It was mid-May the last time FBR Capital Market analyst Craig Berger checked with his contacts in Apple’s supply chain, and what he heard then was bad news: orders for iPhones for the second quarter had just been been cut 25%.

But FBR went back to those same sources earlier this month, and on Thursday he and Robert Pikover reported “big positive revisions” in Apple’s so-called build forecast.

“Our latest checks show forecasted calendar 3Q and 2008 iPhone build volumes have been revised significantly higher, with more than 15 million 3G iPhones plus two million old 2G iPhones forecast for 2008,” they wrote in a note to clients.

Apple’s official target is to sell 10 million iPhones in 2008.

In other Apple (AAPL) supply chain news, Berger and Pikover report:

• More iPods: iPod builds were revised up 15% since their last report, with strong Classic and Nano builds offsetting slighly lower iPod touch builds — a surprise given the number of iPod touches being given away this summer in back-to-school sales.
• New iPods: “We hear a new, lower priced Nano may be coming, as well as refreshed versions of the Touch and Classic,” they write.
• More Macs: Apple’s 3Q notebook and desktop build volumes were revised up by 10% and 20%, respectively.

In summary, they like what they hear:

“For Apple, the firm continues to knock the cover off the ball in terms of product innovation, sleek designs, attractive price points, and effective global deployment plans. These checks confirm Apple’s product cycle momentum continues to gain steam.”

Via Seeking Alpha and Silicon Alley Insider.

The World Wide Developers Conference (WWDC) that opens Monday morning in San Francisco would be a relatively obscure technical gathering of programmers and IT administrators - with sessions on “Advances in OpenGL” and “What’s New in Objective-C” - were it not for one thing.

Steve Jobs.

The keynote address that Apple’s CEO is scheduled to give starting at 10 am Pacific Time (1 pm ET) is perhaps the second most closely watched event in high tech - after the opening speech Jobs gives every January at Macworld.

In the audience at Moscone West’s main hall will be - in addition to thousands of developers (WWDC sold out for the first time this year) - hundreds of reporters, photographers, TV crews, venture capitalists, CEOs and maybe even a few celebrities from Hollywood and the music world.

What’s Jobs going to talk about? To paraphrase Donald Rumsfeld, there are known knowns and known unknowns. That is to say, there are things we think we know he’s going to say, and things we know we don’t know. Here’s a rundown:

3G iPhone. Except for a few short sellers on Wall Street, everybody who follows Apple assumes that Jobs will introduce a new iPhone that can send and receive data at so-called third-generation speeds. (In fact, so widespread is this belief that if Jobs doesn’t show up with the thing on Monday, Apple’s (AAPL) shares will get hammered before he leaves the stage.) Almost everything else about iPhone 2.0 are matters of little hard information and intense speculation. Is it thicker or thinner than version 1.0? Will it have a built-in GPS chip so it always knows where it’s at? Will its price be subsidized by AT&T and the overseas carriers? Will it go on sale next week or sometime later? If these questions weren’t still in play, there would be almost nothing to talk about next week.

The SDK. We know Jobs is going to spend some time discussing the so-called software development kit for the iPhone. We know because that’s one of the two main themes of the conference (symbolized by the bizarre image of two Golden Gate Bridges that decorated the e-mail invitation). The other theme is the Macintosh operating system; presumably the two are merging somewhere in Marin County, judging by the doctored photograph. The SDK will finally give third party developers access to the platform Apple has managed to build, as Jupiter Research’s Michael Gartenberg notes, without them. There’s a flood of new software for the iPhone and iPod touch ready for release soon as Apple gives the word - including programs that will allow IT departments, should they be so inclined, to integrate the iPhone into their enterprises the way Research in Motion’s (RIMM) BlackBerry is today.

.Mac. Even Jobs agrees that Apple’s $99-a-year suite of Internet services (Mail, Backup, iSync, iDisk, etc.) needs an overhaul, if only to match the online applications that Google (GOOG), Yahoo (YHOO) and Microsoft (MSFT) now offer for free. By tracking crumbs of information scattered in recent Apple software releases, some observers believe Jobs is set to replace .Mac with something called Mobile Me, or just plain .Me. Probably the single most effective thing Apple could do improve .Mac would be to emulate Google and give it away.

