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Apple’s Bad-News Roundup: iPhone Sales Falling, iWatch Delays, Electrocutions!?!

Aaron Pressman
The Exchange

In baseball, it’s said, a player on a hitless streak can’t get off the schneid. After a weekend full of some plain old bad news and some rather bizarre bad news, Apple (AAPL) shareholders may know the feeling.

Tuning in on Monday, they faced rumors that Verizon Wireless’s iPhone sales might be falling far short of expectations and that the iWatch, the company's possible next hit product, is beset by engineering problems and delays. Also making headlines was a woman in China who was possibly electrocuted by her iPhone as it charged. And in Nashville, a lawyer is suing Apple for ruining his marriage by not sufficiently blocking him from seeing pornography websites.

If nothing else, the endless flow of such rumors and silliness dominating the news for the world’s second-most valuable public corporation calls into question CEO Tim Cook’s current strategy of cramming all his big product announcements into just a few weeks at the end of the year.

And the latest Apple ad campaign, "Designed by Apple in California," isn't helping. Bragging about the company's design process, the ad seems aimed more at bucking up a few thousand Apple employees than getting millions of customers to buy more Apple products.

Spacing out the most anticipated and exciting reveals on the hardware front would fill news sites with a lot more positive developments. And clever ads have been known to become a story all their own.

The most serious

The Wall Street Journal’s Verizon iPhone story is probably the most serious for Apple, if true. Moffett Research says it uncovered an obscure filing detailing Verizon (VZ) and partner Vodafone Group’s (VOD) commitments to buy future hardware goods, the paper reported.

According to the filing, Verizon shortfalls from the past two years have piled up, leaving it on the hook for $23.5 billion in purchases this year. Whether and how Verizon has to make good on the billions of dollars of under-sales is an unanswered question, but the shortfall could also reduce Apple’s negotiating power to swing such rich deals for iPhones in the future, the Journal notes.

The Financial Times broke the news that Apple’s iWatch project is facing major engineering hurdles, pushing off its likely introduction until the end of 2014 and prompting a hiring spree to bolster the team.

It’s always tricky evaluating rumors about unannounced Apple products – how a device that hasn’t even been unveiled could be “delayed,” for example. But investors are hoping desperately for Cook to unveil a new product category killer like the iPhone, and the iWatch is one possibility. Apple didn’t say much over recent weeks as it went around the world trademarking the "iWatch" term, though the stock did get a small bump.

Deadly defect?

In China, a woman was killed when she answered her iPhone 5, electrocuted while the phone was connected to a charger, Reuters reported. There are no hard facts yet about whether the phone was at fault, and Apple said it is investigating.

But, like Boeing (BA) and its Dreamliner battery fires, news about possibly deadly product defects does not exactly get a stock out of the dumps.

"Craziest lawsuit ever"

Finally, perhaps the least significant but the most viral story of the day: A Nashville man is suing the company alleging that Apple’s safari web browser set off his porn addiction. Apparently, Chris Sevier misspelled the site Facebook.com (FB) by replacing the first half of the site’s name with a common expletive. This led the attorney, whose license to practice was reportedly placed in "disability inactive status" in 2011, down a rabbit hole of porn sites. This ruined his marriage, Sevier alleges, in a court filing that reads almost like an SNL script. Joe Patrice at the Above the Law blog calls it the craziest lawsuit ever brought against Apple.

I doubt many would disagree. But it’s certainly not helping Apple get off the schneid.

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