SAN FRANCISCO (Reuters) - Apple Inc Chief Executive Tim Cook's new go-to management team of mostly familiar faces failed to drum up much excitement on Wall Street, driving its shares to a three-month low on Wednesday.
The world's most valuable technology company, which had faced questions about a visionary-leadership vacuum following the death of Steve Jobs, on Monday stunned investors by announcing the ouster of chief mobile software architect Scott Forstall and retail chief John Browett -- the latter after six months on the job.
Cook gave most of Forstall's responsibilities to Macintosh software chief Craig Federighi, while some parts of the job went to Internet chief Eddy Cue and celebrated designer Jony Ive.
But the loss of the 15-year veteran and Jobs's confidant Forstall, and resurgent talk about internal conflicts, exacerbated uncertainty over whether Cook and his lieutenants have what it takes to devise and market the next ground-breaking, industry-disrupting product.
Apple shares ended the day down 1.4 percent at 595.32. They have shed a tenth of their value this month -- the biggest monthly loss since late 2008, and have headed south since touching an all-time high of $705 in September.
For investors, the management upheaval from a company that usually excels at delivering positive surprises represents the latest reason for unease about the future of a company now more valuable than almost any other company in the world.
Apple undershot analysts targets in its fiscal third quarter, the second straight disappointment. Its latest Maps software was met with widespread frustration and ridicule over glaring mistakes. Sources told Reuters that Forstall and Cook disagreed over the need to publicly apologize for its maps service embarrassment.
And this month, Apple entered the small-tablet market with its iPad mini, lagging Amazon.com Inc and Google Inc despite pioneering the tablet market in 2010.
Investor concerns now center around the demand, availability and profitability of new products, including the iPad mini set to hit stores on Friday.
"The sudden departure of Scott Forstall doesn't help," said Shaw Wu, an analyst with Sterne Agee. "Now there's some uncertainty in the management."
"There appears to be some infighting, post-Steve Jobs, and looks like Cook is putting his foot down and unifying the troops."
Apple declined to comment beyond Monday's announcement.
Against that backdrop, Cook's inner circle has some convincing to do. In the wake of Forstall's exit, iTunes maestro Eddy Cue -- dubbed "Mr Fixit", the sources say -- gets his second promotion in a year, taking on an expanded portfolio of all online services, including Siri and Maps.
The affable executive with a tough negotiating streak who, according to documents revealed in court, lobbied Jobs aggressively and finally convinced the late visionary about the need for a smaller-sized tablet, has become a central figure: a versatile problem-solver for the company.
Ive, the British-born award-winning designer credited with pushing the boundaries of engineering with the iPod and iPhone, now extends his skills into the software realm with the lead on user interface.
Marketing guru Schiller continues in his role, while career engineer Mansfield canceled his retirement to stay on and lead wireless and semiconductor teams. Then there's Federighi, the self-effacing software engineer who a source told Reuters joined Apple over Forstall's initial objections, and has the nickname "Hair Force One" on Game Center.
"With a large base of approximately 60,400 full-time employees, it would be easy to conclude that the departures are not important," said Keith Bachman, analyst with BMO Capital Markets. "However, we do believe the departures are a negative, since we think Mr. Forstall in particular added value to Apple."
TEAM COOK
Few would argue with Forstall's success in leading mobile software iOS and that he deserves a lot of credit for the sale of millions of iPhones and iPads.
But despite the success, his style and direction on the software were not without critics, inside and outside.
Forstall often clashed with other executives, said a person familiar with him, adding he sometimes tended to over-promise and under-deliver on features. Now, Federighi, Ive and Cue have the opportunity to develop the look, feel and engineering of the all-important software that runs iPhones and iPads.
Cue, who rose to prominence by building and fostering iTunes and the app store, has the tough job of fixing and improving Maps, unveiled with much fanfare by Forstall in June, but it was found full of missing information and wrongly marked sites.
The Duke University alum and Blue Devils basketball fan -- he has been seen courtside with players -- is deemed the right person to accomplish this, given his track record on fixing services and products that initially don't do well.
The 23-year veteran turned around the short-lived MobileMe storage service after revamping and wrapping it into the reasonably well-received iCloud offering.
"Eddy is certainly a person who gets thrown a lot of stuff to 'go make it work' as he's very used to dealing with partners," said a person familiar with Cue. The person said Cue was suited to fixing Maps given the need to work with partners such as TomTom and business listings provider Yelp.
Cue's affable charm and years of dealing with entertainment companies may come in handy as he also tries to improve voice-enabled digital assistant Siri. He has climbed the ladder rapidly in the past five years and was promoted to senior vice president last September, shortly after Cook took over as CEO.
Both Cue and Cook will work more closely with Federighi, who spent a decade in enterprise software before rejoining Apple in 2009, taking over Mac software after the legendary Bertrand Serlet left the company in March last year
Federighi was instrumental in bringing popular mobile features such as notifications and Facebook integration onto the latest Mac operating system Mountain Lion, which was downloaded on 3 million machines in four days.
The former CTO of business software company Ariba, now part of SAP, worked with Jobs at NeXT Computer. Federighi is a visionary in software engineering and can be as good as Jobs in strategic decisions for the product he oversees, a person who has worked with him said.
His presentation skills have been called on of late, most recently at Apple annual developers' gathering in the summer.
Then there's Ive, deemed Apple's inspirational force. Among the iconic products he has worked on are multi-hued iMac computers, the iPod music player, the iPhone and the iPad.
Forstall's departure may free Ive of certain constraints, the sources said. His exit brought to the fore a fundamental design issue -- to do or not to do digital skeuomorphic designs. Skeuomorphic designs stay true to and mimic real-life objects, such as the bookshelf in the iBooks icon, green felt in its Game Center app icon, and an analog clock depicting the time.
Forstall, who will stay on as adviser to Cook for another year, strongly believed in these designs, but his philosophy was not shared by all. His chief dissenter was Ive, who is said to prefer a more open approach, which could mean a slightly different design direction on the icons.
"There is no one else who has that kind of (design) focus on the team," the person said of Ive. "He is critical for them."
(Additional reporting by Alistair Barr; Editing by Edwin Chan and Ken Wills)
This news article is brought to you by MUSIC UNITED 1 - where latest news are our top priority.
Wednesday, October 31, 2012
Apple's Cook fields his A-team before a wary Street
SAN FRANCISCO (Reuters) - Apple Inc Chief Executive Tim Cook's new go-to management team of mostly familiar faces failed to drum up much excitement on Wall Street, driving its shares to a three-month low on Wednesday.
The world's most valuable technology company, which had faced questions about a visionary-leadership vacuum following the death of Steve Jobs, on Monday stunned investors by announcing the ouster of chief mobile software architect Scott Forstall and retail chief John Browett -- the latter after six months on the job.
Cook gave most of Forstall's responsibilities to Macintosh software chief Craig Federighi, while some parts of the job went to Internet chief Eddy Cue and celebrated designer Jony Ive.
But the loss of the 15-year veteran and Jobs's confidant Forstall, and resurgent talk about internal conflicts, exacerbated uncertainty over whether Cook and his lieutenants have what it takes to devise and market the next ground-breaking, industry-disrupting product.
Apple shares ended the day down 1.4 percent at 595.32. They have shed a tenth of their value this month -- the biggest monthly loss since late 2008, and have headed south since touching an all-time high of $705 in September.
For investors, the management upheaval from a company that usually excels at delivering positive surprises represents the latest reason for unease about the future of a company now more valuable than almost any other company in the world.
Apple undershot analysts targets in its fiscal third quarter, the second straight disappointment. Its latest Maps software was met with widespread frustration and ridicule over glaring mistakes. Sources told Reuters that Forstall and Cook disagreed over the need to publicly apologize for its maps service embarrassment.
And this month, Apple entered the small-tablet market with its iPad mini, lagging Amazon.com Inc and Google Inc despite pioneering the tablet market in 2010.
Investor concerns now center around the demand, availability and profitability of new products, including the iPad mini set to hit stores on Friday.
'The sudden departure of Scott Forstall doesn't help,' said Shaw Wu, an analyst with Sterne Agee. 'Now there's some uncertainty in the management.'
'There appears to be some infighting, post-Steve Jobs, and looks like Cook is putting his foot down and unifying the troops.'
Apple declined to comment beyond Monday's announcement.
Against that backdrop, Cook's inner circle has some convincing to do. In the wake of Forstall's exit, iTunes maestro Eddy Cue -- dubbed 'Mr Fixit', the sources say -- gets his second promotion in a year, taking on an expanded portfolio of all online services, including Siri and Maps.
The affable executive with a tough negotiating streak who, according to documents revealed in court, lobbied Jobs aggressively and finally convinced the late visionary about the need for a smaller-sized tablet, has become a central figure: a versatile problem-solver for the company.
Ive, the British-born award-winning designer credited with pushing the boundaries of engineering with the iPod and iPhone, now extends his skills into the software realm with the lead on user interface.
Marketing guru Schiller continues in his role, while career engineer Mansfield canceled his retirement to stay on and lead wireless and semiconductor teams. Then there's Federighi, the self-effacing software engineer who a source told Reuters joined Apple over Forstall's initial objections, and has the nickname 'Hair Force One' on Game Center.
'With a large base of approximately 60,400 full-time employees, it would be easy to conclude that the departures are not important,' said Keith Bachman, analyst with BMO Capital Markets. 'However, we do believe the departures are a negative, since we think Mr. Forstall in particular added value to Apple.'
TEAM COOK
Few would argue with Forstall's success in leading mobile software iOS and that he deserves a lot of credit for the sale of millions of iPhones and iPads.
But despite the success, his style and direction on the software were not without critics, inside and outside.
Forstall often clashed with other executives, said a person familiar with him, adding he sometimes tended to over-promise and under-deliver on features. Now, Federighi, Ive and Cue have the opportunity to develop the look, feel and engineering of the all-important software that runs iPhones and iPads.
Cue, who rose to prominence by building and fostering iTunes and the app store, has the tough job of fixing and improving Maps, unveiled with much fanfare by Forstall in June, but it was found full of missing information and wrongly marked sites.
The Duke University alum and Blue Devils basketball fan -- he has been seen courtside with players -- is deemed the right person to accomplish this, given his track record on fixing services and products that initially don't do well.
The 23-year veteran turned around the short-lived MobileMe storage service after revamping and wrapping it into the reasonably well-received iCloud offering.
'Eddy is certainly a person who gets thrown a lot of stuff to 'go make it work' as he's very used to dealing with partners,' said a person familiar with Cue. The person said Cue was suited to fixing Maps given the need to work with partners such as TomTom and business listings provider Yelp.
Cue's affable charm and years of dealing with entertainment companies may come in handy as he also tries to improve voice-enabled digital assistant Siri. He has climbed the ladder rapidly in the past five years and was promoted to senior vice president last September, shortly after Cook took over as CEO.
Both Cue and Cook will work more closely with Federighi, who spent a decade in enterprise software before rejoining Apple in 2009, taking over Mac software after the legendary Bertrand Serlet left the company in March last year
Federighi was instrumental in bringing popular mobile features such as notifications and Facebook integration onto the latest Mac operating system Mountain Lion, which was downloaded on 3 million machines in four days.
The former CTO of business software company Ariba, now part of SAP, worked with Jobs at NeXT Computer. Federighi is a visionary in software engineering and can be as good as Jobs in strategic decisions for the product he oversees, a person who has worked with him said.
His presentation skills have been called on of late, most recently at Apple annual developers' gathering in the summer.
Then there's Ive, deemed Apple's inspirational force. Among the iconic products he has worked on are multi-hued iMac computers, the iPod music player, the iPhone and the iPad.
Forstall's departure may free Ive of certain constraints, the sources said. His exit brought to the fore a fundamental design issue -- to do or not to do digital skeuomorphic designs. Skeuomorphic designs stay true to and mimic real-life objects, such as the bookshelf in the iBooks icon, green felt in its Game Center app icon, and an analog clock depicting the time.
Forstall, who will stay on as adviser to Cook for another year, strongly believed in these designs, but his philosophy was not shared by all. His chief dissenter was Ive, who is said to prefer a more open approach, which could mean a slightly different design direction on the icons.
'There is no one else who has that kind of (design) focus on the team,' the person said of Ive. 'He is critical for them.'
(Additional reporting by Alistair Barr; Editing by Edwin Chan and Ken Wills)
This news article is brought to you by MOVIE GOSSIP NEWS - where latest news are our top priority.
The world's most valuable technology company, which had faced questions about a visionary-leadership vacuum following the death of Steve Jobs, on Monday stunned investors by announcing the ouster of chief mobile software architect Scott Forstall and retail chief John Browett -- the latter after six months on the job.
Cook gave most of Forstall's responsibilities to Macintosh software chief Craig Federighi, while some parts of the job went to Internet chief Eddy Cue and celebrated designer Jony Ive.
But the loss of the 15-year veteran and Jobs's confidant Forstall, and resurgent talk about internal conflicts, exacerbated uncertainty over whether Cook and his lieutenants have what it takes to devise and market the next ground-breaking, industry-disrupting product.
Apple shares ended the day down 1.4 percent at 595.32. They have shed a tenth of their value this month -- the biggest monthly loss since late 2008, and have headed south since touching an all-time high of $705 in September.
For investors, the management upheaval from a company that usually excels at delivering positive surprises represents the latest reason for unease about the future of a company now more valuable than almost any other company in the world.
Apple undershot analysts targets in its fiscal third quarter, the second straight disappointment. Its latest Maps software was met with widespread frustration and ridicule over glaring mistakes. Sources told Reuters that Forstall and Cook disagreed over the need to publicly apologize for its maps service embarrassment.
And this month, Apple entered the small-tablet market with its iPad mini, lagging Amazon.com Inc and Google Inc despite pioneering the tablet market in 2010.
Investor concerns now center around the demand, availability and profitability of new products, including the iPad mini set to hit stores on Friday.
'The sudden departure of Scott Forstall doesn't help,' said Shaw Wu, an analyst with Sterne Agee. 'Now there's some uncertainty in the management.'
'There appears to be some infighting, post-Steve Jobs, and looks like Cook is putting his foot down and unifying the troops.'
Apple declined to comment beyond Monday's announcement.
Against that backdrop, Cook's inner circle has some convincing to do. In the wake of Forstall's exit, iTunes maestro Eddy Cue -- dubbed 'Mr Fixit', the sources say -- gets his second promotion in a year, taking on an expanded portfolio of all online services, including Siri and Maps.
The affable executive with a tough negotiating streak who, according to documents revealed in court, lobbied Jobs aggressively and finally convinced the late visionary about the need for a smaller-sized tablet, has become a central figure: a versatile problem-solver for the company.
Ive, the British-born award-winning designer credited with pushing the boundaries of engineering with the iPod and iPhone, now extends his skills into the software realm with the lead on user interface.
Marketing guru Schiller continues in his role, while career engineer Mansfield canceled his retirement to stay on and lead wireless and semiconductor teams. Then there's Federighi, the self-effacing software engineer who a source told Reuters joined Apple over Forstall's initial objections, and has the nickname 'Hair Force One' on Game Center.
'With a large base of approximately 60,400 full-time employees, it would be easy to conclude that the departures are not important,' said Keith Bachman, analyst with BMO Capital Markets. 'However, we do believe the departures are a negative, since we think Mr. Forstall in particular added value to Apple.'
TEAM COOK
Few would argue with Forstall's success in leading mobile software iOS and that he deserves a lot of credit for the sale of millions of iPhones and iPads.
But despite the success, his style and direction on the software were not without critics, inside and outside.
Forstall often clashed with other executives, said a person familiar with him, adding he sometimes tended to over-promise and under-deliver on features. Now, Federighi, Ive and Cue have the opportunity to develop the look, feel and engineering of the all-important software that runs iPhones and iPads.
Cue, who rose to prominence by building and fostering iTunes and the app store, has the tough job of fixing and improving Maps, unveiled with much fanfare by Forstall in June, but it was found full of missing information and wrongly marked sites.
The Duke University alum and Blue Devils basketball fan -- he has been seen courtside with players -- is deemed the right person to accomplish this, given his track record on fixing services and products that initially don't do well.
The 23-year veteran turned around the short-lived MobileMe storage service after revamping and wrapping it into the reasonably well-received iCloud offering.
'Eddy is certainly a person who gets thrown a lot of stuff to 'go make it work' as he's very used to dealing with partners,' said a person familiar with Cue. The person said Cue was suited to fixing Maps given the need to work with partners such as TomTom and business listings provider Yelp.
