iPhone 3G bids top $1 000 on eBay

Pent-up demand for the iPhone 3G is manifesting itself on auction site eBay, where eager buyers are bidding in excess of $1 000 to get what's turning out to be a hot commodity, says PC World.

The demand for the iPhone remains high even off the Internet, with lines forming Monday outside an Apple store in New York to buy the limited stock of the devices.

Launched on 11 July, the phone sold more than one million units worldwide over the first weekend, according to analysts. The demand has continued with carriers, including AT&T in the US and O2 in the UK, reporting iPhone 3G shortages.

News that Apple expects thinner profit margins sent shares of the consumer electronics maker plummeting in extended trading yesterday, reports BusinessWeek.

The prospect of diminished profitability through the rest of fiscal 2008 and into the following year overshadowed what was otherwise a blow-out quarter. Having forecast earnings of $1 a share on sales of about $7.2 billion, Apple delivered earnings of $1.19 a share and revenue of $7.46 billion.

But investors fixated on the margin forecast. CFO Peter Oppenheimer said gross margins, a key gauge of profitability, will drop below 32% in the current quarter, which ends in September, from 34.8% in the second quarter, which ended on 30 June.

Intel yesterday announced it has dropped the price of seven processors by up to 31%. There were three price cuts in Intel's Core 2 Duo chip family, Computerworld states.

The 3.16GHz Core 2 Duo E8500 was reduced from $266 to $183 as of 20 July. That 31% drop outpaced all the other cuts, which ranged from 11% to 15%, according to an Intel price list.

The price of the Core 2 Duo 2.53-GHz E2700 chip was cut by 15% to $113, and the 3GHz E8400 by 11%, to $163. In addition, the price tag for the company's Core 2 Q6600 2.4GHz quad processor was reduced from $224 to $1 993, a 14% drop.

The launch of Apple's MobileMe service has become a complete shambles, with widespread problems forcing the company to give away one month of free service for the second time in as many weeks, reports The Sydney Morning Herald.

The subscription-based Internet suite, which replaced Apple's ageing .Mac service, allows Mac, iPhone and even PC users to store up to 20GB of personal data, including e-mails, addresses, calendars, dashboard widgets, bookmarks and photos online so they can access them immediately from any device.

But the $119 a year suite has been plagued by issues since it first went online on 11 July, with the service knocked offline repeatedly in the days following the launch so Apple could iron out bugs and resolve server load problems.