SAN FRANCISCO (Reuters) - A U.S. appeals court on Thursday rejected Apple Inc's request to revive its bid for a sales ban on Samsung's Galaxy Nexus smartphone, dashing the iPhone maker's attempt to recover crucial leverage in the global patent wars.
Apple had asked the full Federal Circuit Court of Appeals in Washington, D.C., to revisit a decision in October by a three-judge panel of the same court. The panel rejected Apple's request to impose a sales ban on Samsung's Nexus smartphone ahead of a trial set for March 2014.
An Apple spokeswoman declined to comment. A Samsung representative could not immediately be reached.
The fight in appeals court comes after Apple won a $1.05 billion verdict last year against Samsung in a U.S. District Court in California. The same trial judge will preside over the legal battle surrounding the Nexus phone, which involves a patent not included in the earlier trial.
The fight has been widely viewed as a proxy war between Apple and Google Inc. Samsung's hot-selling Galaxy smartphones and tablets run on Google's Android operating system, which Apple's late co-founder, Steve Jobs, once denounced as a 'stolen product.'
In its October ruling against Apple, the appeals court raised the bar for potentially market-crippling injunctions on product sales based on narrow patents for phone features. The legal precedent puts Samsung in a much stronger position by allowing its products to remain on store shelves while it fights a global patent battle against Apple over smartphone technology.
U.S. District Judge Lucy Koh, in San Jose, California, who has presided over much of the Apple/Samsung litigation in the United States, cited the appeals' court decision in a December order rejecting Apple's request for permanent sales bans on several Samsung phones. Apple has appealed Koh's ruling.
Apple wanted the full Federal Circuit of Appeals, made up of nine active judges, to reverse the earlier ruling. But in a brief order on Thursday, the court rejected Apple's request without detailed explanation or any published dissents.
Several experts had believed that Apple faced long odds, as the legal issues in play were not considered controversial enough to spur full court review.
Apple could still appeal to the U.S. Supreme Court. However, the high court has made it more difficult for patent plaintiffs to secure sales injunctions in recent years.
The case in the Federal Circuit is Apple Inc. vs Samsung Electronics Co Ltd et al, 12-1507.
(Reporting By Dan Levine; Editing by John Wallace, Grant McCool and Leslie Adler)
Thursday, January 31, 2013
Smartphone cases - Built to survive drops, floods - and lawsuits?
NEW YORK (Reuters) - The smartphone patent wars have lit up courtrooms around the world. Next up: the smartphone case wars.
The makers of protective cases that shield cell phones from coffee spills and sticky-fingered toddlers are entangled in countless lawsuits seeking to protect their designs.
The fights come as the mobile accessories market has gone upscale with some cases made by luxury designers costing more than the phones they cover. Some cases are billed as virtually destruction-proof, said to protect precious electronics from crushing blows or cresting waves.
Smartphones themselves are at the heart of a global patent fight, with Apple Inc battling South Korean giant Samsung Electronics Co over the design of the iPhone and iPad.
But now similar fights are escalating over what swaddles the gadgets, as the smartphone case market has become a roughly $1 billion annual industry, according to NPD Group, a market research firm. More than 100 million Apple and Samsung phones were shipped in the most recent quarter, making for more demand.
The damage claims in the case design fights are tiny compared with the smartphone wars, but the lawsuits could help spur a shakeout in a crowded market.
The biggest industry players sell their products at Apple and AT&T Inc retail stores, as well as at retailers such as Best Buy Co Inc. They have had success in getting court judgments against Chinese counterfeiters and domestic sellers of knock-offs, but the lawsuits involving one designer against another aren't as easily resolved.
Otter Products Inc, the maker of OtterBox cases, has become a frequent visitor to the courthouse.
The Colorado-based company has filed lawsuits in federal court in its home state against LifeProof, also known as Treefrog Developments Inc, and Mophie LLC for alleged patent infringement involving waterproof cases for iPhones, iPods and other devices. Mophie and LifeProof in court papers have denied the allegations.
Otterbox and Mophie did not respond to requests for comment. LifeProof declined to comment on pending litigation. Company spokesman Jonathan Wegner said, however, that LifeProof has programs in place to protect its own intellectual property.
The Ballistic Case Co, based in Florida, has also been a repeat plaintiff. The company has sued rivals Cell-Nerds LLC and Boxwave Corp for allegedly copying the look of its rugged 'Shell Gel' series of cases, which feature a dotted back and come in an array of colors.
Designers invest significant resources in case styles and deserve legal protection, said Alan Weisberg, a Ballistic attorney.
The company has sold more than $12 million worth of Shell Gel cases, according to court documents, and they are available at major retailers. Both Cell-Nerds and Boxwave are smaller enterprises that sell cases online. The Shell Gel models are priced at about $35, while similar Cell-Nerds and Boxwave cases go for less than $10.
Earlier this month, a Miami federal judge allowed Ballistic's case against Cell-Nerds to move forward, while the Boxwave case is in its early stages in the same court. Ballistic claims it has so-called 'trade dress rights' to the design of its cases and wants similar, rival products off the market.
An attorney for Cell-Nerds, Ury Fisher, said the company does not think Ballistic has accurately described its trade dress rights, and he noted that such cases are difficult to prove because plaintiffs have to show their product is readily recognizable to consumers.
An attorney for Boxwave did not respond to a request for comment.
For patent-based lawsuits to succeed, plaintiffs will need to prove another company is infringing their patents and may also have to show what is innovative about their designs and worthy of protection.
If found to infringe, some companies could be forced out of the market, said intellectual property attorney Christopher Carani of law firm McAndrews, Held & Malloy.
So far, however, the in-fighting among case designers does not show signs of slowing down the industry.
Casemakers have trotted out models they say are tricked out to withstand two tons of force or can be used to film movies underwater. At the recent Consumer Electronics Show in Las Vegas -- where new case designs seemed to be on display everywhere -- one maker even showed off a case lined in soft orange putty that is designed to become 'rock hard' if the phone is dropped.
(Reporting By Erin Geiger Smith; Editing by Martha Graybow and Kenneth Barry)
The makers of protective cases that shield cell phones from coffee spills and sticky-fingered toddlers are entangled in countless lawsuits seeking to protect their designs.
The fights come as the mobile accessories market has gone upscale with some cases made by luxury designers costing more than the phones they cover. Some cases are billed as virtually destruction-proof, said to protect precious electronics from crushing blows or cresting waves.
Smartphones themselves are at the heart of a global patent fight, with Apple Inc battling South Korean giant Samsung Electronics Co over the design of the iPhone and iPad.
But now similar fights are escalating over what swaddles the gadgets, as the smartphone case market has become a roughly $1 billion annual industry, according to NPD Group, a market research firm. More than 100 million Apple and Samsung phones were shipped in the most recent quarter, making for more demand.
The damage claims in the case design fights are tiny compared with the smartphone wars, but the lawsuits could help spur a shakeout in a crowded market.
The biggest industry players sell their products at Apple and AT&T Inc retail stores, as well as at retailers such as Best Buy Co Inc. They have had success in getting court judgments against Chinese counterfeiters and domestic sellers of knock-offs, but the lawsuits involving one designer against another aren't as easily resolved.
Otter Products Inc, the maker of OtterBox cases, has become a frequent visitor to the courthouse.
The Colorado-based company has filed lawsuits in federal court in its home state against LifeProof, also known as Treefrog Developments Inc, and Mophie LLC for alleged patent infringement involving waterproof cases for iPhones, iPods and other devices. Mophie and LifeProof in court papers have denied the allegations.
Otterbox and Mophie did not respond to requests for comment. LifeProof declined to comment on pending litigation. Company spokesman Jonathan Wegner said, however, that LifeProof has programs in place to protect its own intellectual property.
The Ballistic Case Co, based in Florida, has also been a repeat plaintiff. The company has sued rivals Cell-Nerds LLC and Boxwave Corp for allegedly copying the look of its rugged 'Shell Gel' series of cases, which feature a dotted back and come in an array of colors.
Designers invest significant resources in case styles and deserve legal protection, said Alan Weisberg, a Ballistic attorney.
The company has sold more than $12 million worth of Shell Gel cases, according to court documents, and they are available at major retailers. Both Cell-Nerds and Boxwave are smaller enterprises that sell cases online. The Shell Gel models are priced at about $35, while similar Cell-Nerds and Boxwave cases go for less than $10.
Earlier this month, a Miami federal judge allowed Ballistic's case against Cell-Nerds to move forward, while the Boxwave case is in its early stages in the same court. Ballistic claims it has so-called 'trade dress rights' to the design of its cases and wants similar, rival products off the market.
An attorney for Cell-Nerds, Ury Fisher, said the company does not think Ballistic has accurately described its trade dress rights, and he noted that such cases are difficult to prove because plaintiffs have to show their product is readily recognizable to consumers.
An attorney for Boxwave did not respond to a request for comment.
For patent-based lawsuits to succeed, plaintiffs will need to prove another company is infringing their patents and may also have to show what is innovative about their designs and worthy of protection.
If found to infringe, some companies could be forced out of the market, said intellectual property attorney Christopher Carani of law firm McAndrews, Held & Malloy.
So far, however, the in-fighting among case designers does not show signs of slowing down the industry.
Casemakers have trotted out models they say are tricked out to withstand two tons of force or can be used to film movies underwater. At the recent Consumer Electronics Show in Las Vegas -- where new case designs seemed to be on display everywhere -- one maker even showed off a case lined in soft orange putty that is designed to become 'rock hard' if the phone is dropped.
(Reporting By Erin Geiger Smith; Editing by Martha Graybow and Kenneth Barry)
Facebook slumps as mobile ad growth fails to impress
(Reuters) - Shares of Facebook Inc were set to open 7 percent lower on Thursday as a surge in fourth-quarter mobile advertising revenue failed to live up to Wall Street's high expectations.
Three brokerages downgraded the stock of the No. 1 social network, which has struggled to develop a full-fledged mobile advertising business.
Facebook has long established itself as one of the most important websites, but investors have worried that until the company's mobile advertising strategy takes off, revenue growth will remain shaky.
The company reported a better-than-expected fourth-quarter profit on Wednesday and said its mobile advertising revenue doubled to $306 million, suggesting it was making inroads into handheld devices such as smartphones and tablets.
Investors were looking for at least $350 million in mobile advertising revenue, Piper Jaffray analyst Gene Munster said in a note to clients.
'While the trajectory of mobile growth may not be as steep as some investors were hoping, the theme of mobile as the future of Facebook remains intact,' he said.
BMO Capital Markets analyst Daniel Salmon, who downgraded the stock to 'market perform' from 'outperform', however said Facebook's 2013 stock performance would not be dictated by its ability to generate mobile ad dollars.
He said new catalysts were necessary to drive Facebook's stock price up.
Facebook's stock, which has lost over a quarter of its value since its botched debut in May, were down at $29.08 in premarket trading. The shares closed at $31.24 on the Nasdaq on Wednesday.
(Reporting by Neha Alawadhi in Bangalore; Editing by Saumyadeb Chakrabarty)
Three brokerages downgraded the stock of the No. 1 social network, which has struggled to develop a full-fledged mobile advertising business.
Facebook has long established itself as one of the most important websites, but investors have worried that until the company's mobile advertising strategy takes off, revenue growth will remain shaky.
The company reported a better-than-expected fourth-quarter profit on Wednesday and said its mobile advertising revenue doubled to $306 million, suggesting it was making inroads into handheld devices such as smartphones and tablets.
Investors were looking for at least $350 million in mobile advertising revenue, Piper Jaffray analyst Gene Munster said in a note to clients.
'While the trajectory of mobile growth may not be as steep as some investors were hoping, the theme of mobile as the future of Facebook remains intact,' he said.
BMO Capital Markets analyst Daniel Salmon, who downgraded the stock to 'market perform' from 'outperform', however said Facebook's 2013 stock performance would not be dictated by its ability to generate mobile ad dollars.
He said new catalysts were necessary to drive Facebook's stock price up.
Facebook's stock, which has lost over a quarter of its value since its botched debut in May, were down at $29.08 in premarket trading. The shares closed at $31.24 on the Nasdaq on Wednesday.
(Reporting by Neha Alawadhi in Bangalore; Editing by Saumyadeb Chakrabarty)
Wednesday, January 30, 2013
RIM rebrands as BlackBerry; launches nifty new devices
NEW YORK (Reuters) - Research In Motion Ltd on Wednesday unveiled the long-delayed line of smartphones it hopes will put it on the comeback trail, but it disappointed investors by saying U.S. sales of its all-new BlackBerry 10 devices will not start until March, sending its share price tumbling 12 percent.
Chief Executive Thorsten Heins also announced that RIM was abandoning the name it has used since its inception in 1985 to take the name of its signature product, signaling his hopes for a fresh start for the company that pioneered on-your-hip email.
'From this point forward, RIM becomes BlackBerry,' Heins said at the New York launch. 'It is one brand; it is one promise.'
RIM, which is already starting to call itself BlackBerry, had initially planned to launch the new BlackBerry 10 devices a year ago. But it pushed the release date back twice as it struggled to perfect a new operating system.
Ahead of Wednesday's announcements, analysts had said that any launch after February would be a black mark for the Canada-based company.
'The biggest disappointment was the delay in the U.S., that it will take so long before the devices get going there,' said Eric Jackson, founder and managing Partner at Ironfire Capital LLC in New York.
Heins said the delays reflected the need for U.S. carrier testing, although carrier AT&T Inc offered few clues on what that meant. Instead, the carrier merely stated it was enthusiastic about the devices and would announce availability, pricing and other information at a later date.
'Carriers in all other parts of the world get their devices through the testing process significantly faster than the U.S. carriers do,' said John Jackson, an analyst at IDC, adding that the U.S. process can often take 'weeks' longer.
Nevertheless investors were extremely disappointed with the delay and RIM shares on the Nasdaq ended the day 12 percent lower at $13.78. Its Toronto-listed shares fell by almost the same margin to close at C$13.86.
RIM launched its first BlackBerry back in 1999 as a way for busy executives to stay in touch with their clients and their offices, and the company quickly cornered the market for secure corporate and government emails.
But its star faded as competition rose and the BlackBerry is now a far-behind also-ran in the race for market share, with a 3.4 percent global showing in the fourth quarter - down from 20 percent three years before. Its North American market share is even smaller - a mere 2 percent in the fourth quarter.
RIM shares have tumbled along with the company's market share and the stock is down 90 percent since its 2008 peak. Despite the pullback on Wednesday, RIM's share price has more than doubled over the last four months, reflecting the growing buzz about its new devices.
TOUCH COMPETITION
The new BlackBerry 10 phones will compete with Apple's iPhone and devices using Google's Android technology, both of which have soared above the BlackBerry in a competitive market.
The BlackBerry 10 devices boast fast browsers, new features, smart cameras and - unlike previous BlackBerry models - enter the market primed with a large application library, including services such as Skype and the popular game Angry Birds.
The BlackBerry Z10 touchscreen device, in black or white, will be the first to hit the market, with a country-by-country rollout that starts in Britain on Thursday.
A Q10 model, equipped with a small 'qwerty' keyboard that RIM made into its trademark, will launch globally in April.
'I'm still confident that a lot of the subscriber base are going to want the upgrade to BlackBerry 10. It's a very strong improvement over what they currently have. This is not going to cause mass defections from iOS and Android, but it doesn't have to be a success for RIM. You've got to start somewhere,' said Jackson of Ironfire, which owns shares in RIM.
The Z10 device won a lukewarm review from The Wall Street Journal's tech blogger Walt Mossberg, who complained of a shortage of apps.