Cue's affable charm and years of dealing with entertainment companies may come in handy as he also tries to improve voice-enabled digital assistant Siri. He has climbed the ladder rapidly in the past five years and was promoted to senior vice president last September, shortly after Cook took over as CEO.
Both Cue and Cook will work more closely with Federighi, who spent a decade in enterprise software before rejoining Apple in 2009, taking over Mac software after the legendary Bertrand Serlet left the company in March last year
Federighi was instrumental in bringing popular mobile features such as notifications and Facebook integration onto the latest Mac operating system Mountain Lion, which was downloaded on 3 million machines in four days.
The former CTO of business software company Ariba, now part of SAP, worked with Jobs at NeXT Computer. Federighi is a visionary in software engineering and can be as good as Jobs in strategic decisions for the product he oversees, a person who has worked with him said.
His presentation skills have been called on of late, most recently at Apple annual developers' gathering in the summer.
Then there's Ive, deemed Apple's inspirational force. Among the iconic products he has worked on are multi-hued iMac computers, the iPod music player, the iPhone and the iPad.
Forstall's departure may free Ive of certain constraints, the sources said. His exit brought to the fore a fundamental design issue -- to do or not to do digital skeuomorphic designs. Skeuomorphic designs stay true to and mimic real-life objects, such as the bookshelf in the iBooks icon, green felt in its Game Center app icon, and an analog clock depicting the time.
Forstall, who will stay on as adviser to Cook for another year, strongly believed in these designs, but his philosophy was not shared by all. His chief dissenter was Ive, who is said to prefer a more open approach, which could mean a slightly different design direction on the icons.
'There is no one else who has that kind of (design) focus on the team,' the person said of Ive. 'He is critical for them.'
(Additional reporting by Alistair Barr; Editing by Edwin Chan and Ken Wills)
This news article is brought to you by MOVIE GOSSIP NEWS - where latest news are our top priority.
Changing channels; Sony, Sharp in turnaround battle
TOKYO (Reuters) - Sony Corp is likely to say it returned to an operating profit for July-September after it sold a chemicals business, but investors still aren't sure a consumer electronics revamp will deliver the profit growth the group seeks.
Sony shares, valued at less than $12 billion, have dropped 16 percent since end-June and its 5-year credit default swaps - the cost of insuring against debt default - have jumped by almost 60 percent. The benchmark Nikkei average is down by less than 1 percent.
The maker of Bravia TVs, Vaio laptops and PlayStation game consoles, battling weak demand and tough competition, is expected to say it earned operating profit of 33.8 billion yen ($424.7 million) in its second-quarter, after losing 1.6 billion yen a year ago, according to an average estimate from five analysts on Thomson Reuters I/B/E/S.
Sony has sold a chemicals unit to state-backed Development Bank of Japan for 58 billion yen, and other asset sales may further inflate operating profit this business year. The Japanese group, which blazed a trail in the early 1980s with its Walkman portable music players, is closing the Shinagawa Technology Center, a 31-storey Tokyo office built in 1998 and may even sell the 37-storey Sony Tower, the New York headquarters of its U.S. business, according to media reports.
Sony has said it expects to reduce its global workforce by 10,000 people by end-March, around 6 percent of its total, as it seeks to lop 30 billion yen off its costs.
HIGH-RISK
Kazuo Hirai, who took over as CEO in April, has pledged to rebuild Sony around gaming, digital imaging and mobile devices, and nurture new businesses such as medical devices, as the TV business shrinks - Sony has lost close to $9 billion in TVs over the past 8 years. In late-September, Sony agreed to pay 50 billion yen to become the biggest shareholder in Olympus Corp, a world leader in medical endoscopes.
'The areas in which Sony is continuing to focus are of course high-risk, high-return markets,' said JP Morgan analyst Yoshiharu Izumi in a recent report. 'Although we expect (full-year) margin improvement in the electronics segment, we think it's too early to appraise a sustained recovery.'
While battling weak demand for its products, fierce competition from Apple Inc and Samsung Electronics and others, Sony is also up against a strong yen and a depressed global economy.
Panasonic Corp, a rival Japanese TV maker, said on Wednesday it will lose almost $10 billion this business year as it cleans its house of risky assets - writing down billions of dollars of goodwill and assets in its mobile and energy units and preparing for more restructuring that is likely to see it shift away from money-losing TVs and other consumer electronics.
OUTLOOK DIMMER
In August, Sony cut its full-year operating profit forecast by more than a quarter to 130 billion yen, still some way above the average forecast by 19 analysts for 107 billion yen. At a net level, Sony sees annual profit of 20 billion yen, while the market prediction is for around a third of that.
'It's unclear if Sony will cut its full-year operating profit guidance, but we see considerable potential for second-half shortfalls, mainly in smartphones and games,' Goldman Sachs analyst Takashi Watanabe said in a client note.
Sales of Sony's handsets, including its Xperia smartphones, are expected to have slid by more than a fifth in July-September, to below 8 million devices, a Reuters poll showed last month. [ID:nL6E8LAL10] For next year, it's forecast to sell 34.4 million mobiles, about the same as Samsung shifts each month.
The South Korean firm and Apple are also encroaching on Sony's gaming business, and Hirai has cut the forecast for annual sales of the hand-held Vita and PSP consoles to 12 million from 16 million.
After four straight years of net losses, Hirai is also hampered by weakened finances. At end-June, Sony's shareholder equity ratio fell to below 15 percent - a rate of 20 percent is generally considered a healthy minimum.
While selling off non-core assets, Sony has also spent to bolster its business portfolio - laying out $1.8 billion in four months on the Olympus stake, a cloud gaming firm and a website for doctors, but this has prompted both Moody's and Standard & Poor's to lower their long-term debt rating on the company to the second-lowest investment grade.
SHARP DOWNTURN
At rival Japanese TV maker Sharp Corp, which also announces quarterly earnings on Thursday, the need to return to profit is more urgent.
The maker of Aquos TVs has secured a $4.6 billion bank bailout, and has pledged to axe 10,000 jobs, sell assets, and return to profit. At end-June, Sharp's shareholder equity ratio was 18.7 percent.
After adding restructuring charges, valuation losses on stocks of LCD display panels and other costs, Sharp is expected to post a 400 billion yen net loss for April-September, almost double the company's estimate, the Nikkei business daily reported last week.
In front-loading those costs, and taking the hit now, Sharp may be better placed to return to profit in the current second half of the year, allowing lenders to justify the bailout.
Sharp is said to be increasing production capacity for its high-definition power-saving IGZO screens, which it hopes to sell to makers of ultrabook computers, including Lenovo Group, Dell Inc and Hewlett-Packard, Japanese media have reported.
For the second quarter, Sharp is expected to have made a 50.4 billion yen operating loss, according to the average of six analysts on Thomson Reuters I/B/E/S.
Both Sharp and Sony may also have felt the impact of a recent dispute with China over ownership of islands in the East China Sea, which triggered sometimes violent protests against Japanese products. Sharp had almost a fifth of its revenues in China, while Sony has around 8 percent of its business there.
Sharp shares have more than halved since end-June, to record lows below 150 yen. Five years ago, the stock traded at above 2,440 yen. Its market value has slumped to below $2.4 billion.
($1 = 79.5800 Japanese yen)
(Additional reporting by Reiji Murai; Editing by Ian Geoghegan)
Sony shares, valued at less than $12 billion, have dropped 16 percent since end-June and its 5-year credit default swaps - the cost of insuring against debt default - have jumped by almost 60 percent. The benchmark Nikkei average is down by less than 1 percent.
The maker of Bravia TVs, Vaio laptops and PlayStation game consoles, battling weak demand and tough competition, is expected to say it earned operating profit of 33.8 billion yen ($424.7 million) in its second-quarter, after losing 1.6 billion yen a year ago, according to an average estimate from five analysts on Thomson Reuters I/B/E/S.
Sony has sold a chemicals unit to state-backed Development Bank of Japan for 58 billion yen, and other asset sales may further inflate operating profit this business year. The Japanese group, which blazed a trail in the early 1980s with its Walkman portable music players, is closing the Shinagawa Technology Center, a 31-storey Tokyo office built in 1998 and may even sell the 37-storey Sony Tower, the New York headquarters of its U.S. business, according to media reports.
Sony has said it expects to reduce its global workforce by 10,000 people by end-March, around 6 percent of its total, as it seeks to lop 30 billion yen off its costs.
HIGH-RISK
Kazuo Hirai, who took over as CEO in April, has pledged to rebuild Sony around gaming, digital imaging and mobile devices, and nurture new businesses such as medical devices, as the TV business shrinks - Sony has lost close to $9 billion in TVs over the past 8 years. In late-September, Sony agreed to pay 50 billion yen to become the biggest shareholder in Olympus Corp, a world leader in medical endoscopes.
'The areas in which Sony is continuing to focus are of course high-risk, high-return markets,' said JP Morgan analyst Yoshiharu Izumi in a recent report. 'Although we expect (full-year) margin improvement in the electronics segment, we think it's too early to appraise a sustained recovery.'
While battling weak demand for its products, fierce competition from Apple Inc and Samsung Electronics and others, Sony is also up against a strong yen and a depressed global economy.
Panasonic Corp, a rival Japanese TV maker, said on Wednesday it will lose almost $10 billion this business year as it cleans its house of risky assets - writing down billions of dollars of goodwill and assets in its mobile and energy units and preparing for more restructuring that is likely to see it shift away from money-losing TVs and other consumer electronics.
OUTLOOK DIMMER
In August, Sony cut its full-year operating profit forecast by more than a quarter to 130 billion yen, still some way above the average forecast by 19 analysts for 107 billion yen. At a net level, Sony sees annual profit of 20 billion yen, while the market prediction is for around a third of that.
'It's unclear if Sony will cut its full-year operating profit guidance, but we see considerable potential for second-half shortfalls, mainly in smartphones and games,' Goldman Sachs analyst Takashi Watanabe said in a client note.
Sales of Sony's handsets, including its Xperia smartphones, are expected to have slid by more than a fifth in July-September, to below 8 million devices, a Reuters poll showed last month. [ID:nL6E8LAL10] For next year, it's forecast to sell 34.4 million mobiles, about the same as Samsung shifts each month.
The South Korean firm and Apple are also encroaching on Sony's gaming business, and Hirai has cut the forecast for annual sales of the hand-held Vita and PSP consoles to 12 million from 16 million.
After four straight years of net losses, Hirai is also hampered by weakened finances. At end-June, Sony's shareholder equity ratio fell to below 15 percent - a rate of 20 percent is generally considered a healthy minimum.
While selling off non-core assets, Sony has also spent to bolster its business portfolio - laying out $1.8 billion in four months on the Olympus stake, a cloud gaming firm and a website for doctors, but this has prompted both Moody's and Standard & Poor's to lower their long-term debt rating on the company to the second-lowest investment grade.
SHARP DOWNTURN
At rival Japanese TV maker Sharp Corp, which also announces quarterly earnings on Thursday, the need to return to profit is more urgent.
The maker of Aquos TVs has secured a $4.6 billion bank bailout, and has pledged to axe 10,000 jobs, sell assets, and return to profit. At end-June, Sharp's shareholder equity ratio was 18.7 percent.
After adding restructuring charges, valuation losses on stocks of LCD display panels and other costs, Sharp is expected to post a 400 billion yen net loss for April-September, almost double the company's estimate, the Nikkei business daily reported last week.
In front-loading those costs, and taking the hit now, Sharp may be better placed to return to profit in the current second half of the year, allowing lenders to justify the bailout.
Sharp is said to be increasing production capacity for its high-definition power-saving IGZO screens, which it hopes to sell to makers of ultrabook computers, including Lenovo Group, Dell Inc and Hewlett-Packard, Japanese media have reported.
For the second quarter, Sharp is expected to have made a 50.4 billion yen operating loss, according to the average of six analysts on Thomson Reuters I/B/E/S.
Both Sharp and Sony may also have felt the impact of a recent dispute with China over ownership of islands in the East China Sea, which triggered sometimes violent protests against Japanese products. Sharp had almost a fifth of its revenues in China, while Sony has around 8 percent of its business there.
Sharp shares have more than halved since end-June, to record lows below 150 yen. Five years ago, the stock traded at above 2,440 yen. Its market value has slumped to below $2.4 billion.
($1 = 79.5800 Japanese yen)
(Additional reporting by Reiji Murai; Editing by Ian Geoghegan)
Facebook shares fall as lock-up period expires
(Reuters) - Facebook Inc shares fell nearly 4 percent in busy trade on Wednesday as the company allowed employees to start selling roughly 230 million shares less than six months after its rocky market debut.
The world's largest social network waived a provision that prevented employees from selling shares until November 14, making Facebook shares worth about $5 billion at current prices eligible for sale in the public market.
Facebook staffers were meant to be able to sell their vested shares on Monday, but the two-day market closure due to powerful storm Sandy saw Wednesday become the first trading day.
The flood of shares set to hit the market as insider trading 'lock-up' provisions expire in several phases have pressured Facebook's stock for months.
'I don't really understand why Facebook (chose) to unlock virtually all of its compensation within the year of its IPO, but they did,' said Michael Pachter, an analyst with Wedbush Securities.
'They made a mistake and set the company up for volatility.'
More than 1 billion Facebook shares held by employees, insiders and early investors are set to become available for trading by year's end, a significant increase from the 'float' of roughly 692 million shares that were available for trading as of September 30.
The largest batch of additional shares will become eligible to trade on November 14, when the lock-up expires on roughly 800 million shares.
Facebook's 28-year-old chief executive, Mark Zuckerberg, has committed to not sell any shares before September 2013. But board member and early Facebook investor Peter Thiel sold the majority of his holdings in August, raising criticism from some investors.
The world's No. 1 online social networking website, with roughly 1 billion users, experienced brisk demand for its shares when it was a private company and became the only U.S. company to debut with a market value of more than $100 billion.
But shares of Facebook are down more than 40 percent since the IPO as investors worry about the company's ability to keep up revenue growth and the large pool of additional shares in the lock-up that are now hitting the market.
Wall Street also has cast a gimlet eye on Facebook and its ability to attract mobile revenue as more people turn to smartphones and tablet devices to access the Web.
Last week, Facebook said it increased mobile advertising revenue at a faster than expected pace, totaling $150 million in the third quarter. Estimates had pegged mobile revenue at $40 million to $50 million in the second quarter.
Facebook's stock was down 3.7 percent at $21.14 in Wednesday trading, off an earlier low at $20.73.
Facebook drew $1.5 billion under a loan facility last week to cover the tax withholding obligations of vested employee shares. The company has said it will cover the total tax bill with existing cash and with borrowing from its credit facilities.
(Reporting By Alexei Oreskovic in Sanfrancisco and Jennifer Saba in New York; Editing by Gerald E. McCormick, Claudia Parsons, Matthew Lewis and Tim Dobbyn)
This news article is brought to you by GIRLS TEACH DATING - where latest news are our top priority.
The world's largest social network waived a provision that prevented employees from selling shares until November 14, making Facebook shares worth about $5 billion at current prices eligible for sale in the public market.
Facebook staffers were meant to be able to sell their vested shares on Monday, but the two-day market closure due to powerful storm Sandy saw Wednesday become the first trading day.
The flood of shares set to hit the market as insider trading 'lock-up' provisions expire in several phases have pressured Facebook's stock for months.
'I don't really understand why Facebook (chose) to unlock virtually all of its compensation within the year of its IPO, but they did,' said Michael Pachter, an analyst with Wedbush Securities.
'They made a mistake and set the company up for volatility.'
More than 1 billion Facebook shares held by employees, insiders and early investors are set to become available for trading by year's end, a significant increase from the 'float' of roughly 692 million shares that were available for trading as of September 30.
The largest batch of additional shares will become eligible to trade on November 14, when the lock-up expires on roughly 800 million shares.
Facebook's 28-year-old chief executive, Mark Zuckerberg, has committed to not sell any shares before September 2013. But board member and early Facebook investor Peter Thiel sold the majority of his holdings in August, raising criticism from some investors.
The world's No. 1 online social networking website, with roughly 1 billion users, experienced brisk demand for its shares when it was a private company and became the only U.S. company to debut with a market value of more than $100 billion.
But shares of Facebook are down more than 40 percent since the IPO as investors worry about the company's ability to keep up revenue growth and the large pool of additional shares in the lock-up that are now hitting the market.
Wall Street also has cast a gimlet eye on Facebook and its ability to attract mobile revenue as more people turn to smartphones and tablet devices to access the Web.