Another iPhone. Speculation that Jobs would introduce a so-called iPhone nano - a smaller iPhone at a more affordable price - has faded; the smart money has pushed this back to next January. However, as American Technology Research analyst Shaw Wu points out, there are good reasons to suspect that Apple will keep the first generation iPhone around, if only to have something to sell in those parts of Latin America - and parts of North America, for that matter - where where 3G coverage is spotty or nonexistent.

New MacBooks. Two weeks ago, Piper Jaffray’s Gene Munster put the odds of Apple introducing redesigned Mac portables next week at 60%. The other odds he gave - 80% by the end of summer - now seem more like it.

New Touchscreen device. Wu in report to clients this week said he’s learned that work on larger, 4-inch and 7-inch multitouch devices has “gone beyond the prototype stage” at Apple. He goes out on a limb and gives 50-50 odds that one will be introduced at WWDC next week.

Those are the key themes, but there’s plenty more to speculate about. If you want to dig deeper - in a suitably interactive way - come to WWDC with a copy of the 2008 edition of John Siracusa’s Keynote Bingo card, pasted below the fold. The rules are laid out in detail at Ars Technica here, but they’re pretty straightforward: put a token over a square if Jobs mentions the topic or says the word or introduces the speaker during the keynote. Cover five squares in an a row, and you get to stand up and shout Bingo!

Nobody’s won the game yet. This could be the year.

[Moscone West photo courtesy of MacNN.]

Thursday was a red-letter day for 3G iPhone rumors. On Wall St., the “rumor of a rumor” of an iPhone delay was enough to drive Apple (AAPL) share prices down 5 points in midafternoon trading. Meanwhile, a dozen subway stops to the north, a line 60 customers deep had formed spontaneously outside the company’s flagship Fifth Ave. store. According to Engadget, at least some of the people in the queue thought the new iPhone had already arrived.

So it was refreshing to receive a note to clients from Piper Jaffray’s Gene Munster on Friday morning with some sensible advice about what to expect when Steve Jobs takes the stage at Apple’s World Wide Developers Conference on June 9. According to Munster, look for:

• A new iPhone. Like every Apple analyst on record, he believes Jobs will take this opportunity to unveil an iPhone. But following up on a May 20 note in which Munster cautioned investors to keep their expectations in check, he believes the new device will be almost identical to the current model, with the exception of a 3G chipset to allow faster downloads. iPhones in new shapes and sizes, he expects, won’t come before January ‘09.
• A new OS. With the new iPhone will come a new operating system — OS X iPhone — that will open the device up to enterprise software and to all the 3rd party apps that have been under development since March.
• Focus on integration. Munster expects Jobs to spend a lot of time highlighting Apple’s “unique value proposition” of having Macs and iPhones running on the same operating system platform. “With control over the hardware and the software, Apple offers a uniquely integrated ecosystem of [consumer electronics] devices, which we believe is driving Mac sales, and vice versa.”
• New MacBooks. Given that it’s been two years since the MacBook was introduced and that the MacBook Pro is essentially the same design as the PowerBook G4 that came out 5.5 years ago, Munster believes there’s a 60% chance Jobs will introduce redesigned notebooks on June 9 and an 80% chance they will come this summer — in time for the back-to-school sales rush.

So when should iPhone buyers queue up? Like Gizmodo’s Jesus Diaz, Munster believes that Apple is planning a worldwide release of the new phones in mid-June — not, as previously speculated, June 27 (opening day of Pixar’s Wall-E and the anniversary, almost to the day, of the first iPhone’s release).

But unlike Gizmodo, Munster gives a good business reason for Jobs to push up the date of release. In a note to clients dated May 16 he points out that a mid-June shipment — one month after the original iPhone was listed as unavailable on its Web site — would allow Apple to book the initial surge of 3G iPhones in the June quarter, making up for all the iPhone sales the company lost in May.