On the other hand, David Pogue, who writes for The New York Times, apologized for describing BlackBerry as doomed in the past. The Z10 touchscreen device was 'lovely, fast and efficient, bristling with fresh, useful ideas,' he said.
While technology analysts conceded that RIM has done quite a remarkable job on many of the features of BlackBerry 10 and on the array of its app selection for a new platform, many argue it will be a very tough slog for RIM to regain its crown.
'I don't think that RIM will return to its glory days,' said Charles Golvin, analyst at Forrester Research. 'Success for them looks like staunching the bleeding and clawing back a percentage or point or two of market share.'
Announcements about pricing so far have been in line with expectations. U.S. carrier Verizon Wireless said the phone would cost $199 for a two-year contract, while Canada's Rogers Communications is quoting C$149 ($150) for certain three-year plans.
GLITZY LAUNCH
RIM picked a range of venues for its global launch parties, including Dubai's $650-a-night Armani Hotel, which occupies six floors of the Burj Khalifa, the world's tallest tower.
The New York event took place in a sprawling basketball facility on the Lower East Side of Manhattan, just north of the Manhattan Bridge. The BlackBerry has been 'Re-designed. Re-engineered. Re-invented,' RIM said.
RIM, which is splurging on a Super Bowl ad to promote its new phones, also introduced Grammy-winning singer-songwriter Alicia Keys as its global creative director.
'I was in a long-term relationship with BlackBerry and then I started to notice some new, kind of hotter, attractive, sexier phones at the gym, and I kind of broke up with you for something that had a little more bling,' Keys said at the New York launch.
'But I always missed the way you organized my life and the way you were there for me at my job, and so I started to have two phones - I was kind of playing the field. But then ... you added a lot more features ... and now, we're exclusively dating again, and I'm very happy,' she said.
($1=$1.0029 Canadian)
(Writing by Janet Guttsman; editing by Frank McGurty, Lisa Von Ahn, Peter Galloway, G Crosse)
Chief Executive Thorsten Heins also announced that RIM was abandoning the name it has used since its inception in 1985 to take the name of its signature product, signaling his hopes for a fresh start for the company that pioneered on-your-hip email.
'From this point forward, RIM becomes BlackBerry,' Heins said at the New York launch. 'It is one brand; it is one promise.'
RIM, which is already starting to call itself BlackBerry, had initially planned to launch the new BlackBerry 10 devices a year ago. But it pushed the release date back twice as it struggled to perfect a new operating system.
Ahead of Wednesday's announcements, analysts had said that any launch after February would be a black mark for the Canada-based company.
'The biggest disappointment was the delay in the U.S., that it will take so long before the devices get going there,' said Eric Jackson, founder and managing Partner at Ironfire Capital LLC in New York.
Heins said the delays reflected the need for U.S. carrier testing, although carrier AT&T Inc offered few clues on what that meant. Instead, the carrier merely stated it was enthusiastic about the devices and would announce availability, pricing and other information at a later date.
'Carriers in all other parts of the world get their devices through the testing process significantly faster than the U.S. carriers do,' said John Jackson, an analyst at IDC, adding that the U.S. process can often take 'weeks' longer.
Nevertheless investors were extremely disappointed with the delay and RIM shares on the Nasdaq ended the day 12 percent lower at $13.78. Its Toronto-listed shares fell by almost the same margin to close at C$13.86.
RIM launched its first BlackBerry back in 1999 as a way for busy executives to stay in touch with their clients and their offices, and the company quickly cornered the market for secure corporate and government emails.
But its star faded as competition rose and the BlackBerry is now a far-behind also-ran in the race for market share, with a 3.4 percent global showing in the fourth quarter - down from 20 percent three years before. Its North American market share is even smaller - a mere 2 percent in the fourth quarter.
RIM shares have tumbled along with the company's market share and the stock is down 90 percent since its 2008 peak. Despite the pullback on Wednesday, RIM's share price has more than doubled over the last four months, reflecting the growing buzz about its new devices.
TOUCH COMPETITION
The new BlackBerry 10 phones will compete with Apple's iPhone and devices using Google's Android technology, both of which have soared above the BlackBerry in a competitive market.
The BlackBerry 10 devices boast fast browsers, new features, smart cameras and - unlike previous BlackBerry models - enter the market primed with a large application library, including services such as Skype and the popular game Angry Birds.
The BlackBerry Z10 touchscreen device, in black or white, will be the first to hit the market, with a country-by-country rollout that starts in Britain on Thursday.
A Q10 model, equipped with a small 'qwerty' keyboard that RIM made into its trademark, will launch globally in April.
'I'm still confident that a lot of the subscriber base are going to want the upgrade to BlackBerry 10. It's a very strong improvement over what they currently have. This is not going to cause mass defections from iOS and Android, but it doesn't have to be a success for RIM. You've got to start somewhere,' said Jackson of Ironfire, which owns shares in RIM.
The Z10 device won a lukewarm review from The Wall Street Journal's tech blogger Walt Mossberg, who complained of a shortage of apps.
On the other hand, David Pogue, who writes for The New York Times, apologized for describing BlackBerry as doomed in the past. The Z10 touchscreen device was 'lovely, fast and efficient, bristling with fresh, useful ideas,' he said.
While technology analysts conceded that RIM has done quite a remarkable job on many of the features of BlackBerry 10 and on the array of its app selection for a new platform, many argue it will be a very tough slog for RIM to regain its crown.
'I don't think that RIM will return to its glory days,' said Charles Golvin, analyst at Forrester Research. 'Success for them looks like staunching the bleeding and clawing back a percentage or point or two of market share.'
Announcements about pricing so far have been in line with expectations. U.S. carrier Verizon Wireless said the phone would cost $199 for a two-year contract, while Canada's Rogers Communications is quoting C$149 ($150) for certain three-year plans.
GLITZY LAUNCH
RIM picked a range of venues for its global launch parties, including Dubai's $650-a-night Armani Hotel, which occupies six floors of the Burj Khalifa, the world's tallest tower.
The New York event took place in a sprawling basketball facility on the Lower East Side of Manhattan, just north of the Manhattan Bridge. The BlackBerry has been 'Re-designed. Re-engineered. Re-invented,' RIM said.
RIM, which is splurging on a Super Bowl ad to promote its new phones, also introduced Grammy-winning singer-songwriter Alicia Keys as its global creative director.
'I was in a long-term relationship with BlackBerry and then I started to notice some new, kind of hotter, attractive, sexier phones at the gym, and I kind of broke up with you for something that had a little more bling,' Keys said at the New York launch.
'But I always missed the way you organized my life and the way you were there for me at my job, and so I started to have two phones - I was kind of playing the field. But then ... you added a lot more features ... and now, we're exclusively dating again, and I'm very happy,' she said.
($1=$1.0029 Canadian)
(Writing by Janet Guttsman; editing by Frank McGurty, Lisa Von Ahn, Peter Galloway, G Crosse)
RIM, now known as BlackBerry, launches new BB10 line
NEW YORK (Reuters) - Research In Motion Ltd unveiled the long-delayed line of smartphones it hopes will put it on the comeback trail on Wednesday but it disappointed investors by saying U.S. sales of its all-new BlackBerry 10 will start only in March.
Chief Executive Thorsten Heins also announced that RIM was abandoning the name it has used since its inception in 1985 to take the name of its signature product, signaling his hopes for a fresh start for the company that pioneered on-your-hip email.
'From this point forward, RIM becomes BlackBerry,' Heins said at the New York launch. 'It is one brand; it is one promise.'
RIM, which is already starting to call itself BlackBerry, had initially planned to launch the new BlackBerry 10 smartphones in 2011. But it pushed the date back twice as it struggled to work with a new operating system.
Ahead of Wednesday's announcements, analysts had said that any launch after February would be a black mark for the Canadian company.
'The biggest disappointment was the delay in the U.S., that it will take so long before the devices get going there,' said Eric Jackson, founder and managing Partner at Ironfire Capital LLC in New York.
Heins said the delays reflected the need for U.S. carrier testing, although carrier AT&T offered few clues on what that meant.
'We are very enthusiastic about the devices. We will announce pricing, availability, and other information at a later date. Beyond that, nothing to add,' said spokesman Mark Siegel.
RIM launched its first BlackBerry back in 1999 as a way for busy executives to stay in touch with their clients and their offices, and the Canadian company quickly cornered the market for secure corporate and government email.
But its star faded as competition rose. The BlackBerry is now a far-behind also-ran in the race for market share, with a 3.4 percent global showing in the fourth quarter, down from 20 percent three years before. Its North American market share is even worse: a mere 2 percent in the fourth quarter.
RIM shares tumbled along with the company's market share, and the stock is down 90 percent from its 2008 peak.
The shares fell as much as 8 percent on Wednesday, although they are still more than twice the level of their September 2012 low, reflecting ever-louder buzz about the new devices.
TOUCH COMPETITION
The new BlackBerry 10 phones will compete with Apple's iPhone and devices using Google's Android technology, both of which have soared above the BlackBerry in a competitive market.
The BlackBerry 10 devices boast fast browsers, new features, smart cameras and, unlike previous BlackBerry models, enter the market primed with a large application library, including services such as Skype and the popular game Angry Birds.
The BlackBerry Z10 touchscreen device, in black or white, will be the first to hit the market, with a country-by-country roll-out that starts in Britain on Thursday.
A Q10 model, equipped with small 'qwerty' keyboard that RIM made into its trademark, will launch globally in April.
The Z10 device won a lukewarm review from Wall Street Journal tech blogger Walt Mossberg, who complained of missing or lagging features and a shortage of apps.
But David Pogue, who writes for The New York Times, apologized for describing BlackBerry as doomed in the past. The Z10 touchscreen device was 'lovely, fast and efficient, bristling with fresh, useful ideas,' he said.
Announcements about pricing so far have been in line with expectations. U.S. carrier Verizon Wireless said the phone would cost $199 for a two-year contract, while Canada's Rogers Communications is quoting C$149 ($150) for certain three-year plans.
GLITZY LAUNCH
RIM picked a range of venues for its global launch parties, including Dubai's $650-a-night Armani Hotel, which occupies six floors of the Burj Khalifa, the world's tallest tower.
The New York event took place in a sprawling basketball facility on the Lower East Side of Manhattan, just north of the Manhattan Bridge. The BlackBerry has been 'Re-designed. Re-engineered. Re-invented,' RIM said.
RIM, which is splurging on a Superbowl ad to promote its new phones, also introduced Grammy-winning singer-songwriter Alicia Keys as its global creative director.
'I was in a long-term relationship with BlackBerry, and then I started to notice some new, kind of hotter, attractive, sexier phones at the gym, and I kind of broke up with you for something that had a little more bling,' Keys said at the New York launch.
'But I always missed the way you organized my life, and the way you were there for me at my job, and so I started to have two phones - I was kind of playing the field. But then ... you added a lot more features ... and now, we're exclusively dating again, and I'm very happy.'
($1=$1.0029 Canadian)
(Writing by Janet Guttsman; Editing by Frank McGurty, Lisa Von Ahn and Peter Galloway)
Chief Executive Thorsten Heins also announced that RIM was abandoning the name it has used since its inception in 1985 to take the name of its signature product, signaling his hopes for a fresh start for the company that pioneered on-your-hip email.
'From this point forward, RIM becomes BlackBerry,' Heins said at the New York launch. 'It is one brand; it is one promise.'
RIM, which is already starting to call itself BlackBerry, had initially planned to launch the new BlackBerry 10 smartphones in 2011. But it pushed the date back twice as it struggled to work with a new operating system.
Ahead of Wednesday's announcements, analysts had said that any launch after February would be a black mark for the Canadian company.
'The biggest disappointment was the delay in the U.S., that it will take so long before the devices get going there,' said Eric Jackson, founder and managing Partner at Ironfire Capital LLC in New York.
Heins said the delays reflected the need for U.S. carrier testing, although carrier AT&T offered few clues on what that meant.
'We are very enthusiastic about the devices. We will announce pricing, availability, and other information at a later date. Beyond that, nothing to add,' said spokesman Mark Siegel.
RIM launched its first BlackBerry back in 1999 as a way for busy executives to stay in touch with their clients and their offices, and the Canadian company quickly cornered the market for secure corporate and government email.
But its star faded as competition rose. The BlackBerry is now a far-behind also-ran in the race for market share, with a 3.4 percent global showing in the fourth quarter, down from 20 percent three years before. Its North American market share is even worse: a mere 2 percent in the fourth quarter.
RIM shares tumbled along with the company's market share, and the stock is down 90 percent from its 2008 peak.
The shares fell as much as 8 percent on Wednesday, although they are still more than twice the level of their September 2012 low, reflecting ever-louder buzz about the new devices.
TOUCH COMPETITION
The new BlackBerry 10 phones will compete with Apple's iPhone and devices using Google's Android technology, both of which have soared above the BlackBerry in a competitive market.
The BlackBerry 10 devices boast fast browsers, new features, smart cameras and, unlike previous BlackBerry models, enter the market primed with a large application library, including services such as Skype and the popular game Angry Birds.
The BlackBerry Z10 touchscreen device, in black or white, will be the first to hit the market, with a country-by-country roll-out that starts in Britain on Thursday.
A Q10 model, equipped with small 'qwerty' keyboard that RIM made into its trademark, will launch globally in April.
The Z10 device won a lukewarm review from Wall Street Journal tech blogger Walt Mossberg, who complained of missing or lagging features and a shortage of apps.
But David Pogue, who writes for The New York Times, apologized for describing BlackBerry as doomed in the past. The Z10 touchscreen device was 'lovely, fast and efficient, bristling with fresh, useful ideas,' he said.
Announcements about pricing so far have been in line with expectations. U.S. carrier Verizon Wireless said the phone would cost $199 for a two-year contract, while Canada's Rogers Communications is quoting C$149 ($150) for certain three-year plans.
GLITZY LAUNCH
RIM picked a range of venues for its global launch parties, including Dubai's $650-a-night Armani Hotel, which occupies six floors of the Burj Khalifa, the world's tallest tower.
The New York event took place in a sprawling basketball facility on the Lower East Side of Manhattan, just north of the Manhattan Bridge. The BlackBerry has been 'Re-designed. Re-engineered. Re-invented,' RIM said.
RIM, which is splurging on a Superbowl ad to promote its new phones, also introduced Grammy-winning singer-songwriter Alicia Keys as its global creative director.
'I was in a long-term relationship with BlackBerry, and then I started to notice some new, kind of hotter, attractive, sexier phones at the gym, and I kind of broke up with you for something that had a little more bling,' Keys said at the New York launch.
'But I always missed the way you organized my life, and the way you were there for me at my job, and so I started to have two phones - I was kind of playing the field. But then ... you added a lot more features ... and now, we're exclusively dating again, and I'm very happy.'
($1=$1.0029 Canadian)
(Writing by Janet Guttsman; Editing by Frank McGurty, Lisa Von Ahn and Peter Galloway)
RIM changes name, unveils BlackBerry 10 in comeback bid
NEW YORK (Reuters) - Research In Motion Ltd unveiled on Wednesday the long-delayed line of smartphones it hopes will put the company on the comeback trail in a market it once dominated, but said sales of the BlackBerry 10 in the United States will not start until March.
Signaling his hopes for a fresh start for the company that pioneered on-your-hip email, Chief Executive Thorsten Heins also said RIM was abandoning the name it has used since its inception in 1985 to take on the name of its signature product.
'From this point forward, RIM becomes BlackBerry.' Heins said at the New York launch. 'It is one brand; it is one promise.'
