J.P. Morgan Joins Fake Steve Jobs in the iPhone Spin Room

What do you do when you're an institutional client of J.P. Morgan's and the bank issues a research report with exclusive news on Apple's forthcoming "Nano" version of its iPhone?

Maybe you call your J.P. Morgan trader and increase your Apple holdings.

What do you do when, two days later, a different J.P. Morgan research analyst issues a separate report on Apple that completely debunks the calls made in the first one?

Maybe you switch banks.

In a perfect display of the left hand being completely unaware that there is even a right hand at all, J.P. Morgan managed to execute that very scenario this week. On Sunday, the bank published a report authored by Kevin Chang, its telecommunications analyst in Taiwan, that outlined Apple's plans to release a slimmer, cheaper version of the iPhone in the fourth quarter.

Chang's sources were unnamed informants from the supply channel and a patent application. He speculated that it would cost around $300 and would have "rather limited functionality." The wires picked it up here.

But yesterday, J.P. Morgan did an about-face on its Apple prediction. Bill Shope, the equity analyst that cover's Apple stock for the bank, published a report titled "Our Take on the "Nano Phone" Call from Asia." The report thoroughly negates Chang's original report, saying instead that Apple's next iPhone version will likely be 3G and high-priced and will launch in the first half of 2008. Shope was unable to confirm Chang's source with his own supply channel informants.

"We find Mr. Chang's data very useful, but we have a bit of a different take on the predictions, and we want to clarify that the Asia team's call is distinct from our Apple view," Shope wrote.

When Reuters followed up, it asked J.P. Morgan what to make of the contradicting opinions. A spokesman said Shope "holds J.P. Morgan's official view of Apple stock."

Too bad Chang didn't have an iPhone himself. He could have picked it up and called his colleague in New York before embarrassing his employer.

by Megan Barnett