Last week, Facebook said it increased mobile advertising revenue at a faster than expected pace, totaling $150 million in the third quarter. Estimates had pegged mobile revenue at $40 million to $50 million in the second quarter.
Facebook's stock was down 3.7 percent at $21.14 in Wednesday trading, off an earlier low at $20.73.
Facebook drew $1.5 billion under a loan facility last week to cover the tax withholding obligations of vested employee shares. The company has said it will cover the total tax bill with existing cash and with borrowing from its credit facilities.
(Reporting By Alexei Oreskovic in Sanfrancisco and Jennifer Saba in New York; Editing by Gerald E. McCormick, Claudia Parsons, Matthew Lewis and Tim Dobbyn)
This news article is brought to you by GIRLS TEACH DATING - where latest news are our top priority.
In hurricane, Twitter proves a lifeline despite pranksters
SAN FRANCISCO (Reuters) - As Hurricane Sandy pounded the U.S. Atlantic coast on Monday night, knocking out electricity and Internet connections, millions of residents turned to Twitter as a part-newswire, part-911 hotline that hummed through the night even as some websites failed and swathes of Manhattan fell dark.
But the social network also became a fertile ground for pranksters who seized the moment to disseminate rumors and Photoshopped images, including a false tweet Monday night that the trading floor at the New York Stock Exchange was submerged under several feet of water.
The exchange issued a denial, but not before the tweet was circulated by countless users and reported on-air by CNN, illustrating how Twitter had become the essential - but deeply fallible - spine of information coursing through real-time, major media events.
But a year after Twitter gained attention for its role in the rescue efforts in tsunami-stricken Japan, the network seemed to solidify its mainstream foothold as government agencies, news outlets and residents in need turned to it at the most critical hour.
Beginning late Sunday, government agencies and officials, from New York Governor Andrew Cuomo(@NYGovCuomo) to the Federal Emergency Management Agency (@FEMA) to @NotifyNYC, an account handled by New York City's emergency management officials, issued evacuation orders and updates.
As the storm battered New York Monday night, residents encountering clogged 9-1-1 dispatch lines flooded the Fire Department's @fdny Twitter account with appeals for information and help for trapped relatives and friends.
One elderly resident needed rescue in a building in Manhattan Beach. Another user sent @fdny an Instagram photo of four insulin shots that she needed refrigerated immediately. Yet another sought a portable generator for a friend on a ventilator living downtown.
Emily Rahimi, who manages the @fdny account by herself, according to a department spokesman, coolly fielded dozens of requests, while answering questions about whether to call 311, New York's non-emergency help line, or Consolidated Edison.
At the Red Cross of America's Washington D.C. headquarters, in a small room called the Digital Operations Center, six wall-mounted monitors display a stream of updates from Twitter and Facebook and a visual 'heat map' of where posts seeking help are coming from.
The heat map informed how the Red Cross's aid workers deployed their resources, said Wendy Harman, the Red Cross director of social strategy.
The Red Cross was also using Radian6, a social media monitoring tool sold by Salesforce.com, to spot people seeking help and answer their questions.
'We found out we can carry out the mission of the Red Cross from the social Web,' said Harman, who hosted a brief visit from President Barack Obama on Tuesday.
SPREADING INFORMATION
Twitter, which in the past year has heavily ramped up its advertising offerings and features to suit large brand marketers like Pepsico Inc and Procter & Gamble, suddenly found itself offering its tools to new kind of client on Monday: public agencies that wanted help spreading information.
For the first time, the company created a '#Sandy' event page - a format once reserved for large ad-friendly media events like the Olympics or Nascar races - that served as a hub where visitors could see aggregated information. The page displayed manually- and algorithmically-selected tweets plucked from official accounts like those of New York Mayor Michael Bloomberg and Governor Chris Christie of New Jersey, who was particularly active on the network.
Agencies like the Maryland Emergency Management Agency and the New York Mayor's Office also used Twitter's promoted tweets - an ad product used by advertisers to reach a broader consumer base - to get out the word.
The company said offering such services for free to government agencies was one of several initiatives, including a service that broadcasts location-specific alerts and public announcements based on a Twitter user's postal code.
'We learned from the storm and tsunami in Japan that Twitter can often be a lifeline,' said Rachael Horwitz, a Twitter spokeswoman.
Jeannette Sutton, a sociologist at the University of Colorado who has received funding from the National Science Foundation and the Department of Homeland Security to study social media uses in disaster management, said government agencies have been skeptical until recently about using social media during natural disasters.
'There's a big problem with whether it's valid, accurate information out there,' Sutton said. 'But if you're not part of the conversation, you're going to be missing out.'
As the hurricane hit one of the most wired regions in the country, news outlets also took advantage of the smartphone users who chronicled rising tides on every flooded block. On Instagram, the photo-sharing website, witnesses shared color-filtered snapshots of floating cars, submerged gas stations and a building shorn of its facade at a rate of more than 10 pictures per second, Instagram founder Kevin Systrom told Poynter.org on Tuesday.
Many of the images were republished in the live coverage by news websites and aired on television broadcasts.
LIES SLAPPED DOWN
But by late Monday, fake images began to circulate widely, including a picture of a storm cloud gathering dramatically over the Statue of Liberty and a photoshopped job of a shark lurking in a submerged residential neighborhood. The latter image even surfaced on social networks in China.
Then there was the slew of fabricated message from @comfortablysmug, the Twitter account that claimed the NYSE was underwater. The account is owned by Shashank Tripathi, the hedge fund investor and campaign manager for Christopher Wight, the Republican candidate to represent New York's 12th District in the U.S. House of Representatives.
Tripathi, who did not return emails by Reuters seeking comment, apologized Tuesday night for making a 'series of irresponsible and inaccurate tweets' and resigned from Wight's campaign.
His identity was first reported by Jack Stuef of BuzzFeed.
Around 3:30 p.m. on Tuesday, Tripathi began deleting many of his Hurricane Sandy tweets. Tripathi's friend, @theAshok, defended Tripathi, telling Reuters on Twitter: 'People shouldn't be taking 'news' from an anonymous twitter account seriously.'
Tripathi's @comfortablysmug's Twitter stream, which is followed by business journalists, bloggers and various New York personalities, had been a well-known voice in digital circles, but mostly for his 140-character-or-less criticisms of the Obama administration, often accompanied by the hashtag, #ObamaIsn'tWorking.
On Tuesday, New York City Councilman Peter F. Vallone Jr. appeared to threaten Tripathi with prosecution when he tweeted that he hoped Tripathi was 'less smug and comfortable cuz I'm talking to Cy,' presumably referring to Manhattan District Attorney Cyrus Vance Jr.
For its part, Twitter said that it would not have considered suspending the account unless it received a request from a law enforcement agency.
'We don't moderate content, and we certainly don't want to be in a position of deciding what speech is OK and what speech is not,' said Horwitz, Twitter's spokeswoman.
But Ben Smith, the editor at Buzzfeed, which outed Tripathi, said Twitter's credibility would not be affected by rumormongers because netizens often self-correct and identify falsehoods.
'They used to say a lie will travel halfway around the world before the truth puts its shoes on, but in the Twitter world, that's not true anymore,' Smith said. 'The lies get slapped down really fast.'
For Smith, the ability to disseminate information via Twitter and Facebook on Monday night became perhaps even more important than his Web publication, which enjoyed one of its better nights in readership but went dark when the blackout crippled the site's servers in downtown Manhattan.
Buzzfeed's staff quickly began publishing on Tumblr instead, and Smith personally took over Buzzfeed's Twitter account to stay in the thick of the conversation.
'Our view of the world is that social distribution is the key thing,' Smith said. 'We're in the business of creating content that people want to share, more than the business of maintaining a website.'
(Reporting By Gerry Shih in San Francisco and Jennifer Ablan and Felix Salmon in New York; Editing by Robert Birsel)
This news article is brought to you by LINUXOS.PRO - where latest news are our top priority.
But the social network also became a fertile ground for pranksters who seized the moment to disseminate rumors and Photoshopped images, including a false tweet Monday night that the trading floor at the New York Stock Exchange was submerged under several feet of water.
The exchange issued a denial, but not before the tweet was circulated by countless users and reported on-air by CNN, illustrating how Twitter had become the essential - but deeply fallible - spine of information coursing through real-time, major media events.
But a year after Twitter gained attention for its role in the rescue efforts in tsunami-stricken Japan, the network seemed to solidify its mainstream foothold as government agencies, news outlets and residents in need turned to it at the most critical hour.
Beginning late Sunday, government agencies and officials, from New York Governor Andrew Cuomo(@NYGovCuomo) to the Federal Emergency Management Agency (@FEMA) to @NotifyNYC, an account handled by New York City's emergency management officials, issued evacuation orders and updates.
As the storm battered New York Monday night, residents encountering clogged 9-1-1 dispatch lines flooded the Fire Department's @fdny Twitter account with appeals for information and help for trapped relatives and friends.
One elderly resident needed rescue in a building in Manhattan Beach. Another user sent @fdny an Instagram photo of four insulin shots that she needed refrigerated immediately. Yet another sought a portable generator for a friend on a ventilator living downtown.
Emily Rahimi, who manages the @fdny account by herself, according to a department spokesman, coolly fielded dozens of requests, while answering questions about whether to call 311, New York's non-emergency help line, or Consolidated Edison.
At the Red Cross of America's Washington D.C. headquarters, in a small room called the Digital Operations Center, six wall-mounted monitors display a stream of updates from Twitter and Facebook and a visual 'heat map' of where posts seeking help are coming from.
The heat map informed how the Red Cross's aid workers deployed their resources, said Wendy Harman, the Red Cross director of social strategy.
The Red Cross was also using Radian6, a social media monitoring tool sold by Salesforce.com, to spot people seeking help and answer their questions.
'We found out we can carry out the mission of the Red Cross from the social Web,' said Harman, who hosted a brief visit from President Barack Obama on Tuesday.
SPREADING INFORMATION
Twitter, which in the past year has heavily ramped up its advertising offerings and features to suit large brand marketers like Pepsico Inc and Procter & Gamble, suddenly found itself offering its tools to new kind of client on Monday: public agencies that wanted help spreading information.
For the first time, the company created a '#Sandy' event page - a format once reserved for large ad-friendly media events like the Olympics or Nascar races - that served as a hub where visitors could see aggregated information. The page displayed manually- and algorithmically-selected tweets plucked from official accounts like those of New York Mayor Michael Bloomberg and Governor Chris Christie of New Jersey, who was particularly active on the network.
Agencies like the Maryland Emergency Management Agency and the New York Mayor's Office also used Twitter's promoted tweets - an ad product used by advertisers to reach a broader consumer base - to get out the word.
The company said offering such services for free to government agencies was one of several initiatives, including a service that broadcasts location-specific alerts and public announcements based on a Twitter user's postal code.
'We learned from the storm and tsunami in Japan that Twitter can often be a lifeline,' said Rachael Horwitz, a Twitter spokeswoman.
Jeannette Sutton, a sociologist at the University of Colorado who has received funding from the National Science Foundation and the Department of Homeland Security to study social media uses in disaster management, said government agencies have been skeptical until recently about using social media during natural disasters.
'There's a big problem with whether it's valid, accurate information out there,' Sutton said. 'But if you're not part of the conversation, you're going to be missing out.'
As the hurricane hit one of the most wired regions in the country, news outlets also took advantage of the smartphone users who chronicled rising tides on every flooded block. On Instagram, the photo-sharing website, witnesses shared color-filtered snapshots of floating cars, submerged gas stations and a building shorn of its facade at a rate of more than 10 pictures per second, Instagram founder Kevin Systrom told Poynter.org on Tuesday.
Many of the images were republished in the live coverage by news websites and aired on television broadcasts.
LIES SLAPPED DOWN
But by late Monday, fake images began to circulate widely, including a picture of a storm cloud gathering dramatically over the Statue of Liberty and a photoshopped job of a shark lurking in a submerged residential neighborhood. The latter image even surfaced on social networks in China.
Then there was the slew of fabricated message from @comfortablysmug, the Twitter account that claimed the NYSE was underwater. The account is owned by Shashank Tripathi, the hedge fund investor and campaign manager for Christopher Wight, the Republican candidate to represent New York's 12th District in the U.S. House of Representatives.
Tripathi, who did not return emails by Reuters seeking comment, apologized Tuesday night for making a 'series of irresponsible and inaccurate tweets' and resigned from Wight's campaign.
His identity was first reported by Jack Stuef of BuzzFeed.
Around 3:30 p.m. on Tuesday, Tripathi began deleting many of his Hurricane Sandy tweets. Tripathi's friend, @theAshok, defended Tripathi, telling Reuters on Twitter: 'People shouldn't be taking 'news' from an anonymous twitter account seriously.'
Tripathi's @comfortablysmug's Twitter stream, which is followed by business journalists, bloggers and various New York personalities, had been a well-known voice in digital circles, but mostly for his 140-character-or-less criticisms of the Obama administration, often accompanied by the hashtag, #ObamaIsn'tWorking.
On Tuesday, New York City Councilman Peter F. Vallone Jr. appeared to threaten Tripathi with prosecution when he tweeted that he hoped Tripathi was 'less smug and comfortable cuz I'm talking to Cy,' presumably referring to Manhattan District Attorney Cyrus Vance Jr.
For its part, Twitter said that it would not have considered suspending the account unless it received a request from a law enforcement agency.
'We don't moderate content, and we certainly don't want to be in a position of deciding what speech is OK and what speech is not,' said Horwitz, Twitter's spokeswoman.
But Ben Smith, the editor at Buzzfeed, which outed Tripathi, said Twitter's credibility would not be affected by rumormongers because netizens often self-correct and identify falsehoods.
'They used to say a lie will travel halfway around the world before the truth puts its shoes on, but in the Twitter world, that's not true anymore,' Smith said. 'The lies get slapped down really fast.'
For Smith, the ability to disseminate information via Twitter and Facebook on Monday night became perhaps even more important than his Web publication, which enjoyed one of its better nights in readership but went dark when the blackout crippled the site's servers in downtown Manhattan.
Buzzfeed's staff quickly began publishing on Tumblr instead, and Smith personally took over Buzzfeed's Twitter account to stay in the thick of the conversation.
'Our view of the world is that social distribution is the key thing,' Smith said. 'We're in the business of creating content that people want to share, more than the business of maintaining a website.'
(Reporting By Gerry Shih in San Francisco and Jennifer Ablan and Felix Salmon in New York; Editing by Robert Birsel)
This news article is brought to you by LINUXOS.PRO - where latest news are our top priority.
Tuesday, October 30, 2012
Apple's iPad mini packs full-sized punch but screen inferior: reviews
SAN FRANCISCO (Reuters) - Apple Inc's entry in the accelerating mobile tablet race squeezes about 35 percent more viewing space onto a lighter package than rival devices from Google or Amazon.com Inc, but it sports inferior resolution and a lofty price tag, two influential reviewers wrote on Tuesday.
The iPad mini, which starts at $329 versus the $199 for Google's Nexus 7 and Amazon's Kindle Fire HD, is easy to hold with one hand, eliminating a drawback of the 10-inch iPad, Wall Street Journal columnist Walt Mossberg wrote in one of the first major reviews of a gadget introduced last week.
Both Mossberg and New York Times columnist David Pogue offered kudos for cramming most of its full-sized cousin's functions onto a smaller device, as advertised.
But the iPad mini's 1024 x 768 resolution was a big step backwards from the iPad's much-touted Retina display, and underperformed the rival Kindle and Nexus, the two reviewers agreed.
Mossberg said Apple chose to go with a lower-quality display because the existing 250,000-plus iPad applications could only run unmodified in two resolutions - and the higher level would have sapped too much power.
'The lack of true HD gives the Nexus and Fire HD an advantage for video fans. In my tests, video looked just fine, but not as good as on the regular iPad,' Mossberg wrote.
The original iPad was launched in 2010 and went on to upend the personal computer industry, spawning a raft of similar devices. The iPad mini marks Apple's first foray into a smaller 7-inch segment that Amazon's Kindle Fire now dominates, demonstrating demand exists for such a device.
Apple, making its boldest consumer hardware move since Tim Cook took the helm from late co-founder Steve Jobs, hopes the smaller tablet can beat back incursions onto its home turf of consumer electronics.
'In shrinking the iconic iPad, Apple has pulled off an impressive feat,' Mossberg wrote. 'It has managed to create a tablet that's notably thinner and lighter than the leading small competitors with 7-inch screens, while squeezing in a significantly roomier 7.9-inch display.
'And it has shunned the plastic construction used in its smaller rivals to retain the iPad's sturdier aluminum and glass body.'
