Perhaps it's because expectations are so low. Or maybe it's because nobody really knows what's going on with Steve Jobs' health. But less than a week before the start of Macworld 2009, the lead story on Techmeme's news aggregator Wednesday morning was about a device that Apple (AAPL) is reportedly readying for release next September, at its annual iPod event.

The mystery device is the long-rumored iPod tablet — an oversized iPod touch with a 7- or 9-inch screen. Three independent sources close to Apple — one of whom has seen and handled a prototype — tell Techcrunch's Michael Arrington that Apple is talking to Asian suppliers about mass producing it for Fall '09.

According to Arrington:

"Apple has been experimenting internally with large form tablet devices for years, one source says, but there was concern that users wouldn’t like the device. The difference now is the iTunes app store, which has thousands of games and other applications that are perfect for a touch screen device with an accelerometer." (link)

So what would the thing look like? If the image above represents a 3.5-inch iPod touch, an iPod tablet with a 9-inch screen might look something like this:

As several readers have divined, this was a rush job patched together by a writer with minimal Photoshop skills. If you have a better idea of what form such a device might take, send it to me and I'll post it below the fold.

If it was Steve Jobs' intention to take the wind out of Macworld's sails, he's done a pretty good job.

"Expectations are low," wrote Piper Jaffray's Gene Munster in a note to clients early Tuesday, one week before the first Macworld Expo keynote since 1997 that won't be delivered by Apple's charismatic CEO.  "No significant new products are expected."

"Fairly modest" is how Kaufmann Bros.' Shaw Wu described investor expectations for the Expo, which runs from Jan. 5 – 9 in San Francisco and which Apple (AAPL) has already announced will be its last. "Frankly, we would be a little surprised if there is a major announcement, as we believe it would make better sense for Steve Jobs to do so himself at an AAPL event."

Behind Steve Jobs' Macworld exit

Both Wu and Munster are looking for Jobs' keynote stand-in — senior vice-president Phil Schiller — to introduce updated iMacs and redesigned Mac minis — hardly surprises given that both machines are overdue for a refresh.

Munster has not given up on the "new form factor iPhone" — a.k.a. iPhone nano — that he once thought would be announced at the January event. Now he doesn't expect it to arrive before the end of Apple's second fiscal quarter, which closes in March.

And he is sticking with his famous prediction — the most optimistic of any mainstream analyst — that Apple will sell 45 million iPhones in calendar 2009. But he reminds clients that that figure is predicated on his belief that Apple will enlarge its iPhone offerings, vastly expand its retail outlets and significantly lower its prices. So far it's only done one of the three.

Wal-Mart to sell iPhone starting Sunday

Shaw Wu also sees "strong indications" of a lower-cost iPhone and other "larger form factor touchscreen devices" — a.k.a. iPod tablet — later in the year. His sources hint that Apple may introduce a new "consumer device" next week — possibly a jazzed up Apple TV or a superconnected Time Capsule — a.k.a. home server — that would let you grab your files or do backups from anywhere on the Internet.

And Wu hasn't ruled out the possibility that Phil Schiller will surprise everyone next week with a breakthrough product that nobody is expecting, if only to send the message that Apple is a "much broader and deeper company than one person, even if he/she is a living legend."

For our part, we haven't given up on the possibility that Steve Jobs will make a surprise cameo appearance during Schiller's keynote, if only to show that he's still kicking — Gizmodo's latest rumor to the contrary — and still very much in charge.

AT&T (T) on Saturday began offering refurbished iPhones for the lowest price yet seen in the United States:

• $99 for a black 8GB iPhone 3G (refurbished)
• $199 for a black 16 GB iPhone 3G (refurbished)

The price points are not entirely unexpected. For several weeks before Christmas, Apple (AAPL) blogs were buzzing with rumors that Wal-Mart (WMT) would be selling a new version of Apple's iPhone at the magical $99 price.

But it was not to be. On Friday, Wal-Mart confirmed that starting Sunday, Dec. 28, it will carry the hot-selling phone at nearly 2,500 stores — but starting at $197, not $99.

AT&TS's $99 iPhones are the same old models, slightly used.

According to the small print on att.com,

Refurbished phones are previously owned devices that have been unused or lightly used and returned during the 30-day trial period. Each refurbished phone is independently quality tested and loaded with the latest software to meet current factory standards. Some refurbished iPhone 3G devices will have minor scratches.

