MacRumors

Research analyst Ming-Chi Kuo, who has in the past offered accurate information on Apple's Mac product roadmap, recently took on a new position with KGI Securities and has published a new report today indicating that Apple may be preparing to drop the 17-inch MacBook Pro from its lineup due to weak sales.

Kuo's prediction comes as Apple is expected to introduce new notebooks that serve as a hybrid between the current MacBook Air and MacBook Pro models, offering greater power than the Air but greater portability than the Pro. Kuo believes that Apple will elect to drop the 17-inch size as part of this revamp in order to streamline the company's product offerings.

Apple’s Mac business in 2Q12 will be boosted by several factors. Three of which are: (1) Mountain Lion, which integrates iOS features with Mac OS, Apple TV’s interaction function, will be launched in June; (2) upgrading to Ivy Bridge; and (3) back-to-school demand. We forecast Apple will sell 5.32mn units of the Mac series (up 28.5% QoQ and 35.2% YoY) in 2Q12, making it the main growth driver.

We also predict Apple will roll out a fully new MacBook model in early 3Q12, boasting strong performance and easy carryability by combining the advantages of MacBook Air and MacBook Pro.

While adding new products, Apple is likely to stop making the 17” MacBook Pro this year due to falling shipments, in order to maintain a lean product line strategy.

According to Kuo's estimates for the first calendar quarter of 2012, Apple sold roughly 3.1 million notebooks, with nearly half of them being the 13-inch MacBook Pro, far and away the company's best-selling Mac product. But while Kuo predicts sales of nearly 1.5 million units of the 13-inch MacBook Pro, he sees much lower sales of roughly 500,000 15-inch models and only 50,000 17-inch models.

Kuo estimates Apple's first quarter MacBook Air sales at roughly 1.1 million, split nearly equally between 11-inch and 13-inch models. He believes that the MacBook Air is only meeting Apple's expectations and not exceeding them, in large part because solid-state drives are not yet available in large enough capacities to satisfy consumers. But the trend of abandoning optical and traditional hard disk drives from notebooks will continue, and solid-state drives will continue to become more cost competitive over time.

Following last week's rumor that Apple is looking to adopt thinner in-cell touch technology for the display of the next-generation iPhone, analyst Ming-Chi Kuo, who recently took on a new position with KGI Securities, has issued a report looking at how that change could help Apple reduce the thickness of the iPhone from the current 9.3 mm of the iPhone 4S to under 8 mm. The move would help Apple to compete against its Android-based challengers, which have continued to see reductions in their thickness over time.

Since Apple’s smartphone competitors have generally slimmed down their high-end offerings to 7-8mm, Apple needs to make a leap forward from 4S’ 9.3mm thickness. We believe Apple will aim at 8mm or below (at least 1.4mm slimmer) for iPhone 5, in a bid to ensure brisk sales through 2014, while peers will also continue to introduce increasingly slim models next year.

As such, all iPhone 4S components that account for thickness must be slimmer, specifically, touch panel, battery and casing. Moreover, a marginal amount of space is required between the three parts for the sakes of assembly tolerance and thermal expansion of components.

Kuo calculates that shifting to in-cell touch technology in the next iPhone will yield Apple just shy of 0.5 mm in terms of a reduction in thickness. Kuo envisions a similar reduction coming from the battery, which he predicts Apple will be able to broaden somewhat inside the casing, allowing for a roughly 10% reduction in battery thickness.

A final 0.5 mm reduction in thickness could come from the use of a metal back case, which could come in at half the thickness of the glass back used in the current iPhone. Altogether, Apple could shave 1.4 mm from the iPhone's thickness to bring the next-generation model in at just 7.9 mm thick.

In yet another argument for the adoption of in-cell touch technology for the display in the next-generation iPhone, Kuo notes that display production would be greatly simplified, with fewer steps in the manufacturing process and fewer vendors being involved resulting in an estimated reduction in production time from 12-16 days to just 3-5 days.

While the initial yield on in-cell touch displays is currently lower than for glass-on-glass manufacturing techniques such as those used for the iPhone 4S, that deficiency can be compensated for by re-bonding in-cell panels and cover glass units with the optically clear resin (OCR) used in the bonding process. The optically clear adhesive (OCA) used in the current manufacturing process can not be re-bonded if the initial bonding fails.

