Apple (NASDAQ: AAPL) reported earning after the close of business today and in after hours trading the stock got an initial pop of 5%. After the initial free-for-all wore off, the stock retreated and settled in close to unchanged. What is the story with this?

Here are the initial Briefing.com reports:

23-Apr-08
16:37 AAPL Apple beats by $0.09, beats on revs; guides Q3 EPS below consensus, revs in line

• Reports Q2 (Mar) earnings of $1.16 per share, $0.09 better than the First Call consensus of $1.07; revenues rose 42.7% year/year to $7.51 bln vs the $6.96 bln consensus.
• Co issues in-line guidance for Q3, sees EPS of $1.00 vs. $1.10 consensus; sees Q3 revs of $7.2 bln vs. $7.16 bln consensus.
• Gross margin was 32.9% vs 33.8% Street expectations, down from 35.1% in the year-ago quarter.
  
• International sales accounted for 44% of the quarter's revenue.
  
• Apple shipped 2,289,000 Macintosh computers during the quarter, representing 51% unit growth and 54 percent revenue growth over the year-ago quarter.
  
• The co sold 10,644,000 iPods during the quarter, representing one percent unit growth and eight percent revenue growth over the year-ago quarter.
  
• Quarterly iPhone sales were 1,703,000.
• Statement from Apple: "We're thrilled to have generated $4 bln in cash flow from operations in the first half of fiscal 2008, yielding an ending cash balance of $19.4 bln.

Let's spend a moment and take a closer look at those numbers:

Bloomberg ran an article this morning discussing mobile phone trends. This article should be read by anyone who invests in Apple (NASDAQ: AAPL) because of the iPhone and anyone that considers Google's (NASDAQ: GOOG) moves in the mobile space to be a serious harbinger of what's to come for the mobile market.

As Apple rolled out its vaunted iPhone (it rocks, by the way) and Research in Motion (NASDAQ: RIMM) upgraded its phones to support video, Bloomberg reports that U.S. customers shelled out 40 percent more for handsets last quarter than a year earlier.

The article addresses a few salient trends in the mobile space:

• Analysts expect that North America will be the only region where the average phone price will increase this year.
  
• Last year, mobile handsets sold in Japan cost 74 percent more than in North America. In Europe, they were 10 percent pricier.
• Sales of pricier handsets such as the iPhone almost tripled last quarter and made up 11 percent of phones sold in the U.S.
• Shoppers spent $3.2 billion on phones, or $83 each, up from $2.2 billion a year earlier and the most since 2005
• The iPhone, which doubles as a music player, cost as much as $599 when it went on sale in June and now sells for $399. Apple shipped 1.4 million of them in the first three months. BlackBerrys go for as much as $300.

The Bloomberg article also describes the effect carrier-sponsored subsidies have had on the industry. "Carriers have used subsidies to keep prices of most other phones down. Motorola Inc.'s Razr, which sold for as much $500 when introduced in 2004, can now be had free," reported Bloomberg.

Carriers still act as "gatekeepers" in the industry. The carriers generally decide which devices to offer to their customers, and own the consumer relationship.

This all may change as carriers like Verizon (NYSE: VZ) have made announcements about opening up their networks to non-subscribers. Combine this with phone manufacturers continuing to produce better and more engaging devices and Google's attempts to create incentives and a platform for application development for the mobile device, and it's an opportunity for investors to pick some new horses.

Zack Miller is the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund. Author holds a long-term position in GOOG as of 11/26/2007.

Palm Inc. (NASDAQ: PALM) seems to be a company with little direction these days. In the minds of many, the company that basically invented the popular smartphone market over four years ago with its Treo PDA/cellphone product has done little since that time in product innovation. As a result, competitors like Motorola, Inc. (NYSE: MOT), Research in Motion, Ltd. (NASDAQ: RIMM) and Apple, Inc. (NASDAQ: AAPL) are now chomping heavily into Palm's core business of smartphone production.