Refurbished iPhone 3G devices carry a warranty of 90 days or more. For details about the warranty on your refurbished iPhone 3G go to www.apple.com/support/oss/.

The catch? The heavily discounted phones come with the usual 2-year contracts, which can cost up to $2,000, depending on the plan.

The sale ends Dec. 31 or when AT&T runs out of stock, whichever comes first. Macworld Expo starts the following week, leading to speculation that AT&T may be using the occasion to clear inventory in advance of new models or new memory configurations.

Wal-Mart confirmed Friday what everyone who follows Apple already knew: that it will begin selling Apple's iPhone 3G at nearly 2,500 Wal-Mart stores starting Sunday Dec. 28 — three days after Christmas.

Wal-Mart will sell the red-hot mobile device for $197 for the 8GB model and $297 for the 16GB model, or $2 off their current prices. There had been rumors that Wal-Mart would sell a $99 iPhone. (See Anatomy of a rumor: Wal-Mart's $99 iPhone.)

Wal-Mart, however, appears to be giving individual store managers some wiggle room on prices. According to the press release, the company's price match policy will allow stores to "match the price of any local competitor's advertised store price on the same item within the same promotional period." Best Buy is offering the iPhone for $190 for the 8GB and $290 for the 16GB models.

Getting the iPhone into Wal-Mart (WMT) is something of a coup for Apple (AAPL). Wal-Mart is the world’s largest retail chain — by far — with more than 7,000 mega-stores around the world and some 2.1 million employees. It finished its last fiscal year with nearly $380 billion in sales — earning it the No. 1 slot in the Fortune 500.

The move represents the fourth major expansion of the iPhone’s retail presence outside Apple’s own 200-plus stores. The phone was sold first at AT&T’s (T) 2,000 retail outlets, then at nearly 1,000 Best Buy (BBY) outlets (see here), and then at the tens of thousands of points of sale (many of them no more than mom-and-pop kiosks) that carry iPhones for Apple’s overseas partners.

Piper Jaffray’s Gene Munster has estimated that Apple could easily sell as many iPhones through Wal-Mart stores in 2009 as it sells through its own Apple Stores — by his calculation, about 4.5 million units. See here.

Look what Santa left under Amazon.com's tree this Christmas morning:

• 7 Acer netbooks
• 7 Apple MacBooks
• 4 Asus netbooks
• 2 Samsung netbooks
• 2 MSI netbooks
• 1 OLPC (One laptop per child) XO laptop
• 1 Lenova Ideapad laptop
• 1 Toshiba Satellite laptop

Can you spot the ringer on Amazon's 2008 Christmas-day list of 25 bestselling notebook computers?

You guessed it. It's those seven premium-priced Apple (AAPL) MacBooks in a shopping cart dominated by stripped-down netbooks, heavily discounted Windows notebooks and a 2-for-1 "$100" laptop.

Except for the MacBooks and one $599 Toshiba, every computer on that list sells for less than $500.

The seven MacBooks, by contrast, sell for three times as much: an average of $1,473.41, after rebates.

It's almost as if Macintosh buyers were insensitive to price, even in a recession. In fact, the best-selling Apple on that list isn't the cheapest; it's a $1,299 unibody MacBook marked down to $1,218.98. The cheapest Apple — a $999 white MacBook, marked down to $929.99 — is No. 22.

Over on Amazon's desktop bestseller list, Apple did even better this Christmas morning: 4 of the top 5 are Macs.

Amazon (AMZN) is the world's largest online retailer, but for definitive holiday sales figures we'll have to wait for the quarterly reports.

There's something in the air this holiday season.

Two weeks before Christmas, Apple loosened its rules and allowed an off-color novelty app called Pull My Finger into the iTunes App Store.

The floodgates of propriety having been breached, there was no holding back. Less than a week later, VentureBeat's MG Siegler reports, Apple approved 14 similar apps in a single day.

Today, by Siegler's count, more than four dozen sound-effects apps not suitable for polite company are stinking up the App Store best seller list, which on Christmas Eve was topped by a program that produces — for immediate amusement or delayed gratification — pungent sounds with names like Jack the Ripper, Howard the Duck and The Sick Dog.

The developer of this noisome program, Internet entrepreneur and author Joel Comm, has atoned for his sins by publicly releasing his sales figures. The chart makes for interesting reading, as it documents the snowball effect (to mix a metaphor) of rising high enough in Apple's Top Paid App list to get the attention of the broad app-buying public.

