Apple Investors Focus on New IPods Rather Than Return of Jobs

By Connie Guglielmo and Joseph Galante

Sept. 10 (Bloomberg) -- Apple Inc. investors focused on the shortcomings of a new iPod lineup rather than on the reappearance of Chief Executive Officer Steve Jobs at a product event in San Francisco yesterday, analysts said.

Apple fell as much as 1.9 percent yesterday in Nasdaq Stock Market trading after Jobs introduced an iPod Nano with a video camera and cut prices on other models. Some investors had expected more, such as an iPod Touch with a camera, said Brian Marshall, an analyst at Broadpoint AmTech Inc.

“That was one potential negative to offset the potential positive surprise that we saw with Steve’s appearance,” said Marshall, who is based in San Francisco. Investors are less focused on Jobs than they used to be, he said. “The investment community is very comfortable with Apple’s existing management team in addition to Steve.”

Jobs, 54, spoke publicly about his liver transplant for the first time. He said he now has the liver of a person in their mid-20s who died in a car crash and had donated their organs.

“I wouldn’t be here without such generosity,” Jobs said. “I’m vertical. I am back at Apple and loving every minute of it.”

Jobs, who went on a 5 1/2-month medical leave in January, last appeared at a company event in October, when he introduced Macintosh notebooks.

Dressed in his trademark blue jeans and black turtleneck, Jobs appeared to a standing ovation and spoke for about a half- hour. He mingled with the crowd after his presentation.

Apple, based in Cupertino, California, fell $1.79 to $171.14 yesterday in Nasdaq Stock Market trading. The stock has more than doubled this year.

‘Very Ably’

Jobs relied on a team of executives, including product marketing chief Phil Schiller, to emcee company events while he was on leave. Chief Operating Officer Tim Cook handled Apple’s day-to-day management. The executives ran the company “very ably” in his absence, Jobs said. He returned to Apple in June, staying out of the spotlight until yesterday.

“The big news is Steve Jobs looks relatively well,” said Ryan Jacob, a fund manager at Jacob Asset Management in Los Angeles. He manages about $40 million, and Apple is one of the fund’s largest holdings. “Obviously he’s been back at work, but I think it’s encouraging that he’s well enough to make a full presentation.”

IPhone Sales

Apple’s iPhone sales have climbed to 30 million, Jobs said. There are now more than 75,000 applications available at the company’s App Store, and users have downloaded more than 1.8 billion of the programs, he said. An iPhone version of Electronic Arts Inc.’s John Madden football game went on sale yesterday, the company said.

Cook was in the audience at the event, along with Apple retail chief Ron Johnson and Google Inc. CEO Eric Schmidt.

In addition to a video camera, the new iPod Nano has an FM radio and pedometer. The 8-gigabyte device costs $149, while a 16-gigabyte model goes for $179. It will compete against products such as Cisco Systems Inc.’s Flip camera.

Cisco, the largest maker of networking equipment, said it welcomes new competition and that increased use of video will help sales of its routers and switches.

“We are flattered that Apple and others perceive video is an important market,” said Jonathan Kaplan, general manager of the consumer product unit at San Jose, California-based Cisco.

Apple cut the price of the 8-gigabyte version of the iPod Touch to $199, an effort to stoke demand in the run-up to the holiday shopping season. A 32-gigabyte model will cost $299, while a 64-gigabyte model will be $399.

Apple also unveiled a 160-gigabyte version of its iPod Classic for $249 and cut the price of the 2-gigabyte Shuffle to $59.

ITunes Store

The company introduced a new version of iTunes, improving the way the software syncs with iPhones and iPods by letting users organize applications more easily. The company will also sell ring tones for $1.29 each. A feature called iTunes LP will add videos and liner notes to music, an enticement to buy songs in album form.

Apple has sold more than 220 million iPods, Schiller said at the event. The company has about 74 percent of the market in the U.S., he said.

Jobs, who co-founded Apple with Steve Wozniak in 1976, was ousted by the board in 1985. He rejoined the company 12 years later when it purchased Next Computer Inc., the business he founded after leaving Apple.

“It is a pleasant surprise for him to be hosting the event,” said Shaw Wu, an analyst at Kaufman Bros. in San Francisco. “We believe both customers and investors are grateful.”

To contact the reporters on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net; Joseph Galante in San Francisco at jgalante3@bloomberg.net