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.

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)

Apple (AAPL) may have dropped nearly 7% on the news that Steve Jobs is blowing off Macworld, but according to Bullish Cross‘ Andy Zaky, investors should be happy he did.

In an unpublished analysis of the company’s last four major press events — starting with Macworld 2008 and ending with October’s Spotlight on Notebooks — Zaky documents a pattern that’s become increasingly self-destructive.

“All of Apple’s media events,” he writes, “are met with crazy rumor mongering, irrationally exuberant speculation and undue rants about Steve Jobs’ health.”

The result is that almost every Apple extravaganza since Macworld 2007 — no matter what news comes out of it — has triggered a massive sell-off of Apple stock.

Take, for example, the effect on the share price of the last four press events:

The nearly 11% drop last June is probably the most shocking, given the rave reviews, the huge lines and the sales the iPhone 3G has continued to rack up.

The release of the new iPhone — like nearly every Apple event this year — was billed by traders as “buy on the rumor, sell on the news.” Instead, says Zaky, they’ve been selling on the rumor AND on the news.

If that’s how Wall Street is going to react to these things, why bother having them?

Not that Zaky is suggesting that Wall Street figured into Steve Jobs’ Macworld decision, one way or the other. “Personally,” he says, “I think Apple cares less about its shareholders than almost any other company out there.”

What he is suggesting is that the event-marketing strategies Steve Jobs uses to draw attention to his products may work for him, but they aren’t working any more for his investors.

TBR’s Ezra Gottheil issued a remarkably detailed description Tuesday afternoon of the “inexpensive mobile device” he believes Apple (AAPL) will announce at MacWorld on Jan. 6 for delivery mid-year.

“It will come in two sizes,” he writes, “one much like the MacBook Air and one similar to a netbook, with the smaller unit priced at $599.”

Almost as if he had seen the specs, Gottheil ticks off the benefits the new device offers the user:

• It will provide web access, e-mail, media playing, and essential applications at a single low price.
• Computer beginners will be able to start using it quickly and easily. Users will have fewer questions, problems, conflicts and security breaches, as the device will be less intimidating than both PCs and Macs.
• As with the iPhone, iTunes and the App Store will offer an array of content, applications and games.
• As with the iPhone, the software can be rebuilt from the App Store. With an optional online backup service, the entire device can be restored. Under a more expensive support plan, Apple will be able to send the customer a replacement functional device if theirs is stolen or physically damaged.

There are also several benefits for Apple:

• It will open up new markets, including emerging economies, price-sensitive consumers, and those for whom all PCs, including Macs, are too complicated.
• Because all applications are delivered through the iTunes App Store, Apple will maintain sustained relationships with users, making it easier to upsell and cross-sell to existing customers. TBR believes Apple will make online services like MobileMe increasingly attractive to all customers, but purchasers of the new Apple device may find its simplicity especially appealing.
• The device will provide yet another entry point into the Apple digital hub family of products.
• Apple will be able to sell the captive peripherals that work with the device.

Moreover, the thing will give Apple entree into the most price-sensitive markets — an important consideration in the middle of a recession — with, as Gottheil sees it, only minimal risk of cannibalization of MacBook sales.

Of course, as John Paczkowski of AllThingsD reminds us, Steve Jobs pooh- poohed the whole netbook idea last October, and famously added:

“We don’t know how to make a $500 computer that’s not a piece of junk, and our DNA will not let us ship that.” (link)

But Gottheil’s device, conveniently enough, starts at $599, giving Jobs just enough leeway not to have to eat his words.

We were intrigued, so we called Gottheil and asked for the source of his information.

“I made it up,” he said, with remarkable candor.

“I have no spies or internal information. It’s triangulated. It’s logical. It fits with what they’re trying to do. And it solves a lot of problems for them.”

And it gives us something to talk about, three weeks before the Macworld keynote.

How does Apple plan to sell large quantities of iPods this holiday season in a depressed market already saturated with MP3 players?

By repositioning them as high-end game machines.

That’s the message coming through loud and clear from Cupertino, not only in those ubiquitous TV ads proclaiming the iPod touch “the funnest iPod ever,” but in a series of public pronouncements from executives usually content to let Apple’s products speak for themselves.

Apple marketing guru Greg Joswiak last month called the touch “the future of gameplay” (link). Tech evangelist John Geleynse on Friday proclaimed it a “game console” in the same league as Sony’s and Nintendo’s (link).

Even CEO Steve Jobs entered the fray, telling the Wall Street Journal last month that the iPhone and the iPod touch “may emerge as really viable devices in the mobile games market this holiday season” (link).

It’s an interesting switch in marketing strategy, made just before what should have been — in normal economic times — the biggest selling season for both digital audio players and hand-held game machines. Now it’s a scramble on both fronts, and the players are a little desperate. Even, maybe, Apple.

When it first came out, Apple billed the iPod touch as an iPhone without the phone — a portable media player and a mobile Wi-Fi Internet device without the monthly bill from AT&T.  But it also came without AT&T’s (T) subsidy, which pushed the touch’s average retail price into the mid $300s and kept its quarterly sales — after an initial burst last December — in the 2.0 to 2.3 million range.

With a price cut in September and, equally important, a wave of thousands of games written for the iPhone yet playable on the iPod touch, Apple sensed a new opportunity.

But going up against Nintendo and Sony while maintaining the fat margins to which it has become accustomed required that the company perform a neat trick: it had to flip the usual video console business model on its head.

