The relationship between Apple and NVIDIA, the manufacturer of the graphics chips in most Macs for quite some time now, appears to be souring at an exponential rate. Electronista reports that negotiations between the two companies to continue their business relationship are not going well, with Apple accusing NVIDIA of being arrogant. According to a source with access to NVIDIA, Apple is on track to cut NVIDIA off as a graphics chip provider for the next 3-4 years.

If the two companies cannot reach an agreement, NVIDIA would continue to provide chips for models that currently use NVIDIA, but Apple would be likely to drop NVIDIA chipsets in updates to their product line, particularly in iMacs and MacBooks currently based on Intel's Nehalem architecture.

A significant factor in the disagreement is the way NVIDIA handled the graphics failures of MacBook Pros carrying the GeForce 8600M video chipset, which had a tendency to overheat and eventually stop working. Apple had to extend the warranty on MBP models graphics chips sold from June 2007 to October 2008 to three years (the Apple support page on this issue can be found here).

The relationship between Intel and NVIDIA hasn't exactly helped, either. Both businesses filed opposing lawsuits over NVIDIA's license to make mainboard chipsets with their own internal memory controllers. If Intel wins, NVIDIA could not make another chipset like its GeForce 9400M model that supports Core i7 processors, and would oust NVIDIA from Macs by exclusion.

Neither Apple nor NVIDIA have publicly spoken on the matter so far. Apple does have a history of severing relationships almost without warning, as they dropped ATI (now AMD) from Power Mac G4s after the company revealed Apple's plans ahead of a Macworld keynote address. However, if Apple does indeed drop NVIDIA, they may have to return to AMD in order to maintain their current graphics standard.

A panel on CNBC's Fast Money was recently remarking on AAPL's apparent invulnerability to the recession that's currently affecting the United States, noting that it's jumped 40% so far this year, outperforming the NASDAQ. J.P. Mark of Farmhouse Equity Research suggests that the excitement that persists among Apple's retail employees customers is a part of that performance.

As for the stock's immediate future, the panel and Mr. Mark point to this summer's concurrent release of iPhone OS 3.0 and a likely new iPhone model as a powerful stimulus. Finally, Mr. Mark notes that it isn't often that an electronic gadget becomes more useful and valuable over time.

I definitely agree with that. My iPhone is now almost two years old and it does much more than it did when I first opened its box. Also, if a new iPhone does appear this summer just as my current contract is expiring, I'll almost certainly buy it.

Piqqem, a service that crowdsources stock picks, has some interesting demographic data about who says they're buying AAPL. Among female users, Apple is the most highly rated stock to buy.

The lowest-rated stock is Dillards -- which leads to an interesting analysis by Alex Salkever, director of research and marketing at Piqqem. He says that focused specialty retailers are better at weathering the economic downturn so far than large department stores.

"And while Apple has seen sales growth in its chain stores level off, I submit that a big reason why Apple has held strong is due to the attraction its products, stores, and services hold to women beyond the teenage years," he writes.

Personally, I think linking womens' stock choice specifically to the retail experience falls somewhere between a little chauvinist and a little short-sighted. AAPL is also the most popular stock among all of Piqqem's users, for example. It certainly can't hurt Apple's business, though, to appeal to women, teens, and other key demographics with disposable income right now.

Many analysts point to Apple's strong cash position as reason enough to buy AAPL. Indeed, Apple's stock price has recovered some since Macworld, and is trading around $98 a share. It's certainly shy of their 52-week high of $192 a share, but it's well off their 52-week low of $78.20.

While Apple stock is up over seven percent since its positive earnings report and conference call yesterday afternoon, both Nokia and Microsoft have released dourer reports about their financial outlook.

Microsoft said that it will lay off up to 5,000 people, about five percent of its workforce, over the next year and a half, according to the Seattle P-I. 1,400 of those jobs would be eliminated today. The news comes as the company announced earnings per share two cents less than their quarterly guidance -- 47 cents versus 49 cents -- on revenues of $16.63 billion. Analysts had expected revenues upwards of $17 billion.

Nokia today posted a 69 percent drop in profits for its last quarter. Nokia stock earned 15 euro-cent per share in profit, compared with 47 euro-cent in the same quarter last year. Sales fell 19 percent to €12.66 billion, missing forecasts of €13 billion.

What can we take away from this? Perhaps this is understating things, but Apple appears to be doing very well against its competitors. In yesterday's conference call, the company announced that it had grown sales and revenue even in the face of challenging worldwide economic conditions. In both retail and iPod sales, much of the growth was outside the United States. Apple sold 88 percent more iPhones than they did the same time last year, although much of that may be attributed to pent-up demand for the iPhone 3G.

At midday, AAPL is $10 higher than its record-low close on Tuesday, trading at around $88 per share. Both NOK and MSFT are trading down about $1.65 each.

[Via Daring Fireball.]

Update: Sony, too: It's posting a record annual loss of $3 billion, and plans to close factories and lay off workers.

