Apple could unveil iPhone Mini this summer, says analyst

Launched in China, a lower-cost iPhone might triple Apple's potential market share in the country, says a Morgan Stanley analyst.

Is an iPhone Mini due out this year?

An iPhone Mini priced at $330 in China would provide a healthy shot in the arm to Apple's Chinese smartphone sales, according to Morgan Stanley analyst Katy Huberty.

A low-priced iPhone would add another 20 percent to the 10 percent Chinese market share currently addressed by the iPhone 5, the analyst said today. Smartphone prices are starting to stabilize in China, which will open up the market for such a phone. But a deal with China Mobile is also key.

Apple currently sells the iPhone to Chinese consumers through China Unicom and China Telecom. The company has been trying to cook up a deal with China Mobile, the country's largest carrier, but has run into stumbling blocks.

Still, the analyst sees China Mobile as a major contributor to the growth of the iPhone, citing a few different factors. First, Apple would launch a new Mini model. Second, legislation for TD-LTE licenses and number portability could pass later this year or in 2014. And third, China Mobile would be more open to subsidizing higher-end smartphones on a TD-LTE network.

"We believe Apple could launch iPhone Mini at $330 (about Rmb 2,000), in-line with flagship products in China from Lenovo, Huawei, ZTE, and Coolpad," Huberty said in an investors note out today. "Even in a scenario of low 40 percent gross margin and 1/3 iPhone cannibalization rate (flattening legacy iPhone shipment growth), which we view as conservative, the iPhone Mini adds incremental revenue and gross profit dollars."

The $330 would be the unlocked price for the phone in China. Launching over the summer, the iPhone Mini would target other emerging markets beyond China, according to the investors note.

Several analysts have also forecast a less-expensive iPhone on the agenda for sometime this year.Rumors of a low-cost iPhone gained traction last month following stories from The Wall Street Journal and Bloomberg claiming such a device is on the horizon.

Strategy Analytics analyst Neil Mawston also sees an iPhone Mini in Apple's future but doesn't think it will appear until 2014, at the earliest.

iOS 6.1.2 fixes Exchange battery-drain bug

A small update promises to fix a bug affecting battery-life performance on some iOS devices due to a bug with Microsoft's Exchange technology.

Apple has put out yet another small software update to iOS 6 that addresses a bug that could cut device battery life.

This morning Apple put out iOS 6.1.2, a supplemental update that promises to fix "an Exchange calendar bug that could result in increased network activity and reduced battery life."

The update was previously rumored to arrive sometime this week by Apple news site iFun.

No word yet on if the update also closes a security exploit used by jailbreaking solution Evasi0n, which has become the fastest adopted jailbreaking tool ever.

PlayStation 4 should go all-in on cloud-streaming games

The technology for live-streaming gameplay is still imperfect, but the era of physical media is ending.

Based on the steady stream of rumors about Sony's upcoming next-gen living-room console, it's widely expected that gamers will be spending at least part of their time playing games streamed directly over the Internet.

According to the Wall Street Journal and others, Sony's acquisition of streaming-game provider Gaikai in 2012 set the stage for streaming-game content, and the new Sony console, whatever it's called, will offer both streamed games and games played via traditional optical disc, purportedly older catalog titles for the former, and newer games via the latter.

A move to streaming games is a far-thinking idea, and one that would reduce the need for large amounts of local storage for fully downloaded games, as well as the need to manufacture, transport, and store physical game discs -- with games joining music and movies as media types moving away from being distributed through retail stores on disc.

The idea of streaming game content is one we've been playing with for some time. The best-known player in this space is OnLive, a PC-based service that runs game software on a remote server farm and then streams the action, in real time, to players interacting via a controller or mouse/keyboard combo. Since that service launched in 2010, we've been reasonably impressed with it, although it works better for some games than others (for example, casual or third-person action games work better than first-person games, which are more sensitive to even the slightest lag).

A visual history of the Sony PlayStation (pictures)

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The biggest pushback (besides the fact that OnLive has struggled to succeed) is that streaming games are far too reliant on your broadband Internet connection, which can be flaky, slow, or sometimes out altogether. This, coupled with the lag already built into live cloud game delivery, is enough to potentially turn off consumers.

Legitimate concerns, to be sure, and I have no illusion that today's A-list games could all be converted to cloud streaming right now and deliver the same high level of visual quality. But, the discussion about Sony and Gaikai reminds me of a conversation I had at the 2011 E3 video game trade show with John Carmack, a PC gaming legend and the lead programmer behind classics such as Doom and Quake. I asked him about streaming games in general, and OnLive specifically, and this is what he said:

I've played the On Live stuff and a lot of people have just enough technical knowledge to count it out for the wrong reasons. When you talk about having a 50ms ping, that does not invalidate the process. One of the points that I make is that if you take a lot of the console games out there, and you're playing with your wireless controller, going through your post-process TV, the games themselves often have multiple frames of latency.

You get an event, you pipeline an animation, and it goes to the render thread and the GPU. A lot of games have over 100ms of latency in them right now. Now it's true that adding latency is always bad, and with OnLive, you're adding a compression step and two transmit steps.

But the laws of physics do not guarantee this to be a bad idea. I don't necessarily think any of the current players will live to see the pot of gold at the end of this rainbow, but I'd say it's almost a foregone conclusion that five or ten years from now, that's going to be a significant marketplace.

