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Apple Inc. (NASDAQ: AAPL) says it sold one million 3G iPhones in its first three days on the market. Some analysts believe that company could sell 20 million of them in the next year.

One of the reasons some people waited for the new 3G version of the phone is that it runs on AT&T's (NYSE: T) faster wireless broadband network. The older version, which ran on the 2.5G network, could be very slow linking to the internet.

Now that over a million people have their faster phones, they may find that there are a lot of places they won't work. AT&T's 3G network is concentrated in large cities. Even in those urban areas and their suburbs, there are a lot of dead spots. At least a couple of those are within a short drive from the Apple and AT&T headquarters.

For people taking their iPhones to Las Vegas, the coverage is extremely good. Anyone taking a vacation to Vermont, New Hampshire, Wyoming, or Montana is out of luck. (For a more complete list of places the new 3G iPhone won't work, visit 247wallst.com.)

Douglas A. McIntyre is an editor at 247wallst.com.

Microsoft Corp. (NASDAQ: MSFT) has to deal with improving sales for the Sony (NYSE: SNE) PS3. Sony has been able to get a greater number of attractive games for its console. It has also added better features to play live over the internet with friends connected by broadband.

Now the Xbox 360 will add a feature that Sony cannot match, at least for now.

According to the FT, Microsoft "has struck deals with five horror movie directors for a series of short films in a move aimed at boosting the original entertainment content available on its Xbox console." If the first part of the experiment works, Microsoft will probably go forward with more short content which cannot be seen by owners of rival consoles.

The executives at Toyota Motor Corp. (NYSE: TM) must live in a world all their own. They have maintained the forecast for their worldwide vehicle sales in the face of a massive downturn in the US auto market and weakness in Japan and parts of Europe.

The big Japanese car company finally bowed to reality and cut its prediction for units sales, but not by much. According to MarketWatch, "The automaker forecast sales for the full year in the lower 9.5 million unit range, down from the previously targeted goal of 9.85 million cars and trucks."

While the revision is a defeat for Toyota, it is also an odd acknowledgment of how well its does with car sales around the world and how clever it has been in designing and marketing new cars. In the US, where most auto firms are dying, Toyota has had a smashing success with its Prius hybrid. It cannot make enough of the cars to keep up with demand.

Three of the commissioners of the FCC have voted on the Sirius (NASDAQ: SIRI) merger with XM Satellite (NASDAQ: XMSR). Two have voted in favor, and one has voted against. That leaves two other votes. In other words, the deal could still be killed.

One of the remaining commissioners has indicated that he would vote for the merger if the companies would agree to a six-year price cap on their services. According to The Wall Street Journal, "The offer was viewed as an attempt to start negotiations, but the companies so far are showing little interest in haggling."

Is it any wonder? The most recent earnings reports from the two companies indicate that, while their losses are getting smaller, their subscription growth rates are slowing. Each firm has more than $1 billion in debt and neither has ever had an operating profit. In other words, if the companies cannot raise their rates the chances of them becoming profitable are significantly curtailed.

The FCC may be putting Sirius and XM in an almost impossible position. If they are willing to make moves which could hurt their earnings longterm, they may get the votes they need for approval. If not, the merger could be scuttled.

The future of satellite radio is now based on two bad outcomes.

Douglas A. McIntyre is an editor at 247wallst.com

EMC (NYSE:EMC) is up 6% on strong earnings.

VMWare (NYSE:VMW) is down 14% on a weak forecast for the balance of 2008.

E*Trade (NASDAQ:ETFC) is off 15% after missing Wall St. estimates.

Broadcom (NASDAQ:BRCM) is off 5% on poor earnings.

Stocks may trade differently in the pre-market than they do in the regular session.

Douglas A. McIntyre is an editor at 247wallst.com.

Piper Jaffray downgraded Washington Mutual (NYSE:WM) to "sell" from "neutral", according to Briefing.com. The news service also reports that Citigroup cut VMWare (NYSE:VMW) to "hold" from "buy" and cut its price target to $33 from $52.