RIM launched its first BlackBerry back in 1999 as a way for busy executives to stay in touch with their clients and their offices, and the Canadian company quickly cornered the market for secure corporate and government email.
But its star faded as competition rose. The BlackBerry is now a far-behind also-ran in the race for market share, with a 3.4 percent global showing in the fourth quarter, down from 20 percent three years before. Its North American market share is even worse: a mere 2 percent in the fourth quarter.
RIM said the first of the new BlackBerrys will be available on Thursday in Britain, with other countries following as carriers complete their testing.
In the U.S. market, which sets trends that other countries follow, the BlackBerry Z10 touchscreen device will go on sale in March. U.S. carrier Verizon Wireless said the phone would cost $199 for a two-year contract, while Canada's Rogers Communications is quoting C$149 ($150) for certain three-year plans.
SHARES SLUMP
RIM shares initially rallied on Wednesday, but soon fell as much as 8 percent below Tuesday's close. The stock is down 90 percent from its 2008 peak as the BlackBerry has lost ground to rival devices. But in the last four months its volatile shares have more than doubled as buzz grew about the new devices.
'It was such a well-advertised launch date that people moved the stock up and then they took profits ahead of when it was going to be revealed,' said Ian Nakamoto, director of research at Macdougall, Macdougall and Mactier in Toronto.
'For RIM, it's a normal stock market day. It would have been an abnormal stock market day if it had got cut in half or something.'
The legal name change to BlackBerry from Research In Motion takes affect after shareholders approve the decision, but the company already plans to do business under the BlackBerry name.
'We want our employees to say, 'I work for BlackBerry.' Our customers to say, 'I own a BlackBerry.' Our shareholders to say, 'I own BlackBerry stock,'' said chief marketing officer Frank Boulben. 'We want to become what I'd call a branded house versus a house of brands.'
The new BlackBerry 10 phones will compete with Apple's iPhone and devices using Google's Android technology, both of which have soared above the BlackBerry in a competitive market.
The BlackBerry 10 devices boast fast browsers, new features, smart cameras and, unlike previous BlackBerry models, enter the market primed with a large application library, including services such as Skype and the popular game Angry Birds.
The new devices are sleek black numbers, one with the small 'qwerty' keyboard that RIM made into its trademark, and one a pure touchscreen device that looks much like those its competitors already produce.
'QWERTY' DEVICE IN APRIL
The Q10 'qwerty' device will launch later than the Z10 touchscreen. Heins said it would hit global markets in April.
RIM picked a range of venues for its global launch parties, including Dubai's $650-a-night Armani Hotel, which occupies six floors of the Burj Khalifa, the world's tallest tower.
The New York event took place in a sprawling basketball facility on the Lower East Side of Manhattan, just north of the Manhattan Bridge. The Blackberry has been 'Re-designed. Re-engineered. Re-invented,' RIM said.
RIM, which is splurging on a Superbowl ad to promote its new phones, also introduced Grammy-winning singer/songwriter Alicia Keys as its global creative director.
'I was in a long-term relationship with BlackBerry, and then I started to notice some new, kind of hotter, attractive, sexier phones at the gym, and I kind of broke up with you for something that had a little more bling,' Keys said at the New York launch.
'But I always missed the way you organized my life, and the way you were there for me at my job, and so I started to have two phones - I was kind of playing the field. But then ... you added a lot more features ... and now, we're exclusively dating again, and I'm very happy.'
(Writing by Janet Guttsman; Editing by Frank McGurty, Lisa Von Ahn and Peter Galloway)
Signaling his hopes for a fresh start for the company that pioneered on-your-hip email, Chief Executive Thorsten Heins also said RIM was abandoning the name it has used since its inception in 1985 to take on the name of its signature product.
'From this point forward, RIM becomes BlackBerry.' Heins said at the New York launch. 'It is one brand; it is one promise.'
RIM launched its first BlackBerry back in 1999 as a way for busy executives to stay in touch with their clients and their offices, and the Canadian company quickly cornered the market for secure corporate and government email.
But its star faded as competition rose. The BlackBerry is now a far-behind also-ran in the race for market share, with a 3.4 percent global showing in the fourth quarter, down from 20 percent three years before. Its North American market share is even worse: a mere 2 percent in the fourth quarter.
RIM said the first of the new BlackBerrys will be available on Thursday in Britain, with other countries following as carriers complete their testing.
In the U.S. market, which sets trends that other countries follow, the BlackBerry Z10 touchscreen device will go on sale in March. U.S. carrier Verizon Wireless said the phone would cost $199 for a two-year contract, while Canada's Rogers Communications is quoting C$149 ($150) for certain three-year plans.
SHARES SLUMP
RIM shares initially rallied on Wednesday, but soon fell as much as 8 percent below Tuesday's close. The stock is down 90 percent from its 2008 peak as the BlackBerry has lost ground to rival devices. But in the last four months its volatile shares have more than doubled as buzz grew about the new devices.
'It was such a well-advertised launch date that people moved the stock up and then they took profits ahead of when it was going to be revealed,' said Ian Nakamoto, director of research at Macdougall, Macdougall and Mactier in Toronto.
'For RIM, it's a normal stock market day. It would have been an abnormal stock market day if it had got cut in half or something.'
The legal name change to BlackBerry from Research In Motion takes affect after shareholders approve the decision, but the company already plans to do business under the BlackBerry name.
'We want our employees to say, 'I work for BlackBerry.' Our customers to say, 'I own a BlackBerry.' Our shareholders to say, 'I own BlackBerry stock,'' said chief marketing officer Frank Boulben. 'We want to become what I'd call a branded house versus a house of brands.'
The new BlackBerry 10 phones will compete with Apple's iPhone and devices using Google's Android technology, both of which have soared above the BlackBerry in a competitive market.
The BlackBerry 10 devices boast fast browsers, new features, smart cameras and, unlike previous BlackBerry models, enter the market primed with a large application library, including services such as Skype and the popular game Angry Birds.
The new devices are sleek black numbers, one with the small 'qwerty' keyboard that RIM made into its trademark, and one a pure touchscreen device that looks much like those its competitors already produce.
'QWERTY' DEVICE IN APRIL
The Q10 'qwerty' device will launch later than the Z10 touchscreen. Heins said it would hit global markets in April.
RIM picked a range of venues for its global launch parties, including Dubai's $650-a-night Armani Hotel, which occupies six floors of the Burj Khalifa, the world's tallest tower.
The New York event took place in a sprawling basketball facility on the Lower East Side of Manhattan, just north of the Manhattan Bridge. The Blackberry has been 'Re-designed. Re-engineered. Re-invented,' RIM said.
RIM, which is splurging on a Superbowl ad to promote its new phones, also introduced Grammy-winning singer/songwriter Alicia Keys as its global creative director.
'I was in a long-term relationship with BlackBerry, and then I started to notice some new, kind of hotter, attractive, sexier phones at the gym, and I kind of broke up with you for something that had a little more bling,' Keys said at the New York launch.
'But I always missed the way you organized my life, and the way you were there for me at my job, and so I started to have two phones - I was kind of playing the field. But then ... you added a lot more features ... and now, we're exclusively dating again, and I'm very happy.'
(Writing by Janet Guttsman; Editing by Frank McGurty, Lisa Von Ahn and Peter Galloway)
RIM unveils BlackBerry 10, signaling hope for new start
NEW YORK (Reuters) - Research In Motion Ltd on Wednesday unveiled a long-delayed line of smartphones it says will put the company on the comeback trail in a market it once dominated, promising its BlackBerry 10 devices will wow consumers and businesses alike when they hit stores.
Signaling his hopes for a fresh start for the company that pioneered on-your-hip email, Chief Executive Officer Thorsten Heins said RIM was abandoning the name it has used since its inception in 1985. From now on, he told tech analysts and other guests, the company will just be known as BlackBerry.
The new BlackBerry 10 phones will compete with Apple's iPhone and devices using Google's Android technology, both of which have soared above the BlackBerry in a competitive market.
The BlackBerry 10 phones boast fast browsers, new features, smart cameras and, unlike previous models, enter the market primed with a large app library.
'We have definitely been on a journey of transformation, a journey to not only transform our business and our brand, but one which I truly believe will transform mobile communications into true mobile computing,' Heins said at a New York launch event.
'It's been almost one year exactly since I was handed the reins at Research In Motion, and it has been easily the most challenging year of my career to date. It has also been by far the most exhilarating and the most rewarding one.'
RIM picked a range of venues for its global launch parties. Toronto's announcement was in the downtown art deco Carlu rooms, while the Dubai event was held at the $650-a-night Armani hotel, which occupies six floors of the Burj Khalifa, the world's tallest tower.
The New York event took place in a sprawling basketball facility on the Lower East Side of Manhattan, just north of the Manhattan bridge. The Blackberry has been 'Re-designed. Re-engineered. Re-invented,' RIM said.
(Writing by Janet Guttsman; Editing by Frank McGurty and Lisa Von Ahn)
Signaling his hopes for a fresh start for the company that pioneered on-your-hip email, Chief Executive Officer Thorsten Heins said RIM was abandoning the name it has used since its inception in 1985. From now on, he told tech analysts and other guests, the company will just be known as BlackBerry.
The new BlackBerry 10 phones will compete with Apple's iPhone and devices using Google's Android technology, both of which have soared above the BlackBerry in a competitive market.
The BlackBerry 10 phones boast fast browsers, new features, smart cameras and, unlike previous models, enter the market primed with a large app library.
'We have definitely been on a journey of transformation, a journey to not only transform our business and our brand, but one which I truly believe will transform mobile communications into true mobile computing,' Heins said at a New York launch event.
'It's been almost one year exactly since I was handed the reins at Research In Motion, and it has been easily the most challenging year of my career to date. It has also been by far the most exhilarating and the most rewarding one.'
RIM picked a range of venues for its global launch parties. Toronto's announcement was in the downtown art deco Carlu rooms, while the Dubai event was held at the $650-a-night Armani hotel, which occupies six floors of the Burj Khalifa, the world's tallest tower.
The New York event took place in a sprawling basketball facility on the Lower East Side of Manhattan, just north of the Manhattan bridge. The Blackberry has been 'Re-designed. Re-engineered. Re-invented,' RIM said.
(Writing by Janet Guttsman; Editing by Frank McGurty and Lisa Von Ahn)
U.S. court rejects Apple's bid to raise damages in Samsung case
(Reuters) - South Korea's Samsung Electronics Co did not willfully infringe on some of Apple Inc's patents, a U.S. federal court has ruled, foiling Apple's attempt to ratchet up the $1.05 billion in damages it was awarded last August by a U.S. jury.
The ruling removes a dark cloud hanging over Samsung, which, if the decision had gone the other way, could have been forced to pay triple the original judgment, or more than $3 billion in the worst-case scenario for Samsung's balance sheet, according to analysts and patent experts.
As it stands, Samsung is forging ahead of its arch rival in the smartphone market that Apple virtually created with its first iPhone in 2007. In December, the same U.S. court denied Apple's request for a permanent injunction against Samsung's smartphones.
Tuesday's ruling overrules the jury's finding that Samsung acted 'willfully' when it violated several of Apple's patents, a finding that could have formed the basis to triple the damages owed by Samsung.
'To the extent that Apple does address lost downstream sales, Apple discusses only Samsung's gains and makes no attempt to identify any specific losses Apple has suffered,' U.S. District Court Judge Lucy Koh wrote in her ruling.
Koh said the court could not enhance the damages 'given that Apple has not clearly shown how it has in fact been undercompensated for the losses it has suffered due to Samsung's dilution of its trade dress,' or, the look and feel of its products.
She said the jury, which had examined the case earlier and found that Samsung had copied critical features of the iPhone and iPad, had ample opportunity to compensate Apple for Samsung's use of its product designs.
Koh also denied requests from both Samsung and Apple for a new trial. Samsung had said a major patent verdict in favor of Apple should be overturned and Apple had sought a new trial to overturn some of the jury's findings and to try other issues on which the jury failed to rule.
The judge also denied Apple's motion for judgment that Samsung's Galaxy Tab 10.1 infringes a patent that relates to its iPad design. The jury earlier exonerated Samsung on the patent used to ban Galaxy Tab 10.1 sales.
Apple and Samsung are going toe-to-toe in a patent dispute that mirrors the struggle for industry supremacy between the two companies, which together control around half of worldwide smartphone sales that grew 43 percent in 2012 to 700 million units worth more than $200 billion.
Samsung shipped 213 million smartphones to take 30 percent of the market in 2012, while Apple sold 135.8 million iPhones with 19.4 percent of the market, according to research firm Strategy Analytics.
Since Apple first took Samsung to the court in early 2011, Apple has been more successful in its U.S. litigation campaign, winning the $1.05 billion damage award and a pre-trial sales ban on some Samsung products.
Samsung has since fought back and scored some favourable rulings, including Tuesday's ruling that prevents any higher damages.
The ruling also comes as investors worry Apple is losing its dominance in consumer electronics after it missed Wall Street revenue forecasts for the third consecutive quarter last week on weaker-than-expected iPhone sales.
By comparison, Samsung, once seen as quick to copy the ideas of others, now sets the pace in innovation and widened its lead over Apple on the back of aggressive marketing of its wide product range last year.
Shares in Samsung, the world's top smartphone maker by units shipped, closed up 2.2 percent on Wednesday in Seoul, beating a 0.4 percent gain in the wider market.
The case in the U.S. District Court for the Northern District of California is Apple Inc. vs. Samsung Electronics Co Ltd et al, 11-1846.
(Editing by Jeremy Laurence and Matt Driskill)
The ruling removes a dark cloud hanging over Samsung, which, if the decision had gone the other way, could have been forced to pay triple the original judgment, or more than $3 billion in the worst-case scenario for Samsung's balance sheet, according to analysts and patent experts.
As it stands, Samsung is forging ahead of its arch rival in the smartphone market that Apple virtually created with its first iPhone in 2007. In December, the same U.S. court denied Apple's request for a permanent injunction against Samsung's smartphones.
Tuesday's ruling overrules the jury's finding that Samsung acted 'willfully' when it violated several of Apple's patents, a finding that could have formed the basis to triple the damages owed by Samsung.
'To the extent that Apple does address lost downstream sales, Apple discusses only Samsung's gains and makes no attempt to identify any specific losses Apple has suffered,' U.S. District Court Judge Lucy Koh wrote in her ruling.
Koh said the court could not enhance the damages 'given that Apple has not clearly shown how it has in fact been undercompensated for the losses it has suffered due to Samsung's dilution of its trade dress,' or, the look and feel of its products.
She said the jury, which had examined the case earlier and found that Samsung had copied critical features of the iPhone and iPad, had ample opportunity to compensate Apple for Samsung's use of its product designs.
Koh also denied requests from both Samsung and Apple for a new trial. Samsung had said a major patent verdict in favor of Apple should be overturned and Apple had sought a new trial to overturn some of the jury's findings and to try other issues on which the jury failed to rule.
The judge also denied Apple's motion for judgment that Samsung's Galaxy Tab 10.1 infringes a patent that relates to its iPad design. The jury earlier exonerated Samsung on the patent used to ban Galaxy Tab 10.1 sales.
Apple and Samsung are going toe-to-toe in a patent dispute that mirrors the struggle for industry supremacy between the two companies, which together control around half of worldwide smartphone sales that grew 43 percent in 2012 to 700 million units worth more than $200 billion.
Samsung shipped 213 million smartphones to take 30 percent of the market in 2012, while Apple sold 135.8 million iPhones with 19.4 percent of the market, according to research firm Strategy Analytics.