Adobe today officially announced the launch of Creative Suite 6, the next major update to the company's bundles of popular design applications. The release sees new versions of 14 separate applications, including the flagship Photoshop CS6 that has been offered as a free public beta for the past month.

“Creatives get a ton of innovation across CS6, with milestone releases of all our flagship products,” said David Wadhwani, senior vice president, Digital Media Business, Adobe. “With CS6 and Creative Cloud, we’re also introducing new products, new mobile workflows and advanced publishing capabilities that show we are laser-focused on ensuring design, Web and video pros have everything they need for the delivery of high-impact content and apps.”

As with previous editions of Creative Suite, Adobe is offering the CS6 applications individually, as well as in several different bundles targeting print, web, and video design professionals.

Bundle pricing begins at $1299 for the Design Standard collection, which includes Photoshop, InDesign, Illustrator, and Acrobat X Pro. At an $1899 price point, Adobe offers either the Design & Web Premium collection, which includes Photoshop Extended, Illustrator, InDesign, Flash Professional, Fireworks, Dreamweaver, and Acrobat X Pro, or the Production Premium collection, which includes Premiere Pro, After Effects, Audition, Flash Professional, Illustrator, Photoshop Extended, Prelude, and SpeedGrade. Finally, Adobe's Master Collection containing all of the CS6 applications is available for $2599.

Adobe today also officially introduced Creative Cloud, a subscription service offering access to all CS6 applications as well as other cloud services to facilitate the integration of desktop Adobe software with the company's growing stable of tablet and smartphone applications.

Creative Cloud is priced at $49.99 per month for an annual membership, or $74.99 per month on a month-to-month basis. The service is also being offered at a special introductory rate of $29.99 per month for current users of Adobe's CS3, CS4, CS5 and CS5.5 software.

All Creative Suite 6 products are available for pre-order now and will begin shipping within 30 days. Adobe will be hosting a streaming launch event at 10:00 AM Pacific Time, highlighting the new developments included in Creative Suite 6 and Creative Cloud.

Associated Press reports that Apple has reached a deal with local governments to finalize its plans for a new data center in Prineville, Oregon. According to the report, Apple has agreed to invest $250 million in facilities on its 160-acre property, and will offer an annual $150,000 "project fee" in lieu of property taxes over the next fifteen years. The company has also guaranteed to bring at least 35 jobs to the center at 150% of the average wage in the county.

The $150,000 project fee in part of an agreement with Apple that was made public this week. Prineville City Manager Steve Forrester called it a common arrangement.

The Oregonian reports that the value of the tax break will depend on how much Apple winds up investing. Similar tax breaks on Google's $1.3 billion data center in The Dalles are worth more than $24 million to the company annually, the newspaper said.

Apple paid $5.6 million for the project site back in February, and has already begun installation of a modular data center in order to build out some capacity ahead of construction on the main facility. Apple noted earlier this week in response to a Greenpeace report on data centers being powered by coal-derived energy that it intends for its Prineville data center to run on "100% renewable energy".

Apple just recently opened another data center in Maiden, North Carolina, where the company has indicated that it plans to spend $1 billion. The company is building a 20-megawatt solar farm and a 5-megawatt fuel cell facility at the data center, two of the largest privately-owned renewable energy projects of their kind in the country.

There have been few updates in the "iPad" trademark dispute between Apple and Proview over the past couple of months, but IDG News now reports that the two companies are engaged in settlement talks with an eye toward resolving the issue.

Ma Dongxiao, a lawyer representing the Chinese company Proview, said on Friday the talks were happening, but declined to offer details.

The legal dispute between Apple and Proview is still being deliberated by the Higher People's Court of Guangdong Province. But earlier this week, the court recommended that both Apple and Proview find a way to mediate the dispute, according to a court spokesman.

Apple claims that it used a dummy corporation to purchase the Chinese rights to the iPad trademark in late 2009 as part of a broad deal with Proview's Taiwanese arm covering several markets and carrying a $55,000 purchase price. But Proview has argued that the Chinese rights were controlled by its Chinese arm and that the Taiwanese unit had no ability to sell them to Apple, despite the fact that corporate officers common to both units were involved in the deal.

