SAN FRANCISCO (Reuters) - Apple Inc kicks off its annual developers’ extravaganza on Monday under a tight lid of secrecy, with investors expecting the electronics maker to unveil new or cheaper versions of its popular iPhone.
Thousands of customers, developers and investors are set to convene in San Francisco for Apple’s Worldwide Developers’ Conference, hoping to catch a glimpse of its latest high-tech wonders.
But while Apple made waves with its unveiling of the 3G iPhone at last year’s event, this year’s takes place against a more uncertain backdrop.
Steve Jobs, Apple’s charismatic CEO and master showman, is still on medical leave and not due back until July. And the first credible challenger to Apple’s iPhone, Palm Inc’s new Pre smartphone, makes its grand debut on store shelves just two days before Apple’s gala.
While many analysts believe Apple has a variety of new gadgets in the pipeline — from new iPhone models to a long rumored, so-called tablet mini-PC — the company has said the conference will focus on important but less sexy software operating system upgrades.
Others on Wall Street believe the stage is set for a surprise product announcement.
Apple’s shares have risen about 17 percent in the past two weeks, compared with a 5.7 percent gain in the Dow Jones Industrial Average during the same period.
“The consensus expectation is that they will also announce the next iteration of the iPhone,” said Oppenheimer & Co analyst Yair Reiner.
A few Internet blogs have cited allegedly thin iPhone retail inventories as a tell-tale sign that Apple is clearing the decks to release a new model.
Speculation on a new iPhone has ranged from a model with a physical keyboard to handsets that boast more flash memory and faster processors.
A less expensive, $99 iPhone is also on wish lists, as is the possibility of a model with a cheaper data plan or one sold through a carrier other than AT&T Inc, with which Apple has an exclusive distribution agreement.
Given the proximity to the launch of the Palm Pre smartphone on Saturday, some analysts reckon Apple will hold off on announcing any new iPhones.
“It gives you some time to study the Pre, see what the problems are and roll out a campaign against it,” said Rob Enderle, principal analyst at the Enderle Group consulting firm.
Piper Jaffray analyst Gene Munster expects new iPhones to ship in July, regardless of whether or not Apple announces them at the conference or a later date, while he has forecast a 2010 release date for an Apple tablet PC.
Munster deemed a surprise appearance by Jobs at the show “unlikely,” although he said in a recent note to investors he expects Jobs to be back by the end of the month.
According to Apple, the new iPhone 3.0 operating system unveiled at the conference will include 100 new features, including the ability to cut and paste text and improved search functionality. Apple has also said it will showcase its new Snow Leopard operating system for Mac computers.
With expectations so high, some analysts warn Apple’s stock will be under pressure no matter what the company announces.
“We still like Apple’s long term prospects, but believe at current prices, we could see some sell-off post-WWDC,” BMO Capital Markets analyst Keith Bachman wrote in a recent investor note.
Reporting by Alexei Oreskovic; Editing by Edwin Chan and Andre Grenon