Mossberg, whose reviews are followed closely by consumers and tech companies alike, wrote that the iPad mini did as advertised by bringing the full-sized iPad experience onto a smaller screen.
He noted, however, that the device was too large to fit easily into pockets. It exhibited battery life of about 10 hours and 27 minutes, an hour more than the Kindle Fire at the same settings, but about 17 minutes less than the Nexus 7.
'By pricing the Mini so high, Apple allows the $200 class of seven-inch Android tablets and readers to live,' Pogue wrote.
'But the iPad Mini is a far classier, more attractive, thinner machine. It has two cameras instead of one. Its fit and finish are far more refined. And above all, it offers that colossal app catalog, which Android tablet owners can only dream about.'
(Reporting By Edwin Chan; Editing by Ken Wills)
This news article is brought to you by ECONOMY BLOG - where latest news are our top priority.
The iPad mini, which starts at $329 versus the $199 for Google's Nexus 7 and Amazon's Kindle Fire HD, is easy to hold with one hand, eliminating a drawback of the 10-inch iPad, Wall Street Journal columnist Walt Mossberg wrote in one of the first major reviews of a gadget introduced last week.
Both Mossberg and New York Times columnist David Pogue offered kudos for cramming most of its full-sized cousin's functions onto a smaller device, as advertised.
But the iPad mini's 1024 x 768 resolution was a big step backwards from the iPad's much-touted Retina display, and underperformed the rival Kindle and Nexus, the two reviewers agreed.
Mossberg said Apple chose to go with a lower-quality display because the existing 250,000-plus iPad applications could only run unmodified in two resolutions - and the higher level would have sapped too much power.
'The lack of true HD gives the Nexus and Fire HD an advantage for video fans. In my tests, video looked just fine, but not as good as on the regular iPad,' Mossberg wrote.
The original iPad was launched in 2010 and went on to upend the personal computer industry, spawning a raft of similar devices. The iPad mini marks Apple's first foray into a smaller 7-inch segment that Amazon's Kindle Fire now dominates, demonstrating demand exists for such a device.
Apple, making its boldest consumer hardware move since Tim Cook took the helm from late co-founder Steve Jobs, hopes the smaller tablet can beat back incursions onto its home turf of consumer electronics.
'In shrinking the iconic iPad, Apple has pulled off an impressive feat,' Mossberg wrote. 'It has managed to create a tablet that's notably thinner and lighter than the leading small competitors with 7-inch screens, while squeezing in a significantly roomier 7.9-inch display.
'And it has shunned the plastic construction used in its smaller rivals to retain the iPad's sturdier aluminum and glass body.'
Mossberg, whose reviews are followed closely by consumers and tech companies alike, wrote that the iPad mini did as advertised by bringing the full-sized iPad experience onto a smaller screen.
He noted, however, that the device was too large to fit easily into pockets. It exhibited battery life of about 10 hours and 27 minutes, an hour more than the Kindle Fire at the same settings, but about 17 minutes less than the Nexus 7.
'By pricing the Mini so high, Apple allows the $200 class of seven-inch Android tablets and readers to live,' Pogue wrote.
'But the iPad Mini is a far classier, more attractive, thinner machine. It has two cameras instead of one. Its fit and finish are far more refined. And above all, it offers that colossal app catalog, which Android tablet owners can only dream about.'
(Reporting By Edwin Chan; Editing by Ken Wills)
This news article is brought to you by ECONOMY BLOG - where latest news are our top priority.
Disney to buy "Star Wars" producer for $4.05 billion
LOS ANGELES (Reuters) - Walt Disney Co agreed to buy filmmaker George Lucas's Lucasfilm Ltd and its 'Star Wars' franchise for $4.05 billion in cash and stock, a blockbuster deal that includes the surprise promise of a new film in the series in 2015.
Disney Chief Executive Bob Iger told analysts on Tuesday that the plan is to release a new movie in the series every two to three years thereafter. The last 'Star Wars' picture was 'Revenge of the Sith' in 2005, and Lucas has in the past denied any plans for more.
Lucas, a Hollywood icon known for exercising control over the most minute details of the fictional universe he created, will remain as a creative consultant on the new films.
'It's now time for me to pass 'Star Wars' on to a new generation of filmmakers,' he said in a statement. Lucas will become the second-largest individual holder of Disney shares, with a 2.2 percent stake.
Disney will pay about half the purchase price in cash and issue about 40 million shares at closing.
'This is one of the greatest entertainment properties of all time,' Iger said. Like Disney's purchases of Marvel Entertainment and Pixar studio, LucasFilm will 'drive long-term value to our shareholders,' he said.
Chief Financial Officer Jay Rasulo said the deal would lower Disney's earnings per share by a low single-digits percentage in fiscal 2013 and 2014. He also said Disney would repurchase all of the issued shares on the open market within the next two years, on top of planned buybacks.
This agreement marks the third time in less than seven years that Disney has signed a massive deal to take over a beloved studio or character portfolio, part of its strategy to acquire brands that can be stretched across TV, movies, theme parks and the Internet.
In early 2006, Disney struck a deal to acquire 'Toy Story' creator Pixar, and in the summer of 2009 it bought the comic book powerhouse Marvel.
'Disney already has a great portfolio and this adds one more,' said Morningstar analyst Michael Corty. 'They don't have any holes, but their past deals have been additive.'
Iger said he and Lucas first discussed a possible sale about 18 months ago. Lucas was pondering his retirement, and Iger was looking to add another well-known brand to the Disney empire. The two signed the deal at Disney's Burbank, California, headquarters on Tuesday.
'Everywhere I went, 'Star Wars' was already there, and sometimes they got there ahead of us,' said Iger in an interview. 'I kept seeing that brand and decided maybe we should buy it.'
He told analysts he believed there was 'substantial pent-up demand' for new 'Star Wars' movies. Each of the last three films in the series would have grossed $1.5 billion in today's dollars at the box office, CFO Rasulo estimated.
The film's iconic characters also will boost Disney's sales of toys and other consumer products, particularly overseas, executives said. Sales of 'Star Wars' items such as Darth Vader and Yoda action figures total roughly $215 million a year, Rasulo said.
In 2005, the year the last 'Star Wars' film was released, LucasFilm generated $550 million in operating income, Rasulo said.
Disney also will be able to extend the presence of the franchise at its theme parks around the globe, Iger said. The company's parks already feature rides based on 'Star Wars' and 'Indiana Jones,' another Lucas property.
'Star Wars' characters also are likely to find a home on the Disney XD cable channel, which is aimed at young boys, Iger said.
Iger wouldn't commit to keeping the 'Star Wars' operation separate from Disney, as he did with Pixar and Marvel.
And Lucas won't sit on the Disney board despite his 2.2 percent stake in the company, Iger said. The late Apple CEO Steve Jobs, who held a large stake in Disney after it bought his Pixar studio, had a seat on the Disney board.
From a fan's perspective, critics said there was sure to be at least some excitement at the prospect of episode seven in the saga of Luke Skywalker and Darth Vader.
'Do I want to see more Star Wars movies? Not really, but they're not making these movies for me,' the film writer 'Mr. Beaks' wrote on the well-regarded industry site Ain't It Cool News. 'There's a whole new generation of Star Wars fans, and they worship the prequels like folks my age worshipped the original trilogy.'
Besides 'Star Wars,' the Lucasfilm deal also includes rights to the 'Indiana Jones' franchise, though Disney did not elaborate on any plans for that series.
(Additional reporting by Michael Erman in New York and Himank Sharma in Bangalore; Writing by Ben Berkowitz; Editing by Saumyadeb Chakrabarty and Ciro Scotti)
This article is brought to you by BUY A NEW COMPUTER.
Disney Chief Executive Bob Iger told analysts on Tuesday that the plan is to release a new movie in the series every two to three years thereafter. The last 'Star Wars' picture was 'Revenge of the Sith' in 2005, and Lucas has in the past denied any plans for more.
Lucas, a Hollywood icon known for exercising control over the most minute details of the fictional universe he created, will remain as a creative consultant on the new films.
'It's now time for me to pass 'Star Wars' on to a new generation of filmmakers,' he said in a statement. Lucas will become the second-largest individual holder of Disney shares, with a 2.2 percent stake.
Disney will pay about half the purchase price in cash and issue about 40 million shares at closing.
'This is one of the greatest entertainment properties of all time,' Iger said. Like Disney's purchases of Marvel Entertainment and Pixar studio, LucasFilm will 'drive long-term value to our shareholders,' he said.
Chief Financial Officer Jay Rasulo said the deal would lower Disney's earnings per share by a low single-digits percentage in fiscal 2013 and 2014. He also said Disney would repurchase all of the issued shares on the open market within the next two years, on top of planned buybacks.
This agreement marks the third time in less than seven years that Disney has signed a massive deal to take over a beloved studio or character portfolio, part of its strategy to acquire brands that can be stretched across TV, movies, theme parks and the Internet.
In early 2006, Disney struck a deal to acquire 'Toy Story' creator Pixar, and in the summer of 2009 it bought the comic book powerhouse Marvel.
'Disney already has a great portfolio and this adds one more,' said Morningstar analyst Michael Corty. 'They don't have any holes, but their past deals have been additive.'
Iger said he and Lucas first discussed a possible sale about 18 months ago. Lucas was pondering his retirement, and Iger was looking to add another well-known brand to the Disney empire. The two signed the deal at Disney's Burbank, California, headquarters on Tuesday.
'Everywhere I went, 'Star Wars' was already there, and sometimes they got there ahead of us,' said Iger in an interview. 'I kept seeing that brand and decided maybe we should buy it.'
He told analysts he believed there was 'substantial pent-up demand' for new 'Star Wars' movies. Each of the last three films in the series would have grossed $1.5 billion in today's dollars at the box office, CFO Rasulo estimated.
The film's iconic characters also will boost Disney's sales of toys and other consumer products, particularly overseas, executives said. Sales of 'Star Wars' items such as Darth Vader and Yoda action figures total roughly $215 million a year, Rasulo said.
In 2005, the year the last 'Star Wars' film was released, LucasFilm generated $550 million in operating income, Rasulo said.
Disney also will be able to extend the presence of the franchise at its theme parks around the globe, Iger said. The company's parks already feature rides based on 'Star Wars' and 'Indiana Jones,' another Lucas property.
'Star Wars' characters also are likely to find a home on the Disney XD cable channel, which is aimed at young boys, Iger said.
Iger wouldn't commit to keeping the 'Star Wars' operation separate from Disney, as he did with Pixar and Marvel.
And Lucas won't sit on the Disney board despite his 2.2 percent stake in the company, Iger said. The late Apple CEO Steve Jobs, who held a large stake in Disney after it bought his Pixar studio, had a seat on the Disney board.
From a fan's perspective, critics said there was sure to be at least some excitement at the prospect of episode seven in the saga of Luke Skywalker and Darth Vader.
'Do I want to see more Star Wars movies? Not really, but they're not making these movies for me,' the film writer 'Mr. Beaks' wrote on the well-regarded industry site Ain't It Cool News. 'There's a whole new generation of Star Wars fans, and they worship the prequels like folks my age worshipped the original trilogy.'
Besides 'Star Wars,' the Lucasfilm deal also includes rights to the 'Indiana Jones' franchise, though Disney did not elaborate on any plans for that series.
(Additional reporting by Michael Erman in New York and Himank Sharma in Bangalore; Writing by Ben Berkowitz; Editing by Saumyadeb Chakrabarty and Ciro Scotti)
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Hurricane Sandy disrupts Northeast U.S. telecom networks
NEW YORK (Reuters) - Power outages and flooding caused by Hurricane Sandy disrupted telecommunications services in Northeastern states on Tuesday, resulting in spotty coverage for cellphones, television, home telephones and Internet services.
While all the region's telecom service providers were having problems, Verizon Communications, which serves many of the states in the hurricane's path, appeared to have suffered some of the worst damage from the storm.
The New York-based company said the storm caused flooding at three Verizon central offices that hold telecom equipment in Lower Manhattan as well as sites in Queens and Long Island.
Its downtown headquarters, which was put out of action 11 years ago by the September 11 attacks, had three feet of water in the lobby at one point. Because of flooding, all its telecom equipment at that office, which serves much of Wall Street and downtown consumers, was knocked out of service.
The company said it was working on pumping out the water in the hope that it could restart its back-up power generators in the facility as commercial power services were not yet restored the morning after the big storm hit.
'The bullseye of the impact is the metro area,' said spokesman William Kula, adding that restoring service for the city's financial district was a top priority for Verizon.
Telecom disruptions affect electronic trading as well as corporate operators. The Chief Operating Officer of the New York Stock Exchange, which does not expect to open again until Wednesday, said 'lots of telecom infrastructure is down' and that the NYSE was working with big firms to ensure they were doing testing of their systems.
Verizon did not give an estimate as to how many businesses and consumers were affected. Two of three Manhattan central offices were partially flooded and operating minimal services.
Customers served by the damaged central offices will experience 'a loss of all services' including TV, Internet, and traditional telephone services, Kula said. Some customers may experience intermittent busy signals for non-emergency calls.
Verizon said its engineers were working on assessing the damage from the early hours. Outside of New York, the company warned that it was also having some trouble.
'Verizon is discovering that many poles and power lines/Verizon cables are down throughout the region due to heavy winds and falling trees,' the company said in a statement.
Verizon Wireless, AT&T Inc, Sprint Nextel, T-Mobile USA said they were dealing with wireless service problems in the hurricane region. Cable operators Cablevision Systems Corp, Comcast Corp and Time Warner Cable also said they were having service problems.
'I think everybody's equipment's going to be damaged, including cellphone towers,' Stifel Nicolaus analyst Christopher King said from his Verizon Wireless cellphone in Baltimore.
'Particularly for Verizon, they're clearly going to have the most damage on the wireline side because its pretty much all of their territory (where the storm hit),' King said.
Sprint Nextel, the No. 3 U.S. mobile provider said it was seeing outages at some cell sites because of the power outages across all the states in Sandy's path including New York, New Jersey, Connecticut, Pennsylvania, Washington DC, Maryland, North Virginia and New England.
'(Repair crews) have started on some critical areas but they haven't been able to get to everywhere they need to be,' spokeswoman Crystal Davis said. She noted that 80 of the company's stores would reopen at noon. Sprint had closed about 180 stores ahead of the storm.
T-Mobile USA said that 'customers may be experiencing service disruptions or an inability to access service in some areas, especially those that were hardest hit by the storm.'
People complained of outages to their cable telephone, Internet and television services from providers including Comcast, Cablevision and Verizon in New Jersey, Connecticut, and New York.
Cablevision said it was experiencing widespread service interruptions primarily related to loss of power. The company said it is working to restore services.
Comcast, whose headquarters is in Philadelphia and serves East Coast states, said that for the majority of customers, 'Comcast service should be restored as power comes back on to their homes.'
Cellphone service was spotty for top wireless providers Verizon Wireless, AT&T Inc and T-Mobile USA, a unit of Deutsche Telekom, according to some customers.
Verizon Wireless, a venture of Verizon Communications and Vodafone Group, said on Tuesday afternoon that customers may be experiencing service issues and that about 94 percent of its cell sites were up and running.
AT&T said it was experiencing some issues in areas heavily affected by the storm. By Tuesday morning spokesman Mark Siegel said AT&T was in the initial stages of on-the-ground assessment and that it expected 'crews will be working around the clock to restore service.'
Several Time Warner Cable customers in Brooklyn said that their Internet, television and phone services stopped working Monday night but were back again by Tuesday morning.
Time Warner Cable said that while it has not seen any major damage to its infrastructure, its customers who do not have electricity do not have cable services.
Millions of people in the eastern United States awoke on Tuesday to flooded homes, fallen trees and widespread power outages caused by Sandy, which swamped New York City's subway system and submerged streets in Manhattan's financial district.
At least 30 people were reported killed in the United States by one of the biggest storms to ever hit the country. Sandy dropped just below hurricane status before making landfall on Monday night in New Jersey.
(Additional reporting by Jennifer Saba, Liana Baker in New York and other Reuters reporters around the hurricane region; Editing by Chizu Nomiyama and Andrea Ricci)
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While all the region's telecom service providers were having problems, Verizon Communications, which serves many of the states in the hurricane's path, appeared to have suffered some of the worst damage from the storm.
The New York-based company said the storm caused flooding at three Verizon central offices that hold telecom equipment in Lower Manhattan as well as sites in Queens and Long Island.