Proview has since filed several suits against Apple, with reports of damage claims ranging up to $2 billion. For its part, Apple has been playing up a Hong Kong court ruling that found Proview and its subsidiaries had conspired to extort millions of dollars from Apple once it was discovered that Apple was behind the trademark purchase. Chinese courts have, however, yet to rule on the issue.

It is unclear whether the new settlement talks between Apple and Proview are likely to be successful, with each side undoubtedly weighing their chances of winning in court as they decide how far to compromise in the talks.

As announced earlier this week, Apple today began selling the new iPad in twelve new countries: Brunei, Croatia, Cyprus, Dominican Republic, El Salvador, Guatemala, Malaysia, Panama, South Korea, Saint Maarten, Uruguay and Venezuela. An additional nine countries will see the new iPad launch a week from today.

Just as Apple expands availability of the device yet again, the company is also reducing shipping estimates in a number of markets, now citing 5-7 business days for new orders instead of the 1-2 week estimate that has been in place for the past month. The new 5-7 business day estimates appear to be in effect in Apple's North American and Asia/Pacific distribution channels, but have not yet made their way to the company's European channel, where estimates remain at 1-2 weeks.

Update: Fortune posts a video of the new iPad going on sale at an Apple reseller in South Korea.

Taiwan's Central News Agency reports on comments from DisplaySearch analyst David Hsieh, who believes that Apple is planning to use new "in-cell" display technology from Japanese manufacturers in the next-generation iPhone. The move would benefit suppliers such as Sony, Sharp, and Toshiba, which currently lead the industry in the technology.

Compared with on-cell technology, touch panels that use in-cell technology can be made thinner because the touch sensors are actually placed inside the color filters rather than on top of them, he explained.

At present, Taiwan's TPK Holding Co. and Wintek Corp., which supply touch panels to Apple, use mainly on-cell technology in their products, according to the two companies.

The occasionally-reliable Digitimes is reporting similar claims based on "sources in Apple's supply chain", indicating that improvements in yield rates for the in-cell panels have made it feasible for Apple to use the technology in its products. According to the report, Sharp and Toshiba will be ramping up their production of in-cell panels this quarter.

RTÉ reports that Apple is making plans to add 500 more jobs at its European headquarters in Cork, Ireland, bringing the total headcount at the site to 3,300 as the company works to continue expansion of its business in the region.

The company plans to construct a three-storey office block next to its existing plant in the city to cater for the expansion of its business in Europe, the Middle East, India and Africa.

Apple has been in Cork for 30 years and currently employs 2,800 people in the city.

Apple expects to add the new jobs over the next 18 months, and the move appears to be on top of plans for 350 jobs in downtown Cork announced less than a year ago.

The company's main campus in Cork was in the news earlier this week after Greenpeace activists scaled a building to protest Apple's use of coal-derived power at its data centers.

Apple of course continues to expand its workforce at and around its corporate headquarters in Cupertino, California, with the company snapping up a number of leases in the area to support the growth as it works toward building a new campus for up to 13,000 workers. The company is also expanding at its other primary employment hubs, currently working with governmental authorities on a plan to add 3,600 at its administrative and support center in Austin, Texas, doubling the size of its workforce there.

Apple CEO Tim Cook didn't visit Valve headquarters according to company co-founder Gabe Newell. The rumor, originally reported by AppleInsider, was squashed by Newell in a podcast interview.

Video game website Kotaku had a preview of the podcast from Seven Day Cooldown that included this quote:

We actually, we all sent mail to each other, going, "Who's Tim Cook meeting with? Is he meeting with you? I'm not meeting with Tim Cook." So we're... it's one of those rumors that was stated so factually that we were actually confused.

No one here was meeting with Tim Cook or with anybody at Apple that day. I wish we were! We have a long list of things we'd love to see Apple do to support games and gaming better. But no, we didn't meet with Tim Cook. He seems like a smart guy, but I've never actually met him.

The report of the meeting between Cook and Valve executives set off a torrent of speculation about partnerships between the companies, including rumors of Valve's Steam service integrating with the App Store or an Apple television.

9to5Mac claims Apple's marketing chief Phil Schiller told a fan that the uber-popular photography app Instagram "jumped the shark" after it launched an Android version.

Schiller recently deleted his Instagram account and a 9to5Mac reader noticed this and asked why he had deleted it.