From a raw technical standpoint, it has too many positives going for it. There are negatives, but a lot of times, people will accept a big negative for a much bigger win. And the win for convenience and managing your library is huge. And the win for publishers and developers -- zero piracy, instant patching, all that data gathering -- are strong advantages. I don't think it's the big thing next year, but I think it's coming.

Even if the next-gen PlayStation kicks off with only a nod to streaming games, the era of the physical disc is still winding down. The current Xbox 360, PlayStation 3, and Wii U all offer full game downloads (even if many of these consoles have limited onboard storage for full games), and a whole generation of media consumers already thinks of video and music as streaming products from Netflix, Spotify, and others, as opposed to something you get on a plastic disc.

The game publishers themselves would like nothing more than to kill disc-based gaming. Think of the fixed hard costs associated with manufacturing an optical disc, putting it in a box, loading it in a gas-guzzling truck, driving it to a store, placing it on a shelf, and waiting for a consumer to march in and buy it (to say nothing of the resale of used games, something game publishers hate). Many of these costs can be reduced in the future by digital distribution, both download and streaming -- not that gamers can expect to see any of the savings passed along to them.

Whatever new hardware is being announced by Sony later this week will surely include an optical drive, as will the inevitable Microsoft Xbox upgrade expected later this year. But if we take a look at the current state of laptops, there's something similar going on. Many popular models, from the MacBook Air to almost every ultrabook, omit the once-ubiquitous DVD drive. Taken to its logical conclusion, this may be the last generation of living-room consoles that include support for physical game discs.

Sony's PlayStation event will be held in New York on February 20, starting at 3 p.m. PT/6 p.m. ET.

HTC One looks great. But will anyone care?

analysis CNET looks at the fundamental problem plaguing the company: the lack of marketing muscle.

The HTC One.

As sexy as the HTC One is, it is doomed to failure if the company doesn't quickly shake things up.

HTC's design and software teams did their jobs in creating an attractive, unique, and premium-feeling phone, taking Apple's love for metal construction and taking it to the next logical progression.

But guess what? HTC's One family of phones met with similar critical praise last year, yet failed to reverse its flagging revenue and profits. While HTC has had a history of showing off buzz-worthy products, dating back to the first Android smartphone in the G1 and the first 4G phone in the Evo 4G, the company has more recently shown a troubling trend: the tendency to get ignored in the marketplace.

It's the reality of the smartphone business and a key dilemma for a company like HTC, which lacks the marketing firepower that larger rivals Apple and Samsung enjoy. This year will be a critical one for HTC, which needs to prove that it can still compete in the increasingly duopolistic market. History has already shown that a sexy, new product just enough anymore.

"HTC is going up against two of the biggest spenders in the world with intensely loyal followings," said Avi Greengart, an analyst at Current Analysis.

So HTC needs to do a few things it hasn't been comfortable doing in the past. For one, it'll need to get more proactive with its own marketing. It's something the company has always half-heartedly done in the past, but it will need to work harder to develop both the One brand and the HTC name. Apple and Samsung are household names, and while HTC was seemingly on its way to becoming one just a few years ago, it lost its way.

"I think they need to invest a tremendous amount in marketing," Greengart said.

The company will also need to break from its traditional reliance on the carriers for support, and stop kowtowing to all of their needs. That's a particularly difficult one because that had been HTC's tentpole strategy for so long. But as Apple and Samsung have moved beyond carrier exclusives and customizing phones, HTC must do the same.

HTC appears to be on the right track. The company plans to roughly double its global marketing budget from a year ago, as it embarks on a new campaign, according to Erin McGee, vice president of marketing for HTC's North American business. The company plans to be the second or third largest advertiser in the industry during the launch period.

But in acknowledging the relative limits of HTC's marketing resources when stacked against its rivals, McGee said the company would target tech-savvy adults aged 18 to 34 through digital advertising and social media. While the company wouldn't talk about the details of the campaign, McGee said that in the U.S., HTC would run its promotions alongside music events it plans to organize through its Beats partnership.

HTC executives also conceded that they had relied too much on the carriers in the past, and vowed to take more of a direct role in the purchasing experiencing. McGee said a lot of the advertising would focus on generating awareness and demand before the consumer went into the store, so there would be less reliance on a carrier salesperson.

"This is by far our best device, and it's our job to make sure people know about it," she said, noting that the campaign would be much more focused than before.

HTC plans to get some support from Best Buy, which it mentioned as being another distribution outlet beyond AT&T, Sprint Nextel, and T-Mobile USA.

Best Buy plans to jointly run some national commercials featuring the HTC One, according to Alistair Jones, head of marketing for the big-box retail chain's connectivity business group. He added this was the most resources that Best Buy has put behind HTC in at least 18 months.

Likewise, the HTC One will be featured prominently in Best Buy's stores, occupying one of the coveted "end caps" of the mobile area, where the latest and greatest are displayed.

Jones conceded that he was really worried about HTC's products over the past few years, but said he was excited about the One.

Hands-on with the sleek, gorgeous HTC One (pictures)

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"This is a real serious contender," he said.

All of HTC's attempts may be for naught. While the company was smart to get its phone out ahead of the noisy Mobile World Congress conference next week, it will still need to brace for the looming announcement of Samsung's Galaxy S4, which is slated to be unveiled in less than a month, likely a few days before the One hits stores.

But HTC is off to a better start than last year, having more carriers than ever committing to a single smartphone. It also features a design and user interface that some believe will set it apart from the Android pack.

But HTC's bet on a single flagship phone means a lot is riding on its success. If the One doesn't turn out to be the one, the company isn't going to have a lot of options.