Its downtown headquarters, which was put out of action 11 years ago by the September 11 attacks, had three feet of water in the lobby at one point. Because of flooding, all its telecom equipment at that office, which serves much of Wall Street and downtown consumers, was knocked out of service.
The company said it was working on pumping out the water in the hope that it could restart its back-up power generators in the facility as commercial power services were not yet restored the morning after the big storm hit.
'The bullseye of the impact is the metro area,' said spokesman William Kula, adding that restoring service for the city's financial district was a top priority for Verizon.
Telecom disruptions affect electronic trading as well as corporate operators. The Chief Operating Officer of the New York Stock Exchange, which does not expect to open again until Wednesday, said 'lots of telecom infrastructure is down' and that the NYSE was working with big firms to ensure they were doing testing of their systems.
Verizon did not give an estimate as to how many businesses and consumers were affected. Two of three Manhattan central offices were partially flooded and operating minimal services.
Customers served by the damaged central offices will experience 'a loss of all services' including TV, Internet, and traditional telephone services, Kula said. Some customers may experience intermittent busy signals for non-emergency calls.
Verizon said its engineers were working on assessing the damage from the early hours. Outside of New York, the company warned that it was also having some trouble.
'Verizon is discovering that many poles and power lines/Verizon cables are down throughout the region due to heavy winds and falling trees,' the company said in a statement.
Verizon Wireless, AT&T Inc, Sprint Nextel, T-Mobile USA said they were dealing with wireless service problems in the hurricane region. Cable operators Cablevision Systems Corp, Comcast Corp and Time Warner Cable also said they were having service problems.
'I think everybody's equipment's going to be damaged, including cellphone towers,' Stifel Nicolaus analyst Christopher King said from his Verizon Wireless cellphone in Baltimore.
'Particularly for Verizon, they're clearly going to have the most damage on the wireline side because its pretty much all of their territory (where the storm hit),' King said.
Sprint Nextel, the No. 3 U.S. mobile provider said it was seeing outages at some cell sites because of the power outages across all the states in Sandy's path including New York, New Jersey, Connecticut, Pennsylvania, Washington DC, Maryland, North Virginia and New England.
'(Repair crews) have started on some critical areas but they haven't been able to get to everywhere they need to be,' spokeswoman Crystal Davis said. She noted that 80 of the company's stores would reopen at noon. Sprint had closed about 180 stores ahead of the storm.
T-Mobile USA said that 'customers may be experiencing service disruptions or an inability to access service in some areas, especially those that were hardest hit by the storm.'
People complained of outages to their cable telephone, Internet and television services from providers including Comcast, Cablevision and Verizon in New Jersey, Connecticut, and New York.
Cablevision said it was experiencing widespread service interruptions primarily related to loss of power. The company said it is working to restore services.
Comcast, whose headquarters is in Philadelphia and serves East Coast states, said that for the majority of customers, 'Comcast service should be restored as power comes back on to their homes.'
Cellphone service was spotty for top wireless providers Verizon Wireless, AT&T Inc and T-Mobile USA, a unit of Deutsche Telekom, according to some customers.
Verizon Wireless, a venture of Verizon Communications and Vodafone Group, said on Tuesday afternoon that customers may be experiencing service issues and that about 94 percent of its cell sites were up and running.
AT&T said it was experiencing some issues in areas heavily affected by the storm. By Tuesday morning spokesman Mark Siegel said AT&T was in the initial stages of on-the-ground assessment and that it expected 'crews will be working around the clock to restore service.'
Several Time Warner Cable customers in Brooklyn said that their Internet, television and phone services stopped working Monday night but were back again by Tuesday morning.
Time Warner Cable said that while it has not seen any major damage to its infrastructure, its customers who do not have electricity do not have cable services.
Millions of people in the eastern United States awoke on Tuesday to flooded homes, fallen trees and widespread power outages caused by Sandy, which swamped New York City's subway system and submerged streets in Manhattan's financial district.
At least 30 people were reported killed in the United States by one of the biggest storms to ever hit the country. Sandy dropped just below hurricane status before making landfall on Monday night in New Jersey.
(Additional reporting by Jennifer Saba, Liana Baker in New York and other Reuters reporters around the hurricane region; Editing by Chizu Nomiyama and Andrea Ricci)
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Nokia says shipping new Lumia smartphones this week
HELSINKI (Reuters) - Finnish phone maker Nokia said its new Lumia smartphones, key to the company's hopes for recovery, will begin to appear in some European markets this week.
Nokia late on Monday said its high-end Lumia 820 and 920 phones, which will run on Microsoft's Windows Phone 8 software, will this week reach first operators and retail outlets in France and Britain and later in Russia and Germany as well as other select markets.
In the United States, AT&T will start selling the devices in early November. Verizon Wireless will begin selling Lumia 822 and T-Mobile will offer Lumia 810, Nokia said.
(Reporting By Helsinki newsroom; Editing by Richard Pullin)
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Nokia late on Monday said its high-end Lumia 820 and 920 phones, which will run on Microsoft's Windows Phone 8 software, will this week reach first operators and retail outlets in France and Britain and later in Russia and Germany as well as other select markets.
In the United States, AT&T will start selling the devices in early November. Verizon Wireless will begin selling Lumia 822 and T-Mobile will offer Lumia 810, Nokia said.
(Reporting By Helsinki newsroom; Editing by Richard Pullin)
This news article is brought to you by MUSIC UNITED 1 - where latest news are our top priority.
Monday, October 29, 2012
Panasonic may curb solar panel, lithium battery expansion: sources
TOKYO (Reuters) - Electronics conglomerate Panasonic Corp may curtail its expanded production of solar panels and small lithium batteries used in PCs and other devices as part of new round of restructuring, two sources at the company told Reuters.
Panasonic recently built a solar panel plant in Malaysia for 45 billion yen ($564 million), upping capacity by one-third to 900 megawatts. Plans to further ramp up production to 1.5 gigawatts may be scaled back, however, because of weak demand, particularly in Europe, the sources said on condition they were not identified.
Panasonic's new president, Kazuhiro Tsuga, has promised a new revival plan for the Japanese company by the end of the current business year next March 31. He has said he will weed out loss-making or low-profitability units.
The firm's business in small lithium batteries has been hurt by price competition from Korean and Chinese competitors. Falling into the red last year, it was aiming to return to profit this year by shifting production to China, where costs are lower, but may post a loss instead, the sources said.
As a result of the squeeze on expanded output of solar panels and batteries, Panasonic's energy unit may struggle to reach a target of raising sales to more than 1 trillion yen, or 10 percent of overall sales, and operating margin to at least 10 percent by March 2016, the sources said.
The unit retains 202 billion yen of goodwill following the acquisition of Sanyo in 2010. Analysts estimate that two-thirds of that is related to solar panels and small lithium batteries.
Shares of Panasonic, which releases its results on Wednesday for the quarter ended September 30, rose 3 percent in morning trading in Tokyo to 507 yen. ($1 = 79.8150 Japanese yen) (Writing by Tim Kelly; Editing by Michael Watson)
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Panasonic recently built a solar panel plant in Malaysia for 45 billion yen ($564 million), upping capacity by one-third to 900 megawatts. Plans to further ramp up production to 1.5 gigawatts may be scaled back, however, because of weak demand, particularly in Europe, the sources said on condition they were not identified.
Panasonic's new president, Kazuhiro Tsuga, has promised a new revival plan for the Japanese company by the end of the current business year next March 31. He has said he will weed out loss-making or low-profitability units.
The firm's business in small lithium batteries has been hurt by price competition from Korean and Chinese competitors. Falling into the red last year, it was aiming to return to profit this year by shifting production to China, where costs are lower, but may post a loss instead, the sources said.
As a result of the squeeze on expanded output of solar panels and batteries, Panasonic's energy unit may struggle to reach a target of raising sales to more than 1 trillion yen, or 10 percent of overall sales, and operating margin to at least 10 percent by March 2016, the sources said.
The unit retains 202 billion yen of goodwill following the acquisition of Sanyo in 2010. Analysts estimate that two-thirds of that is related to solar panels and small lithium batteries.
Shares of Panasonic, which releases its results on Wednesday for the quarter ended September 30, rose 3 percent in morning trading in Tokyo to 507 yen. ($1 = 79.8150 Japanese yen) (Writing by Tim Kelly; Editing by Michael Watson)
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Apple software, retail chiefs out in overhaul
SAN FRANCISCO (Reuters) - Apple Inc CEO Tim Cook on Monday replaced the heads of its software and retail units in the company's biggest executive shake-up in a decade following embarrassing problems with its new mapping program and unpopular store-related decisions.
Software chief Scott Forstall, who oversaw the launch of the flawed mapping software and much criticized Siri voice-enabled assistant, will leave Apple next year.
Forstall, seen as a polarizing figure inside Apple, had been billed as one of the future candidates to take the top job at Apple. He was the executive behind the panned Apple Maps app that the company announced with much fanfare in summer.
Apple said in a statement that retail chief John Browett 'is leaving,' without elaborating; that a search for his replacement is underway; and the retail team would report directly to Cook. Browett had riled up the retail store staff when he reduced the number of employees in his unit.
The departures come a little more than a year into Cook's tenure as chief executive. Cook replaced the late Apple founder Steve Jobs, considered one of the best executives of all times by many analysts and investors.
'These changes show that Tim Cook is stamping his authority on the business,' Ben Wood, analyst with CCS Insight, said. 'Perhaps disappointed with the Maps issues, Forstall became the scapegoat.'
Apple upended the tech industry with the release of its iPhone smartphone in 2007. But the company is facing increasing competition from search giant Google, whose Android has become the world's most popular mobile software, as well as from Amazon.com Inc, Microsoft and Samsung.
'Competition is moving much faster to be more Apple-like,' said Tim Bajarin, president of technology research and consulting firm Creative Strategies. 'They're finding they need to streamline the management team in order to get things going faster.'
Apple's launch of its own mapping service in September, when it began selling the iPhone 5 and rolled out its updated iOS 6 software, led to widespread user complaints, particularly since it replaced the popular Google Inc Maps.
Apple's Siri personal assistant software also came under a lot of criticism, including for not providing information on business location, when it was launched last year.
Both the services were introduced with much fanfare by Forstall, who had supervised their development as senior vice president of iOS software.
The executive changes hand over substantially more responsibility to Eddy Cue, the head of Internet Software and Services who helped create the iTunes music store and App Store. The 23-year Apple veteran already is in charge of Cloud services and will take on Apple Maps and Siri. Craig Federighi will oversee Apple's mobile iOS software as well as its OS X Mac software, Apple said.
Putting the mobile and personal computer software teams under the same manager could improve operations within the company, particularly as the capabilities and features of smartphones and PCs increasingly converge, said analysts.
'If you have two different heads, you have two different fiefdoms,' said BGC Partners analyst Colin Gillis.
Another executive who will get extra responsibility under the shake-up is Jonathan Ive, Apple's head of industrial design, who has played a key role in Apple's success by imbuing its gadgets with a distinct look and feel.
That magic touch could help reinvigorate the look of Apple's software, which has been criticized by some technology observers, Gillis said.
RETAIL SWITCH
Shares of Apple, the world's largest publicly traded company by market value, have declined 14 percent in the past month since reaching a 52-week high of $705.07 in September.
Browett, former CEO of British electronics retailer Dixons, took over as senior vice president of Apple's retail stores earlier this year, replacing Ron Johnson, who went on to become the CEO of JCPenney.
'I think ultimately they probably discovered that his experience with Dixons didn't translate that well to the Apple stores and he just probably wasn't the right fit,' Bajarin of Creative Strategies said.
Apple, which described Monday's moves as a way to increase 'collaboration' across its hardware, software and services business, said Forstall will serve as an advisor to Cook until his departure.
Last week Apple delivered a second straight quarter of disappointing financial results, and iPad sales fell short of Wall Street's targets, marring its record of consistently blowing past investors' expectations.
(Reporting by Alexei Oreskovic; Editing by Richard Chang)
This news article is brought to you by INTERNET NEWS - where latest news are our top priority.
Software chief Scott Forstall, who oversaw the launch of the flawed mapping software and much criticized Siri voice-enabled assistant, will leave Apple next year.
Forstall, seen as a polarizing figure inside Apple, had been billed as one of the future candidates to take the top job at Apple. He was the executive behind the panned Apple Maps app that the company announced with much fanfare in summer.
Apple said in a statement that retail chief John Browett 'is leaving,' without elaborating; that a search for his replacement is underway; and the retail team would report directly to Cook. Browett had riled up the retail store staff when he reduced the number of employees in his unit.
The departures come a little more than a year into Cook's tenure as chief executive. Cook replaced the late Apple founder Steve Jobs, considered one of the best executives of all times by many analysts and investors.
'These changes show that Tim Cook is stamping his authority on the business,' Ben Wood, analyst with CCS Insight, said. 'Perhaps disappointed with the Maps issues, Forstall became the scapegoat.'
Apple upended the tech industry with the release of its iPhone smartphone in 2007. But the company is facing increasing competition from search giant Google, whose Android has become the world's most popular mobile software, as well as from Amazon.com Inc, Microsoft and Samsung.
'Competition is moving much faster to be more Apple-like,' said Tim Bajarin, president of technology research and consulting firm Creative Strategies. 'They're finding they need to streamline the management team in order to get things going faster.'
Apple's launch of its own mapping service in September, when it began selling the iPhone 5 and rolled out its updated iOS 6 software, led to widespread user complaints, particularly since it replaced the popular Google Inc Maps.
Apple's Siri personal assistant software also came under a lot of criticism, including for not providing information on business location, when it was launched last year.
Both the services were introduced with much fanfare by Forstall, who had supervised their development as senior vice president of iOS software.
The executive changes hand over substantially more responsibility to Eddy Cue, the head of Internet Software and Services who helped create the iTunes music store and App Store. The 23-year Apple veteran already is in charge of Cloud services and will take on Apple Maps and Siri. Craig Federighi will oversee Apple's mobile iOS software as well as its OS X Mac software, Apple said.
Putting the mobile and personal computer software teams under the same manager could improve operations within the company, particularly as the capabilities and features of smartphones and PCs increasingly converge, said analysts.
'If you have two different heads, you have two different fiefdoms,' said BGC Partners analyst Colin Gillis.
Another executive who will get extra responsibility under the shake-up is Jonathan Ive, Apple's head of industrial design, who has played a key role in Apple's success by imbuing its gadgets with a distinct look and feel.
That magic touch could help reinvigorate the look of Apple's software, which has been criticized by some technology observers, Gillis said.
RETAIL SWITCH
Shares of Apple, the world's largest publicly traded company by market value, have declined 14 percent in the past month since reaching a 52-week high of $705.07 in September.
Browett, former CEO of British electronics retailer Dixons, took over as senior vice president of Apple's retail stores earlier this year, replacing Ron Johnson, who went on to become the CEO of JCPenney.
'I think ultimately they probably discovered that his experience with Dixons didn't translate that well to the Apple stores and he just probably wasn't the right fit,' Bajarin of Creative Strategies said.
Apple, which described Monday's moves as a way to increase 'collaboration' across its hardware, software and services business, said Forstall will serve as an advisor to Cook until his departure.
Last week Apple delivered a second straight quarter of disappointing financial results, and iPad sales fell short of Wall Street's targets, marring its record of consistently blowing past investors' expectations.
(Reporting by Alexei Oreskovic; Editing by Richard Chang)
This news article is brought to you by INTERNET NEWS - where latest news are our top priority.
Apple software, retail chiefs out in sweeping overhaul
SAN FRANCISCO (Reuters) - Apple Inc Chief Executive Tim Cook on Monday replaced the heads of its software and retail units in the company's most sweeping executive shake-up in a decade following embarrassing problems with its new mapping program and unpopular store-related decisions.
Software chief Scott Forstall, who oversaw the launch of the flawed mapping software and much criticized Siri voice-enabled assistant, will leave Apple next year and serve as an advisor to Cook in the meantime.
Forstall, seen as a polarizing figure inside Apple, had been billed as one of the future candidates to take the top job at Apple. He was the executive behind the panned Apple Maps app that the company announced with much fanfare in summer.
The moves, which come a little more than a year into Cook's tenure as CEO, were described by Apple as a way to increase 'collaboration' across its hardware, software and services business.
'These changes show that Tim Cook is stamping his authority on the business,' Ben Wood, analyst with CCS Insight, said. 'Perhaps disappointed with the Maps issues, Forstall became the scapegoat.'
Critics of the maps debacle, which led Cook to apologize to customers, had been calling for Forstall's head. 'Does Apple have a Scott Forstall problem?' Fortune editor Philip Elmer Dewitt wrote on Sept 29.
