The Verizon Wireless website shows that the Droid X is sold out until July 27 when handsets ordered now will be shipped.

The news represents another example of the lack of product planning by large smartphone companies. Apple had similar problems with the iPhone 4 and iPad.The critical difference between the Droid X and iPhone is that the Droid is not considered one of the top-tier products in the industry, a position enjoyed by Apple and Research In Motion (NASDAQ: RIMM), which makes the Blackberry. Motorola, which was almost destroyed when its RAZR handset sales lost momentum, has a small window of time to gain market share in a competitive field that includes Apple, RIMM, Samsung, LG, and smartphone laggard Nokia (NYSE: NOK).

Motorola’s shares dropped from almost $26 at the height of the success of the RAZR in 2006 to just above $3 in March 2009.  Shares have recovered to $7.50, but without an extremely successful set of Droid launches, Motorola will slip to the back of the smartphone track again.

Douglas A. McIntyre

Neither Apple nor AT&T has commented on the terms of the deal between the two companies, which is widely believed to continue through 2012.

The original complaint was filed in late 2007, claiming anti-competitive practices the suit sought to stop Apple from selling phones that can only be used on AT&T’s network and to prohibit the iPhone maker from issuing software updates that blocked ‘unlocked’ iPhones from functioning at all. The suit was amended in June 2008 to include the charge that the five-year Apple-AT&T contract locked iPhone buyers into using AT&T’s voice and data services beyond their two-year contracts.

The judge’s ruling allows those parts of the suit that address violations of anti-trust law may go ahead as a class action. The judge dismissed claims arising from updated software that stopped some iPhones from working.

On its face, the suit appears to have merit. After all, buying a two-year contract only to find out later that you have, in reality, bought a five-year contract is likely to be a nasty surprise. On top of that, AT&T has now changed its unlimited data contract to require customers to pay by the amount of data they actually transfer.

Still, it seems unlikely that neither Apple’s nor AT&T’s lawyers didn’t think of this. The iPhone purchase agreement and software license undoubtedly contain language that ‘reveals’ the nature of the link between Apple and AT&T. Similarly, the contract a customer signed for network services surely contains language that AT&T’s lawyers believe allows the phone company to charge whatever it wants.

This issue is far from played out. As with most other anti-competitive lawsuits, this one virtually cries out for a settlement that will net the plaintiffs’ attorneys a tidy sum and the plaintiffs themselves with a free app and a free month’s service.

Paul Ausick

Reuters:   Large shareholders of BP plc (NYSE: BP) were against the oil company raising a large sum of capital by issuing new shares.

Reuters:   Oil from the spill leaked into Lake Pontchartrain.

Reuters:   The EU said it would share bank data with the US to detect terrorism.

Reuters:   Crude continued a four-week drop.Reuters:   Fujitsu is letting software developers run some of its products free for testing purposes.

Reuters:   Microsoft’s (NASDAQ: MSFT) Bing and Google Inc.’s (NASDAQ: GOOG) search products will allow for music downloads with Google’s set up to work with Android.

WSJ: Agricultural Bank of China’s IPO will gauge global demand for large Chinese companies.

WSJ:   Many major stock markets are below 2007 highs.

WSJ:   Vacant offices rose in Q2.

WSJ:   Brian T. Moynihan’s choice as CEO of Bank of America (NYSE: BAC) was nearly blocked by one board member.

WSJ:   Toyota Motor (NYSE: TM) is changing how its tests its cars.

WSJ:   News Corp.’s (NYSE: NWS) MySpace is allowing search engines including Yahoo! (NASDAQ: YHOO), Bing, And Google Inc. to bid to sell ads on the service. The amount MySpace gets from the deal will be less that its last deal with Google.

WSJ:   Eli Lilly & Co (NYSE: LLY) will lose patents on eight drugs this year.

WSJ:   Dell Inc. (NASDAQ: DELL) is working to create a large business to serve the health care industry.

WSJ:   China attacked a US plan to prevent one of its steel companies from investing in US counterparts.

WSJ:   SK Telecom may offer the Apple Inc. (NASDAQ: AAPL) iPhone and iPad.

WSJ:   Libya suggested it should by a stake in BP.

WSJ:   Europe’s leaders are losing popularity because of new austerity plans.

WSJ:   Growth in China’s car market slowed.

WSJ:   CEOs at companies with stock price increases are hanging on to their jobs.

WSJ:   China’s companies are increasing the rate at which they buy companies in Japan.

WSJ:   IPOs which are also for sale to private investors get higher prices at market.

WSJ:   The improvement in credit card delinquencies is because the long-term unemployed are no longer in the system

NYT:   Rising labor costs cut hurt margins on the iPhone and other electronics.

FT:   China may begin to invest in US banks.

FT:   BP ruled out issuing new shares.

FT:   The global car sector’s recovery is over for now.

FT:   Investors are worried about regional defaults in the US.

Bloomberg:   The head economist at TD Bank says the European financial situation will worsen

Bloomberg:   Global nations are reducing deficits by the most since 1970 which will hurt GDP growth.