Here, via MacRumors, is the record of Joel Comm's rise to the top:

12/14 – 841 units – #76 overall

12/15 – 1510 units – #39 overall

12/16 – 1797 units – #22 overall

12/17 – 2836 units – #15 overall

12/18 – 3086 units – #10 overall

12/19 – 3117 units – #9 overall

12/20 – 5497 units, – #4 overall

12/21 – 9760 units, #2 overall

12/22 – 13274 units, #1 overall

Note that sales accelerated once the program made it into the top 5. Note also that at 99 cents a pop, JoelComm is netting more than $10,000 a day. Apple's (AAPL) cut is better than $3,000 a day.

No wonder so many third-party developers can't seem to contain themselves.

But they better move fast. Like all novelty trends, this too will pass.

Steve Jobs in June

Traders may be punishing Apple (AAPL) for Steve Jobs' decision to skip his annual Macworld keynote — rekindling fears about his health in the wake of his 2004 surgery for pancreatic cancer — but analysts who follow the stock closely generally agree that those fears have been overblown.

Kaufman Bros. Shaw Wu is the latest to weigh in on the issue. In a note to clients Tuesday, he acknowledges that Jobs deserves a lot of credit for the "revival and success of Apple." In language that could have been written by Cupertino's PR department, he credits Apple's CEO with "helping revolutionize the world" with a long list of products and innovations, from the Apple II to the Apple Store.

But he argues that Apple doesn't need Steve Jobs to prosper, because his "spirit" has been "institutionalized":

"In our view, AAPL has an uncanny ability to attract and hire Apple 'fanatics' who are entrepreneurial, work hard, and are looking to change the world. The difference with AAPL today is that in addition to being innovative, the company has world-class operations and execution. We believe for a company of AAPL's size, … there are a lot of other people besides Steve Jobs driving success including members of its senior management team down to its 32,000 individual employees."

As proof, Wu ticks off a list of hit products that Apple introduced when Jobs was no longer there to drive innovation: the Macintosh Quadra, QuickTime, PowerMac and PowerBook, and Apple IIgs.

Okaaaay. But none of those products quite rises to the level of the iPod, iTunes, Mac OS X, the iPhone or the App Store.

In any event, Wu is sticking with his $12o price target. "With the pullback in the shares," he writes,  "we find the risk-reward favorable for longer-term investors."

Apple closed at 86.38 Tuesday, up 0.75% for the day.

The momentum has shifted in the battle for smartphone supremacy, according to the results of a ChangeWave survey of 3,803 cell phone owners released Monday.

Measured by market share, Apple's (AAPL) iPhone continues what research director Paul Carton characterizes as "explosive growth." Apple's slice of the consumer smartphone market is now 23%, having grown 6 points since September and more than doubled since the introduction of the iPhone 3G in June.

Research in Motion's (RIMM) market share, meanwhile, has leveled off, while Palm's (PALM) seems to be circling the drain. See the chart below:

The picture going forward, however, looks very different. The ChangeWave survey was conducted between Dec. 9 and Dec. 15 — following the release of a slew of new BlackBerry products that culminated in the Storm, RIM's answer to the touchscreen iPhone.

When the participants who planned to purchase a smartphone over the next three months were asked which kind they hoped to get, 39% said a BlackBerry — up 9 points from September. Meanwhile, the wave of enthusiasm that greeted the iPhone 3G seems to have settled down; today, only 30% plan to buy an Apple smartphone, down 4 points from September and 26 points from June's peak. See below:

"So as we approach the 1st Quarter," Carton writes, "the ball has shifted back into BlackBerry’s court."

But there's an important difference between the iPhone's spike in interest last June and the BlackBerry Storm's December surge.

iPhone users, on the whole, have been extremely satisfied with their new toys. Storm owners are considerably less so.

For comparison purposes, Carton has stacked the Storm's favorability ratings against the original 2G iPhone, using results from a July 2007 survey taken less than a month after the iPhone's initial release.

As the chart below shows, the original iPhone — with all its flaws — drew a "very satisfied" rating (77%) that was more than double the BlackBerry Storm's (33%). More importantly, says Carton, the Storm's "unsatisfied" rating (14%) is three times higher than that of the original iPhone (5%).