Welcome one and all for TUAW's coverage of Apple's First Quarter 2009 Results Conference Call. If you haven't already, you can go start the audio stream available on Apple's website. You'll need QuickTime 6 or 7 installed (Mac users should already have it, and Windows users get it with the iTunes install).

Update: The call has ended. AAPL is up over seven points in after-hours trading.

Click on through to view the transcript!

Just a reminder: Be sure to come back today at 5 p.m. Eastern (that's 2 p.m. Pacific) for Apple's First Quarter 2009 Results Conference Call. We'll be liveblogging the occasion, with contributions from your favorite TUAW bloggers, and yours truly.

Apple is streaming audio from the call here. A recording of the call will be available at that page for a few weeks afterward.

Fortune's Apple 2.0 blog has its roundup of projected Q1 sales numbers from Bernstein Research's Toni Sacconaghi and Piper Jaffray's Gene Munster:

• Mac sales. Munster: 2.5 million to 2.6 million. Sacconaghi: 2.57 million.
• iPod sales. Munster: 18.6 million. Sacconaghi: 18.1 million.
• iPhone sales: Munster: 6.4 million. Sacconaghi: 3.5 million to 4 million.

In related news, AAPL hit a two-year low yesterday, closing at its nadir of $78.20 per share. Also, Bloomberg is reporting that the U.S. Securities and Exchange Commission will review Apple's 10-K filing from last year. Apple hasn't been accused of any wrongdoing, but Bloomberg says the SEC wants to make sure investors weren't being misled about Steve Jobs' health. (Via Macworld.)

More coverage of the earnings report is available at our sister site Blogging Stocks.

CNBC is reporting that Steve Jobs' health situation is "more serious" than previously thought, and Steve Jobs announced he is taking a "medical leave of absence" in a letter to Apple employees. He anticipates returning in July.

Tim Cook, Chief Operating Officer, is taking over day-to-day operations of Apple, Inc. in the meantime. In his letter, Jobs says the board supports this plan, and that he will be involved in major decisions even though he is out of the office.

Cook took the reins at Apple for a month in 2004, while Jobs had surgery for pancreatic cancer, the disease that could be contributing to his health problems today.

Jobs released a letter the day before Macworld Expo detailing a "hormone imbalance" that he said would be treatable with an adjusted diet. His health concerns apparently became a distraction to himself and Apple employees, so he chose to take a six-month medical leave of absence.

CNBC analyst Jim Goldman said his sources inside Apple told him that "Steve Jobs is in serious denial" about the state of his health. BusinessWeek's Arik Hesseldahl said on CNBC that although this is a surprise announcement, he took a milder tone, and doesn't think this is a resurgence of Jobs' pancreatic cancer, which Jobs said he beat.

Piper Jaffray's Gene Munster said on CNBC's Fast Money program that while Tim Cook is a solid choice to lead in the interim, "replacing the magic of Steve Jobs is impossible." Even so, Munster considers this a buying opportunity for Apple stock.

Apple stock trading was halted until 5 p.m. Eastern time. In early trades since the stock re-opened, AAPL's price is down by about $10.

Read on to see the full text of Jobs' letter.

UBS analyst Maynard Um says that Apple could sell 7 million iPhones in the first quarter of the year if they sell a low-cost, 4GB model, according to Electronista.

Citing "checks" with industry partners, Um claims a 4GB model is in the works, though it's unclear if it will be a regular iPhone at a lower price point, or a smaller iPhone nano device rumored to be in development. While it may cannibalize sales from the current low-end 8GB model, a significantly lower price could add 1.5 million more sales for the quarter.

Generator Research's Andrew Sheehy goes even further, projecting that Apple could sell 77 million iPhones by 2013, according to Philip Elmer-DeWitt. Sheehy has three reasons why Apple will dominate the smartphone business:

• Apple's ability to combine hardware and software, making it easy for users to consume
• The App Store's vertical platform model leads the market so far
• Smartphones are the only kind of phone that Apple makes, unlike other handset manufacturers like Nokia.

Sheehy says that, among other recommendations, Apple must broaden its offering to include higher- and lower-end units, including tablets and entry-level smartphones: All with access to the App Store.

He also says that Apple will capitalize on the paralysis brought on by a weak global economy, and use its cash to get "one or two design cycles ahead of the competition."

"When rivals start spending again, they may discover that Apple has built an unassailable lead," Sheehy writes.

Citi analyst Richard Gardner repeated the firm's "buy" recommendation for Apple stock, but reduced his estimate through 2011 to "reflect a more conservative view of consumer spending," according to the Associated Press.

Gardner reduced his 12-month price target to $132 from $153. He noted "soft" iPhone shipments in the last quarter of 2008 and conservative guidance for the first quarter of 2009 as reasons behind the cut.

"We view weakness as a buying opportunity," Gardner said. If Apple's stock were to drop by $7 or $8 before the company's Q1 2009 conference call on January 21, "[Citi] would be aggressive buyers." He expects the company will announce a profit of $1.42 per share for Q4 2008 during the call.

AAPL was down by about $1.45 in afternoon trading.