You don’t see this too often.

Less than two weeks after American Technology Research’s chief Apple analyst zigged when the Street zagged, downgrading Apple (AAPL) from Buy to Hold in advance of the company’s Q2 earnings report — and in the face of a generally bullish consensus — Shaw Wu on Monday issued a new report that reverses his April 22 opinion and raises his price target from $175 a share to $210.

What makes the change of heart so unusual for an analyst of Wu’s caliber is that he doesn’t cite any major change in market conditions or Apple’s performance. Instead, his report reads like a mea culpa. He writes:

“We overestimated the potential negative reaction on the quarter, concerned with high expectations, a typically conservative outlook and the extreme sell-off following December results. In hindsight, we should have maintained our BUY rating and moderated our position rather than downgrading. While AAPL shares will likely remain volatile and we may see a better entry point from here, we need to align our rating with our longer term view on fundamentals of the company.”

While Wu continues to worry about what he calls a “product vacuum” and inventory draw-downs in the June quarter, he now believes that investors have already factored those concerns into the share price and are focused on what’s coming in the second half of the year. Here he adds some useful specifics:

• New portable Macs in time for the back-to-school sales.“Our contacts also suggest a radical redesign of MacBook and MacBook Pro, with styling closer to the new iMac and MacBook Air. While MacBook and MacBook Pro have done well, there has not been a form factor refresh since 2001-2002.”
• An iPhone transition around June and July.“In addition to a 3G version, our contacts indicate that the 2.5G model could see a minor casing change and lower price point closer to $299-349 vs. its $399 price today. We believe Steve Jobs will likely unveil new models at his WWDC keynote in early June.”
• Accelerating growth in Mac share of the worldwide PC market. “We estimate Mac had about 3.0% share of the worldwide computer market in 2007, up from about 2.5% in 2006…. We estimate that every incremental 50bps of incremental share gain (around 1.5m units) would be $0.45-0.50 per share in earnings.”
• Growth in media and entertainment.“The spread of Wi-Fi, 3G cellular and future generations of wireless technologies will have a profound impact on media consumption and distribution. … With a multi-platform approach, AAPL is positioned to benefit more than any other supplier.”

Gene Munster, Piper Jaffray’s chief Apple analyst, issued a report to clients Thursday offering his take on 15 “unanswered questions” about Apple’s Mac, iPod, iPhone and retail businesses. Much of it covers territory that will be familiar to Apple (AAPL) watchers, but one point struck me as new.

It has to do with Apple’s Multi-Touch technology, which Munster describes as a fully-protected “core differentiator” of Apple’s products.

Munster believes that the Multi-Touch gestures pioneered on the iPhone and recently added to the MacBook Air and Pro, are “just the beginning of Apple’s exploration of Multi-Touch on the Mac.” Eventually, Munster says, those gesture controls will work their way from MacBook’s trackpad, where they currently reside, to the backlit screen, for “a more dynamic user interface for the Mac.”

A touchscreen MacBook — the so-called MacBook Touch — was something many Apple enthusiasts hoped would be announced at MacWorld this year. Gizmodo last November ran a contest inviting users to imagine what an Apple Tablet computer would look like. You can see the winner, and 20 other notable entries, here.

Munster shares Gizmodo’s enthusiasm for such a device, but doesn’t expect to see one anytime soon. He writes:

“Ultimately we expect Apple to develop a full touch-screen MacBook, although not until the technology has fully matured over the next 3-5 years.”

[Photoshop rendition of a MacBook Touch by Logan Lape, Gizmodo. Posted with permission.]

With Apple’s second-quarter earnings due Wednesday, some of the two dozen analysts who follow the stock have dusted off their spreadsheets, taken a fresh look at their models, and come to some last-minute conclusions.

The trend, starting with MacBook sales, is mostly bullish for Apple (AAPL); the four analysts we know of who have published new reports in the past 24 hours have pushed their Macintosh sales estimates up 100,000 to 300,000 above the Street consensus of 2.0 million. Their estimates of iPod sales, by contrast, fall below the 10.7 million consensus target. Their iPhone numbers are all over the lot, ranging from 1.5 to 2 million. For why this may be so, see Apple Q2 earnings: What to watch.