Bloomberg:   Apple may use app downloads to sell ads.

Bloomberg:   GM sales in Latin America could grow 68% by 2014.

Douglas A. McIntyre

Research firm Screen Digest says that Apple should move ahead of Time Warner Cable (NYSE: TMC),  and will be second only to Comcast (NASDAQ: CMCSA) by the end of this year.

The FT reports that iTunes will have overtaken the video-on-demand service operated by Comcast, the largest provider, by 2014.The news may be bad for the cable companies, but it is worse for companies like Netflix (NASDAQ: NFLX) and Walmart (NYSE: WMT) which have much smaller shares of the US VOD market. They are using their brands and large customer networks to increase their footholds. The same is true of AT&T (NYSE: T) and Verizon (NYSE: VZ), which have set up fiber-to-the home products FiOS and U-verse. Verizon has spent over $20 billion one the infrastructure for its initiative.

The news also shows that growing power of the Apple hardware/software/content ecosystem that has continued to grow with the launch of the iPad and iPhone 4. Apple has effectively built a network for content using its hundreds of millions of devices . The size of that network makes it impossible for content companies to gain access to many consumers.

Apple is, once again, the winner in a market that a decade ago no one would have believed that it would be in at all

Douglas A. McIntyre

Disney announced yesterday that it will buy iPhone game supplier firm Tapulus which has 35 million users. Its most widely used game, “Tap Tap Revenge”, has been played more that 1 billion times.According to Reuters, Tapulous is profitable and has about $1 million in revenue per month.

Disney said that Tapulous strengthens the company’s portfolio of games and entertainment offerings in the fast-growing mobile arena. Disney already has a large and quickly growing business in mobile interactive media.

Disney and old-line media companies are in the same race. They must use their brands and content to push into the world of handheld devices that have become a new platform for entertainment in addition to the TV and PC. Firms including Tapulous, Clickgamer, and Gameloft, none of which are part of major media companies, are dominating game sales made from the Apple Apps store.

Over three billion downloads have been made from the App store, many of them entertainment and game applications. More than a third of the top 25 downloads for the store are  games.

The acquisition of these game companies by larger entertainment firms will likely quicken as the larger firms buy what they cannot quickly and successfully build.

Douglas A. McIntyre

Reuters:   Automakers had a setback in June, an indication that the industry is facing slow growth.

Reuters:   The House passed a bill to extend jobless benefits, but the Senate may reject it.

Reuters:   Walt Disney (NYSE: DIS) bought Apple Inc. (NASDAQ: AAPL) iPhone game maker Tabulous.Reuters:   Google Inc. (NASDAQ: GOOG) bought online travel software company ITA Software for $700 million.

Reuters:   Dell Inc. (NASDAQ: DELL) bought Scalent.

Reuters:   Ed Whitacre of GM said 2010 would be a good year for the company’s IPO

WSJ:   Habitat for Humanity became one of the ten largest homebuilders in the US.

WSJ:   France and Germany are at odds over how Europe should be rebuilt

WSJ:   Mortgage bonds backed by the US government have become more attractive.

WSJ:   There is confusion about how the new financial reform bill will treat derivatives.

WSJ:   Deepwater drilling off Cuba threatens Florida beaches.

WSJ:   Healthcare companies are facing huge changes in how they do business.

WSJ:   Goldman Sachs Group (NYSE: GS) is defending its actions on trades with American International Group (NYSE: AIG) during the financial crisis.

WSJ:   Apple Inc (NASDAQ: AAPL) is still allowing Google ads on its iPhone and iPad.

WSJ:   GE (NYSE: GE) said that CEO Jeff Immelt’s attacks on China and President Obama do not reflect the firm’s views.

WSJ:   Blockbuster will be delisted from the NYSE.

WSJ:   As factory activity rebounds many workers do not have the necessary skills.

FT:   Fears are growing over slow economic demand.

FT:   Apple is pushing its on-demand movies business segment of its iTunes store.

Bloomberg:   Portable missile defend plans may cost $43 billion.

Bloomberg:   Carl Icahn says he owns 38% of Lions Gate.

Douglas A. McIntyre

Reuters:   Work on the BP plc (NYSE: B) oil spill will be delayed because of Hurricane Alex.

Reuters:   China’s economic growth slowed.

Reuters:   Oil prices fell for the fourth day.

Reuters:   The euro hit record lows against the Swiss franc.Reuters:   Microsoft Corporation killed its Kin phone.

Reuters:   Amazon.com (NASDAQ: AMZN) launched a less expensive Kindle.

Reuters:   Google Inc.’s (NASDAQ :GOOG) operating license in China is under review.

Reuters:   Amazon will buy online store Woot.

WSJ:   China’s banks are trying to find a source of earnings beyond lending in the People’s Republic.

WSJ:   GlaxoSmithKline (NYSE: GSK) has set up a number of small biotech units.

WSJ:   Democrats on a panel set up by Obama said spending cuts would have to outweigh taxes to drop the deficit.