The moves hand over substantially more responsibility to Cue, the head of Internet Software and Services who helped create the iTunes music store and App Store. The 23-year Apple veteran already is in charge of Cloud services and will take on Apple Maps and Siri.
Apple said a search is underway for a new retail chief to replace John Browett and that the retail team would report directly to Cook. Browett had riled up the retail store staff when he decided to reduce the number of retail employees.
Browett took over as head of Apple's retail stores earlier this year, replacing Ron Johnson, who went on to become the CEO of JC Penney.
Last week Apple delivered a second straight quarter of disappointing financial results, and iPad sales fell short of Wall Street's targets, marring its record of consistently blowing past investors' expectations.
(Reporting by Alexei Oreskovic; Editing by Richard Chang)
This article is brought to you by BUY AFFORDABLE COMPUTERS.
Software chief Scott Forstall, who oversaw the launch of the flawed mapping software and much criticized Siri voice-enabled assistant, will leave Apple next year and serve as an advisor to Cook in the meantime.
Forstall, seen as a polarizing figure inside Apple, had been billed as one of the future candidates to take the top job at Apple. He was the executive behind the panned Apple Maps app that the company announced with much fanfare in summer.
The moves, which come a little more than a year into Cook's tenure as CEO, were described by Apple as a way to increase 'collaboration' across its hardware, software and services business.
'These changes show that Tim Cook is stamping his authority on the business,' Ben Wood, analyst with CCS Insight, said. 'Perhaps disappointed with the Maps issues, Forstall became the scapegoat.'
Critics of the maps debacle, which led Cook to apologize to customers, had been calling for Forstall's head. 'Does Apple have a Scott Forstall problem?' Fortune editor Philip Elmer Dewitt wrote on Sept 29.
The moves hand over substantially more responsibility to Cue, the head of Internet Software and Services who helped create the iTunes music store and App Store. The 23-year Apple veteran already is in charge of Cloud services and will take on Apple Maps and Siri.
Apple said a search is underway for a new retail chief to replace John Browett and that the retail team would report directly to Cook. Browett had riled up the retail store staff when he decided to reduce the number of retail employees.
Browett took over as head of Apple's retail stores earlier this year, replacing Ron Johnson, who went on to become the CEO of JC Penney.
Last week Apple delivered a second straight quarter of disappointing financial results, and iPad sales fell short of Wall Street's targets, marring its record of consistently blowing past investors' expectations.
(Reporting by Alexei Oreskovic; Editing by Richard Chang)
This article is brought to you by BUY AFFORDABLE COMPUTERS.
Apple iPhone software and retail chiefs leaving company
SAN FRANCISCO (Reuters) - Apple Inc said on Monday its iPhone software chief and its head of retail would leave, a major executive shake-up that follows embarrassing problems with the company's new mapping software and disappointing quarterly results.
The moves, which come a little more than a year into Tim Cook's tenure as Apple's chief executive, were described by the company as a way to increase 'collaboration' across its hardware, software and services business.
Apple said that Scott Forstall, one of the original architects of the Mac operating system and head of its smartphone software, would leave next year. It said he would serve as an advisor to Cook in the interim.
Forstall was the executive behind the panned Apple Maps app, and Apple said responsibility for maps and Siri, the voice search assistant, would be taken over by another longtime executive, Eddy Cue.
Critics of the maps debacle, which led CEO Tim Cook to apologize to customers, had been calling for Forstall's head. 'Does Apple have a Scott Forstall problem?' Fortune editor Philip Elmer-Dewitt wrote on Sept 29.
Apple said a search is underway for a new retail chief to replace John Browett and that the retail team would report directly to Cook.
Browett took over as head of Apple's retail stores earlier this year, replacing Ron Johnson, who went on to become the CEO of JC Penney.
Last week Apple delivered a second straight quarter of disappointing financial results, and iPad sales fell short of Wall Street's targets, marring its record of consistently blowing past investors' expectations.
(Reporting by Alexei Oreskovic; Editing by Richard Chang)
This article is brought to you by AFFORDABLE COMPUTERS.
The moves, which come a little more than a year into Tim Cook's tenure as Apple's chief executive, were described by the company as a way to increase 'collaboration' across its hardware, software and services business.
Apple said that Scott Forstall, one of the original architects of the Mac operating system and head of its smartphone software, would leave next year. It said he would serve as an advisor to Cook in the interim.
Forstall was the executive behind the panned Apple Maps app, and Apple said responsibility for maps and Siri, the voice search assistant, would be taken over by another longtime executive, Eddy Cue.
Critics of the maps debacle, which led CEO Tim Cook to apologize to customers, had been calling for Forstall's head. 'Does Apple have a Scott Forstall problem?' Fortune editor Philip Elmer-Dewitt wrote on Sept 29.
Apple said a search is underway for a new retail chief to replace John Browett and that the retail team would report directly to Cook.
Browett took over as head of Apple's retail stores earlier this year, replacing Ron Johnson, who went on to become the CEO of JC Penney.
Last week Apple delivered a second straight quarter of disappointing financial results, and iPad sales fell short of Wall Street's targets, marring its record of consistently blowing past investors' expectations.
(Reporting by Alexei Oreskovic; Editing by Richard Chang)
This article is brought to you by AFFORDABLE COMPUTERS.
Google unveils first 10-inch Nexus tablet
SAN FRANCISCO (Reuters) - Google Inc unveiled a larger version of its Nexus-branded tablet computer on Monday, and updated its mobile gadget and online content offerings as competition with Apple Inc, Amazon.com Inc and Microsoft Corp heats up ahead of the holiday sales season.
The device follows a spate of new product launches by the technology leaders in recent weeks, including Apple's iPad Mini last week and software-maker Microsoft's first-ever home-built tablet, the Surface.
Google, the world's No.1 Internet search engine, has pushed deeper into the hardware business at a time when consumers are increasingly accessing the Web on mobile devices.
Google's new Nexus 10, made in partnership with consumer electronics company Samsung Electronics Co, is the first 10-inch tablet to come to market under Google's Nexus brand. The device, with prices starting at $299, will be available on November 13 in the United States and seven other countries, Google said in its official blog on Monday.
Google was scheduled to introduce the device at a media event in New York on Monday, but was forced to cancel because of Hurricane Sandy.
Google also said it was expanding its online movie and music retail businesses to several countries in Europe.
And the company introduced an improvement to its online-music storage service. The new 'matching' feature scans songs in a consumer's music collection and automatically creates an online or 'cloud-based' library of the same tracks which consumers can access from any device or computer.
Google said the music matching feature, which only works with tracks that are part of the Google Play store's music catalog, will be available in Europe on November 13 and in the United States soon after.
Google also updated its smaller, Nexus 7 tablet released earlier this year. It increased the storage on the $199 version of the device to 16GB from 8GB, and introduced a new $299 version of the Nexus 7 with a cellular data service option. Google also unveiled a new Nexus 4 smartphone, made in partnership with LG Electronics, that features a quad-core processor and a 4.7-inch display.
(Reporting by Alexei Oreskovic; Editing by Richard Chang)
This article is brought to you by AFFORDABLE COMPUTERS.
The device follows a spate of new product launches by the technology leaders in recent weeks, including Apple's iPad Mini last week and software-maker Microsoft's first-ever home-built tablet, the Surface.
Google, the world's No.1 Internet search engine, has pushed deeper into the hardware business at a time when consumers are increasingly accessing the Web on mobile devices.
Google's new Nexus 10, made in partnership with consumer electronics company Samsung Electronics Co, is the first 10-inch tablet to come to market under Google's Nexus brand. The device, with prices starting at $299, will be available on November 13 in the United States and seven other countries, Google said in its official blog on Monday.
Google was scheduled to introduce the device at a media event in New York on Monday, but was forced to cancel because of Hurricane Sandy.
Google also said it was expanding its online movie and music retail businesses to several countries in Europe.
And the company introduced an improvement to its online-music storage service. The new 'matching' feature scans songs in a consumer's music collection and automatically creates an online or 'cloud-based' library of the same tracks which consumers can access from any device or computer.
Google said the music matching feature, which only works with tracks that are part of the Google Play store's music catalog, will be available in Europe on November 13 and in the United States soon after.
Google also updated its smaller, Nexus 7 tablet released earlier this year. It increased the storage on the $199 version of the device to 16GB from 8GB, and introduced a new $299 version of the Nexus 7 with a cellular data service option. Google also unveiled a new Nexus 4 smartphone, made in partnership with LG Electronics, that features a quad-core processor and a 4.7-inch display.
(Reporting by Alexei Oreskovic; Editing by Richard Chang)
This article is brought to you by AFFORDABLE COMPUTERS.
Sunday, October 28, 2012
In San Francisco, tech investor leads a political makeover
SAN FRANCISCO (Reuters) - One morning in April, Ron Conway, the billionaire technology investor, sat in a conference room on the second floor of San Francisco's City Hall with about 50 representatives from the city's business community.
On the agenda was a sweeping proposal by Mayor Ed Lee to reform the city's payroll tax, a plan that would favor companies with many employees but little revenue - tech start-ups, namely - while shifting the burden to the real estate and financial industries.
The head of the San Francisco Chamber of Commerce was arguing against the proposal when Conway abruptly cut him off.
'The tech industry is producing all the jobs in this city,' Conway snapped, according to four people present, his voice rising as he insisted that old-line businesses 'need to get on board.'
In the end, they did get on board - and San Francisco voters on November 6 will decide whether to approve the change in the tax code.
Conway's success with the tax initiative demonstrates the profound transformation playing out in San Francisco's business corridors and its halls of power. As start-ups blossom, attracting a wave of entrepreneurs and investment dollars, the tech industry is wielding newfound clout in local politics - largely thanks to Conway, its brash, silver-haired champion.
The shift, local political experts say, harks back to the turn of the last century, when financial institutions like the Bank of Italy - forebear to present-day Bank of America - gradually eroded the railroad barons' grip over California politics.
Now the tech industry, led by Conway, is beginning to overshadow long-dominant local business lobbies, said Chris Lehane, a political consultant and former adviser in the Clinton White House.
'When you have a new business entity that really hasn't existed in the past and becomes a real player in local politics, that changes the balance a bit,' said Lehane, who is based in San Francisco. 'People like Ron Conway, he's an angel investor in companies but also an angel supporter of politicians he cares about.'
Not everyone in this famously liberal city is enthused about the new tech boom, which is driving up rents and threatening to price out all but the wealthy.
'As someone who lived through the tech boom in the '90s and watched countless friends and community members get pushed out of their homes, only for the bubble to disintegrate, this is painful to watch,' said Gabriel Haaland, political director for the SEIU Local 1021, the largest union in the city. 'Those times are here again.'
Last month, when San Francisco Magazine published an article bemoaning tech-driven gentrification, traffic on the magazine's website broke all records.
'It touched on an issue that people have been thinking about for a while,' said Jon Steinberg, the magazine's editor.
Conway and Lee make no apologies.
'Tech added 13,000 out of the 25,000 new jobs we created the last couple years, which helped us bring the unemployment rate to the third-lowest in the state,' Lee, a Democrat, said in an interview. 'We have to work with the new jobs creators, and that's what I believe the public wants me to do.'
Conway, who made his name in the 1990s by betting on small, early-stage companies and scoring a huge win with Google, says a key goal of a new civic organization he has started, San Francisco Citizens Initiative for Technology & Innovation, is to provide service jobs in tech for long-term residents and the unemployed.
'It would be great if we could create a few hundred jobs in the $50,000 to $80,000 income bracket,' said Conway. 'We're here to improve the living conditions for all of San Francisco. That's the responsibility tech wants to take.'
ODD COUPLE
Conway and Lee have an exceptionally close relationship, one that has captivated the city's political set even while attracting accusations of favoritism from the mayor's rivals.
The two make an odd couple. Lee was a publicity-shy city bureaucrat and civil rights lawyer for decades before being named caretaker mayor of this Democratic bastion in 2011 after his predecessor was elected lieutenant governor. Conway, until recently a registered Republican, counts Tiger Woods and Henry Kissinger among his investors and considers a start-up tour with Ashton Kutcher in tow just another day's work.
In a city that faces chronic budget deficits even as it enjoys a comparatively strong economy, the relationship is symbiotic. Conway taps his access to Lee to promote his companies, from Twitter to Zynga to Airbnb; Lee persuades Conway to rally tech leaders to help fund the police, the schools, the parks.
Their alliance began only last year. As interim mayor, Lee impressed Conway when he pushed through a tax exemption for Twitter, which had considered moving out of the city to avoid the tax bill that would have resulted from an initial public offering. San Francisco imposes a 1.5 percent payroll tax on local companies, a levy that applies to any gains in an IPO.
When Lee ran for a full four-year term several months later, Conway formed an independent political action committee on his behalf. He rustled up almost $700,000 from the likes of entrepreneur Sean Parker; Zynga CEO Mark Pincus; Salesforce CEO Marc Benioff; venture capitalists John Doerr and Tom Byers; and Credit Suisse banker Bill Brady.
He also enlisted Portal A, a video production outfit consisting of three twentysomething hitmakers, to create a YouTube video that featured rapper MC Hammer, Yahoo CEO Marissa Mayer and San Francisco Giants pitcher Brian Wilson dancing on Conway's rooftop. The clip went viral and effectively drowned out ads from Lee's rivals.
A year later, Conway rated the mayor's performance a '9.5 out of 10.'
'I have a tremendous respect for Mayor Lee,' he said. 'He listens to people. He builds consensus, and that's an improvement from the past.'
Conway said he and Lee are 'too busy with our day jobs' to socialize frequently. Neither likes to publicly discuss their relationship. But when the mayor turned 60 in May, Lee and his family sat down for a three-hour private dinner with Conway and his wife, Gayle, at an Italian restaurant in North Beach, according to the San Francisco Chronicle's gossip columnists.
For Conway - whose calls to the mayor's office are considered the highest priority, City Hall insiders say - no issue facing his portfolio companies is too insignificant for him to get involved. In one instance this year, after social media company Pinterest moved to San Francisco, Conway pressed officials to repaint curbs to allow employee parking near the start-up's offices, according to two people with knowledge of the matter. The city refused; Conway denied that the incident occurred.
While some cities have cracked down on services like Airbnb, which lets residents rent out spare bedrooms and can run afoul of local lodging ordinances, Lee has taken the opposite tack. This year he formed a policy-making group to consider how to regulate and foster such companies, which are part of what's known in Silicon Valley as the 'sharing economy.'
The mayor has also urged Conway to help city initiatives. Conway recently contributed $100,000 toward a campaign to approve bonds to restore the city's parks, and gave $25,000 to a charity founded by Lee that funds impoverished public schools. When a group of software developers tried recently to create an app that would improve public bus performance but lacked funds for a pilot program, SF Citi stepped in and cut a check.
Lee said he hoped Conway would fill a void left by recently deceased philanthropists such as Gap Inc founder Don Fisher, real estate mogul Walter Shorenstein and private equity investor Warren Hellman.
'The tech guys like Conway usually want to meet presidents and such. You never see them play so deep in local government,' said one Democratic fundraiser. 'It's unusual.'
But the tech world says the headlong plunge into local politics is classic Conway.
'When Ron is passionate about an issue or a company or a person, it's never a secret,' said Twitter CEO Dick Costolo. 'He's passionate about San Francisco right now, and it's exhibiting itself in the way he helps companies in the city, the way he helps the city. It's fantastic to see.'
CHANGING TAX POLICY
Conway says his top priority is passage of the payroll tax reform initiative on November 6.
The measure would tax local businesses based on their gross receipts instead of the size of their payroll, which benefits low-revenue, high-headcount companies like startups. Financial, insurance and real estate companies would see their local taxes rise by 30 percent, while taxes will remain flat for most scientific and technical companies.
Crucially, the measure would also mean that proceeds from an IPO would not be subject to taxes.
Landlords, and to a lesser extent financial services companies, conceded that they had lost their first political fight with the tech industry, but took the long view.
'We knew we were going to be socked in a big way, and we worked early and long and hard with the city for a rate that was fair,' said Ken Cleaveland of the Building Owners and Managers Association. 'In the end it wasn't in our best interest to fight our tenants.'
(Reporting by Gerry Shih; Editing by Jonathan Weber, Douglas Royalty and Dale Hudson)
This article is brought to you by BUY A NEW COMPUTER.
On the agenda was a sweeping proposal by Mayor Ed Lee to reform the city's payroll tax, a plan that would favor companies with many employees but little revenue - tech start-ups, namely - while shifting the burden to the real estate and financial industries.