Since Apple first took Samsung to the court in early 2011, Apple has been more successful in its U.S. litigation campaign, winning the $1.05 billion damage award and a pre-trial sales ban on some Samsung products.
Samsung has since fought back and scored some favourable rulings, including Tuesday's ruling that prevents any higher damages.
The ruling also comes as investors worry Apple is losing its dominance in consumer electronics after it missed Wall Street revenue forecasts for the third consecutive quarter last week on weaker-than-expected iPhone sales.
By comparison, Samsung, once seen as quick to copy the ideas of others, now sets the pace in innovation and widened its lead over Apple on the back of aggressive marketing of its wide product range last year.
Shares in Samsung, the world's top smartphone maker by units shipped, closed up 2.2 percent on Wednesday in Seoul, beating a 0.4 percent gain in the wider market.
The case in the U.S. District Court for the Northern District of California is Apple Inc. vs. Samsung Electronics Co Ltd et al, 11-1846.
(Editing by Jeremy Laurence and Matt Driskill)
Tuesday, January 29, 2013
Amazon shares set record after strong quarterly profit
SAN FRANCISCO (Reuters) - Amazon.com Inc shares hit a new record on Tuesday after it reported better-than-expected quarterly profit, fueled by the growth of higher-margin businesses during the fiercely competitive holiday quarter.
The world's largest Internet retailer said that its cloud computing services, video content sales and its aggressive expansion in e-books helped increase profitability.
In addition, a growing network of warehouses or fulfillment centers closer to customers held down shipping costs as it vied with Wal-Mart Stores Inc and other major retailers for consumer dollars over the holidays.
Chief Executive Jeff Bezos highlighted the Kindle's e-book business, calling it a multi-billion dollar category that grew about 70 percent in 2012. Its traditional physical book business rose about five percent in the same period, he noted.
'We're now seeing the transition we`ve been expecting,' Bezos said in the company's results statement.
Profits have shrunk in recent years as the company invested for longer-term growth, building massive fulfillment centers, developing a Kindle Fire tablet hardware business in competition with Apple Inc, and expanding into Internet-based cloud services.
The fourth-quarter profit results suggested that Amazon may be able to generate attractive returns from such spending, analysts said.
'The fourth-quarter operating income was up more than expected,' said R.J. Hottovy, an equity analyst at Morningstar. 'This supports the bull case that Amazon can monetize its growth over the longer term.'
The Seattle-based company said operating income jumped 56 percent to $405 million in the fourth quarter, compared with $260 million in the fourth quarter of 2011.
Amazon's stock climbed 11 percent to $288 in after-hours trading. It hit a record of $284.72 on January 25.
The company also said fourth-quarter revenue rose 22 percent to $21.27 billion as it grabbed a big share of online spending during the holidays. But it was the profit that initially caught Wall Street's eye.
'It was a much better-than-expected gross margin, a strong forward indicator to drive margin expansion. What is really important is gross profit dollars and that line is stronger,' said Ken Sena at Evercore Partners.
The gross profit margins were 24 percent in the fourth quarter, compared with Wall Street expectations of about 22 percent.
'Incredibly strong margins,' said Jordan Rohan, an analyst at Stifel Nicolaus. Amazon generated the highest quarterly gross margin in its North America business in more than three years, he noted.
Amazon mainly operates as a retailer, buying products at wholesale prices, storing them and then selling at a slight mark-up to consumers online.
But the company has expanded into other businesses that are potentially more profitable, including cloud computing, digital content and acting as an online marketplace for other merchants.
These newer businesses are growing faster than the company's original retail operations, boosting profitability.
(Reporting By Alistair Barr; Editing by Bernard Orr)
The world's largest Internet retailer said that its cloud computing services, video content sales and its aggressive expansion in e-books helped increase profitability.
In addition, a growing network of warehouses or fulfillment centers closer to customers held down shipping costs as it vied with Wal-Mart Stores Inc and other major retailers for consumer dollars over the holidays.
Chief Executive Jeff Bezos highlighted the Kindle's e-book business, calling it a multi-billion dollar category that grew about 70 percent in 2012. Its traditional physical book business rose about five percent in the same period, he noted.
'We're now seeing the transition we`ve been expecting,' Bezos said in the company's results statement.
Profits have shrunk in recent years as the company invested for longer-term growth, building massive fulfillment centers, developing a Kindle Fire tablet hardware business in competition with Apple Inc, and expanding into Internet-based cloud services.
The fourth-quarter profit results suggested that Amazon may be able to generate attractive returns from such spending, analysts said.
'The fourth-quarter operating income was up more than expected,' said R.J. Hottovy, an equity analyst at Morningstar. 'This supports the bull case that Amazon can monetize its growth over the longer term.'
The Seattle-based company said operating income jumped 56 percent to $405 million in the fourth quarter, compared with $260 million in the fourth quarter of 2011.
Amazon's stock climbed 11 percent to $288 in after-hours trading. It hit a record of $284.72 on January 25.
The company also said fourth-quarter revenue rose 22 percent to $21.27 billion as it grabbed a big share of online spending during the holidays. But it was the profit that initially caught Wall Street's eye.
'It was a much better-than-expected gross margin, a strong forward indicator to drive margin expansion. What is really important is gross profit dollars and that line is stronger,' said Ken Sena at Evercore Partners.
The gross profit margins were 24 percent in the fourth quarter, compared with Wall Street expectations of about 22 percent.
'Incredibly strong margins,' said Jordan Rohan, an analyst at Stifel Nicolaus. Amazon generated the highest quarterly gross margin in its North America business in more than three years, he noted.
Amazon mainly operates as a retailer, buying products at wholesale prices, storing them and then selling at a slight mark-up to consumers online.
But the company has expanded into other businesses that are potentially more profitable, including cloud computing, digital content and acting as an online marketplace for other merchants.
These newer businesses are growing faster than the company's original retail operations, boosting profitability.
(Reporting By Alistair Barr; Editing by Bernard Orr)
Amazon shares hit record after quarterly results
SAN FRANCISCO (Reuters) - Amazon.com Inc shares hit a new record on Tuesday after the world's largest Internet retailer reported better-than-expected quarterly profit, fueled by growth of higher-margin businesses.
The stock jumped 11 percent to $288 in after-hours trading following its results. The stock hit a record of $284.72 in regular trading on January 25.
The Seattle-based company said operating income jumped 56 percent to $405 million in the fourth quarter, compared with $260 million in the fourth quarter of 2011.
'The fourth-quarter operating income was up more than expected,' said R.J. Hottovy, an equity analyst at Morningstar. 'This supports the bull case that Amazon can monetize its growth over the longer term.'
Amazon mainly operates as a retailer, buying products at wholesale prices, storing them and then selling at a slight mark-up to consumers online. This is a low-margin business. However, the company has expanded into other businesses that are potentially more profitable, including cloud computing, digital content and acting as an online marketplace for other merchants.
These newer businesses are growing faster than the company's original retail operations, boosting profitability.
Morningstar's Hottovy said the increase in fourth-quarter profit was driven by a combination of growth in higher margin businesses, such as e-books, and a reduction in heavy fulfillment center investments Amazon has been making in recent years.
Amazon Chief Executive Jeff Bezos highlighted the company's Kindle e-book business, which he called a multi-billion dollar category that grew about 70 percent in 2012. Meanwhile, Amazon's physical book business grew about five percent in the same period, he noted.
'We're now seeing the transition we`ve been expecting,' Bezos said in a statement.
The company also said fourth-quarter revenue jumped 22 percent to $21.27 billion as it grabbed a big share of online spending during the crucial holiday period.
(Reporting By Alistair Barr; Editing by Bernard Orr)
The stock jumped 11 percent to $288 in after-hours trading following its results. The stock hit a record of $284.72 in regular trading on January 25.
The Seattle-based company said operating income jumped 56 percent to $405 million in the fourth quarter, compared with $260 million in the fourth quarter of 2011.
'The fourth-quarter operating income was up more than expected,' said R.J. Hottovy, an equity analyst at Morningstar. 'This supports the bull case that Amazon can monetize its growth over the longer term.'
Amazon mainly operates as a retailer, buying products at wholesale prices, storing them and then selling at a slight mark-up to consumers online. This is a low-margin business. However, the company has expanded into other businesses that are potentially more profitable, including cloud computing, digital content and acting as an online marketplace for other merchants.
These newer businesses are growing faster than the company's original retail operations, boosting profitability.
Morningstar's Hottovy said the increase in fourth-quarter profit was driven by a combination of growth in higher margin businesses, such as e-books, and a reduction in heavy fulfillment center investments Amazon has been making in recent years.
Amazon Chief Executive Jeff Bezos highlighted the company's Kindle e-book business, which he called a multi-billion dollar category that grew about 70 percent in 2012. Meanwhile, Amazon's physical book business grew about five percent in the same period, he noted.
'We're now seeing the transition we`ve been expecting,' Bezos said in a statement.
The company also said fourth-quarter revenue jumped 22 percent to $21.27 billion as it grabbed a big share of online spending during the crucial holiday period.
(Reporting By Alistair Barr; Editing by Bernard Orr)
RIM faces its day of reckoning with BlackBerry 10 launch
NEW YORK (Reuters) - The innovative line of BlackBerry smartphones that Research In Motion Ltd will formally unveil on Wednesday has already succeeded on one crucial count - getting RIM back in the conversation.
The new BlackBerry 10 has created a buzz among technology watchers and financial analysts, thanks to nifty features that may set it apart in an overcrowded smartphone market. RIM stock has almost tripled over the past four months on hopes the devices can restore RIM to sustained prosperity.
Reviewers like the browser speed and the intuitive keyboard on RIM's new touchscreen. A feature called BlackBerry Balance, which keeps corporate and personal data separate, could help RIM rebuild its traditional base of big business customers.
It's a welcome start for RIM, the smartphone pioneer that has teetered on the brink of irrelevance. But success will come only if consumer and business customers embrace the new technology in the weeks and months after CEO Thorsten Heins takes the wraps off the phone at a glitzy New York launch.
RIM is gambling its survival on the much-delayed BlackBerry 10, hoping to claw its way back into an industry now dominated by Apple Inc's iPhone and Samsung Electronics Co Ltd's Galaxy.
The timing may be just right. The new phone hits the market just as the iPhone's remarkable run is showing some signs of slowing.
'I really do believe that the consumer market as a whole is ready for something new,' said Kevin Burden, head of mobility at Strategy Analytics, an industry consulting firm.
'I have to believe that there is some level of user fatigue that plays into the longevity of some of these platforms,' he added, referring to Google Inc's Android and Apple's iOS, which are both more than five years old. 'RIM is probably timing it right.'
U.S. BATTLEGROUND
To be sure, RIM shares are about 90 percent below a 2008 peak near $150 a share and the company still has a tough fight ahead. It may take investors some time to determine whether RIM's big gamble on an untested technology has paid off.
RIM's market share collapsed in the three years ahead of the launch. Strategy Analytics data shows RIM's global share of the smartphone market was about 3.4 percent in the fourth quarter, down from around 20 percent just three years ago.
While RIM has done well in developing markets, it has hemorrhaged customers in the United States, a market that sets technology trends. RIM's fourth-quarter North American market share fell to 2 percent from more than 40 percent three years ago.
Acknowledging that it is crucial to win back U.S. customers, RIM will hold its main BlackBerry 10 launch in New York, although there are simultaneous events in six cities across the globe.
Underscoring the point, RIM is splurging on a costly Super Bowl ad to tout its new devices and attempt to brighten its faded image in the U.S. market.
BIG QUESTIONS
Over 150 carriers already have tested the new devices and RIM has said the launch will be the largest ever global rollout of a new platform.
The two big questions the market expects RIM to answer on Wednesday are when the phones - a full touch-screen device and one with a traditional physical keyboard - will hit store shelves, and how much they will cost.
The company is expected to unveil specifics on pricing and availability in different regions at the launch.
'The Street is expecting mid-February for a launch. Anything earlier than that is a positive, anything later will be viewed as negative,' said RBC Dominion Securities analyst Paul Treiber.
That said, there are few mysteries to be cleared up on Wednesday. Leaked photos and specifications of the devices have been splashed across the tech world.
'We've had the beta devices for a few weeks and in terms of the devices, they are right up there with the competition,' said Andy Ambrozic, head of IT Infrastructure at Ricoh Canada. 'The Balance feature is crucial for corporations that are becoming increasingly concerned about data security.'
Scotiabank analyst Gus Papageorgiou feels RIM has a good chance of a comeback. He says the new BB10 operating system outpaces Apple's iOS platform and Google's market-leading Android system in every category except app selection and content.
'There is, we believe, huge potential for the platform and devices to bring people back to BlackBerry or draw entirely new users into the platform,' said Papageorgiou, who has a 'sector outperform' rating on the stock.
BlackBerry 10 will not be able to compete on the number of apps, but RIM says its operating system will have the largest application library for any new platform at launch, with more than 70,000 apps available.
It has already gathered big-name music and video partners for its BlackBerry 10 storefront, including Walt Disney Studios and Sony Pictures, Universal Music and Warner Music Group.
Wireless carriers already report strong demand for the new devices. Rogers Communications Inc, Canada's top wireless carrier and the first globally to take pre-orders for the new devices, said orders are already in the thousands.
'Our customers are excited,' said John Boynton, Rogers' head of marketing, adding that some users are holding off on upgrades in anticipation of the BB10 launch.
(Additional reporting by Alastair Sharp and Allison Martell in Toronto; Editing by Frank McGurty, Janet Guttsman and Andre Grenon)
The new BlackBerry 10 has created a buzz among technology watchers and financial analysts, thanks to nifty features that may set it apart in an overcrowded smartphone market. RIM stock has almost tripled over the past four months on hopes the devices can restore RIM to sustained prosperity.
Reviewers like the browser speed and the intuitive keyboard on RIM's new touchscreen. A feature called BlackBerry Balance, which keeps corporate and personal data separate, could help RIM rebuild its traditional base of big business customers.
It's a welcome start for RIM, the smartphone pioneer that has teetered on the brink of irrelevance. But success will come only if consumer and business customers embrace the new technology in the weeks and months after CEO Thorsten Heins takes the wraps off the phone at a glitzy New York launch.
RIM is gambling its survival on the much-delayed BlackBerry 10, hoping to claw its way back into an industry now dominated by Apple Inc's iPhone and Samsung Electronics Co Ltd's Galaxy.
The timing may be just right. The new phone hits the market just as the iPhone's remarkable run is showing some signs of slowing.
'I really do believe that the consumer market as a whole is ready for something new,' said Kevin Burden, head of mobility at Strategy Analytics, an industry consulting firm.
'I have to believe that there is some level of user fatigue that plays into the longevity of some of these platforms,' he added, referring to Google Inc's Android and Apple's iOS, which are both more than five years old. 'RIM is probably timing it right.'
U.S. BATTLEGROUND
To be sure, RIM shares are about 90 percent below a 2008 peak near $150 a share and the company still has a tough fight ahead. It may take investors some time to determine whether RIM's big gamble on an untested technology has paid off.
RIM's market share collapsed in the three years ahead of the launch. Strategy Analytics data shows RIM's global share of the smartphone market was about 3.4 percent in the fourth quarter, down from around 20 percent just three years ago.
While RIM has done well in developing markets, it has hemorrhaged customers in the United States, a market that sets technology trends. RIM's fourth-quarter North American market share fell to 2 percent from more than 40 percent three years ago.
Acknowledging that it is crucial to win back U.S. customers, RIM will hold its main BlackBerry 10 launch in New York, although there are simultaneous events in six cities across the globe.
