Headline Feeds
The news for Apple (Nasdaq: AAPL) investors is mixed this week, and the company's stock prices reflect that uncertainty.
You'd think Apple's share prices would skyrocket at the news that Apple has finally cracked the China market, and a report that it might cut a deal with Verizon.
Or at the news that Mac sales 
in the enterprise are growing.
Instead, Apple's share were down by US$1.96 at press time on Tuesday, to close at $166.25.
Several factors may have contributed to the drop. For one, the Chinese apparently proved better at Yankee horse trading than AT&T (NYSE: T). In addition, investors could have been unnerved by the prospect of greater competition in the smartphone market and reports that the antimalware feature in Apple's Snow Leopard does not offer as much protection as it should.
Empire of the East
Apple has achieved its goal of entering the Chinese market this year, having signed a three-year deal with China Unicom.
The Chinese market will be huge for Apple. China Unicom has agreed to sell 4 million iPhones a year, Kevin Wang, director, research at iSuppli, told MacNewsWorld. That's a nice piece of change for Cupertino.
On the plus side, the deal may put the squeeze on China's gray market for iPhones, where more than 1 million units change hands every year, Wang said.
"Gray market prices will drop if China Unicom sells its iPhones at a reasonable price," Allen Nogee, In-Stat's principal analyst for wireless technology and infrastructure, told MacNewsWorld.
China Unicom will price iPhones at between $400 and $500 retail, which is $100 less than the gray-market price, said Wang.
Meanwhile, China Mobile, which previously turned down Apple's overtures, has signaled that it is interested in doing business with Cupertino. Apple has said that its deal with China Unicom is not exclusive.
It's Not All Good
On the minus side, China Unicom will not share revenues with Apple, according to Wang.
Another consideration is that the smartphone market in general is going to heat up. China Mobile has introduced the O-Phone, which runs a modified version of Android, and there will be a flood of O-Phones hitting the market soon.
"At present, Lenovo, Dell (Nasdaq: DELL), Dopod and Philips (NYSE: PHG) are introducing the O-Phone," Wang said. "Samsung, Moto, LG, ZTE, Tianyu and others will do so later this year."
O-Phone shipments will total about 3 million units in 2010, he estimates.
Huawei, the largest networking and telecommunications operator in China, will introduce the T-Mobile service later this year, Wang said.
From the silver-lining department, the gray market could indirectly help Apple by impacting the market for Android phones.
Chinese design houses are ramping up to develop Android phones for the gray market, Wang said. The enemy of Apple's enemy might just be its friend.
Swing That Partner
The enemy of Apple's partner might also be its friend, if the reports that Apple is considering opening up to more carriers prove to be true. It could happen sometime next summer, suggests a report from Piper Jaffray analyst Gene Munster.
Although Apple has publicly maintained that it's happy with AT&T, it is reported to have privately expressed its dissatisfaction with AT&T's wireless coverage. Further, the carrier's 3G service has drawn lots of complaints from iPhone users.
As the leading wireless carrier in the United States, Verizon is the most likely target for an iPhone deal. If it should agree to carry the iPhone, that would provide a considerable boost for Apple. Unless Apple gives Verizon really good terms, however, this isn't going to happen.
Because of Apple's stringent requirements, Verizon previously turned down the iPhone, which drove Apple to AT&T. Subsequent events have shown the wisdom of Verizon's decision: Although iPhone customers have boosted AT&T's subscriber figures, the carrier is offering a subsidy of $200 to $400 for each iPhone sold.
There were more than 2.4 million iPhone activations in the second quarter of 2009, according to AT&T. Averaging out the iPhone subsidy at $300, for the sake of convenience, if even half of them were sold to new subscribers, that means the carrier actually gave up about $360 million.
So, if Verizon does sign on to offer the iPhone, the terms of the deal will warrant a very careful look. It may not be as good for Apple as it seems.
Storm Clouds on the Horizon?
Another thing that may not be as good for Apple as previously hoped is Snow Leopard, or OS X 10.6, which was unveiled only last week. While all upgrades to operating systems have bugs, Snow Leopard appears to have more than its fair share.
Snow Leopard includes an antimalware feature -- probably because Apple wants to push further into enterprise computing. Already, enterprises are turning to Macs, according to Needham Senior Analyst Charlie Wolff, who told investors that Apple is performing relatively better than PCs in this segment. Needham attributed this to Apple's June 8 price cuts.
The trouble is, the antimalware feature is weak.
"Apple's simple solution, which currently only scans files downloaded or received by email or chat with certain applications, runs the risk of making users more complacent, leading them to think they have overall protection from malware," Laurent Marteau, CEO of Apple antivirus software firm Intego, told MacNewsWorld.
"Apple's antimalware feature only scans files when they are double-clicked, and infected files may be deleted, not repaired," Marteau pointed out.
That won't go down well in the enterprise, and Mac sales may suffer as a result.
The verdict: Keep a close eye on key issues, and don't worry about the razzmatazz.
Talkback: 