When Palm acquired Handspring in 2003 and began setting the world ablaze with its Treo product, it was happy times for the company. The Treo line quickly became Palm's lifeblood as its PDA products (like the Palm Tungsten and Zire) continued selling in decreasing numbers. Those customers moved into smartphones, and the Treo was timed at the right moment to capture those folks.

MOST NOTEWORTHY: Apple (AAPL), Spectranetics (SPNC), First Solar (FSLR) and Online Resources (ORCC) were today's noteworthy initiations:

• ThinkEquity believes Apple Inc (NASDAQ: AAPL) is one of the best-positioned hardware companies that can capitalize on the monetization of digital media consumption through PC, televisions and mobile devices. The firm transferred coverage with an Accumulate rating and $135 target.

• Roth Capital said atherectomy procedures continue to grow in the high-teens and that Spectranetics (NASDAQ: SPNC) should be able to exceed these growth rates with its ability to treat certain complicated lesions as well as through new product introductions. The firm started shares off with a Buy rating and $15 target.

• Deutsche Bank initiated shares of First Solar (NASDAQ: FSLR) with a Neutral rating and $90 target on valuation.

• CIBC started Online Resources (NASDAQ: ORCC) with a Sector Performer rating and $15 target, citing favorable risk/reward...

OTHER INITIATIONS:

• G&K Services (NASDAQ: GKSR) was initiated with a Hold rating at Needham.

• Diodes (NASDAQ: DIOD) was initiated with a Buy rating at LongBow.

• JMP Securities initiated Anworth Mortgage Asset Mortgage Corp (NYSE: ANH) with an Outperform rating and $10 target.

• Covidien (NYSE: COV) was initiated at Morgan Stanley with an Overweight rating and $49 target.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY: Ericsson (ERIC), Hiland Holdings (HPGP), AVX Corp (AVX), Tibco Software Inc (TIBX) and UPS (UPS) were some of today's notable downgrades:

• UBS downgraded shares of Ericsson (NASDAQ: ERIC) to Neutral from Buy following the company's Q1 report that showed weaker than expected operating cash flow.

• Hiland Holdings (NASDAQ: HPGP) was cut from Wachovia to Underperform from Market Perform.

• AVX Corp (NYSE: AVX) was downgraded to Underweight form Neutral at JP Morgan.

• Goldman cut Tibco Software Inc (NASDAQ: TIBX) to Sell from Neutral, citing valuation.

• Stifel downgraded United Parcel Service (NYSE: UPS) to Hold from Buy at Stifel, after Q1 showed a slight decline in U.S. Ground parcel volume...

OTHER DOWNGRADES:

• AG Edwards downgraded Cigna Corp (NYSE: CI) to Hold from Buy.

• Covad Communications (AMEX: DVW) was cut to Hold from Buy at Stanford to reflect the postponed profit growth.

• Citigroup downgraded Apple (NASDAQ: AAPL) to Hold from Buy on valuation.

• LongBow Research cut LSI Corp (NYSE: LSI) to Neutral from Buy; Wedbush cut shares to Hold from Buy on their disappointing Q1 report.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

It was rumored to be the truth of Steve Jobs' visit as soon as all of the reports announcing The Beatles' entrance to the digital world were filed. Now it is the truth, but there was no Beatles announcement. It would certainly be easy to say that my last blog post was wrong, but I was basing my hopes on the incorrect reports of a multitude of sources.

Despite the lack of a Beatles press announcement, Apple Inc. (NASDAQ: AAPL) and EMI are working together to end EMI's use of DRM technology in their entire repertoire (see the article on NME). Obviously this is a big move, because now stores like iTunes can sell a major label's material that is equal in sharing capacity as the free sharing networks most labels and the RIAA deplore so much (perhaps that is why Jobs made the announcement with EMI in the UK, where EMI is based). NME also reports that the DRM-free music will be "superior quality downloads" which are interesting terms to use and may indicate something else on the horizon, like a remastered Beatles catalog. A technological "improvement" would not go beyond how innovative The Beatles as a unit have always been. They would have to try something, since The Beatles music has been kept out of the digital world for so long (thus making it somehow more advanced than the rest of the digital music available).