WSJ:   Toyota (NYSE: TM) found engine problems in 270,000 cars

WSJ:   Wellpoint cut back rate increases.

WSJ:   Federal authorities began a crackdown on film piracy.

WSJ:   Robert Benmosche, CEO of American International Group, threatened to resign again.

WSJ:   Yahoo! Inc. (NASDAQ:YHOO) said it would buy back $3 billion in shares.

WSJ:   Moody’s may downgrade Spain’s Aaa rating.

WSJ:   The financial reform bill would cut FDIC charges for some small banks.

WSJ:   JAL will ask for more funds to operate in bankruptcy.

WSJ:   GM is expanding the launch of its Chevrolet Volt battery-powered car.

WSJ:   The WTO condemned subsidies offered to Airbus by European nations.

WSJ:   Warner Music (NYSE: WMG) and MTV will team up to market songs.

WSJ:   The SEC said that pension funds may not seek political contributions from politicians that oversee them

NYT:   Documents show Goldman Sachs Group put pressure on American International Group to make insurance payments.

NYT:   The TARP could be phased out early.

NYT:   During Q2 the DJIA was down 10% and the S&P 500 by 12%.

FT:   Manufacturing growth slowed in Asia.

FT:   The EU agreed to harsh guidelines for banker bonuses.

FT:   BP plc is trying to raise more money.

Bloomberg: Boeing (NSYE: BA) may get a lift for its Air Force tanker bid from the WTO censure of Airbus.

Bloomberg:   Apple Inc. (NASDAQ: AAPL) was sued by consumers over iPhone reception charges.

Bloomberg:   Google’s Chinese plans may push more advertisers to Baidu (NASDAQ: BIDU)

Douglas A. McIntyre

Microsoft told CNET that “We have made the decision to focus exclusively on Windows Phone 7 and we will not ship KIN in Europe this fall as planned,” the company said. “Additionally, we are integrating our KIN team with the Windows Phone 7 team, incorporating valuable ideas and technologies from KIN into future Windows Phone releases. We will continue to work with Verizon in the U.S. to sell current KIN phones.”

It is odd that Microsoft launched the Kin. The marketplace for smartphones is already crowded with successful products such as Research In Motion’s (NASDAQ: RIMM) BlackBerry, the Apple Inc. (NASDAQ: AAPL) iPhone, and many handsets based on the Google Inc. (NASDAQ: GOOG) Android operating system.

The Kin never had a chance.

Douglas A. McIntyre

Apple may top 2 million iPhone sales by the end of the fiscal quarter on June 26, with half of that coming today,  Andy Hargreaves, an analyst at Pacific Crest Securities, told Bloomberg.Already, 600,000 iPhones have been ordered online from Apple and AT&T. Many customers who tried to order the smartphone were turned away, so the pent-up demand is significant.

It is worth remembering that one million iPhone 3 models were sold in less than a week after the product’s launch. The new iPhone offers new advances such as longer battery life, a high def screen, a video camera and an antenna that wraps all the way around the handset’s outer edge.

The iPhone is also priced to sell quickly. The 16GB version is only $199 and the 32GB version $299. That is competitive with other smartphones that AT&T (NYSE: T) sells including some versions of the BlackBerry.

Another important reason that iPhone 4 sales could hit one million on the first day is that the phone will be available at Walmart (NYSE: WMT) and at Best Buy (NYSE: BBY), which will substantially increase Apple’s retail footprint beyond its retail stores and AT&T’s.

People are already standing in lines outside Apple stores around the world. The 600,000 pre-ordered phones are about to be delivered.

Another blockbuster device is about to be launched.

Douglas A. McIntyre

An Apple product launch which creates simply modest sales would take the firm’s stock down 10%. Jobs has set the bar that high.

It is improbable that Apple could have two new product introductions in a month that would do better than even Wall St. might imagine. The new iPad sold 2 million units within six weeks, despite the bumbling of partner AT&T Inc (NYSE: T). The phone company managed to allow hackers to get 114,000 e-mails of iPad users. Its 3G network has operated so poorly that frustrated customers have turned to Verizon Wireless and Android-powered phones.

Jobs bested the iPad launch by selling 600,000 iPhone 4 units before the product is available on June 24. The company said:

Yesterday Apple and its carrier partners took pre-orders for more than 600,000 of Apple’s new iPhone 4. It was the largest number of pre-orders Apple has ever taken in a single day and was far higher than we anticipated, resulting in many order and approval system malfunctions. Many customers were turned away or abandoned the process in frustration. We apologize to everyone who encountered difficulties, and hope that they will try again or visit an Apple or carrier store once the iPhone 4 is in stock.

If Apple has an operational flaw, it is that it rarely builds enough of a new product to meet demand. Cynics would claim that this is by design–absence makes the heart grow fonder.

Ballmer, Schmidt, Dell, and dozens of other large cap CEOs can only envy what Jobs has done, and wait for his first failure–which, against all odds, may never come.

Douglas A. McIntyre