Underscoring the point, RIM is splurging on a costly Super Bowl ad to tout its new devices and attempt to brighten its faded image in the U.S. market.
BIG QUESTIONS
Over 150 carriers already have tested the new devices and RIM has said the launch will be the largest ever global rollout of a new platform.
The two big questions the market expects RIM to answer on Wednesday are when the phones - a full touch-screen device and one with a traditional physical keyboard - will hit store shelves, and how much they will cost.
The company is expected to unveil specifics on pricing and availability in different regions at the launch.
'The Street is expecting mid-February for a launch. Anything earlier than that is a positive, anything later will be viewed as negative,' said RBC Dominion Securities analyst Paul Treiber.
That said, there are few mysteries to be cleared up on Wednesday. Leaked photos and specifications of the devices have been splashed across the tech world.
'We've had the beta devices for a few weeks and in terms of the devices, they are right up there with the competition,' said Andy Ambrozic, head of IT Infrastructure at Ricoh Canada. 'The Balance feature is crucial for corporations that are becoming increasingly concerned about data security.'
Scotiabank analyst Gus Papageorgiou feels RIM has a good chance of a comeback. He says the new BB10 operating system outpaces Apple's iOS platform and Google's market-leading Android system in every category except app selection and content.
'There is, we believe, huge potential for the platform and devices to bring people back to BlackBerry or draw entirely new users into the platform,' said Papageorgiou, who has a 'sector outperform' rating on the stock.
BlackBerry 10 will not be able to compete on the number of apps, but RIM says its operating system will have the largest application library for any new platform at launch, with more than 70,000 apps available.
It has already gathered big-name music and video partners for its BlackBerry 10 storefront, including Walt Disney Studios and Sony Pictures, Universal Music and Warner Music Group.
Wireless carriers already report strong demand for the new devices. Rogers Communications Inc, Canada's top wireless carrier and the first globally to take pre-orders for the new devices, said orders are already in the thousands.
'Our customers are excited,' said John Boynton, Rogers' head of marketing, adding that some users are holding off on upgrades in anticipation of the BB10 launch.
(Additional reporting by Alastair Sharp and Allison Martell in Toronto; Editing by Frank McGurty, Janet Guttsman and Andre Grenon)
Microsoft launches new Office for consumers
SEATTLE (Reuters) - Microsoft Corp launched its new Office software on Tuesday, featuring constantly updated, online access to documents from a range of devices as the world's largest software company attempts to tailor its most profitable product to a mobile generation.
The new Office suite of applications - including desktop staples Outlook email, Excel charts, Word and PowerPoint - marks the first overhaul since 2010 and aims to beat back growing competition from Google Inc's free online apps.
'The notion of an always up-to-date streaming version of Office comes directly from how people are using devices today,' said Kurt DelBene, head of Microsoft's Office unit, in a phone interview. 'You really want all your content to roam with you. We see that as an opportunity to deliver what customers are asking for.'
The consumer-focused version of the new software, called Office 365 Home Premium, launched on Tuesday. After downloading the basic programs online, users can access the latest versions of all Office applications from up to five devices on a subscription basis for $100 a year.
The software will be updated online, marking a change from the past where users had to wait years for upgrades to installed software.
The new Office largely adopts the look of last year's Windows 8, with a cleaner, more modern-looking design and includes touch-screen capability.
The 'ribbons' showing commands in Word and Excel are mostly unchanged. For the first time the package includes online calling and video service Skype, which Microsoft bought in 2011.
Users' work can be stored in remote data centers - known as 'the cloud' - and the latest version of a document accessed from any licensed device with a browser that the user wants to work on.
GOOGLE KILLER
Two and a half years in the making, the new Office is designed to counter the growing popularity of Google Apps, a collection of online-only, Office-style applications Google provides free for home users and sells to businesses for $50 per user per year.
Microsoft is hoping its move into online services, alongside its new Surface tablets, pushes it back into the forefront of mobile computing, which has been led by Google's Android software and Apple's combination of slick hardware and apps.
'Today's launch of Office 365 Home Premium marks the next big step in Microsoft's transformation to a devices and services business,' said Steve Ballmer, Microsoft chief executive, in a statement.
The new Office will run natively on Microsoft's own Surface tablets - both the 'RT' and Pro versions running on ARM Holdings and Intel Corp chips respectively - but it will not run natively on Apple's iPad, disappointing some iPad users who are also Office fans.
'We have not said that we will do rich client software on the iPad at this point,' said DelBene, although he did not rule out producing such software in the future. 'We've been very logical in our approach. I'm pleased with the software we have delivered for the iPad to date,' he said.
Microsoft's SkyDrive online storage system and its OneNote note-taking software are available as iPad apps and iPad users can use limited Web versions of some Office applications.
The iPad issue has been a long-time quandary for Microsoft, which might gain more mobile users by making Office available on the iPad, but also removes a major incentive to buying its own competing Surface tablet.
The rollout of Office 365 for corporations, Microsoft's core market, has already started, but the new product will not be officially launched until February 27. The new Office applications have been available to large volume business customers since December.
Microsoft estimates that 1 billion people worldwide use some part of Office and the unit that produces Office is Microsoft's most profitable, edging out the flagship Windows division for the last few years. It now accounts for more than half of Microsoft's overall profit.
Sales dipped last quarter as consumers held off in anticipation of the new Office, but analysts expects sales to ramp up again this quarter.
'Microsoft has been criticized not only for pricing, but also for not innovating Office quickly and being slow to respond to the move to the Web or to mobile,' said Michael Silver, an analyst at tech research firm Gartner. 'Office 2013 addresses some of the criticisms, but Microsoft still has the power to maintain its pricing levels.'
(Reporting By Bill Rigby; Editing by Matt Driskill)
The new Office suite of applications - including desktop staples Outlook email, Excel charts, Word and PowerPoint - marks the first overhaul since 2010 and aims to beat back growing competition from Google Inc's free online apps.
'The notion of an always up-to-date streaming version of Office comes directly from how people are using devices today,' said Kurt DelBene, head of Microsoft's Office unit, in a phone interview. 'You really want all your content to roam with you. We see that as an opportunity to deliver what customers are asking for.'
The consumer-focused version of the new software, called Office 365 Home Premium, launched on Tuesday. After downloading the basic programs online, users can access the latest versions of all Office applications from up to five devices on a subscription basis for $100 a year.
The software will be updated online, marking a change from the past where users had to wait years for upgrades to installed software.
The new Office largely adopts the look of last year's Windows 8, with a cleaner, more modern-looking design and includes touch-screen capability.
The 'ribbons' showing commands in Word and Excel are mostly unchanged. For the first time the package includes online calling and video service Skype, which Microsoft bought in 2011.
Users' work can be stored in remote data centers - known as 'the cloud' - and the latest version of a document accessed from any licensed device with a browser that the user wants to work on.
GOOGLE KILLER
Two and a half years in the making, the new Office is designed to counter the growing popularity of Google Apps, a collection of online-only, Office-style applications Google provides free for home users and sells to businesses for $50 per user per year.
Microsoft is hoping its move into online services, alongside its new Surface tablets, pushes it back into the forefront of mobile computing, which has been led by Google's Android software and Apple's combination of slick hardware and apps.
'Today's launch of Office 365 Home Premium marks the next big step in Microsoft's transformation to a devices and services business,' said Steve Ballmer, Microsoft chief executive, in a statement.
The new Office will run natively on Microsoft's own Surface tablets - both the 'RT' and Pro versions running on ARM Holdings and Intel Corp chips respectively - but it will not run natively on Apple's iPad, disappointing some iPad users who are also Office fans.
'We have not said that we will do rich client software on the iPad at this point,' said DelBene, although he did not rule out producing such software in the future. 'We've been very logical in our approach. I'm pleased with the software we have delivered for the iPad to date,' he said.
Microsoft's SkyDrive online storage system and its OneNote note-taking software are available as iPad apps and iPad users can use limited Web versions of some Office applications.
The iPad issue has been a long-time quandary for Microsoft, which might gain more mobile users by making Office available on the iPad, but also removes a major incentive to buying its own competing Surface tablet.
The rollout of Office 365 for corporations, Microsoft's core market, has already started, but the new product will not be officially launched until February 27. The new Office applications have been available to large volume business customers since December.
Microsoft estimates that 1 billion people worldwide use some part of Office and the unit that produces Office is Microsoft's most profitable, edging out the flagship Windows division for the last few years. It now accounts for more than half of Microsoft's overall profit.
Sales dipped last quarter as consumers held off in anticipation of the new Office, but analysts expects sales to ramp up again this quarter.
'Microsoft has been criticized not only for pricing, but also for not innovating Office quickly and being slow to respond to the move to the Web or to mobile,' said Michael Silver, an analyst at tech research firm Gartner. 'Office 2013 addresses some of the criticisms, but Microsoft still has the power to maintain its pricing levels.'
(Reporting By Bill Rigby; Editing by Matt Driskill)
Yahoo sees revenue climb this year, but long road ahead
(Reuters) - Yahoo Inc forecast a modest uptick in revenue for the current year as it revamps its family of websites but Chief Executive Marissa Mayer warned it would be a long journey to revive the Internet company's fortunes.
In Yahoo's first financial outlook since Mayer became CEO in July, the company outlined a plan to trigger a 'chain reaction of growth' by overhauling a dozen of its online services to increase the amount of time users spent on its websites.
It also pointed to strength in its search advertising business and progress made in improving its internal operations.
Yahoo's shares were 3 percent higher in after hours trade after the revenue projection was disclosed during an analysts conference call, shedding some ground after earlier rising as much as 4.5 percent.
But weakness in Yahoo's display ad business, which accounts for roughly 40 percent of the company's total revenue, caught some analysts by surprise.
'While the road to growth is certain, it will not be immediate,' said Mayer, a former Google Inc executive and Yahoo's third full-time CEO since September 2011.
Yahoo said that revenue, excluding fees it pays to partner websites, will range between $4.5 billion and $4.6 billion in 2013, implying an annual growth rate of 0.7 percent to 3 percent.
Finance Chief Ken Goldman also warned investors to expect 'an investment phase' in the first half of the year, which he said would impact profit margins.
'What was clear from the call is that this is a long-term turnaround story,' said Macquarie Research analyst Ben Schachter. 'We shouldn't expect anything to just snap back and correct itself.'
During the fourth quarter, Yahoo's net revenue increased 4 percent year-on-year to $1.22 billion, as search advertising sales offset a 10 percent decline in the number of display ads sold on Yahoo's core properties.
Mayer said the decline was the result of less activity by visitors to its popular websites, such as its Web email service, and to a lesser extent due to users accessing the Web on smartphones, where Yahoo's ad business is not as strong.
Efforts to revamp its mobile properties, begun last year with a redesign of the photo-sharing service Flickr, remain on track, said Mayer, noting that Yahoo now has 200 million monthly mobile users.
'From a monetization perspective this is still a very nascent source of revenue for us. With any platform shift, revenue always followed users and mobile will be no different,' she said.
Mayer took over after a tumultuous period at Yahoo in which former CEO Scott Thompson resigned after less than 6 months on the job over a controversy about his academic credentials and in which Yahoo co-founder Jerry Yang resigned from the board and cut his ties with the company.
Yahoo's stock has risen roughly 30 percent since Mayer took the helm, reaching its highest levels since 2008.
Part of the stock's rise has been driven by significant stock buybacks, using proceeds from a $7.6 billion deal to sell half of its 40 percent stake in Chinese Internet company Alibaba Group, said Sameet Sinha, an analyst with B. Riley Caris.
Yahoo said it repurchased $1.5 billion worth of shares during the fourth quarter.
The company's fourth-quarter net income was $272.3 million, or 23 cents per share, versus $295.6 million, or 24 cents per share in the year-ago period.
Excluding certain items, Yahoo said it had earnings per share of 32 cents, versus the average analyst expectation of 28 cents according to Thomson Reuters I/B/E/S.
For the first quarter, Yahoo said it expects revenue, excluding partner website fees, of $1.07 billion to $1.1 billion, trailing the $1.1 billion that Wall Street analysts expect on average.
Shares of Yahoo were up 59 cents at $20.90 in after-hours trading on Monday.
(Reporting by Alexei Oreskovic; Editing by Phil Berlowitz and Edwina Gibbs)
In Yahoo's first financial outlook since Mayer became CEO in July, the company outlined a plan to trigger a 'chain reaction of growth' by overhauling a dozen of its online services to increase the amount of time users spent on its websites.
It also pointed to strength in its search advertising business and progress made in improving its internal operations.
Yahoo's shares were 3 percent higher in after hours trade after the revenue projection was disclosed during an analysts conference call, shedding some ground after earlier rising as much as 4.5 percent.
But weakness in Yahoo's display ad business, which accounts for roughly 40 percent of the company's total revenue, caught some analysts by surprise.
'While the road to growth is certain, it will not be immediate,' said Mayer, a former Google Inc executive and Yahoo's third full-time CEO since September 2011.
Yahoo said that revenue, excluding fees it pays to partner websites, will range between $4.5 billion and $4.6 billion in 2013, implying an annual growth rate of 0.7 percent to 3 percent.
Finance Chief Ken Goldman also warned investors to expect 'an investment phase' in the first half of the year, which he said would impact profit margins.
'What was clear from the call is that this is a long-term turnaround story,' said Macquarie Research analyst Ben Schachter. 'We shouldn't expect anything to just snap back and correct itself.'
During the fourth quarter, Yahoo's net revenue increased 4 percent year-on-year to $1.22 billion, as search advertising sales offset a 10 percent decline in the number of display ads sold on Yahoo's core properties.
Mayer said the decline was the result of less activity by visitors to its popular websites, such as its Web email service, and to a lesser extent due to users accessing the Web on smartphones, where Yahoo's ad business is not as strong.
Efforts to revamp its mobile properties, begun last year with a redesign of the photo-sharing service Flickr, remain on track, said Mayer, noting that Yahoo now has 200 million monthly mobile users.
'From a monetization perspective this is still a very nascent source of revenue for us. With any platform shift, revenue always followed users and mobile will be no different,' she said.
Mayer took over after a tumultuous period at Yahoo in which former CEO Scott Thompson resigned after less than 6 months on the job over a controversy about his academic credentials and in which Yahoo co-founder Jerry Yang resigned from the board and cut his ties with the company.
Yahoo's stock has risen roughly 30 percent since Mayer took the helm, reaching its highest levels since 2008.
Part of the stock's rise has been driven by significant stock buybacks, using proceeds from a $7.6 billion deal to sell half of its 40 percent stake in Chinese Internet company Alibaba Group, said Sameet Sinha, an analyst with B. Riley Caris.
Yahoo said it repurchased $1.5 billion worth of shares during the fourth quarter.
The company's fourth-quarter net income was $272.3 million, or 23 cents per share, versus $295.6 million, or 24 cents per share in the year-ago period.
Excluding certain items, Yahoo said it had earnings per share of 32 cents, versus the average analyst expectation of 28 cents according to Thomson Reuters I/B/E/S.
For the first quarter, Yahoo said it expects revenue, excluding partner website fees, of $1.07 billion to $1.1 billion, trailing the $1.1 billion that Wall Street analysts expect on average.
Shares of Yahoo were up 59 cents at $20.90 in after-hours trading on Monday.
(Reporting by Alexei Oreskovic; Editing by Phil Berlowitz and Edwina Gibbs)
Monday, January 28, 2013
Yahoo revenue rises on search advertising
(Reuters) - Yahoo Inc posted a 4 percent gain in net revenue to $1.22 billion in the fourth quarter, when an increase in search advertising sales offset weakness in the Web portal's display ad business.