Carton also notes that 4% of new Storm buyers report that they've already returned or exchanged their unit or are "very likely" to return it. Another 7% say they are "somewhat likely" to return or exchange.

"A key question for RIM," Carton concludes, "is whether their new BlackBerry products are strong enough to capitalize on the increased consumer interest."

From the Changewave Alliance Web site:

ChangeWave runs a proprietary network of 20,000 highly qualified business, technology, and medical professionals referred to as the ChangeWave Alliance. Alliance members are credentialed experts in leading companies of select industries who spend their everyday lives working on the frontline of technological change. (link)

Money gets tight. Buyers get picky. Price-sensitive consumers — the kind Steve Jobs  and Apple famously "choose not to serve" — start shopping for bargain basement PCs and Taiwanese netbooks. Mac sales plummet.

That's the conventional wisdom. Or at least that's the line Morgan Stanley's Kathryn Huberty pitched in September — when she lowered Apple's (AAPL) rating twice in two weeks — and reiterated last week, when she earned the distinction of being the first and only mainstream Apple analyst to set a 2009 price target below $100 a share. (see here)

“PC unit growth is decelerating," she wrote in September, "and the remaining source of growth is increasingly in the sub-$1000 market where Apple does not play.”

The only trouble with this argument, as Turley Muller of Financial Alchemist points out, is that it flies in the face of Macintosh unit sales for the first 12 months of the recession.

"Huberty claims Apple is at risk because it’s highly exposed to the premium-end, where demand has been falling," Muller writes in an analysis posted Friday. "However, Mac unit sales grew nearly 40% for 2008, and its share in the premium segment almost doubled. Mac sales have been growing roughly 3x the market."

Huberty, whose Mac and iPhone estimates are among the worst in the industry, has become a favorite target for Apple enthusiasts. (See Why Apple shares took a nosedive.)

But Muller may be the first to put his finger on precisely what she's doing wrong.

"I understand why consumers aren’t paying-up for Windows PCs," he writes. "How are HP, Dell, Acer, Toshiba, etc different from each other if they all use Intel chips, run Windows, and have many other of the same components?"

And because the PC industry is so dominated by Windows PCs, the dynamics that drive demand for Microsoft (MSFT) Windows machines are going to determine what demand for the entire industry looks like.

But, as Muller points out,

"Macs and Windows PCs are not similar product offerings. Some analysts, notably Huberty, appear to conflate the two. Macs are Windows machines, for one can install Windows OS on Mac hardware and use it just as if it were a Dell or HP. But, PCs such as Dell and HP can’t run Mac OS."

"Therefore," he writes, "it’s Windows PC demand that is shifting to the lower-end" (emphasis his).

Muller's analysis suggests that Apple was right not to offer sharp Black Friday discounts and to stay out of the business of making $500 computers — the kind of "junk" Steve Jobs says Apple's DNA won't allow it to ship.

Even Muller concedes, however, that no company is immune to the effects of an economic downturn of this magnitude. He argues — as others have before — that once you've tasted the benefits of the Mac OS, it's hard to switch back. But with money tight, buyers may be less likely to explore the high-price offerings in the Apple Store.

"The recession won’t cause cheap Windows PCs to take sales away from Macs," he concludes. "Instead it will slow the rate that Macs take share from PCs."

Click here to read the rest of Muller's piece.

"We are in the early stages of changing roles in Apple's management structure," Piper Jaffray's Gene Munster wrote last week in the wake of Steve Jobs' decision to hand the Macworld keynote over to senior vice president Phil Schiller — a move Munster characterized as "a clear message that a leadership shift is underway."

In this analyst's scenario, Jobs stays on as CEO — "the irreplaceable face of Apple" — but gives an increasing public role to a management team that Munster believes is one of the company's "competitive advantages" but who, in contrast to their world-famous CEO, are virtually unknown.

So who are these guys?

We took a crack at handicapping Apple's (AAPL) back bench last June, when Jobs' emaciated appearance at the World Wide Developers Conference raised the issue of his succession with new urgency. (See Why does Steve Jobs looks so thin?)

Except for the elimination of one of our favorites  (Tony Fadell, who left the team in November) and the disputed appointment of his replacement (Mark Papermaster, whose move from IBM is still tied up in court) — the faces haven't changed.

Rather than repeat the exercise, we simply offer it again, in its original form, below the fold.

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