Wiretap: The Apple secrets that Walter Shimoon sold

08 Jul 2011

The insider trader who pled guilty Tuesday leaked details about the iPhone 4 and the iPad

Walter Shimoon, then a director at Flextronics (FLEX), a Singapore-based company that supplies Apple (AAPL) with camera and battery components, was being paid up to $200 per hour to leak insider information to a shadowy group of hedge funds and so-called expert networks.The wiretap caught it all.

In an Oct. 1, 2009 phone call secretly taped by the FBI, he gave his contact at a New York-based hedge fund called Kingdom Ridge Capital some third quarter iPhone sales figures that wouldn't be released for another two and a half weeks.

Then, according to his indictment, he dropped two bombshells:

  • The iPhone 4: Apple, he told his contact, was "coming out next year" with a new iPhone that's "gonna have two cameras ... It'll be a neat phone because it's gonna have a five-megapixel auto-focus camera and it will have a VGA forward-facing videoconferencing camera." Apple announced the iPhone 4 -- with its two cameras -- eight months later.
  • The iPad: "They [Apple] have a code name for something new ... It's ... It's totally ... It's a new category altogether... It doesn't have a camera, what I figured out. So I speculated that it's probably a reader. ... Something like that. Um, let me tell you, it's a very secretive program ... It's called K, K48. That's the internal name. So, you can get, at Apple you can get fired for saying K48." The iPad -- code named K48 -- was unveiled four months later.

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