The company forecast net revenue -- which excludes fees shared with partner websites -- of $1.07 billion to $1.1 billion in the current quarter, trailing the $1.1 billion that Wall Street analysts expect on average.
Shares in Yahoo, which is trying to stave off declines across much of its business and revive growth, were up 1.5 percent in after hours trade. They had risen 4.5 percent before the revenue projections were disclosed on an analysts' conference call.
'We got the revenue acceleration we were hoping for. Display was down, but search is doing better' said Sameet Sinha, an analyst at B. Riley Caris.
'As long as in the near-term things are not bad, I think the stock will generally act positively while we wait for Marissa Mayer to deliver,' said Sinha.
The company said on Monday its fourth-quarter net income was $272.3 million, or 23 cents per share, versus $295.6 million, or 24 cents per share in the year-ago period.
Excluding certain items, Yahoo said it had earnings per share of 32 cents, versus the average analyst expectation of 28 cents according to Thomson Reuters I/B/E/S.
Chief Executive Marissa Mayer is moving to revive the company's fortunes after several years of declining revenue. Yahoo's stock has risen roughly 30 percent since she became CEO, reaching its highest levels since 2008.
Yahoo said it repurchased $1.5 billion worth of shares during the fourth quarter. Shares in the company were up 1.5 percent at $20.61 in extended trading from a close of $20.31 on the Nasdaq.
(Reporting by Alexei Oreskovic; Editing by Phil Berlowitz)
The company forecast net revenue -- which excludes fees shared with partner websites -- of $1.07 billion to $1.1 billion in the current quarter, trailing the $1.1 billion that Wall Street analysts expect on average.
Shares in Yahoo, which is trying to stave off declines across much of its business and revive growth, were up 1.5 percent in after hours trade. They had risen 4.5 percent before the revenue projections were disclosed on an analysts' conference call.
'We got the revenue acceleration we were hoping for. Display was down, but search is doing better' said Sameet Sinha, an analyst at B. Riley Caris.
'As long as in the near-term things are not bad, I think the stock will generally act positively while we wait for Marissa Mayer to deliver,' said Sinha.
The company said on Monday its fourth-quarter net income was $272.3 million, or 23 cents per share, versus $295.6 million, or 24 cents per share in the year-ago period.
Excluding certain items, Yahoo said it had earnings per share of 32 cents, versus the average analyst expectation of 28 cents according to Thomson Reuters I/B/E/S.
Chief Executive Marissa Mayer is moving to revive the company's fortunes after several years of declining revenue. Yahoo's stock has risen roughly 30 percent since she became CEO, reaching its highest levels since 2008.
Yahoo said it repurchased $1.5 billion worth of shares during the fourth quarter. Shares in the company were up 1.5 percent at $20.61 in extended trading from a close of $20.31 on the Nasdaq.
(Reporting by Alexei Oreskovic; Editing by Phil Berlowitz)
Yahoo fourth-quarter adjusted profit beats expectations; shares rise
(Reuters) - Yahoo Inc reported revenue of $1.35 billion in the fourth quarter, up nearly 2 percent year-on-year.
The Web portal said on Monday that its fourth-quarter net income was $272.3 million, or 23 cents per share, versus $295.6 million, or 24 cents per share in the year-ago period.
(Reporting by Alexei Oreskovic; Editing by Phil Berlowitz)
The Web portal said on Monday that its fourth-quarter net income was $272.3 million, or 23 cents per share, versus $295.6 million, or 24 cents per share in the year-ago period.
(Reporting by Alexei Oreskovic; Editing by Phil Berlowitz)
Siemens picks banks for two disposals: sources
FRANKFURT (Reuters) - Siemens AG has picked banks to organize the sale of two units as part of its efforts to streamline operations and stay competitive in a weak global economy, people familiar with the matter said.
Goldman Sachs Group Inc will advise the German conglomerate on the sale of its Water Technologies units, while Rothschild will oversee the divestment of its smaller security products arm, which makes access card readers and technology for intruder detection and surveillance, the sources said on Monday.
Siemens, Goldman and Rothschild all declined comment.
Siemens, which ranks as Germany's second-most valuable company and which makes products ranging from trains to hearing aids, late last year announced the plan to divest several units in a bid to focus on its most profitable businesses.
It also aims to put itself in a better position to compete in core product areas with the likes of Switzerland's ABB Ltd and U.S.-based General Electric Co.
Since then, several possible bidders for the water unit - which has annual sales of about 1 billion euros ($1.4 million) and employs 600 - have approached the Munich-based group and investment bankers have started to work on the possible sale, the sources said.
HATS IN THE RING
Siemens built up its water technology operations through a flurry of acquisitions over the last decade, buying the water systems and services division of U.S. Filter from Veolia Environnement for instance for $1 billion in 2004.
Since much of Siemens's water business is focused on North America, industry sources expect U.S.-based peers Xylem Inc and Pentair Ltd to take a look at the asset.
'Asian companies are also likely to throw their hats into the ring,' one of the people said.
The region is experiencing rapid economic growth, climate change effects, rising populations and stricter energy and water regulations and is therefore expected to see heavy investment in water treatment equipment in coming years, he said.
Kurita Water Industries Ltd, Hyflux Ltd, Hitachi Ltd and Marubeni Corp are seen as possible suitors, he added.
Big private equity groups like KKR & Co LP, Bain and Permira are also expected to show interest.
Permira in 2011 bought Israel-based Netafim, a maker of irrigation technology, for 800 million euros.
Siemens Water Technologies offers products ranging from conventional water treatment to emergency water supply and water disinfection systems.
A report published in 2010 by Global Water Intelligence, an industry journal, put the size of the global water market at more than $500 billion.
Siemens shares were down 0.3 percent by 8.25 a.m, backtracking from a five-month high set last week, compared with a 0.1 percent drop in the main German index.
(Additional reporting by Jens Hack; Editing by Hans-Juergen Peters)
Goldman Sachs Group Inc will advise the German conglomerate on the sale of its Water Technologies units, while Rothschild will oversee the divestment of its smaller security products arm, which makes access card readers and technology for intruder detection and surveillance, the sources said on Monday.
Siemens, Goldman and Rothschild all declined comment.
Siemens, which ranks as Germany's second-most valuable company and which makes products ranging from trains to hearing aids, late last year announced the plan to divest several units in a bid to focus on its most profitable businesses.
It also aims to put itself in a better position to compete in core product areas with the likes of Switzerland's ABB Ltd and U.S.-based General Electric Co.
Since then, several possible bidders for the water unit - which has annual sales of about 1 billion euros ($1.4 million) and employs 600 - have approached the Munich-based group and investment bankers have started to work on the possible sale, the sources said.
HATS IN THE RING
Siemens built up its water technology operations through a flurry of acquisitions over the last decade, buying the water systems and services division of U.S. Filter from Veolia Environnement for instance for $1 billion in 2004.
Since much of Siemens's water business is focused on North America, industry sources expect U.S.-based peers Xylem Inc and Pentair Ltd to take a look at the asset.
'Asian companies are also likely to throw their hats into the ring,' one of the people said.
The region is experiencing rapid economic growth, climate change effects, rising populations and stricter energy and water regulations and is therefore expected to see heavy investment in water treatment equipment in coming years, he said.
Kurita Water Industries Ltd, Hyflux Ltd, Hitachi Ltd and Marubeni Corp are seen as possible suitors, he added.
Big private equity groups like KKR & Co LP, Bain and Permira are also expected to show interest.
Permira in 2011 bought Israel-based Netafim, a maker of irrigation technology, for 800 million euros.
Siemens Water Technologies offers products ranging from conventional water treatment to emergency water supply and water disinfection systems.
A report published in 2010 by Global Water Intelligence, an industry journal, put the size of the global water market at more than $500 billion.
Siemens shares were down 0.3 percent by 8.25 a.m, backtracking from a five-month high set last week, compared with a 0.1 percent drop in the main German index.
(Additional reporting by Jens Hack; Editing by Hans-Juergen Peters)
Sunday, January 27, 2013
In Asia's trend-setting cities, iPhone fatigue sets in
SINGAPORE (Reuters) - Apple Inc's iconic iPhone is losing some of its luster among Asia's well-heeled consumers in Singapore and Hong Kong, a victim of changing mobile habits and its own runaway success.
Driven by a combination of iPhone fatigue, a desire to be different and a plethora of competing devices, users are turning to other brands, notably those from Samsung Electronics Co Ltd, eating into Apple's market share.
In Singapore, Apple's products were so dominant in 2010 that more devices here ran its iOS operating system per capita than anywhere else in the world.
But StatCounter http://gs.statcounter.com, which measures traffic collected across a network of 3 million websites, calculates that Apple's share of mobile devices in Singapore - iPad and iPhone - declined sharply last year. From a peak of 72 percent in January 2012, its share fell to 50 percent this month, while Android devices now account for 43 percent of the market, up from 20 percent in the same month last year.
In Hong Kong, devices running Apple's iOS now account for about 30 percent of the total, down from about 45 percent a year ago. Android accounts for nearly two-thirds.
'Apple is still viewed as a prestigious brand, but there are just so many other cool smartphones out there now that the competition is just much stiffer,' said Tom Clayton, chief executive of Singapore-based Bubble Motion http://www.bubblemotion.com, which develops a popular regional social media app called Bubbly.
Where Hong Kong and Singapore lead, other key markets across fast-growing Asia usually follow.
'Singapore and Hong Kong tend to be, from an electronics perspective, leading indicators on what is going to be hot in Western Europe and North America, as well as what is going to take off in the region,' said Jim Wagstaff, who runs a Singapore-based company called Jam Factory http://www.jamfactoryonline.com developing mobile apps for enterprises.
Southeast Asia is adopting smartphones fast - consumers spent 78 percent more on smartphones in the 12 months up to September 2012 than they did the year before, according to research company GfK http://www.gfkrt.com.
IN WITH THE YOUNG CROWD
Anecdotal evidence of iPhone fatigue isn't hard to find: Where a year ago iPhones swamped other devices on the subways of Hong Kong and Singapore they are now outnumbered by Samsung and HTC Corp smartphones.
While this is partly explained by the proliferation of Android devices, from the cheap to the fancy, there are other signs that Apple has lost followers.
Singapore entrepreneur Aileen Sim, recently launched an app for splitting bills called BillPin http://www.billpin.com, settling on an iOS version because that was the dominant platform in the three countries she was targeting - Singapore, India and the United States.
'But what surprised us was how strong the call for Android was when we launched our app,' she said.
Indeed, 70 percent of their target users - 20-something college students and fresh graduates - said they were either already on Android or planned to switch over.
'Android is becoming really hard to ignore, around the region and in the U.S. for sure, but surprisingly even in Singapore,' she said. 'Even my younger early-20s cousins are mostly on Android now.'
BillPin launched an Android version this month.
Napoleon Biggs, chief strategy officer at Gravitas Group http://www.gravitas.com.hk, a Hong Kong-based mobile marketing company, said that while Apple and the iPhone remained premium brands there, Samsung's promotional efforts were playing to an increasingly receptive audience.
For some, it is a matter of wanting to stand out from the iPhone-carrying crowd. Others find the higher-powered, bigger-screened Android devices better suited to their changing habits - watching video, writing Chinese characters - while the cost of switching devices is lower than they expected, given that most popular social and gaming apps are available for both platforms.
'Hong Kong is a very fickle place,' Biggs said.
Janet Chan, a 25-year-old Hong Kong advertising executive, has an iPhone 5 but its fast-draining battery and the appeal of a bigger screen for watching movies is prodding her to switch to a Samsung Galaxy Note II.
'After Steve Jobs died, it seems the element of surprise in product launches isn't that great anymore,' she said.
To be sure, there are still plenty of people buying Apple devices. Stores selling their products in places such as Indonesia were full over the Christmas holidays, and the company's new official store in Hong Kong's Causeway Bay has queues snaking out of the door most days.
But the iPhone's drop in popularity in trendy Hong Kong and Singapore is mirrored in the upmarket malls of the region.
'IPhones are like Louis Vuitton handbags,' said marketing manager Narisara Konglua in Bangkok, who uses a Galaxy SIII. 'It's become so commonplace to see people with iPads and iPhones so you lose your cool edge having one.'
In the Indonesian capital Jakarta, an assistant manager at Coca Cola's local venture, Gatot Hadipratomo, agrees. The iPhone 'used to be a cool gadget but now more and more people use it.'
There is another influence at play: hip Korea. Korean pop music, movies and TV are hugely popular around the region and Samsung is riding that wave. And while the impact is more visible in Hong Kong and Singapore, it also translates directly to places like Thailand.
'Thais are not very brand-loyal,' says Akkaradert Bumrungmuang, 24, a student at Mahidol University in Bangkok. 'That's why whatever is hot or the in-thing to have is adopted quickly here. We follow Korea so whatever is fashionable in Korea will be a big hit.'
(Additional reporting by Lee Chyen Yee in Hong Kong; Khettiya Jittapong and Amy Sawitta Lefevre in Bangkok, and Andjarsari Paramaditha in Jakarta; Editing by Emily Kaiser)
Driven by a combination of iPhone fatigue, a desire to be different and a plethora of competing devices, users are turning to other brands, notably those from Samsung Electronics Co Ltd, eating into Apple's market share.
In Singapore, Apple's products were so dominant in 2010 that more devices here ran its iOS operating system per capita than anywhere else in the world.
But StatCounter http://gs.statcounter.com, which measures traffic collected across a network of 3 million websites, calculates that Apple's share of mobile devices in Singapore - iPad and iPhone - declined sharply last year. From a peak of 72 percent in January 2012, its share fell to 50 percent this month, while Android devices now account for 43 percent of the market, up from 20 percent in the same month last year.
In Hong Kong, devices running Apple's iOS now account for about 30 percent of the total, down from about 45 percent a year ago. Android accounts for nearly two-thirds.
'Apple is still viewed as a prestigious brand, but there are just so many other cool smartphones out there now that the competition is just much stiffer,' said Tom Clayton, chief executive of Singapore-based Bubble Motion http://www.bubblemotion.com, which develops a popular regional social media app called Bubbly.
Where Hong Kong and Singapore lead, other key markets across fast-growing Asia usually follow.
'Singapore and Hong Kong tend to be, from an electronics perspective, leading indicators on what is going to be hot in Western Europe and North America, as well as what is going to take off in the region,' said Jim Wagstaff, who runs a Singapore-based company called Jam Factory http://www.jamfactoryonline.com developing mobile apps for enterprises.
Southeast Asia is adopting smartphones fast - consumers spent 78 percent more on smartphones in the 12 months up to September 2012 than they did the year before, according to research company GfK http://www.gfkrt.com.
IN WITH THE YOUNG CROWD
Anecdotal evidence of iPhone fatigue isn't hard to find: Where a year ago iPhones swamped other devices on the subways of Hong Kong and Singapore they are now outnumbered by Samsung and HTC Corp smartphones.
While this is partly explained by the proliferation of Android devices, from the cheap to the fancy, there are other signs that Apple has lost followers.
Singapore entrepreneur Aileen Sim, recently launched an app for splitting bills called BillPin http://www.billpin.com, settling on an iOS version because that was the dominant platform in the three countries she was targeting - Singapore, India and the United States.
'But what surprised us was how strong the call for Android was when we launched our app,' she said.
Indeed, 70 percent of their target users - 20-something college students and fresh graduates - said they were either already on Android or planned to switch over.
'Android is becoming really hard to ignore, around the region and in the U.S. for sure, but surprisingly even in Singapore,' she said. 'Even my younger early-20s cousins are mostly on Android now.'
BillPin launched an Android version this month.