Note: The Daily Option Update is provided by Stock Options Specialist Paul Foster of theflyonthewall.com.

Volatility Index S&P 500 Options-VIX is up 3.78 to 14.93. VXN 10-day moving average is 10.77. S&P's recently down 2.45%.

Volatility Index NASDAQ 100-VXN up 3.84 to 19.82. VXN 10-day moving average is 15.84. NASDAQ 100 recently sells off 3.41%.

Weyerhaeuser-(NYSE-:WY) implied volatility suggests non-directional risk into Domtar (NYSE-DTC) exchange. On 2/2/07 WY announced a split-off transaction in which each $1 worth of WY tendered will receive $1.11 worth of DTC stock. WY announced on 2/26 that security holders of DTC have voted to approve the plan to combine DTC with the fine paper business of WY, the deal is expected close in March. WY is then expected to be a buyer of its own stock and then possibly announce a more tax efficient structure for its timberlands. WY call option volume of 12,427 contracts compares to put volume of 8,133. WY over all option implied volatility of 22 is near its 26-week average according to Track Data, suggesting non-directional price risk.

Kohl's-(NYSE:KSS) options suggest non-direction price risks into 3/1 EPS & Outlook. KSS, an operator of 817 stores, will report EPS on 3/1. First Call is expecting EPS of $1.43. Buckingham Research says "We are maintaining our neutral rating on KSS ahead of its Q4 earnings report, valuation and the likelihood of difficult sales, gross margin and SD&A comparisons in the hear ahead." KSS call option volume of 1,616 contracts compares to put volume of 1,466. KSS March option implied volatility of 26 is near its 26-week average according to Track Data, suggesting non-directional price risks.

Option volume leaders today were: Qualcomm (NASDAQ:QCOM) & Apple (NASDAQ:AAPL).

When Apple Inc.'s (NASDAQ:AAPL) CEO Steve Jobs said "let's get rid of Digital Rights Management" recently, some in the music industry stated their displeasure with that comment, as they see DRM the only way to protect the intellectual property of musicians. On the other hand, it severely stifles consumer choice -- digital music players from here won't work with music download services from there. The non-operability of different music download services on the different music players combined with the phenomenal success of the iPod is extremely frustrating.

But the iPod's popularity may have peaked, hence the reason for Jobs' letter to the industry. The thinking may be something along these lines: open up your music and we'll sell it all for you and we'll make up for all those lost CD sales. The "second act" of the iPod is in the planning stages right about now -- and why not non-protected music files?

Some are a little puzzled by Jobs' stance here. He could license his FairPlay DRM to other music-player companies -- giving the ability to play Apple-purchased music on any digital music player. That won't happen of course, as it would break down the iTunes wall. But with the estimate of only 3% of songs on all iPods having DRM in them (meaning they were purchased from the iTunes music store), is this a new open market for Apple should it convince music studios to drop the copy protection requirements on music downloads?

When Apple Inc.'s (NASDAQ:AAPL) iPhone was announced a little under a month ago, the eyes of certain Cisco Systems, Inc. (NASDAQ:CSCO) lawyers popped no doubt. No less than 24 hours after that announcement, came a lawsuit from the networking giant that stated Apple was infringing on Cisco's trademark claim on the "iPhone" name. Cisco already has a VoIP wireless handset from its Linksys division with the same name, the suit said.

Well, the two companies are relaxing their court stances for the moment as they both go back to the negotiation table in order to try and hash this minor little squabble out between them.