The head of the San Francisco Chamber of Commerce was arguing against the proposal when Conway abruptly cut him off.
'The tech industry is producing all the jobs in this city,' Conway snapped, according to four people present, his voice rising as he insisted that old-line businesses 'need to get on board.'
In the end, they did get on board - and San Francisco voters on November 6 will decide whether to approve the change in the tax code.
Conway's success with the tax initiative demonstrates the profound transformation playing out in San Francisco's business corridors and its halls of power. As start-ups blossom, attracting a wave of entrepreneurs and investment dollars, the tech industry is wielding newfound clout in local politics - largely thanks to Conway, its brash, silver-haired champion.
The shift, local political experts say, harks back to the turn of the last century, when financial institutions like the Bank of Italy - forebear to present-day Bank of America - gradually eroded the railroad barons' grip over California politics.
Now the tech industry, led by Conway, is beginning to overshadow long-dominant local business lobbies, said Chris Lehane, a political consultant and former adviser in the Clinton White House.
'When you have a new business entity that really hasn't existed in the past and becomes a real player in local politics, that changes the balance a bit,' said Lehane, who is based in San Francisco. 'People like Ron Conway, he's an angel investor in companies but also an angel supporter of politicians he cares about.'
Not everyone in this famously liberal city is enthused about the new tech boom, which is driving up rents and threatening to price out all but the wealthy.
'As someone who lived through the tech boom in the '90s and watched countless friends and community members get pushed out of their homes, only for the bubble to disintegrate, this is painful to watch,' said Gabriel Haaland, political director for the SEIU Local 1021, the largest union in the city. 'Those times are here again.'
Last month, when San Francisco Magazine published an article bemoaning tech-driven gentrification, traffic on the magazine's website broke all records.
'It touched on an issue that people have been thinking about for a while,' said Jon Steinberg, the magazine's editor.
Conway and Lee make no apologies.
'Tech added 13,000 out of the 25,000 new jobs we created the last couple years, which helped us bring the unemployment rate to the third-lowest in the state,' Lee, a Democrat, said in an interview. 'We have to work with the new jobs creators, and that's what I believe the public wants me to do.'
Conway, who made his name in the 1990s by betting on small, early-stage companies and scoring a huge win with Google, says a key goal of a new civic organization he has started, San Francisco Citizens Initiative for Technology & Innovation, is to provide service jobs in tech for long-term residents and the unemployed.
'It would be great if we could create a few hundred jobs in the $50,000 to $80,000 income bracket,' said Conway. 'We're here to improve the living conditions for all of San Francisco. That's the responsibility tech wants to take.'
ODD COUPLE
Conway and Lee have an exceptionally close relationship, one that has captivated the city's political set even while attracting accusations of favoritism from the mayor's rivals.
The two make an odd couple. Lee was a publicity-shy city bureaucrat and civil rights lawyer for decades before being named caretaker mayor of this Democratic bastion in 2011 after his predecessor was elected lieutenant governor. Conway, until recently a registered Republican, counts Tiger Woods and Henry Kissinger among his investors and considers a start-up tour with Ashton Kutcher in tow just another day's work.
In a city that faces chronic budget deficits even as it enjoys a comparatively strong economy, the relationship is symbiotic. Conway taps his access to Lee to promote his companies, from Twitter to Zynga to Airbnb; Lee persuades Conway to rally tech leaders to help fund the police, the schools, the parks.
Their alliance began only last year. As interim mayor, Lee impressed Conway when he pushed through a tax exemption for Twitter, which had considered moving out of the city to avoid the tax bill that would have resulted from an initial public offering. San Francisco imposes a 1.5 percent payroll tax on local companies, a levy that applies to any gains in an IPO.
When Lee ran for a full four-year term several months later, Conway formed an independent political action committee on his behalf. He rustled up almost $700,000 from the likes of entrepreneur Sean Parker; Zynga CEO Mark Pincus; Salesforce CEO Marc Benioff; venture capitalists John Doerr and Tom Byers; and Credit Suisse banker Bill Brady.
He also enlisted Portal A, a video production outfit consisting of three twentysomething hitmakers, to create a YouTube video that featured rapper MC Hammer, Yahoo CEO Marissa Mayer and San Francisco Giants pitcher Brian Wilson dancing on Conway's rooftop. The clip went viral and effectively drowned out ads from Lee's rivals.
A year later, Conway rated the mayor's performance a '9.5 out of 10.'
'I have a tremendous respect for Mayor Lee,' he said. 'He listens to people. He builds consensus, and that's an improvement from the past.'
Conway said he and Lee are 'too busy with our day jobs' to socialize frequently. Neither likes to publicly discuss their relationship. But when the mayor turned 60 in May, Lee and his family sat down for a three-hour private dinner with Conway and his wife, Gayle, at an Italian restaurant in North Beach, according to the San Francisco Chronicle's gossip columnists.
For Conway - whose calls to the mayor's office are considered the highest priority, City Hall insiders say - no issue facing his portfolio companies is too insignificant for him to get involved. In one instance this year, after social media company Pinterest moved to San Francisco, Conway pressed officials to repaint curbs to allow employee parking near the start-up's offices, according to two people with knowledge of the matter. The city refused; Conway denied that the incident occurred.
While some cities have cracked down on services like Airbnb, which lets residents rent out spare bedrooms and can run afoul of local lodging ordinances, Lee has taken the opposite tack. This year he formed a policy-making group to consider how to regulate and foster such companies, which are part of what's known in Silicon Valley as the 'sharing economy.'
The mayor has also urged Conway to help city initiatives. Conway recently contributed $100,000 toward a campaign to approve bonds to restore the city's parks, and gave $25,000 to a charity founded by Lee that funds impoverished public schools. When a group of software developers tried recently to create an app that would improve public bus performance but lacked funds for a pilot program, SF Citi stepped in and cut a check.
Lee said he hoped Conway would fill a void left by recently deceased philanthropists such as Gap Inc founder Don Fisher, real estate mogul Walter Shorenstein and private equity investor Warren Hellman.
'The tech guys like Conway usually want to meet presidents and such. You never see them play so deep in local government,' said one Democratic fundraiser. 'It's unusual.'
But the tech world says the headlong plunge into local politics is classic Conway.
'When Ron is passionate about an issue or a company or a person, it's never a secret,' said Twitter CEO Dick Costolo. 'He's passionate about San Francisco right now, and it's exhibiting itself in the way he helps companies in the city, the way he helps the city. It's fantastic to see.'
CHANGING TAX POLICY
Conway says his top priority is passage of the payroll tax reform initiative on November 6.
The measure would tax local businesses based on their gross receipts instead of the size of their payroll, which benefits low-revenue, high-headcount companies like startups. Financial, insurance and real estate companies would see their local taxes rise by 30 percent, while taxes will remain flat for most scientific and technical companies.
Crucially, the measure would also mean that proceeds from an IPO would not be subject to taxes.
Landlords, and to a lesser extent financial services companies, conceded that they had lost their first political fight with the tech industry, but took the long view.
'We knew we were going to be socked in a big way, and we worked early and long and hard with the city for a rate that was fair,' said Ken Cleaveland of the Building Owners and Managers Association. 'In the end it wasn't in our best interest to fight our tenants.'
(Reporting by Gerry Shih; Editing by Jonathan Weber, Douglas Royalty and Dale Hudson)
This article is brought to you by BUY A NEW COMPUTER.
SAP eyes "long" period of high sales growth: report
BERLIN (Reuters) - Germany's SAP may be able to sustain high sales from software and related services for a 'very long time,' co-chief executive Bill McDermott told a German newspaper.
'It's our ambition to grow with double-digit numbers for a very long time to come,' Euro am Sonntag quoted McDermott as saying in an interview published on Sunday.
'I believe that's possible.'
The newspaper also cited the co-CEO as saying SAP currently has no plans for further acquisitions following the purchases of cloud-computing company Ariba and Success Factors.
(Reporting By Andreas Cremer; Editing by Hans-Juergen Peters)
This article is brought to you by BUY A NEW COMPUTER.
'It's our ambition to grow with double-digit numbers for a very long time to come,' Euro am Sonntag quoted McDermott as saying in an interview published on Sunday.
'I believe that's possible.'
The newspaper also cited the co-CEO as saying SAP currently has no plans for further acquisitions following the purchases of cloud-computing company Ariba and Success Factors.
(Reporting By Andreas Cremer; Editing by Hans-Juergen Peters)
This article is brought to you by BUY A NEW COMPUTER.
Friday, October 26, 2012
Star Silicon Valley analyst felled by Facebook IPO fallout
SAN FRANCISCO (Reuters) - The firing of Citigroup stock analyst Mark Mahaney on Friday in the regulatory fallout from Facebook Inc's initial public offering was greeted with shock and dismay in Silicon Valley, where Mahaney was a well-known and well-liked figure.
'Pretty shocked,' was the reaction of Jacob Funds Chief Executive Ryan Jacob, who described Mahaney as one of the most respected financial analysts covering the Internet industry.
'I'd put him at the top. If not at the top, then near the top,' said Jacob. 'He really knew what to look for.'
In addition to firing Mahaney, Citigroup paid a $2 million fine to Massachusetts regulators to settle charges that the bank improperly disclosed research on Facebook ahead of its $16 billion IPO in May.
The settlement agreement said Mahaney failed to supervise a junior analyst who improperly shared Facebook research with the TechCrunch news website. (Settlement agreement: http://r.reuters.com/pyj63t)
The settlement agreement also outlined an incident in which Mahaney failed to get approval before responding to a journalist's questions about Google Inc -- and told a Citigroup compliance staffer that the conversation had not occurred -- even after being warned about unauthorized conversations with the media.
Mahaney declined to comment.
Mahaney got his start in the late 1990s, during the first dot-com boom where he worked at Morgan Stanley for Mary Meeker, one of the star analysts of the time. He went on to work at hedge fund Galleon Group before moving to Citigroup in 2005. Unlike most of his New York-based peers in the analyst world, Mahaney worked in San Francisco's financial district, close to the companies and personalities at the heart of the tech industry.
Earlier this month, Mahaney was named the top Internet analyst for the fifth straight year by Institutional Investor. The review cited fans of Mahaney who praised a 'systematic' investment approach that allows him to avoid the 'waffling' often evidenced by other analysts.
Mahaney's Buy rating on IAC/InteractiveCorp in April 2011, when the stock traded at $33.32, allowed investors to lock in a 51 percent gain before he downgraded the stock to a Hold at $50.31 a few months later, according to Institutional Investor.
But it wasn't only his stock picks that put him in good stead. He earned kudos for simply being a nice guy.
'He's a kind and thoughtful person and that's evident in the way he deals with people,' said Jason Jones of Internet investment firm HighStep Capital. 'He's very well liked on Wall Street because of that.'
A CAUTIOUS VIEW ON FACEBOOK
Mahaney was only indirectly involved in the incident involving the Facebook research, according to the settlement agreement by Massachusetts regulators released on Friday. But the actions of the junior analyst who worked for him provide an unusual glimpse into the type of behind-the-scenes information trading that regulators are attempting to rein in.
While the Massachusetts regulators did not identify any of the individuals by name, Reuters has learned that the incident involved TechCrunch reporters Josh Constine and Kim-Mai Cutler as well as Citi junior analyst Eric Jacobs.
Jacobs, Constine and Cutler all did not respond to requests for comments.
In early May, shortly before Facebook's IPO, Jacobs sent an email to Cutler and Constine. Constine attended Stanford University at the same time as Jacobs.
Constine, who studied social networks such as Facebook and Twitter for his 2009 Master's degree in cybersociology at Stanford, had a close friendship with Jacobs, according to the settlement agreement.
'I am ramping up coverage on FB and thought you guys might like to see how the street is thinking about it (and our estimates),' Jacobs wrote in the email. The email included an 'outline' that Jacobs said would eventually become the firm's 30-40 page initiation report on Facebook.
He also included a 'Facebook One Pager' document, which contained confidential, non-public information that Citigroup obtained in order to help begin covering Facebook after the IPO.
Asked by Constine if the information could be published and attributed to an anonymous source, Jacobs responded that 'my boss would eat me alive,' the agreement said.
A spokeswoman for AOL Inc, which owns TechCrunch, declined to answer questions on the matter, saying only that 'We are looking into the matter and have no comment at this time.'
Ironically, Mahaney was one of a small group of analysts at the many banks underwriting Facebook's IPO who had cautious views of the richly valued offering. Mahaney initiated coverage of the company with a neutral rating.
Analysts at the top three underwriters on Facebook's IPO - Morgan Stanley, Goldman Sachs and J.P. Morgan - started the stock with overweight or buy recommendations.
Earlier this year, Reuters reported that Facebook had pre-briefed analysts for its underwriters ahead of its IPO, advising them to reduce their profit and revenue forecasts.
Facebook, whose stock was priced at $38 a share in the IPO, closed Friday's regular session at $21.94 and has traded as low as $17.55.
'There were tens of billions of dollars in losses based on hyping the name, a lack of skeptical information and misunderstanding the company,' said Max Wolff, chief economist and senior analyst at research firm GreenCrest Capital.
'It's highly unfortunate and darkly ironic that one of the signature regulatory actions from this IPO so far involves punishing analysts for disseminating cautious information about Facebook,' he added.
(Editing by Jonathan Weber, Mary Milliken and Lisa Shumaker)
This news article is brought to you by TAXES BLOG - where latest news are our top priority.
'Pretty shocked,' was the reaction of Jacob Funds Chief Executive Ryan Jacob, who described Mahaney as one of the most respected financial analysts covering the Internet industry.
'I'd put him at the top. If not at the top, then near the top,' said Jacob. 'He really knew what to look for.'
In addition to firing Mahaney, Citigroup paid a $2 million fine to Massachusetts regulators to settle charges that the bank improperly disclosed research on Facebook ahead of its $16 billion IPO in May.
The settlement agreement said Mahaney failed to supervise a junior analyst who improperly shared Facebook research with the TechCrunch news website. (Settlement agreement: http://r.reuters.com/pyj63t)
The settlement agreement also outlined an incident in which Mahaney failed to get approval before responding to a journalist's questions about Google Inc -- and told a Citigroup compliance staffer that the conversation had not occurred -- even after being warned about unauthorized conversations with the media.
Mahaney declined to comment.
Mahaney got his start in the late 1990s, during the first dot-com boom where he worked at Morgan Stanley for Mary Meeker, one of the star analysts of the time. He went on to work at hedge fund Galleon Group before moving to Citigroup in 2005. Unlike most of his New York-based peers in the analyst world, Mahaney worked in San Francisco's financial district, close to the companies and personalities at the heart of the tech industry.
Earlier this month, Mahaney was named the top Internet analyst for the fifth straight year by Institutional Investor. The review cited fans of Mahaney who praised a 'systematic' investment approach that allows him to avoid the 'waffling' often evidenced by other analysts.
Mahaney's Buy rating on IAC/InteractiveCorp in April 2011, when the stock traded at $33.32, allowed investors to lock in a 51 percent gain before he downgraded the stock to a Hold at $50.31 a few months later, according to Institutional Investor.
But it wasn't only his stock picks that put him in good stead. He earned kudos for simply being a nice guy.
'He's a kind and thoughtful person and that's evident in the way he deals with people,' said Jason Jones of Internet investment firm HighStep Capital. 'He's very well liked on Wall Street because of that.'
A CAUTIOUS VIEW ON FACEBOOK
Mahaney was only indirectly involved in the incident involving the Facebook research, according to the settlement agreement by Massachusetts regulators released on Friday. But the actions of the junior analyst who worked for him provide an unusual glimpse into the type of behind-the-scenes information trading that regulators are attempting to rein in.
While the Massachusetts regulators did not identify any of the individuals by name, Reuters has learned that the incident involved TechCrunch reporters Josh Constine and Kim-Mai Cutler as well as Citi junior analyst Eric Jacobs.
Jacobs, Constine and Cutler all did not respond to requests for comments.
In early May, shortly before Facebook's IPO, Jacobs sent an email to Cutler and Constine. Constine attended Stanford University at the same time as Jacobs.
Constine, who studied social networks such as Facebook and Twitter for his 2009 Master's degree in cybersociology at Stanford, had a close friendship with Jacobs, according to the settlement agreement.
'I am ramping up coverage on FB and thought you guys might like to see how the street is thinking about it (and our estimates),' Jacobs wrote in the email. The email included an 'outline' that Jacobs said would eventually become the firm's 30-40 page initiation report on Facebook.
He also included a 'Facebook One Pager' document, which contained confidential, non-public information that Citigroup obtained in order to help begin covering Facebook after the IPO.