Napoleon Biggs, chief strategy officer at Gravitas Group http://www.gravitas.com.hk, a Hong Kong-based mobile marketing company, said that while Apple and the iPhone remained premium brands there, Samsung's promotional efforts were playing to an increasingly receptive audience.
For some, it is a matter of wanting to stand out from the iPhone-carrying crowd. Others find the higher-powered, bigger-screened Android devices better suited to their changing habits - watching video, writing Chinese characters - while the cost of switching devices is lower than they expected, given that most popular social and gaming apps are available for both platforms.
'Hong Kong is a very fickle place,' Biggs said.
Janet Chan, a 25-year-old Hong Kong advertising executive, has an iPhone 5 but its fast-draining battery and the appeal of a bigger screen for watching movies is prodding her to switch to a Samsung Galaxy Note II.
'After Steve Jobs died, it seems the element of surprise in product launches isn't that great anymore,' she said.
To be sure, there are still plenty of people buying Apple devices. Stores selling their products in places such as Indonesia were full over the Christmas holidays, and the company's new official store in Hong Kong's Causeway Bay has queues snaking out of the door most days.
But the iPhone's drop in popularity in trendy Hong Kong and Singapore is mirrored in the upmarket malls of the region.
'IPhones are like Louis Vuitton handbags,' said marketing manager Narisara Konglua in Bangkok, who uses a Galaxy SIII. 'It's become so commonplace to see people with iPads and iPhones so you lose your cool edge having one.'
In the Indonesian capital Jakarta, an assistant manager at Coca Cola's local venture, Gatot Hadipratomo, agrees. The iPhone 'used to be a cool gadget but now more and more people use it.'
There is another influence at play: hip Korea. Korean pop music, movies and TV are hugely popular around the region and Samsung is riding that wave. And while the impact is more visible in Hong Kong and Singapore, it also translates directly to places like Thailand.
'Thais are not very brand-loyal,' says Akkaradert Bumrungmuang, 24, a student at Mahidol University in Bangkok. 'That's why whatever is hot or the in-thing to have is adopted quickly here. We follow Korea so whatever is fashionable in Korea will be a big hit.'
(Additional reporting by Lee Chyen Yee in Hong Kong; Khettiya Jittapong and Amy Sawitta Lefevre in Bangkok, and Andjarsari Paramaditha in Jakarta; Editing by Emily Kaiser)
Japan to start 4K TV broadcast in July 2014: report
TOKYO (Reuters) - The Japanese government is set to launch the world's first 4K TV broadcast in July 2014, roughly two years ahead of schedule, to help stir demand for ultra high-definition televisions, the Asahi newspaper reported on Sunday without citing sources.
The service will begin from communications satellites, followed by satellite broadcasting and ground digital broadcasting, the report said.
The 4K TVs, which boast four times the resolution of current high-definition TVs, are now on sale by Japanese makers including Sony Corp , Panasonic and Sharp Corp . Other manufacturers include South Korea's LG Electronics .
Japan's Ministry of Internal Affairs and Communications had aimed to kick-start the 4K TV service in 2016. That has been brought forward to July 2014, when the final match of the 2014 football World Cup is set to take place in Brazil, the Asahi report said.
In Japan, the development of super high-definition 8K TVs is in progress, and the Ministry of Internal Affairs and Communications plans to launch the test 8K TV broadcast in 2016, two years ahead of schedule, it said.
(Reporting by Osamu Tsukimori; Editing by Paul Tait)
This article is sponsored by real estate news.
The service will begin from communications satellites, followed by satellite broadcasting and ground digital broadcasting, the report said.
The 4K TVs, which boast four times the resolution of current high-definition TVs, are now on sale by Japanese makers including Sony Corp , Panasonic and Sharp Corp . Other manufacturers include South Korea's LG Electronics .
Japan's Ministry of Internal Affairs and Communications had aimed to kick-start the 4K TV service in 2016. That has been brought forward to July 2014, when the final match of the 2014 football World Cup is set to take place in Brazil, the Asahi report said.
In Japan, the development of super high-definition 8K TVs is in progress, and the Ministry of Internal Affairs and Communications plans to launch the test 8K TV broadcast in 2016, two years ahead of schedule, it said.
(Reporting by Osamu Tsukimori; Editing by Paul Tait)
This article is sponsored by real estate news.
Friday, January 25, 2013
Samsung puts lid on capex for the first time since financial crisis
SEOUL (Reuters) - Samsung Electronics Co turned cautious on spending for the first time since the global financial crisis, keeping its annual investment plan unchanged at 2012 levels, as demand for computer chips wanes and the smartphone market slows.
Samsung, one of the industry's most aggressive spenders, has ramped up capital expenditure every year since 2004 except 2009 to meet soaring demand for its array of consumer electronics and mobile devices. It sold a record 700,000 smartphones a day in the last quarter.
But with the personal computer market shrinking for the first time in 11 years, the global smartphone market growing more slowly, and Apple Inc moving to buy fewer of Samsung's microprocessors used in the iPhone and iPad, the South Korean IT giant is now forced to keep a lid on spending.
'Overall its earnings momentum remains intact, and smartphone shipments will continue to grow even in the traditionally weak first quarter, as Samsung's got a broader product line-up and Apple appears to be struggling in pushing iPhone volumes aggressively,' said Lee Se-chul, a Seoul-based analyst at Meritz Securities.
Samsung, which reported a record quarterly and annual profit on Friday, said it would keep 2013 capital expenditure unchanged from 2012.
'The key word for us in investment in 2013 is flexibility. We'll decide as the market demand dictates,' Robert Yi, head of Samsung's investor relations, told analysts.
Data from the company shows Samsung started to slow down planned investment in the last quarter.
Samsung said it spent 4.4 trillion won in October-December, pushing its 2012 investment to a record 23 trillion won ($21.5 billion). But the company said in October that it was on course to spend 25 trillion won in 2012.
Analysts had expected a 4-20 percent cut in Samsung's 2013 capital spending.
By contrast, Taiwanese rival TSMC is planning to raise its capital expenditure to $9 billion this year, aimed in part at winning Apple orders away from Samsung.
Shares in Samsung fell 2.1 percent as of 0250 GMT, lagging a 1.1 percent decline in the wider market.
RECORD EARNINGS
Samsung had poured money into factories to boost production of chips and panels used in Apple products and its Galaxy range devices, pushing its operating profit to 8.84 trillion won in the last quarter. The 89 percent increase from a year earlier was in line with its earlier estimate.
Profit at its mobile devices division, which makes phones, tablets and cameras, more than doubled to 5.44 trillion won in the quarter from a year earlier, lifted by a broader offering of smartphones - from the very cheap to the very expensive.
The division accounted for 62 percent of Samsung's overall fourth-quarter profit, up from 55 percent a year earlier.
Samsung is also seeing strong sales of its Note phablet, which analysts expect to help Samsung get through any seasonal weakness better than rivals.
Samsung, which doesn't provide a breakdown of smartphone sales, is estimated to have sold around 63 million smartphones in the last quarter, including 15 million Galaxy S IIIs and 7 million Note IIs.
The company also said 2012 operating profit rose 86 percent to an all-time high of 29 trillion won.
SAMSUNG VS APPLE
Samsung sold 213 million smartphones last year and enlarged its share of the global market to 30.4 percent from around 20 percent in 2011, a report by market research firm Strategy Analytics showed on Friday. The sharp increase reflects Samsung's aggressive marketing of its wide product range.
Apple's share of the market rose slightly to 19.4 percent from 19.0 percent in 2011, according to the report.
Globally, sales of smartphones surged 42.7 percent last year to 700 million, Strategy Analytics said.
Samsung said on Friday it expects the global smartphone segment to shrink in January-March from the seasonally strong fourth quarter, and that growth of the overall handset market will slow to the mid single-digits this year.
The forecast is in line with industry estimates, with signs of a slowdown having already emerged.
Apple shipped 47.8 million iPhones in the three months ended December, a record that nonetheless disappointed many analysts accustomed to years of outperformance. The Cupertino, California-based company also missed Wall Street's revenue forecast for a third straight quarter as iPhone sales lagged expectations.
Apple shares have dropped by more than a third since mid-September as investors fret that its days of hyper growth are over and its devices are no longer as 'must-have' as they were.
By contrast, shares in Samsung have risen 12 percent in the same period as the company once seen as quick to copy the ideas of others now sets the pace in innovation.
At the world's biggest electronics show in Las Vegas this month, Samsung unveiled a prototype phone with a flexible display that can be folded almost like paper, and a microchip with eight processing cores, creating a buzz that these may be used in the next Galaxy range.
'It's very probable to us that the Exynos 5 Octa (processor) will find its way into the Galaxy S4,' UBS analyst Nicolas Gaudois wrote in a recent note.
'It also looked as if the curved display is close enough to finished product. We came away even more convinced that displays will provide significant differentiation to Samsung devices, and application processors will materially grow over time,' Gaudois said. ($1 = 1066.2000 Korean won)
(This story corrects 19th paragraph to show Apple's 2012 smartphone market share rose slightly according to Strategy Analytics.)
(Reporting by Miyoung Kim; Editing by Ryan Woo)
Samsung, one of the industry's most aggressive spenders, has ramped up capital expenditure every year since 2004 except 2009 to meet soaring demand for its array of consumer electronics and mobile devices. It sold a record 700,000 smartphones a day in the last quarter.
But with the personal computer market shrinking for the first time in 11 years, the global smartphone market growing more slowly, and Apple Inc moving to buy fewer of Samsung's microprocessors used in the iPhone and iPad, the South Korean IT giant is now forced to keep a lid on spending.
'Overall its earnings momentum remains intact, and smartphone shipments will continue to grow even in the traditionally weak first quarter, as Samsung's got a broader product line-up and Apple appears to be struggling in pushing iPhone volumes aggressively,' said Lee Se-chul, a Seoul-based analyst at Meritz Securities.
Samsung, which reported a record quarterly and annual profit on Friday, said it would keep 2013 capital expenditure unchanged from 2012.
'The key word for us in investment in 2013 is flexibility. We'll decide as the market demand dictates,' Robert Yi, head of Samsung's investor relations, told analysts.
Data from the company shows Samsung started to slow down planned investment in the last quarter.
Samsung said it spent 4.4 trillion won in October-December, pushing its 2012 investment to a record 23 trillion won ($21.5 billion). But the company said in October that it was on course to spend 25 trillion won in 2012.
Analysts had expected a 4-20 percent cut in Samsung's 2013 capital spending.
By contrast, Taiwanese rival TSMC is planning to raise its capital expenditure to $9 billion this year, aimed in part at winning Apple orders away from Samsung.
Shares in Samsung fell 2.1 percent as of 0250 GMT, lagging a 1.1 percent decline in the wider market.
RECORD EARNINGS
Samsung had poured money into factories to boost production of chips and panels used in Apple products and its Galaxy range devices, pushing its operating profit to 8.84 trillion won in the last quarter. The 89 percent increase from a year earlier was in line with its earlier estimate.
Profit at its mobile devices division, which makes phones, tablets and cameras, more than doubled to 5.44 trillion won in the quarter from a year earlier, lifted by a broader offering of smartphones - from the very cheap to the very expensive.
The division accounted for 62 percent of Samsung's overall fourth-quarter profit, up from 55 percent a year earlier.
Samsung is also seeing strong sales of its Note phablet, which analysts expect to help Samsung get through any seasonal weakness better than rivals.
Samsung, which doesn't provide a breakdown of smartphone sales, is estimated to have sold around 63 million smartphones in the last quarter, including 15 million Galaxy S IIIs and 7 million Note IIs.
The company also said 2012 operating profit rose 86 percent to an all-time high of 29 trillion won.
SAMSUNG VS APPLE
Samsung sold 213 million smartphones last year and enlarged its share of the global market to 30.4 percent from around 20 percent in 2011, a report by market research firm Strategy Analytics showed on Friday. The sharp increase reflects Samsung's aggressive marketing of its wide product range.
Apple's share of the market rose slightly to 19.4 percent from 19.0 percent in 2011, according to the report.
Globally, sales of smartphones surged 42.7 percent last year to 700 million, Strategy Analytics said.
Samsung said on Friday it expects the global smartphone segment to shrink in January-March from the seasonally strong fourth quarter, and that growth of the overall handset market will slow to the mid single-digits this year.
The forecast is in line with industry estimates, with signs of a slowdown having already emerged.
Apple shipped 47.8 million iPhones in the three months ended December, a record that nonetheless disappointed many analysts accustomed to years of outperformance. The Cupertino, California-based company also missed Wall Street's revenue forecast for a third straight quarter as iPhone sales lagged expectations.
Apple shares have dropped by more than a third since mid-September as investors fret that its days of hyper growth are over and its devices are no longer as 'must-have' as they were.
By contrast, shares in Samsung have risen 12 percent in the same period as the company once seen as quick to copy the ideas of others now sets the pace in innovation.
At the world's biggest electronics show in Las Vegas this month, Samsung unveiled a prototype phone with a flexible display that can be folded almost like paper, and a microchip with eight processing cores, creating a buzz that these may be used in the next Galaxy range.
'It's very probable to us that the Exynos 5 Octa (processor) will find its way into the Galaxy S4,' UBS analyst Nicolas Gaudois wrote in a recent note.
'It also looked as if the curved display is close enough to finished product. We came away even more convinced that displays will provide significant differentiation to Samsung devices, and application processors will materially grow over time,' Gaudois said. ($1 = 1066.2000 Korean won)
(This story corrects 19th paragraph to show Apple's 2012 smartphone market share rose slightly according to Strategy Analytics.)
(Reporting by Miyoung Kim; Editing by Ryan Woo)
Thursday, January 24, 2013
Microsoft profit dips ahead of Office revamp
SEATTLE (Reuters) - Microsoft Corp said its quarterly profit fell as Office software sales slowed ahead of a new launch, offseting a solid start for its new Windows 8 operating system.
Profit at the world's largest software company slid to $6.4 billion, or 76 cents per share, in the fiscal second quarter, from $6.6 billion, or 78 cents per share, in the year-ago quarter.
Wall Street had expected 75 cents per share, on average, according to Thomson Reuters I/B/E/S.
Overall sales rose 3 percent to $21.5 billion, Microsoft said on Thursday, in line with analysts' estimates.
With the loss of some deferred revenue to account for discounted upgrades to new software, Office revenue fell about 10 percent to $5.7 billion, which is not unusual ahead of a new launch, expected next week.
Windows sales, which included some deferred revenue from the launch of Windows 8 last October, jumped 24 percent to $5.9 billion.
Microsoft said it has sold more than 60 million Windows 8 licenses since launch, a solid but unspectacular start for its latest operating system.
Microsoft shares fell slightly in after-hours trading.
(Reporting by Bill Rigby; Editing by Richard Chang)
Profit at the world's largest software company slid to $6.4 billion, or 76 cents per share, in the fiscal second quarter, from $6.6 billion, or 78 cents per share, in the year-ago quarter.
Wall Street had expected 75 cents per share, on average, according to Thomson Reuters I/B/E/S.
Overall sales rose 3 percent to $21.5 billion, Microsoft said on Thursday, in line with analysts' estimates.
With the loss of some deferred revenue to account for discounted upgrades to new software, Office revenue fell about 10 percent to $5.7 billion, which is not unusual ahead of a new launch, expected next week.
Windows sales, which included some deferred revenue from the launch of Windows 8 last October, jumped 24 percent to $5.9 billion.
Microsoft said it has sold more than 60 million Windows 8 licenses since launch, a solid but unspectacular start for its latest operating system.