In a direct message, Schiller reportedly replied:

It "jumped the shark" when it went to Android

Instagram's Android app launched two weeks ago and the app was previously picked as the iPhone App of the Year in 2011. Instagram was just purchased by Facebook for $1 billion.

Update: As noted in an update to the original post, one individual was able to contact Schiller about his comment and received a response clarifying his feelings on Instagram's evolution.

Instagram is a great app and community. That hasn't changed.

But one of the things I really liked about Instagram was that it was a small community of early adopters sharing their photographs.

Now that it has [grown] much larger the signal to noise ratio is different.

That isn't necessarily good or bad, it's just not what I originally had fun with.

Qualcomm yesterday warned analysts that it is experiencing supply issues with some of its advanced mobile phone chips, particularly its new 28-nm modem chips set to power the next wave of LTE devices.

"At this stage we cannot secure enough supply to meet the increasing demand we are experiencing," Chief Executive Paul Jacobs told analysts on a conference call, adding that the issue would limit revenue growth this year. [...]

"Demand went so far ahead of availability that we've decided to start spending more money to get more supply as soon as possible," [Chief Financial Officer Bill Keitel] told Reuters. "Any time we can't make a customer totally happy I'm going to worry. You don't want to give a customer a reason to go elsewhere."

As a result of the issues, analysts believe that vendors may have to slow their rollout of new devices, and a report out today from Piper Jaffray's Gene Munster predicts that the next-generation iPhone will arrive in October.

Munster had previously been modeling for an August launch as a hedge between those thinking the device may arrive in June and those thinking it will arrive in a September-October timeframe similar to the iPhone 4S. Apple is expected to use Qualcomm's 28-nm MDM9615 modem chip in its next-generation iPhone to provide LTE data and voice services, and the chip appears to be one of those impacted by Qualcomm's supply issues.

QCOM will likely support an Apple iPhone launch in October. Based on our checks, we believe the design win momentum of QCOM's 28nm products has been exceptionally strong and a 28nm LTE baseband is likely designed into the next iPhone. QCOM's supply issue likely pushes the launch of the iPhone to October. Based on the increased capital spending this year from TSMC and QCOM's efforts over the last quarter to port its 28nm designs to UMC and probably Global Foundries, we think QCOM will have the capacity to support a Q4 LTE iPhone 5 launch. Moreover, the slow wireless infrastructure spending in 1H:12 is also likely a result of the lack of availability of a low power 28nm LTE baseband modem.

Apple may have been planning for a September-October iPhone launch all along, but Qualcomm's issues seem to make it less likely that those holding out hope for an earlier launch will see something closer to the June-July timeframe that had been the traditional launch window prior to last year.

Munster believes that it is "irrelevant" whether the iPhone launches in August as his model currently predicts or in October, with the primary driver of success being whether the upgrade is a compelling one for consumers. And with the next-generation iPhone expected to offer LTE support and carry a redesigned form factor, it seems likely that it will be an attractive device for both new and upgrade customers.

Back in January, blogger Seattle Rex announced that he would be suing Apple over issues related to his 2008 MacBook Pro that appears to have suffered from an NVIDIA graphics card failure. According to Rex, the graphics chip on his top-of-the-line 17-inch MacBook Pro began to flake out late last year, two months after his AppleCare extended warranty expired, and a month later the machine died completely, refusing to boot.

Upon taking the machine to the Genius Bar at a local Apple retail store, Rex was informed that because the machine could not be booted to confirm that the graphics chip was indeed defective, he would have to pay for all repairs to the machine, up to $600.

I proceeded to explain my displeasure with the “genius”, firmly, but politely. I explained, calmly, that a $4,500 laptop that fails in 3 years and 3 months is defective. Period. I explained to him that a chip on the mainboard was known to be defective, and that Apple had admitted as much. I was calm, but at this point, I think my temper was starting to show, because I could feel that telltale flushness in my face.

Following an additional two months of speaking to various levels of Apple's support and executive relations teams and filing a complaint with the Better Business Bureau, all to no avail, Rex filed suit against Apple in small claims court seeking compensation for his dead MacBook Pro and associated expenses.