Asked by Constine if the information could be published and attributed to an anonymous source, Jacobs responded that 'my boss would eat me alive,' the agreement said.
A spokeswoman for AOL Inc, which owns TechCrunch, declined to answer questions on the matter, saying only that 'We are looking into the matter and have no comment at this time.'
Ironically, Mahaney was one of a small group of analysts at the many banks underwriting Facebook's IPO who had cautious views of the richly valued offering. Mahaney initiated coverage of the company with a neutral rating.
Analysts at the top three underwriters on Facebook's IPO - Morgan Stanley, Goldman Sachs and J.P. Morgan - started the stock with overweight or buy recommendations.
Earlier this year, Reuters reported that Facebook had pre-briefed analysts for its underwriters ahead of its IPO, advising them to reduce their profit and revenue forecasts.
Facebook, whose stock was priced at $38 a share in the IPO, closed Friday's regular session at $21.94 and has traded as low as $17.55.
'There were tens of billions of dollars in losses based on hyping the name, a lack of skeptical information and misunderstanding the company,' said Max Wolff, chief economist and senior analyst at research firm GreenCrest Capital.
'It's highly unfortunate and darkly ironic that one of the signature regulatory actions from this IPO so far involves punishing analysts for disseminating cautious information about Facebook,' he added.
(Editing by Jonathan Weber, Mary Milliken and Lisa Shumaker)
This news article is brought to you by TAXES BLOG - where latest news are our top priority.
Surface tablet buzz starts, but Windows 8 excitement muted
SEATTLE (Reuters) - U.S. shoppers woke up with mild Surface fever on Friday, lining up in moderate numbers to buy Microsoft's groundbreaking tablet computer designed to challenge Apple's iPad.
The global debut of the Windows 8 operating system was greeted with pockets of enthusiasm, but not the mania reserved for some previous Apple Inc launches.
Microsoft is positioning the slick new computing device, which runs a limited version of Windows and Office with a thin, click-on keyboard cover, as a perfect combination of PC and tablet that is good for work as well as entertainment.
"I like the flexibility of having the keyboard and the touch capability," said Mike Gipe, 50, who works in sales for bank Barclays, and was planning to buy a Surface tablet at Microsoft's pop-up store in Times Square in New York.
"It's the combination of having the consumer stuff and the work stuff," he said, looking forward to using Excel spreadsheets and PowerPoint presentations on the new device.
The Times Square store was the first to sell the Surface -- Microsoft's first ever own-brand computer -- and other Windows 8 devices late on Thursday and will be open through the holiday shopping season. On Friday morning it was crowded with a mix of tourists and local office workers, but the cash tills were not jammed.
"With the other tablets you're a consumer. With this you can have input," said Peter Townsend, on vacation in New York from Australia with his wife, who bought a Surface tablet because he liked the keyboard.
Mark Pauluch, 28, who works for a New York private equity firm, said he would like a Surface because he does not want to take a laptop on a plane, but was disappointed when the sales representative told him the wifi-only Surface would not work with Cisco VPN networking.
"I can't use this to replace my work laptop unless it supports VPN," he said.
MIDWEST, WEST COAST
Elsewhere in the United States, there was solid but not overwhelming interest for the Surface.
"It's a good tablet. I am not a huge i-anything fan, I like Windows," said Matt Shanahan, a software developer who drove four hours to the tiny Michigan Avenue pop-up store in Chicago from Grand Rapids, Michigan to buy a Surface. "My friend and I are software developers and this gives us an opportunity to develop new apps," he said.
In a pop-up store at the San Francisco Centre mall about 50 people lined up to buy the new Surface.
"On an iPad you have to use half the screen for a keyboard, or buy an accessory. I love that the Surface is so integrated, that you can type and use Word and all my other programs," said Malte von Sehested, a textbook creator who bought a Surface.
"With the Surface you get a steeper learning curve -- I had to get someone to show me how to side-swipe, swipe out to get the menus for instance," he said. "It may take a week, before it all becomes natural. That could be a problem for Microsoft. My old dad, he would get hit by that steeper learning curve."
ANALYSTS PATIENT
Wall Street and tech industry experts failed to show great enthusiasm for Windows 8, but were prepared to give Microsoft time to succeed.
"Microsoft did not come out with Windows 8 thinking it will be an overnight success," said Daniel Ives, an analyst at FBR Capital Markets. "But there's hope that this could be the silver bullet of growth (for Microsoft) as well as giving the PC industry some optimism that there's better days ahead."
The next six to 12 months is a "crucial period" for Microsoft to get traction with consumers, added Ives.
Sarah Rotman Epps, an analyst at tech research firm Forrester, said consumers may be best served waiting for tablets running the full Windows 8 Pro and Intel Corp chips, which are due out early next year.
"Windows 8 has a lot of great features, but RT has a long way to go," she said, citing a lack of apps and poor video performance on the Surface.
"It's not really a PC. RT is too restricted. Some people will be happier with the full Windows 8," she said.
Microsoft shares were up 33 cents at $28.21 on Nasdaq on Friday. Apple shares were down slightly after disappointing earnings on Thursday.
(Reporting By Nivedita Bhattacharjee in Chicago, Sinead Carew and Nicola Leske in New York, Edwin Chan in San Francisco; Editing by Alden Bentley)
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The global debut of the Windows 8 operating system was greeted with pockets of enthusiasm, but not the mania reserved for some previous Apple Inc launches.
Microsoft is positioning the slick new computing device, which runs a limited version of Windows and Office with a thin, click-on keyboard cover, as a perfect combination of PC and tablet that is good for work as well as entertainment.
"I like the flexibility of having the keyboard and the touch capability," said Mike Gipe, 50, who works in sales for bank Barclays, and was planning to buy a Surface tablet at Microsoft's pop-up store in Times Square in New York.
"It's the combination of having the consumer stuff and the work stuff," he said, looking forward to using Excel spreadsheets and PowerPoint presentations on the new device.
The Times Square store was the first to sell the Surface -- Microsoft's first ever own-brand computer -- and other Windows 8 devices late on Thursday and will be open through the holiday shopping season. On Friday morning it was crowded with a mix of tourists and local office workers, but the cash tills were not jammed.
"With the other tablets you're a consumer. With this you can have input," said Peter Townsend, on vacation in New York from Australia with his wife, who bought a Surface tablet because he liked the keyboard.
Mark Pauluch, 28, who works for a New York private equity firm, said he would like a Surface because he does not want to take a laptop on a plane, but was disappointed when the sales representative told him the wifi-only Surface would not work with Cisco VPN networking.
"I can't use this to replace my work laptop unless it supports VPN," he said.
MIDWEST, WEST COAST
Elsewhere in the United States, there was solid but not overwhelming interest for the Surface.
"It's a good tablet. I am not a huge i-anything fan, I like Windows," said Matt Shanahan, a software developer who drove four hours to the tiny Michigan Avenue pop-up store in Chicago from Grand Rapids, Michigan to buy a Surface. "My friend and I are software developers and this gives us an opportunity to develop new apps," he said.
In a pop-up store at the San Francisco Centre mall about 50 people lined up to buy the new Surface.
"On an iPad you have to use half the screen for a keyboard, or buy an accessory. I love that the Surface is so integrated, that you can type and use Word and all my other programs," said Malte von Sehested, a textbook creator who bought a Surface.
"With the Surface you get a steeper learning curve -- I had to get someone to show me how to side-swipe, swipe out to get the menus for instance," he said. "It may take a week, before it all becomes natural. That could be a problem for Microsoft. My old dad, he would get hit by that steeper learning curve."
ANALYSTS PATIENT
Wall Street and tech industry experts failed to show great enthusiasm for Windows 8, but were prepared to give Microsoft time to succeed.
"Microsoft did not come out with Windows 8 thinking it will be an overnight success," said Daniel Ives, an analyst at FBR Capital Markets. "But there's hope that this could be the silver bullet of growth (for Microsoft) as well as giving the PC industry some optimism that there's better days ahead."
The next six to 12 months is a "crucial period" for Microsoft to get traction with consumers, added Ives.
Sarah Rotman Epps, an analyst at tech research firm Forrester, said consumers may be best served waiting for tablets running the full Windows 8 Pro and Intel Corp chips, which are due out early next year.
"Windows 8 has a lot of great features, but RT has a long way to go," she said, citing a lack of apps and poor video performance on the Surface.
"It's not really a PC. RT is too restricted. Some people will be happier with the full Windows 8," she said.
Microsoft shares were up 33 cents at $28.21 on Nasdaq on Friday. Apple shares were down slightly after disappointing earnings on Thursday.
(Reporting By Nivedita Bhattacharjee in Chicago, Sinead Carew and Nicola Leske in New York, Edwin Chan in San Francisco; Editing by Alden Bentley)
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Thursday, October 25, 2012
Apple iPad sales disappoint, Street eyes the holidays
SAN FRANCISCO (Reuters) - Apple Inc delivered a second straight quarter of disappointing results and iPad sales fell well short of Wall Street's targets, marring its record of consistently blowing past investors' expectations.
Shares in the world's most valuable technology company briefly dipped to levels not seen since the start of August, after it delivered a 27 percent rise in revenue for its fourth quarter while earnings rose 24 percent.
The numbers, while in line with expectations, lacked the positive surprises that investors had grown used to and came after Apple undershot revenue targets in the previous quarter. Its shares bounced back, however, after CEO Tim Cook told analysts on a conference call that the latest iPhone 5 was heavily backlogged but the company had mostly worked out kinks in its iPhone supply chain.
Apple shipped 26.9 million iPhones in the last quarter, somewhat higher than the 25 million to 26 million that Wall Street analysts had predicted. But sales of the iPad came in at 14 million, well below lowered forecasts for the tablet as the economy remained weak and consumers awaited the iPad mini, which will hit store shelves next month.
Analysts say the real test for the company will come during the crucial holiday shopping season, when competition will reach fever-pitch with Apple, Amazon.com Inc, Google Inc and Microsoft Corp all fielding new gadgets.
'Going into earnings we were wondering if the slowing economy will catch up with Wall Street and it has,' said Channing Smith, co-manager of the Capital Advisors Growth Fund.
'Apple is very well-positioned with the iPad and now the iPad mini. It has a great smartphone and we expect the iPhone 5 to sell very well. The outlook is conservative but that's not surprising. Err on the side of caution is a proven formula.'
Just hours after Apple's results, its main smartphone rival Samsung Electronics Co reported a near doubling in quarterly earnings, and while it did not detail smartphone shipments, they are estimated to have surged to 58 million.
Apple heads into the current quarter after refreshing almost all of its product lines, including introducing an upgraded, fourth-generation full-sized iPad. The December quarter will show how well consumers respond to Apple's latest gamble - the iPad mini that will go on sale on November 2.
CAR THAT FLIES AND FLOATS
For the December quarter, Apple forecast revenue of $52 billion, below the average estimate of $55 billion, according to Thomson Reuters I/B/E/S. It is expecting margins to come in at 36 percent, far lower than analysts' expected 43 percent.
Apple Chief Financial Officer Peter Oppenheimer mostly attributed the lower margin and conservative guidance to a combination of a stronger dollar, higher costs associated with new products, and the fact that Apple's next fiscal quarter has one less week than the same period a year ago.
Apple's stock was holding steady at $609.40 in extended trade after flirting with the $600 level. The shares had ended regular trade at $609.54.
Supply constraints holding up sales of the iPad and iPhone dominated discussions between analysts and Apple executives during the post-results conference call. Apple had struggled to deliver large quantities of the iPhone 5 since its launch in late September, with the waitlist for the device at one point stretching to three weeks in some regions.
'Our supply output is significantly higher than it was earlier in October,' Cook said, referring to the iPhone 5. 'And I'm confident that we'll be able to supply quite a few during the quarter.'
Cook also opined on Microsoft's new Windows 8-based Surface tablet that will hit stores in the wee hours of Friday.
'I haven't personally played with the Surface yet, but what we're reading about it, is that it's a fairly compromised, confusing product,' he said. 'I suppose you could design a car that flies and floats, but I don't think it would do all of those things very well.'
Despite the lackluster fourth quarter, Apple put up big numbers for the year. It ended its fiscal 2012 with a 45 percent increase in revenue to $156.5 billion, while net income was up 61 percent at $41.7 billion.
For the final fiscal quarter, it posted net income of $8.2 billion or $8.67 a diluted share in the fiscal fourth quarter on revenue of $35.96 billion, versus $6.6 billion or $7.05 a share a year earlier. Analysts had expected on average that Apple would earn $8.75 per share.
Apple ended the quarter with $121.3 billion in cash and securities, of which $83 billion was offshore.
(Reporting by Poornima Gupta; Editing by Richard Chang and Edmund Klamann)
This article is brought to you by COMPUTERS FOR SALE.
Shares in the world's most valuable technology company briefly dipped to levels not seen since the start of August, after it delivered a 27 percent rise in revenue for its fourth quarter while earnings rose 24 percent.
The numbers, while in line with expectations, lacked the positive surprises that investors had grown used to and came after Apple undershot revenue targets in the previous quarter. Its shares bounced back, however, after CEO Tim Cook told analysts on a conference call that the latest iPhone 5 was heavily backlogged but the company had mostly worked out kinks in its iPhone supply chain.
Apple shipped 26.9 million iPhones in the last quarter, somewhat higher than the 25 million to 26 million that Wall Street analysts had predicted. But sales of the iPad came in at 14 million, well below lowered forecasts for the tablet as the economy remained weak and consumers awaited the iPad mini, which will hit store shelves next month.
Analysts say the real test for the company will come during the crucial holiday shopping season, when competition will reach fever-pitch with Apple, Amazon.com Inc, Google Inc and Microsoft Corp all fielding new gadgets.
'Going into earnings we were wondering if the slowing economy will catch up with Wall Street and it has,' said Channing Smith, co-manager of the Capital Advisors Growth Fund.
'Apple is very well-positioned with the iPad and now the iPad mini. It has a great smartphone and we expect the iPhone 5 to sell very well. The outlook is conservative but that's not surprising. Err on the side of caution is a proven formula.'
Just hours after Apple's results, its main smartphone rival Samsung Electronics Co reported a near doubling in quarterly earnings, and while it did not detail smartphone shipments, they are estimated to have surged to 58 million.
Apple heads into the current quarter after refreshing almost all of its product lines, including introducing an upgraded, fourth-generation full-sized iPad. The December quarter will show how well consumers respond to Apple's latest gamble - the iPad mini that will go on sale on November 2.
CAR THAT FLIES AND FLOATS
For the December quarter, Apple forecast revenue of $52 billion, below the average estimate of $55 billion, according to Thomson Reuters I/B/E/S. It is expecting margins to come in at 36 percent, far lower than analysts' expected 43 percent.
Apple Chief Financial Officer Peter Oppenheimer mostly attributed the lower margin and conservative guidance to a combination of a stronger dollar, higher costs associated with new products, and the fact that Apple's next fiscal quarter has one less week than the same period a year ago.
Apple's stock was holding steady at $609.40 in extended trade after flirting with the $600 level. The shares had ended regular trade at $609.54.
Supply constraints holding up sales of the iPad and iPhone dominated discussions between analysts and Apple executives during the post-results conference call. Apple had struggled to deliver large quantities of the iPhone 5 since its launch in late September, with the waitlist for the device at one point stretching to three weeks in some regions.
'Our supply output is significantly higher than it was earlier in October,' Cook said, referring to the iPhone 5. 'And I'm confident that we'll be able to supply quite a few during the quarter.'
Cook also opined on Microsoft's new Windows 8-based Surface tablet that will hit stores in the wee hours of Friday.
'I haven't personally played with the Surface yet, but what we're reading about it, is that it's a fairly compromised, confusing product,' he said. 'I suppose you could design a car that flies and floats, but I don't think it would do all of those things very well.'
Despite the lackluster fourth quarter, Apple put up big numbers for the year. It ended its fiscal 2012 with a 45 percent increase in revenue to $156.5 billion, while net income was up 61 percent at $41.7 billion.
For the final fiscal quarter, it posted net income of $8.2 billion or $8.67 a diluted share in the fiscal fourth quarter on revenue of $35.96 billion, versus $6.6 billion or $7.05 a share a year earlier. Analysts had expected on average that Apple would earn $8.75 per share.
Apple ended the quarter with $121.3 billion in cash and securities, of which $83 billion was offshore.
(Reporting by Poornima Gupta; Editing by Richard Chang and Edmund Klamann)
This article is brought to you by COMPUTERS FOR SALE.
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