Apple Gets IPhone Prototype Back, Gizmodo Says

Apple Inc. got an iPhone prototype back from technology blog Gizmodo.com, which said it obtained the device after a company engineer left it at a bar.

The device, disguised as the current 3GS model, was found in a bar in Redwood City, California, the Gawker Media-owned blog said yesterday. The handset, using an unreleased version of Apple’s operating system, has a front-facing camera, metallic rim and boxier design. It also has a camera flash, higher- resolution screen and larger battery, the blog said.

Gizmodo paid $5,000 for the device, Jason Chen, editor of the blog, said today in an e-mail. He said he returned the prototype to Apple yesterday after receiving a letter from the company’s general counsel requesting it back.

“Now that we definitely know it’s not some knockoff, and it really is Apple’s, I’m happy to see it returned to its rightful owner,” Chen said in a response to Bruce Sewell, Apple’s top lawyer.

Natalie Kerris, a spokeswoman at Cupertino, California- based Apple, didn’t respond to messages seeking comment. Apple, which estimates it has sold more than 50 million iPhones worldwide, fell $2.48 to $244.59 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have climbed 16 percent this year.

The legitimacy of the device has been the subject of debate among Apple bloggers. That was laid to rest when Apple asked for its return, Chen said.

Prototype Play

“It has come to our attention that Gizmodo is currently in possession of a device that belongs to Apple,” Sewell wrote yesterday in a letter to Gizmodo published by the site. “Please let me know where to pick up the unit.”

Gizmodo said its employees played with the prototype for a week, disassembled it and found components labeled “Apple.” The device was eventually remotely disabled, Gizmodo said.

According to the blog, the device was left behind at the bar on March 18 by an Apple software engineer named Gray Powell, who was celebrating his birthday. A bar patron discovered the abandoned prototype on a bar stool. After playing with it and realizing it was an unreleased device, he tried to contact Apple to return it, Gizmodo said, citing an interview with the unnamed finder.

Analysts, including Gene Munster at Piper Jaffray & Co. in Minneapolis, expect Apple to introduce a new iPhone this summer. Apple has released three versions of the smartphone in June or July since 2007.

Tweet Foul

Apple closely guards access to new products. Companies testing the iPad ahead of its April 3 debut had to promise to keep it quarantined in a room with blacked-out windows and key- card locks, four people familiar with the more than 10-page document that bars partners from disclosing information about the tablet said in March.

Nondisclosure agreements extend to messages posted on Twitter. During a meeting with Apple representatives in February, Wall Street Journal Deputy Managing Editor Alan Murray posted a message to Twitter that announced he was using the iPad. The tweet was later removed from the site. Emily Edmonds, a spokeswoman for Dow Jones & Co., the newspaper’s publisher, confirmed the account.

Apple has used legal measures to pursue sources of leaks.

The company in January 2007 was ordered to pay more than $750,000 to lawyers who defended online journalists against the company’s failed attempt to force them to reveal sources of confidential information used in news stories.

Gizmodo said one of its editors spoke with Powell, the Apple engineer, by phone and was told by him that someone from the company would contact the site.

“I hope you take it easy on the kid who lost it,” Chen said in his letter to Apple. “I don’t think he loves anything more than Apple.”

To contact the reporters on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net; Pavel Alpeyev in Tokyo at palpeyev@bloomberg.net

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