The exception to this bullish sentiment is Shaw Wu of American Technology Research. A long-time Apple supporter, he issued a turnabout report on Tuesday in which he downgraded the stock from Buy to Neutral, warning clients that Apple’s shares are near his target of 175, with only 4% appreciation ahead of it and a 15% to 20% downside risk. “We continue to be upbeat on the potential for a strong 2H product roll-out,” he writes. “However, we are concerned there could be a vacuum before then. Our supply chain checks indicate 3G iPhones will not likely ship in volume until July and new Macs until the Sept. quarter, likely putting stress on the June quarter.”

Below: our working spreadsheet of the latest estimates (e-mail subscribers click here). If you’re an analyst and want your numbers added to the list, you can e-mail me here.

Looking for analyts’ target prices? Mike from Helsinki early Tuesday posted a summary on TMO’s Apple Finance Board. Here’s his list, edited slightly for clarity:

Daedalus Capital: $300 by the end of this year, $600 during next year
Piper Jaffray: $250
Needham: $235
Friedman, Billings, Ramsey: $225
Lehman Bros.: $195
CitiBank: $212
RBC Capital:$190
Merrill Lynch: $180
Morgan Stanley: $175
Goldman Sachs $185
Caris & Co.: $170

Downgrade
Morgan Keegan: $133

[Update: Reader Terry Gregory points out that he maintains a complete list of brokerage targets for Apple, color coded for upgrades and downgrades, at AAPLinvestors.net. Click here.]

Apple is set to release its second-quarter earnings on Wednesday, and by coincidence its shares closed on Friday at just over $161 — almost exactly where they stood three months earlier, before Apple’s first-quarter earnings report.

Although the company in January posted the best earnings in its 32-year history, the Q1 report is remembered by investors as a disaster. In the weeks that followed, Apple (AAPL) shares fell more than 40 points — from above $160 to below $120 — knocking $36.5 billion off the company’s market capitalization. Recession fears were a big factor in what turned out to be a three-month bungee jump, but what really spooked the market was Apple’s Q2 earnings guidance: 94 cents per share, nearly 15% below the Street’s average estimate of $1.09. [Reader "Mick" points out that hedge funds dumping Apple to prop up their shaky financial positions played a major role in the sell-off. He notes that institutions held 71% of Apple's shares before the plunge and 68% after.]

So there are two things to watch for on Wednesday: 1) Apple’s sales figures for Q2, which should be stellar, and 2) what kind of guidance it gives for Q3, which is anybody’s guess.

All signs point to an excellent second quarter for Apple. The consensus of analysts surveyed Monday was looking for the company to earn $1.07 a share on $6.95 billion in sales, versus the company’s guidance of $0.94 on $6.8 billion

Strong sales of MacBooks led the quarter. IDC last week reported that, although growth in overall PC sales in the United States slowed last quarter to just 3%, Apple’s computer shipments were up 25.1%. Gartner, using slightly different methodology, reported Mac sales up 32.5%.

If Apple’s worldwide performance is anything like its domestic record, the company should easily beat the Street’s consensus of 1.95 million Macs sold in the quarter. Piper Jaffray’s Gene Munster is looking for Mac sales of 2-2.1 million; JP Morgan’s Mark Moskowitz expects them to come in even higher, at 2.11 million. Either number would represent a near doubling of sales in just two years, as Ars Technica’s handy bar graph shows.

