being built by carriers including AT&T Inc. (T) and Verizon Wireless. The new iPad released earlier this year works on those networks.

What’s unclear is whether the screen size change means the device will be bigger or the screen will take up more space on the front -- with the iPhone keeping the same general dimensions it has had since 2007. A 4-inch screen, measured diagonally, can fit on the face of the iPhone with the current dimensions.

Speculation that Apple is planning a new iPhone can lead to a drop in sales of current models. In the company’s fourth quarter, Apple reported sales and profit that missed analysts’ estimates as customers waited for the iPhone 4S to be introduced. In April, Apple predicted sales and profit in the current quarter would decline compared to last quarter.

Apple reportedly slows iPhone orders, increases iPad orders

Sterne Agee analyst Shaw Wu said in a note to investors on Tuesday that Apple has reduced iPhone orders by between 20% to 25% from the 35.1 million units the company shipped in the March quarter. Wu now expects shipments of between 26 million and 28 million iPhones, lower than the Street’s consensus of between 30 million and 31 million units. The analyst also noted that Apple has an estimated 8.6 million iPhones in channel inventory, 2.6 million of which were added in the most recent quarter, allowing the Cupertino-based company to achieve supply-demand balance of between four to six weeks. “From our understanding, the reason for the reduction is not demand related but rather due to the upcoming 6th generation iPhone refresh likely in the September-October timeframe,” Wu explained. “It appears that AAPL is opting to be conservative with its suppliers to factor in a potential 2-quarter pause ahead of the refresh and also to manage inventory. We believe this helps explain why its June quarter guidance was somewhat more conservative.” The analyst went on to state that the opposite is occurring with Apple’s iPad tablet, which is seeing increased build plans. Shipments of the device were previously held back due to supply constraints on its new Retina Display, although it has been “greatly improved with an additional supplier.” Wu believes that this will help Apple to better meet the strong demand for its iPad. For the June quarter, Wu reduced his iPhone forecast from 28 million units to 27 million, and raised iPad shipment expectations from 14 million to 15 million units. Due to improved iPad profitability, the analyst is increasing his gross margin assumption from 42.5% to 43.5% and forecasting $36.1 billion in revenue and $10.16 in EPS. Wu reiterated his Buy rating on shares of Apple stock, as well as his $780 price target.

Check out these awesome iPhone-controlled RC cars

There’s no shortage of iPhone-controlled vehicles on the market these days. We’ve seen cars, helicopters, robots, and even tiny spheres that can be controlled with Apple’s handset. But we’ve never seen anything look this good. The folks over at iHelicopters.net, yes, the makers of the rocket-launching Cobra copter, just informed us that they’ve got a new lineup of iPhone-controlled RC cars out that we wouldn’t want to miss. And they were right… The company’s RC car collection comes in a number of different flavors. You can choose from gorgeous replicas of popular makes and models including an Audi R8, Q7, BMW X6, 5 series, or a more ruggedly-designed stunt racer. The cars are controlled by a dedicated iOS app, which interfaces with an audio jack transmitter. And judging from the video, they seem to be pretty well made. They’re fast, responsive, and can last for up to 60 minutes on a single charge. If you’re interested, you can purchase one of these awesome cars from iHelicopter’s online store. It looks like all models run just under $60/RM180, which is about middle-of-the-road for remote control vehicles. What do you think? Are these cars awesome or what?