And finally, Rex earlier this week published a lengthy blog post outlining his experience facing off against two Apple lawyers last week and winning an unspecified sum sufficient to purchase a new computer. Among the interesting incidents from the proceedings:

- Apple's lawyers argued that Rex's MacBook Pro wasn't covered by the repair program because he had purchased a build-to-order machine with a faster processor, even though the machine carried the same GeForce 8600M GT graphics chip that was the subject of the repair program. Only after Rex presented this information to the court did Apple's lawyers admit the fact and concede that the machine should be covered for repair.

- Rex had refused to accept a replacement logic board for his MacBook Pro, arguing that he would simply receive yet another defective GeForce 8600M GT chip. Apple's lawyers conceded that the machine could only accept the GeForce 8600M GT chip, and the judge ruled that Rex's machine was not repairable.

- Apple fought the case even though a repair could have been made at no expense to Apple, as NVIDIA was covering the cost of repairs related to the defective chip.

At one point, the judge asked Apple how much it would have cost them to have simply replaced my logic board when I had taken it in, and one of the Apple guys said “Oh, it wouldn’t have cost us anything, Nvidia foots the bill for each board we replace.”

The judge’s face almost hit the floor as he shot me a quizzical look, to which I just shrugged. I knew that he, and everyone else in the courtroom was thinking the same thing:

If Apple could have replaced my logic board at no cost to themselves, then why in the hell did they drag this out for so long, and why did they send two people to court to try and make sure that I got absolutely nothing? Friends, this is a question I have been asking myself for three months, and it is a question that I do not have the answer to.

Rex still has to collect on the judgment, which covers the cost of a new computer and compensation for court costs and other minor expenses, and he remains concerned that Apple will try to avoid making the required payment.

Beyond his own case, Rex notes in an update to his post that the response from readers has been overwhelming, with numerous readers sharing similar tales of being unable to have suspected NVIDIA graphics chip failures covered by Apple's repair program. Consequently, he is now considering organizing a class action lawsuit to allow those affected by the issue to band together in seeking compensation.

Marking the first significant piece of data to help build a picture of Apple's quarterly iPhone sales numbers ahead of next week's earnings release, Verizon today announced its own earnings results for the first quarter of 2012, revealing during the associated conference call that it activated 3.2 million iPhones during the quarter.

The number is down from 4.3 million iPhones in the previous quarter, which was part of Apple's record-setting launch quarter for the iPhone 4S that saw the company sell 37 million iPhones worldwide.

Analysts are generally expecting Apple's iPhone sales for the first calendar quarter of 2012 to be down slightly from that 37 million number, and Verizon's results certainly support that belief, at least in the United States. But increased international availability of the iPhone 4S during the first quarter, most notably a launch in China in mid-January and an expansion to China Telecom in early March, should help Apple maintain strong iPhone momentum.

Overall, Verizon reported sales of 6.3 million smartphones during the first quarter, meaning that the iPhone continues to represent just over half of the carrier's smartphone business. But Verizon is continuing to shift the focus of its data highlights toward its 4G LTE network, with the carrier noting that it sold 2.9 million LTE devices during the quarter. 4G LTE users now make up 9.1% of Verizon's wireless user base.

As noted by Macgasm, Apple has begun notifying at least some MobileMe users of a new upgrade program offering a free copy of Mac OS X Snow Leopard. The offer is being made to provide users of machines running older versions of Mac OS X with a reduced-cost pathway to upgrade to OS X Lion, which is required to take full advantage of the features of iCloud.

With OS X Lion being distributed via the Mac App Store, users need to have Mac OS X Snow Leopard installed on their systems in order to access the store. Consequently, users still on Mac OS X Leopard or earlier would have to pay $29 to upgrade to Snow Leopard via disc and then an additional $29.99 to upgrade to Lion via the Mac App Store in the absence of the new upgrade program. With MobileMe set to be discontinued in favor of iCloud as of June 30, Apple is clearly seeking to encourage MobileMe users to move their accounts to iCloud.

In an article sent to MobileMe customers, Apple has recommended that potential customers get in touch with Apple to receive a free DVD of Snow Leopard so that users can upgrade to Lion, and move to iCloud. All you have to do is follow this link, log in to MobileMe with your Mobile Me account, and fill out your mailing information. Apple will then send you a Snow Leopard DVD for free.

Mac OS X Snow Leopard remains available in the Apple online store for $29, suggesting that the offer is a targeted program intended for MobileMe members who need to upgrade their systems in order to move to iCloud rather than a general price cut for all purchasers of Snow Leopard.