The iPod picture is not quite as rosy. There is sure to be sharp seasonal falloff from the Christmas quarter, when Apple shipped 22.1 million units. JP Morgan’s Moskowitz estimates that Apple sold 9.68 million iPods in Q2; Piper Jaffray’s Munster is calling for somewhere between 10 to 10.5 million, reflecting a sales spurt late in the quarter sparked by a sharp price cut on the low-end iPod shuffle. According to Munster, the Street has already decided that the iPod’s days of growth are behind it, and that the consensus is looking for sales of just under 53 million iPods in 2008 — essentially unchanged from 2007. Munster’s more optimistic; he believes the iPod will evolve over the next 12 months from a stand-alone music player into a mobile Internet device that fits in your pocket, and he’s looking for iPod sales to grow 10% year over year.

iPhone sales are harder to predict, given the spot shortages in the United States, excess inventory in Europe, and a chaotic black market in jailbroken iPhones in Asia and the developing world. Analysts’ estimates are all over the lot. Moskowitz and Munster (to pick on those two one more time) differ by half a million units. Moskowitz expects Apple to report sales of 1.5 million iPhones; Munster is looking for 1.6 to 2 million. Charles Jade at Ars Technica’s Infinite Loop speculates that the release date of the 3G iPhone may hinge on what the actual number turns out to be. He writes:

With a prediction of 10 million iPhones sold in CY 2008 … Apple must sell, on average, 2.5 million iPhones per quarter. … If the iPhone sold less than 2 million units this quarter, expect a 3G iPhone sooner rather than later. Conversely, if the current shortages are a result of insatiable lust for the greatest phone ever made, expect Apple to milk that cow for all it’s worth before introducing a new model. (link)

When it comes to pricing Apple’s shares, however, Wall Street cares less about the past than the future. The guidance Apple gave last October hinting at a blowout Christmas surprised analysts and help drive the stock to a record $200 a share in December. Although Apple beat everybody’s expectations for the quarter, by the time the first quarter results came out, traders were focused on Q2. And when Apple shocked analysts in January with surprisingly pessimistic guidance, it triggered a 40 point fall.

Investors, some of whom lost millions in the debacle, were furious, and Apple was besieged by angry threats and e-mails. (”Straight out, bald face, criminal lying,” was how one described Apple’s Q2 guidance). Few expect the company to respond such complaints by sweetening its numbers; if anything, it is more likely to offer no guidance at all, especially for a quarter that is so hard to call. Although investors can look forward to a new iPhone and software developers kit in June, back-to-school sales in late summer, and Christmas sales before the end of the year, none of those expectations will show up in Q3 earnings.

If Apple does offers Q3 numbers, they are sure to be, as always, conservative. Apple, more than most companies, likes to make only promises it knows it can keep. But despite recent complaints, the fact is that its results do tend to track its guidance. The spreadsheet at left, produced by a member of TMO’s Apple Finance Board who calls himself “awcabot,” shows guidance and results quarter by quarter since 2002. Past performance is no guarantee, but over that time, revenues have exceeded guidance fairly dependably by an average of 5.7% and earnings by an average of 43.8%.

Take all this for what it’s worth. Apple is a volatile stock, and it’s especially volatile before and after earnings reports. We may not be in for another bungee jump, but for the next few days it could be a bumpy ride.

MacRumors has issued an update of its immensely useful Buyer’s Guide — a consumer-oriented cheat sheet that tracks the update cycle of Apple’s product line and offers informed opinions about whether you should go ahead buy that MacBook Pro you’ve been lusting after or wait for the next model. As MacRumors put it:

Apple updates their products in a very consistent manner. A Mac comes out at a certain price with certain features. The price and features of that particular Mac stay exactly the same throughout the lifespan of the product. So, if a customer buys on Day #1, they are getting the fastest/newest technology for the dollar. The problem, however, is that 8 months later, on the day prior to its refresh, that Mac costs the exact same money, but contains 8 month old technology. (link)

Although based on rumors and second-hand reports, the Guide is pretty dependable, especially since Apple (AAPL) switched to Intel chips. Intel (INTC) is quite open about its product plans, and Apple tends to switch to their newest processors in a fairly predictable timeframe. (Although as MacRumors notes, Intel’s switch to the Nehalem microarchitecture, due late this year, could stretch out some Apple product cycles.)