Deutsche Bank downgraded TRW (NYSE:TRW) to "hold" from "buy", according to MarketWatch.

Caterpillar (NYSE:CAT) Cut to Neutral at JPMorgan according to 24/7 Wall St. The financial website also reports Target Corp. (NYSE:TGT) Cut to Neutral at Credit Suisse.

Douglas A. McIntyre

When McDonald's (NYSE: MCD) reports earnings, it may be an indication for how badly the spending habits of the working class and middle class in America have been hurt by the current economic downturn. According to The Wall Street Journal, "McDonald's has advantages over its rivals. The omnipresence of its restaurants means customers don't have to go far looking for them, making them a convenient trade-down option that doesn't eat up gas."

That is only an advantage if people can go out to eat at all. It is highly likely that the rising costs of food and fuel are hurting the people at the bottom levels of the income pool much worse than everyone else. It is hard to imagine most families with incomes under $25,000 being able to manage their daily living costs at all.

Even if a meal for four at McDonald's costs less than $20, it may be that a cheaper meal can be made at home.

McDonald's is not the preferred restaurant for the upper classes and it may be moving beyond the reach of the spending habits of those with very modest incomes .

Douglas A. McIntyre is an editor at 247wallst.com.

Europe is not exactly a growth market for most US companies. The economy there is slowing much as it is in America. But, McDonald's (NYSE: MCD) may be an exception. According to Bloomberg, "McDonald's Corp., the world's largest restaurant company, may report a second-quarter profit after European sales rose twice as fast as in the U.S."

The news is unusually good because rising commodities prices are likely to squeeze the fast food company's margins. The costs of bread and meat have been up sharply over the last year.

Europe seems an unlikely savior for McDonald's numbers. It is often viewed as a region where good food and traditional cuisine are part of the culture. Who wants a hamburger from a fast food place when the local restaurant has crepe suzette?

But fast food, filled with fat and salt, is irresistible. McDonald's has proved that in every country where it does business.

Douglas A. McIntyre is an editor at 247wallst.com.

JP Morgan downgraded big China-based PC maker Lenovo. According to Reuters, the brokerage cut Lenovo "to neutral from overweight due to a near-term slowdown in revenue growth from weak China demand and a slower ramp-up of the U.S. consumer business."

That is not exactly good news for U.S. PC companies Dell (NASDAQ: DELL) and Hewlett-Packard (NYSE: HPQ) that already appear to be losing market share to the Apple (NASDAQ: AAPL) Mac. China is a critical market to both companies, and any sign of further stress in the U.S. market does not leave them many regions to make up for faltering demand.

Wall Street is already concerned that a recession in the U.S. and slowing economies abroad will hammer the PC market. Like most American companies, HP and Dell thought they could always rely on the rapidly expanding markets in Asia.

It turns out that the best laid plans are not working out.

Douglas A. McIntyre is an editor at 247wallst.com.

To no one's surprise, Ford (NYSE: F) will detail its plans to dive into the small car market when it announces earnings on Thursday. It is a lot late to get religion.

According to The New York Times, "as part of the huge bet it is placing on the future direction of the troubled American auto industry, Ford will realign factories to manufacture more fuel-efficient engines." The bet is a smart one, but it may not matter.

Ford is now close to a decade behind the curve. Companies such as Toyota (NYSE: TM) have produced small cars for the US market since the days they began to open dealerships in America as Ford chased immediate profits in pick-ups and SUVs. The margins in these products were outstanding, but their success relied on gas staying at $2 a gallon forever. Things did not work out that way.

Ford will now go through a process of more cost cutting, firings, and expensive retooling of its plants. To make all of this work, the car company will have to borrow money or sell more stock. In either case, current shareholders are likely to be diluted.

Ford has been so slow to move into the market for fuel-efficient vehicles that it may have trouble staying solvent if the US car market stays very soft for the next two years.

That means Ford's future as an independent company could be in jeopardy.

Douglas A. McIntyre is an editor at 247wallst.com.