[Via Mac Observer.]

Mark your calendars: Apple plans to conduct its first-quarter conference call on Wednesday, January 21 at 5 p.m. Eastern (2 p.m. Pacific). Apple executives will discuss the company's financial performance over the last quarter, and give their guidance as to how the next quarter is shaping up.

Audio from the conference call will be broadcast via QuickTime. When the time comes, you can visit this page and listen in. (Bonus: Check out the old QuickTime Player screenshot in the "Q1-2009" graphic.)

In Apple's last conference call, CEO Steve Jobs joined in the fun -- a rarity -- to discuss sales, margins, cash reserves, and Apple's competition.

Prepare for plenty of hyperbole and chipper "forward-looking statements" -- as well as dialtone to dialtone coverage from us here at TUAW. Be sure to check back on the 21st.

[Via MacDailyNews.]

Yesterday, Apple released a proxy statement detailing the financial compensation that executives enjoy as part of their participation on the board of directors.

Steve Jobs retained his $1 salary for 2008, but has over 5.5 million shares of Apple stock, which is worth over $500 million on paper. Jobs is worth about $5.7 billion, thanks largely to the fact that he's Disney's largest individual shareholder. Fidelity Investments continues to be Apple's largest investor with over 46 million shares of stock.

There are five shareholder proposals up for voting this time around:

• Proposal 1 asks to re-elect the board of directors, consisting of Steve Jobs, William Campbell, Millard Drexler, Al Gore, Andrea Jung, Arthur Levinson, Eric Schmidt, and Jerry York.
• Proposal 2 asks for more transparency surrounding Apple's political contributions.
• Proposal 3 asks the company to adopt a statement supporting universal health care for everyone, and not just employees.
• Proposal 4 asks the company to release a report on corporate strategies surrounding climate change and greenhouse gas emissions before July.
• Proposal 5 asks to adopt a policy that gives shareholders more input on executive compensation. (Thanks, Scott!)

The board of directors, perhaps not surprisingly, recommends approving the first proposal, and rejecting the other four.

The proxy statement is available from Apple's Investor Relations website, and will not be mailed to shareholders unless requested.

[Via MacDailyNews.]

Our favorite-named analyst, Piper Jaffray's Gene Munster, predicts that Apple will announce new Mac models at Macworld Expo, and a smaller iPhone for the March quarter.

Piper Jaffray expects that Apple will sell 45 million iPhones during 2009, though that estimate is predicated on the fact that Apple will release a lower-cost iPhone model early in the year, priced between $99 and $149.

As for Macworld Expo, the expectation is that there won't be any groundbreaking announcements, since Phil Schiller will be giving the presentation. They do expect new iMac or Mac mini models, however.

Piper Jaffray is maintaining its "buy" rating, and $235 price target, on shares of AAPL. The stock was up slightly during morning trading.

[Via StreetInsider.]

AAPL fell 6.57 percent today after the Macworld announcements yesterday and a general retreat among tech-sector stocks. The company's stock closed at $89.16 per share, and over 42 million shares changed hands.

A lot of the selling was done last night in after-hours trading, with the stock opening the day's trading this morning around $91 a share.

In related news today, Oppenheimer Funds cut its rating on Apple stock from "outperform" to "perform," based largely on the fact that Jobs will not present the keynote speech at Macworld Expo next month.

Oppenheimer analyst Yair Reiner wrote a note to clients, saying "we don't know why Steve Jobs has pulled out of his annual address at Macworld [...] Whatever the reason, the unexpected announcement has underscored the greatest risk to Apple's long-term success -- its dependence on Jobs' health and its apparent lack of a succession plan."

AAPL has remained off its 52-week low of $79.14, which it recorded on November 21.

Morgan Stanley analysts yesterday cut AAPL's price target to $95, mostly citing the weak economy. They said that despite price cuts, extreme interest in the iPhone, Mac users' high satisfaction, and marketshare momentum for Mac sales, the quarter will be slow for Apple.

Blog Notable Calls said it wouldn't have been surprised if AAPL slipped by five points yesterday, but instead the stock gained 34 cents a share before the closing bell.

On a brighter note, Kaufman Bros. analyst Shaw Wu sees promise in iPhone gift cards, according to Fortune's Apple 2.0 blog. As with any gift card, Apple collects revenue from the customer up front. However, Apple can't report the revenue until the phone is activated, which will likely be during the first quarter of next year.

Wu anticipates Apple will sell 6 million iPhone handsets during the company's fiscal Q1 2009, which includes October, November and December 2008. Morgan Stanley analyst Kathryn Huberty thinks Apple will sell only 4 million that same quarter.

In the same Apple 2.0 story, Philip Elmer-DeWitt notes that Piper Jaffray's Gene Munster looked at how many units Walmart might sell, after pricing details leaked on Monday. He conjectures that each Walmart store could sell 1,284 iPhones in 2009, accounting for nearly 10 percent of Apple's worldwide iPhone sales.

AAPL was up by $2.50 or so in midday trading.