I'm quite sure that Apple and Cisco will reach an amicable agreement soon, as the "iPhone" name is now synonymous with Apple's efforts towards re-invention of the wireless handset. I'm not sure 1% of 1% of Americans even knew Linksys had an "iPhone" before this lawsuit began, but they sure do now (maybe 1.2%, heh).

Not helping matters much, though, was Apple COO Tim Cook calling Cisco's lawsuit "silly." We'll see if that comes back to haunt him.

Questionable options practices continue to take their toll on companies. This time, a Canadian darling, without a doubt one of Canada's recent success stories, Research in Motion Ltd. (NASDAQ:RIMM) might be getting into trouble.

The BlackBerry maker (affectionately nicknamed CrackBerry) missed its financial reporting deadline of October 17. RIM was supposed to file the second-quarter earnings on that date in accordance with the Ontario Securities Commission. As a result, the OSC ordered all insiders, about 60 of them including co-CEOs Jim Balsillie and Mike Lazaridis, to stop trading in the company's stock. Even if the company files now, insiders would not be able to trade until two days after the filing. There will still be a hearing on November 7 regarding the ban.

While this is happening in Canada, in the U.S., the Securities and Exchange Commission has also asked RIM to supply the commission with stock-option grants and practices information. However, the SEC requests the information to be provided voluntarily. RIM said it would comply with the SEC's request.

Like most companies lately, RIM decided to look into its accounting practices recently and review financials going a few years back. RIM plans to restate earnings starting in 1998, but at the same time stated it doesn't believe the adjustments would be material and that earnings since 1997 would be reduced by up to $45 million.

In addition, RIM has to arrange some accounting "glitches" arising from different accounting rules in Canada and the U.S.

With Apple Computer, Inc. (NASDAQ:AAPL) just barely avoiding NASDAQ delisting, I wonder when we'll hear the last of that.

Futures of all major market indices are ticking higher today, indicating to a possible positive day. Perhaps investors have had some time to digest two positive reports released on Friday of the narrowing trade deficit and the rebound in consumer sentiment.

Overseas, Asian markets were down overnight, following Friday's American markets example. But European markets are posting gains on news that Nokia and Siemens are planning a joint venture.

No economic data today, but tomorrow, two economic indicators will be released at 8:30 a.m.: Building permits and housing starts. Market consensus is 1.961 million and 1.86 million respectively. Atlanta Fed President Guynn will be speaking at 09:30 ET about the economic outlook.

Despite indications of a positive day, not  much strength is associated with it and the day is expected to be mixed.

Here's a look at some key Blogging Stocks:

Apple (AAPL) shares are down $1.58 in pre-market trading to $57.80 as of 7:49 a.m. The biggest news on Apple is a rumor that we've reported last week and that has been confirmed Friday regarding an iPod rival Microsoft is developing.

General Electric (GE) fell 21 cents after the close Friday to trade at $33.90 at 7:46 p.m. Friday.  Reports of NBC revenue declining by 21 percent from a year ago due to struggles replacing past blockbusters and lowering ad prices compared to competitors while US FCC puts off vote on TV multicasting on Cable.

Time Warner (TWX) are down 15 cents to $16.96 at 4:52 p.m. Friday. AOL is looking to focus its business in Germany and is looking into a full or partial sale of its Internet access operations in Germany while Dutch telecoms firm Versatel is interested in buying. Hurting its film business, a study shows that China piracy costs film industry $2.7 bln in 2005.  On Friday, The U.S. Federal Trade Commission has lifted a voting restriction on Liberty Media (LCAPA.O), a Time Warner Inc. minority shareholder and US FCC put off vote on TV multicasting on Cable. Finally, somewhat tabloid story, Time Warner Chief Financial Officer has been named by a prostitution ringleader as being her "sugar daddy".

Wal-Mart (WMT) shares lost 41 cents after the close yesterday to trade at $48.25 at 4:02 p.m. Friday. Wal-Mart is considering closing more outlets in Germany.