General Motors (NYSE: GM) has finally come up with something to save its bacon. It will team with a number of utilities including Con Edison (NYSE: ED) and Duke Power (NYSE: DUK) to create a broad market for electric cars.

According to The Wall Street Journal, "Auto makers need the cooperation of utilities since they control the new technology's primary fuel -- electricity -- and must make sure that the vehicles' recharging processes mesh with the electricity grid and don't inadvertently undermine grid reliability." In other words, no one wants the cars to cause brown outs. GM also plans to negotiate special rates to make its electric cars cheaper to recharge.

The announcement is one of GM's first intelligent moves in a long time. It has allowed its reliance on pickup trucks and SUVs to drive down its sales and cut its market share in the US. Foreign rivals that kept lines of smaller cars now have products with broad appeal to consumers. This is particularly true of their hybrids.

GM's concern remains whether being late to the market will make it too late. Its potential customers want fuel-efficient cars now, when the price of gas is high. GM will lose billions of dollars while it tries to catch up.

The competition will not be sitting still.

Douglas A. McIntyre is an editor at 247wallst.com.

The Fed and the Comptroller of the Currency want to know how Freddie Mac (NYSE: FRE) and Fannie Mae (NYSE: FNM) are doing financially. No one seems to know for sure. That means the price of a bail-out of the companies is up in the air

According to The New York Times, "The financial condition of Fannie and Freddie is of keen interest to members of Congress, some of whom have expressed concern about approving a plan without a clearer understanding of the value of the possible losses."

The questions out of Congress are fair enough. The fact that the two firms do not already have answers to the questions is disturbing.

It is hard to imagine how Fannie Mae and Freddie Mac could have gotten so off track that they cannot give an adequate assessment of their own books. Perhaps if they had know more about their balance sheets and had implemented better forecasting and risk controls, the current mess would not be nearly as dire.

When no one knows how bad things are, they usually get worse.

Douglas A. McIntyre is an editor at 247wallst.com.

Foundry Networks (NASDAQ:FDRY) is up over 30% on a buy-out by Brocade (NASAQ:BRCD). Brocade is off nearly 20% on the same news.

Apple (NASDAQ:AAPL) is off 10% on a weak forecast for the next quarter.

Wachovia (NYSE:WB) is off 12% on poor earnings and a dividend cut.

American Express (NYSE:AXP) is down over 10% after reporting a weak quarter.

Texas Instrument (NYSE:TXN) is off over 10% on poor numbers.

Shares may trade differently in the pre-market than they do in the regular session.

Douglas A. McIntyre is an editor at 247wallst.com

Citigroup dropped Sandisk (NASDAQ:SNDK) to "sell" from "hold" according to MarketWatch.

Texas Instruments (NYSE:TXN) Cut to Neutral at Merrill Lynch, according to 24/7 Wall St.

UBS downgraded Autodesk (NASDAQ:ADSK) to "sell" from "neutral", according to Briefing.com.

Douglas A. McIntyre is an editor at 247wallst.com.

McDonald's (NYSE: MCD) program to sell premium coffee is not going well. That would make some sense. Even Starbucks (NASDAQ: SBUX), the kings of expensive Java, is doing poorly.

According to The Wall Street Journal, "Management may have to defend its giant bet on lattes and cappuccinos, which they want to add at all McDonald's 14,000 U.S. restaurants by next year." The newspaper says that early sales figures for the new drinks are mediocre.

If McDonald's did pull back on its sales of high end coffee-based drinks, it would be the best news Starbucks has had in a couple of years. As US same-store sales growth rates at the chain have fallen, the company's stock has moved from over $40 to below $15. Getting some competition out of the market could be critical to Starbucks recovery.

But Starbucks is not likely to be so lucky. With its massive size and tremendous cash-flow, McDonald's can afford to stay in the premium coffee business for years without a meaningful impact on its earnings. It sells too many hamburgers to be hurt by a slow start in latte sales.

McDonald's can wait Starbucks out and hope that, as things get worse for the coffee company, customers will turn to Ronald McDonald more frequently.

Douglas A. McIntyre can be reached at 247wallst.com.