"By publishing details about the phone and its features, sales of current Apple products are hurt wherein people that would have otherwise purchased a currently existing Apple product would wait for the next item to be released," said Apple lawyer George Riley in an affidavit unsealed by San Mateo, Calif., Judge Clifford Cretan on Friday.

The affidavit was given to a detective in support of a warrant to search the home of Jason Chen, the Gizmodo editor who reportedly paid $5,000 for the device.

Falling Prices?

"What they are talking about is that when end users know a new phone is coming, they stop buying the current version, leaving those holding stock to reduce prices to move the inventory," says Ken Dulaney, an analyst for Gartner Research.

But one week before the iPhone 4G photos and a breakdown were published, Apple CEO Steve Jobs unveiled the 4.0 version of the iPhone operating system. While that OS will work on most current models, Apple has released new iPhone hardware every summer since 2007.

Still, Dulaney said, this speculation may not have trickled down to a wide audience if not for the prototype leak, which received national media coverage outside of the dedicated technology beat. "We in the press and analyst area keep up on these things while the consumer doesn't," he said. "This just made it more public."

Apple's soaring stock price hasn't shown any signs of harm, trading at $258 on Monday, compared to $247 on April 19, when the photos were published.

4G Mania?

And a new report on DigiTimes, a Taiwanese technology daily, projects that Foxconn, Apple's handset manufacturer, also based in Taiwan, will ship 24 million iPhone 4Gs this year, beginning with 4.5 million units in the third quarter. The report said Apple will unveil the iPhone 4G on June 7 during its Worldwide Developers Conference in San Jose, Calif.

DigiTimes cited Taiwan-based component makers as the source for its estimate.

The report also cited, as primary features of the 4G, in-plane switching panels and a 960x640 resolution that exceeds the 854x480 maximum displays of Android devices.

Despite the rosy outlook for Apple, and despite what has become a methodical release of new iPhone hardware in June or July, Current Analysis mobile -devices expert Avi Greengart sees the leaked 4G specs as damaging because they diminish the element of surprise.

"Apple's product development and sales strategy is based on secrecy, and substantial leaks are likely more damaging to Apple's current sales than a vague notion consumers always have that there is always something new coming to the market," said Greengart. "Leaks also give Apple's competitors additional time to respond."

A similar iPhone prototype, also purported to be a 4G, turned up on a Vietnamese tech site last week. Apple has not yet commented on whether it is authentic.

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