Nintendo (NTO.F) and Sony (SNE) use the Gillette razor/razor blade strategy: they sell their hardware as cheaply as possible — often at a loss — and make their profit on the games, which typically sell for anywhere from $19.99 to $39.99.

Apple (AAPL) makes nice profits on the hardware and leaves a few crumbs on the table for third party software developers, whose games typically sell for $0.99 to $9.99, if not for $0.00. (See Trouble in the (99-cent) App Store.)

Here’s how the three machines — and their top-selling games — stack up:

Analysts are split on whether the strategy will work. Kaufman Bros.’s Shaw Wu is bullish; he believes Apple will sell 21 million iPods this quarter — almost as many as it sold last year. The normally bullish Gene Munster at Piper Jaffray is bearish; he doesn’t expect Apple to sell more than 18.6 million units, down 16% from 2007. (See iPod holiday sales: Hot or Cold?)

Hand-held gaming is a brutal business and Apple is not the first company to try to break in. The field is littered with the carcasses of portable game systems marketed, priced down and ultimately abandoned. For a gallery of machines past and present see below the fold. (Source: here.)

Apple’s iPhone is the star in a series of charts published Tuesday by Needham & Co. analyst Charles Wolf.

The first is a quarter-by-quarter snapshot of the worldwide smartphone market that shows a sharp uptick in Apple’s (AAPL) share set against the downward drift of its major competitors — Nokia’s (NOK) Symbian, RIM’s (RIMM) BlackBerry and Microsoft’s (MSFT) Windows Mobile.

The second chart shows the same data without Symbian — which lets you zero in on the competition between the iPhone, BlackBerry and Windows Mobile. In this chart, the rise in Apple’s market share after the July release of the iPhone 3G looks positively meteoric.

The third chart shows the battle for the U.S. smartphone market, which is shaping up as a two-way race with the iPhone closing in on BlackBerry and Palm (PALM) and Microsoft Windows falling ever further behind. Note that Apple more than tripled its market share in the third quarter to grab 30% of the domestic smartphone business, while RIM lost considerable momentum and most of its lead. According to Wolf, the seven million iPhones Apple shipped in the September quarter accounted for all the growth in smartphone shipments that quarter — and then some. See AppleInsider here.

The British Advertising Standards Authority is nothing if not literal-minded — which may be why Apple ads that hew closely to Steve Jobs’ standards of truth in advertising keep running into trouble in the United Kingdom.

Last summer the Authority banned an Apple TV ad with a voiceover that said “all the parts of the Internet are on the iPhone.” Objection: there are many parts of the Internet requiring Flash and Java that you can’t get to with an iPhone. (see here)

On Wednesday, the ASA banned a second iPhone ad.

According to the BBC, 17 viewers complained that this particular “advert” showed an iPhone 3G downloading files and Web pages “really fast” — in less than a second — something you can apparently do in an editing room but not with an iPhone in the wild.

Judge for yourself. Although the ad can no longer be aired in Britain, we can show it here, via paidcontent.org:

You can read the ASA’s ruling, including Apple’s (AAPL) three paragraph defense, here.

Now that Apple (AAPL) has shipped its 10 millionth iPhone this year — outselling Research in Motion’s (RIMM) BlackBerry for the quarter, according to Steve Jobs, and climbing to the No. 3 spot in cell phone revenues worldwide, after Nokia (NOK) and Samsung — this might be a good time to revisit MacDailyNews‘ collection the dumbest things people have said about the device over the past two years.

A sampling:

“Apple is slated to come out with a new phone… And it will largely fail.”
Michael Kanellos, CNET, December 07, 2006

“[Apple's iPhone] is the most expensive phone in the world and it doesn’t appeal to business customers because it doesn’t have a keyboard which makes it not a very good email machine… So, I, I kinda look at that and I say, well, I like our strategy. I like it a lot.”
Steve Ballmer, Microsoft CEO, January 17, 2007

“Apple should pull the plug on the iPhone… What Apple risks here is its reputation as a hot company that can do no wrong. If it’s smart it will call the iPhone a ‘reference design’ and pass it to some suckers to build with someone else’s marketing budget. Then it can wash its hands of any marketplace failures… Otherwise I’d advise people to cover their eyes. You are not going to like what you’ll see.”
John C. Dvorak, Bloated Gas Bag, March 28, 2007

“The iPhone is going to be nothing more than a temporary novelty that will eventually wear off.”
Gundeep Hora, CoolTechZone Editor-in-Chief, April 02, 2007

“I’m more convinced than ever that, after an initial frenzy of publicity and sales to early adopters, iPhone sales will be unspectacular… iPhone may well become Apple’s next Newton.”
David Haskin, Computerworld, February 26, 2007

“There’s no chance that the iPhone is going to get any significant market share. No chance. It’s a $500 subsidized item. They may make a lot of money. But if you actually take a look at the 1.3 billion phones that get sold, I’d prefer to have our software in 60% or 70% or 80% of them, than I would to have 2% or 3%, which is what Apple might get.”
Steve Ballmer, Microsoft CEO, 30 April 2007

“How do you deal with that? How do they deal with us?”
Ed Zander, Motorola CEO/Chairman May 10, 2007

“It just doesn’t matter anymore. There are now alternatives to the iPhone, which has been introduced everywhere else in the world. It’s no longer a novelty.”
Eamon Hoey, Hoey and Associates, April 30, 2008

To see MacDailyNews’ full list, click here.