New filing seen as proof of Apple cell phone

The March 2006 filing, published Thursday by the United States Patent and Trademark Office, offers broad illustrations and descriptions of several potential hand held devices that each contain multiple touch sensing devices.

Shaw Wu, an analyst with American Technology Research, said in a research note on Friday that he believes Apple is describing a device that may include the ability to switch between multiple functions such as a cell phone, PDA, music player, video player, game player, digital camera, GPS, handtop and remote control.

"While this is a broad patent application covering a wide variety of areas (not surprising as it was likely reviewed and co-authored by Apple legal), we believe it represents the fundamental basis and technology behind Apple's cell phone efforts," he wrote. "As shown in the schematics (Figure 1 and Figure 2) included in Apple's application, we believe the device will have a candy bar form factor (as opposed to flip phone) with iPod like functionality, including a clickwheel."

In the recent filing, Apple engineers say "the touch sensing devices may for example be selected from touch panels, touch screens or touch sensitive housings." Meanwhile, another part of the invention relates to "a method for operating a handheld device. The method includes determining if a user is touching the handheld device. The method also includes determining the user based on the user's touch."

Wu said he remains upbeat on Apple's prospects in building a material cell phone business given its strong brand name, loyal customer base, and unique click-wheel user experience. "Should Apple gain 1 percent share in a billion unit [cell phone] market, we believe that could amount to a $2 billion opportunity, assuming around 10 million units at a $200 average selling price, but not including potential services and accessories revenue," he wrote.

Earlier this week, Wu said his research indicated that an Apple-designed smart phone had moved from concept to prototype and recently progressed to near completion as a production unit

"We believe this smart phone has been in development for over 12 months and has overcome substantial challenges including design, interference, battery life and other technical glitches," the analyst told his clients. He said the phone would sport an iPod nano-like candy bar form factor and come in three colors."

Wu maintains a Buy rating on Apple shares with a price target of $91.