To see the full 2008-2009 Buyer’s Guide, click here. This is a summary of their recommendations:

• iPod classic: Buy only if you need it - Approaching the end of a cycle
• iPod touch: Neutral - Mid product cycle
• iPod nano: Buy only if you need it - Approaching the end of a cycle
• iPod shuffle: Buy - Product recently updated
• Mac mini: Don’t Buy - Updates soon
• Mac Pro: Neutral - Mid product cycle
• MacBook: Buy - Product recently updated
• MacBook Pro: Buy - Product recently updated
• iPhone: Buy only if you need it - Approaching the end of a cycle
• LCDs: Don’t Buy - Updates soon
• Xserve: Buy - Product recently updated

There’s lots more information in the full Buyer’s Guide, including historical release dates, days since update and links to recent news.

One caveat: you take a risk when you buy a computer on Day #1, as MacRumors suggests. You might want to monitor Apple’s discussion boards for few weeks to see what problems emerge. Let the company and the users who like to live on the bleeding edge work out the kinks before you buy.

Without budging from his “neutral” rating on Apple, JP Morgan analyst Mark Moskowitz issued a cautiously optimistic report on the company Thursday based on stronger-than-expected MacBook sales in the quarter that ended in March.

Moskowitz is looking for Apple (AAPL) to report that it shipped 2.11 million Macs in the company’s second quarter (up from his earlier estimate of 1.97 million).

Computer sales usually fall after the Christmas quarter; instead, he expects Mac sales to rise a hair — 0.2 percent — quarter-to-quarter, which is why he is raising his estimates. Apple’s increased sales come against a backdrop of unit sales falling 9 percent sequentially in the broader PC market, according to Moskowitz.

But the analyst sees “soft patches” in the rest of Apple’s businesses. In particular, he has trimmed his quarterly iPhone and iPod sales estimates, respectively, to 1.5 million and 9.68 million (down from 1.62 million and 10.1 million). “Seasonality is having an impact,” he writes. “Also, there could be some slowing in the iPhone ahead of the 3G launch.”

The bigger story, he says, is the timing of the 3G iPhone launch: “As long as there is nothing to suggest that a summer launch of the 3G phone is not a possibility, we would expect investors to look past any near-term disappointment in iPhones.”

Bottom line: He is raising his second-quarter estimates. Revenue: $6.76 billion. Earnings per share: $1.09. The Street is looking for $6.95 billion and $1.06, respectively.

Apple will report its quarterly earnings on April 23.

What is Steve Jobs waiting for?

It’s already April, and Apple has yet to start making large-scale purchase orders for NAND flash memory for 2008, according to a report issued Monday by iSuppli Corp. By this time last year, Apple had already ordered huge quantities of the stuff.

Apple (AAPL) looms large in the NAND flash market. According to iSuppli, it is the world’s third-largest OEM buyer of NAND flash, which it uses in iPods, iPhones and solid state disk drives for the MacBook Air.

Based on the lack of new large-scale orders — and on a February iSuppli report that Apple had “slashed” its expected 2008 flash growth forecast — iSuppli cut its own forecast of revenue growth for NAND flash memory this year by about two-thirds on Monday. iSuppli had previously forecast NAND revenue to rise 27 percent to $17.9 billion. It now expects revenue reach $15.2 billion in 2008, up only 9 percent from 2007’s $13.9 billion.

iSuppli had earlier predicted that Apple’s spending on memory would jump 32% this year to $1.6 billion. The firm now projects the company’s spending will increase only 12% to $1.4 billion in 2008, up from $1.2 billion last year.

iSuppli’s February report of “slashed” orders had surprised Apple watchers and didn’t help its share price, which had dropped 60 points from its December high of over $200 per share.

But the market seems to have shaken off iSuppli’s latest report, perhaps because demand for Apple’s products is so high. Apple can’t make iPhones fast enough to supply demand in the U.S. (see here) and interest in the next-generation 3G iPhones seems to grow every week. Meanwhile, Apple’s MacBooks are moving briskly and even iPods sales, which had slacked off, have picked up in the wake of the shuffle’s February price cut.

If Steve Jobs plans to sell 10 million iPhones in 2008, let’s hope he’s got the flash to put in them.