Microsoft shares fell slightly in after-hours trading.
(Reporting by Bill Rigby; Editing by Richard Chang)
RIM shares rise on report of Lenovo interest
TORONTO (Reuters) - Shares of Research In Motion Ltd rose 3 percent on Thursday after a report quoted China's Lenovo Group as saying a bid for the BlackBerry maker was among the options for boosting its mobile business.
'We are looking at all opportunities -- RIM and many others,' Lenovo Chief Financial Officer Wong Wai Ming told Bloomberg in an interview at the World Economic Forum's annual meeting in Davos, Switzerland. 'We'll have no hesitation if the right opportunity comes along that could benefit us.'
Wong said Lenovo has spoken to RIM and its bankers about various combinations or strategic ventures, the Bloomberg report said.
Any bid for RIM, which Canadian Prime Minister Stephen Harper has described as a national 'crown jewel,' would face a rigorous review by the government to determine whether the deal would bring a 'net benefit' to Canada.
Earlier this week, RIM shares surged to a 13-month high after Chief Executive Thorsten Heins said RIM may consider strategic alliances with other companies after next week's launch of devices powered by a new operating system.
In an interview with a German newspaper on Monday, Heins said RIM's review could potentially lead to the sale of its handset business or the licensing of its software to rival smartphone companies.
Analysts expressed skepticism about a Lenovo bid for RIM.
'Anybody who's serious about buying a company doesn't go talking it up...It sounds to me like a comment made more for publicity's sake than a serious approach for RIM,' said Charter Equity analyst Ed Snyder. 'It is a very long shot at the best. There's so many hurdles. One is regulatory of course.'
Earlier this week, Canada's Industry Minister Christian Paradis told Reuters that the Canadian government might go to the extent of even reviewing a sale of RIM's handset business, following the comments made by RIM's CEO.
'I think third parties are always interested in making acquisitions, but to conclude that they (Lenovo) are going to buy RIM is a stretch,' said RBC Capital Markets analyst Paul Treiber.
ALL OPTIONS EXAMINED
RIM announced a far-reaching strategic review last May under which it was expected to examine all options, from software licensing deals to an outright sale of the company.
After the comments from Lenovo, a RIM spokesman said the company had nothing new to report on its strategic review at this time.
'We continue to examine all available options to create new opportunities, focusing on areas where we will be more effective partnering rather than going it alone, and ultimately maximizing value for all stakeholders,' said RIM spokesman Nick Manning.
The company, once a pioneer in the smartphone industry, has struggled in recent years as its aging line-up of devices lost market share to Apple Inc's iPhone and devices based on Google Inc's Android operating system.
RIM hopes its new touch-screen and keyboard devices, powered by its new BlackBerry 10 operating system, will help it claw back market share.
Shares of RIM were up 3.1 percent at $17.88 in midday trading on the Nasdaq. The Toronto-listed shares were up 3.5 percent at C$17.90. RIM is a volatile stock, and moves of 3 percent and more are not uncommon.
A spokesman for Lenovo said the comments made during the Bloomberg interview were consistent with previous statements on Lenovo's M&A strategy.
'Lenovo is very focused on growing its business, both organically and through M&A. When inorganic ideas arise, we explore them to see if there is a strategic fit,' Lenovo spokesman Brion Tingler said in an e-mail.
RIM shares are down almost 90 percent from an all-time high of over C$148 in 2008, but the stock has rallied in the last four months as the launch of the BlackBerry 10 devices nears. Its shares have nearly tripled in value since dipping as low as C$6.22 in late September.
(Reporting by Euan Rocha in Toronto and Sinead Carew in New York; Editing by Frank McGurty and Leslie Gevirtz)
'We are looking at all opportunities -- RIM and many others,' Lenovo Chief Financial Officer Wong Wai Ming told Bloomberg in an interview at the World Economic Forum's annual meeting in Davos, Switzerland. 'We'll have no hesitation if the right opportunity comes along that could benefit us.'
Wong said Lenovo has spoken to RIM and its bankers about various combinations or strategic ventures, the Bloomberg report said.
Any bid for RIM, which Canadian Prime Minister Stephen Harper has described as a national 'crown jewel,' would face a rigorous review by the government to determine whether the deal would bring a 'net benefit' to Canada.
Earlier this week, RIM shares surged to a 13-month high after Chief Executive Thorsten Heins said RIM may consider strategic alliances with other companies after next week's launch of devices powered by a new operating system.
In an interview with a German newspaper on Monday, Heins said RIM's review could potentially lead to the sale of its handset business or the licensing of its software to rival smartphone companies.
Analysts expressed skepticism about a Lenovo bid for RIM.
'Anybody who's serious about buying a company doesn't go talking it up...It sounds to me like a comment made more for publicity's sake than a serious approach for RIM,' said Charter Equity analyst Ed Snyder. 'It is a very long shot at the best. There's so many hurdles. One is regulatory of course.'
Earlier this week, Canada's Industry Minister Christian Paradis told Reuters that the Canadian government might go to the extent of even reviewing a sale of RIM's handset business, following the comments made by RIM's CEO.
'I think third parties are always interested in making acquisitions, but to conclude that they (Lenovo) are going to buy RIM is a stretch,' said RBC Capital Markets analyst Paul Treiber.
ALL OPTIONS EXAMINED
RIM announced a far-reaching strategic review last May under which it was expected to examine all options, from software licensing deals to an outright sale of the company.
After the comments from Lenovo, a RIM spokesman said the company had nothing new to report on its strategic review at this time.
'We continue to examine all available options to create new opportunities, focusing on areas where we will be more effective partnering rather than going it alone, and ultimately maximizing value for all stakeholders,' said RIM spokesman Nick Manning.
The company, once a pioneer in the smartphone industry, has struggled in recent years as its aging line-up of devices lost market share to Apple Inc's iPhone and devices based on Google Inc's Android operating system.
RIM hopes its new touch-screen and keyboard devices, powered by its new BlackBerry 10 operating system, will help it claw back market share.
Shares of RIM were up 3.1 percent at $17.88 in midday trading on the Nasdaq. The Toronto-listed shares were up 3.5 percent at C$17.90. RIM is a volatile stock, and moves of 3 percent and more are not uncommon.
A spokesman for Lenovo said the comments made during the Bloomberg interview were consistent with previous statements on Lenovo's M&A strategy.
'Lenovo is very focused on growing its business, both organically and through M&A. When inorganic ideas arise, we explore them to see if there is a strategic fit,' Lenovo spokesman Brion Tingler said in an e-mail.
RIM shares are down almost 90 percent from an all-time high of over C$148 in 2008, but the stock has rallied in the last four months as the launch of the BlackBerry 10 devices nears. Its shares have nearly tripled in value since dipping as low as C$6.22 in late September.
(Reporting by Euan Rocha in Toronto and Sinead Carew in New York; Editing by Frank McGurty and Leslie Gevirtz)
Apple results spur price target cuts, shares fall 9 percent
(Reuters) - Weaker-than-expected holiday sales of Apple Inc's iPhone reinforced fears that it is losing its dominance in smartphones, driving its shares down 9 percent in premarket trading and drawing another round of stock price target cuts.
Fourteen brokerages including Barclays Capital, Mizuho Securities USA, Credit Suisse, Deutsche Bank, Raymond James, Robert W. Baird & Co and Canaccord Genuity cut their price target on the stock by $142 on average to $599.
Apple's shares closed at $514 Wednesday on the Nasdaq.
Jefferies & Co cut its rating on Apple's stock to 'hold' from 'buy' and slashed its share price target by $300 to $500.
Jefferies analyst Peter Misek, who has previously raised red flags about Apple cutting orders to suppliers, said the iPhone slowdown was 'real and material' and here to stay.
'We think Apple is losing the screen-size wars,' Misek said, noting that demand was moving away from the iPhone's 3.5-inch and 4-inch screens to screens of 5 inches offered by rivals such as Samsung Electronics Co Ltd, HTC Corp and Nokia Oyj.
Misek is a top-rated analyst for the accuracy of his earnings estimates for Apple, according to Thomson Reuters StarMine.
Apple said it shipped a record 47.8 million iPhones in the December quarter, but this trailed the average analyst forecast of 50 million units.
Deutsche Bank trimmed its price target to $575 from $800, and said Apple should start making a lower-priced iPhone to arrest the market share loss.
Credit Suisse analysts said a new product cycle and wider telecom carrier selection could be possible catalysts for the company, but added that these were not imminent.
'We believe a lower ability to beat earnings per share expectations, and some concerns on demand, may weigh on the stock near-term,' said Credit Suisse, which cut its target price by $150 to $600.
Up to Wednesday, 24 analysts had lowered their price targets since October when Apple reported its fourth-quarter results, according to Thomson Reuters data.
Apple is the lowest ranked stock among the marquee technology firms in the United States based on the change in analyst sentiment, or Analysts Revision Model (ARM), according to StarMine.
Apple's global ARM score of 10 is well below Google Inc's 34 and Microsoft Corp's 19 out of a possible 100. Nokia and Samsung have scores of 82 and 89, respectively.
Research in Motion Ltd has a perfect score of 100, according to the model, which measures analysts' revision of key indicators such as earnings and revenue estimates and changes to their ratings.
Apple shares were trading at $468 before the bell.
(Reporting by Himank Sharma and Saqib Ahmed in Bangalore; Editing by Saumyadeb Chakrabarty)
Fourteen brokerages including Barclays Capital, Mizuho Securities USA, Credit Suisse, Deutsche Bank, Raymond James, Robert W. Baird & Co and Canaccord Genuity cut their price target on the stock by $142 on average to $599.
Apple's shares closed at $514 Wednesday on the Nasdaq.
Jefferies & Co cut its rating on Apple's stock to 'hold' from 'buy' and slashed its share price target by $300 to $500.
Jefferies analyst Peter Misek, who has previously raised red flags about Apple cutting orders to suppliers, said the iPhone slowdown was 'real and material' and here to stay.
'We think Apple is losing the screen-size wars,' Misek said, noting that demand was moving away from the iPhone's 3.5-inch and 4-inch screens to screens of 5 inches offered by rivals such as Samsung Electronics Co Ltd, HTC Corp and Nokia Oyj.
Misek is a top-rated analyst for the accuracy of his earnings estimates for Apple, according to Thomson Reuters StarMine.
Apple said it shipped a record 47.8 million iPhones in the December quarter, but this trailed the average analyst forecast of 50 million units.
Deutsche Bank trimmed its price target to $575 from $800, and said Apple should start making a lower-priced iPhone to arrest the market share loss.
Credit Suisse analysts said a new product cycle and wider telecom carrier selection could be possible catalysts for the company, but added that these were not imminent.
'We believe a lower ability to beat earnings per share expectations, and some concerns on demand, may weigh on the stock near-term,' said Credit Suisse, which cut its target price by $150 to $600.
Up to Wednesday, 24 analysts had lowered their price targets since October when Apple reported its fourth-quarter results, according to Thomson Reuters data.
Apple is the lowest ranked stock among the marquee technology firms in the United States based on the change in analyst sentiment, or Analysts Revision Model (ARM), according to StarMine.
Apple's global ARM score of 10 is well below Google Inc's 34 and Microsoft Corp's 19 out of a possible 100. Nokia and Samsung have scores of 82 and 89, respectively.
Research in Motion Ltd has a perfect score of 100, according to the model, which measures analysts' revision of key indicators such as earnings and revenue estimates and changes to their ratings.
Apple shares were trading at $468 before the bell.
(Reporting by Himank Sharma and Saqib Ahmed in Bangalore; Editing by Saumyadeb Chakrabarty)
Wednesday, January 23, 2013
Apple revenue, iPhone sales disappoint; shares dive
SAN FRANCISCO (Reuters) - Apple Inc missed Wall Street's revenue forecast for the third straight quarter as iPhone sales came in below expectations, fueling investors' worries that its dominance of the mobile industry was slipping.
Shares of the world's largest tech company fell 10 percent to $463 after-hours, wiping out some $50 billion of its market value from its $514 close.
On Wednesday, Apple said it shipped a record 47.8 million iPhones in the December quarter, up 29 percent from the year-ago period but below the 50 million shipments that analysts on average had expected.
'It's going to call into question Apple's dominance in the space. It's still one of the strong players, the others being Samsung and Google. It's still a two-horse race, but Android continues to grow rapidly,' said Sterne Agee analyst Shaw Wu.
'If you step back a bit, it's clear they shipped a lot of phones. But the problem is the high expectations that investors have. Apple's conservative guidance highlights the concerns over production cuts coming out of Asia recently.'
Apple projected revenue of $41 billion to $43 billion in the current, second fiscal quarter, lagging the average Wall Street forecast of more than $45 billion.
Fiscal first quarter revenue rose 18 percent to $54.5 billion, below the average analyst estimate of $54.73 billion, though earnings per share of $13.81 beat the Street forecast of $13.47, according to Thomson Reuters I/B/E/S.
Apple also undershot revenue targets in the previous two quarters, and these results will prompt more questions on what Apple has in its product pipeline, and what it can do to attract new sales and maintain its growth trajectory, analysts said.
Net income of $13.07 billion was virtually flat with $13.06 billion a year earlier.
CHINA IS BRIGHT SPOT
Investors' expectations heading into the results had already been subdued by news of possible production cutbacks by some component suppliers in Asia, triggering fears that demand for the iPhone, which accounts for half of Apple's revenue, and the iPad could be slowing.
Apple shares are down nearly 30 percent from a record high in September, in part on worries that its days of hyper growth are over and its mobile devices are no longer as popular.
Intense competition from Samsung's cheaper phones - powered by Google's Android software - and signs that the premium smartphone market may be close to saturation in developed markets have also caused a lot of investor anxiety.
Meanwhile, sales of the iPad came in at 22.9 million in the fiscal first quarter, roughly in line with forecasts.
On the brighter side, Chief Financial Officer Peter Oppenheimer told Reuters that iPhone sales more than doubled in greater China - a region that Apple Chief Executive Tim Cook has vowed to focus on as its next big growth driver.
The company will begin detailing results from that country.
'These results were OK, but they definitely raised a few questions,' said Shannon Cross, analyst with Cross Research. 'Gross margin trajectory looks fine so that's a positive and cash continues to grow. But I think investors are going to want to know what Apple plans to do with growing cash balance.'
'And other questions are going to be around innovation and where the next products are coming from and what does Tim Cook see in the next 12 to 18 months.'
(Reporting By Poornima Gupta; Editing by Bernard Orr)
Shares of the world's largest tech company fell 10 percent to $463 after-hours, wiping out some $50 billion of its market value from its $514 close.
On Wednesday, Apple said it shipped a record 47.8 million iPhones in the December quarter, up 29 percent from the year-ago period but below the 50 million shipments that analysts on average had expected.
'It's going to call into question Apple's dominance in the space. It's still one of the strong players, the others being Samsung and Google. It's still a two-horse race, but Android continues to grow rapidly,' said Sterne Agee analyst Shaw Wu.
'If you step back a bit, it's clear they shipped a lot of phones. But the problem is the high expectations that investors have. Apple's conservative guidance highlights the concerns over production cuts coming out of Asia recently.'
Apple projected revenue of $41 billion to $43 billion in the current, second fiscal quarter, lagging the average Wall Street forecast of more than $45 billion.
Fiscal first quarter revenue rose 18 percent to $54.5 billion, below the average analyst estimate of $54.73 billion, though earnings per share of $13.81 beat the Street forecast of $13.47, according to Thomson Reuters I/B/E/S.
Apple also undershot revenue targets in the previous two quarters, and these results will prompt more questions on what Apple has in its product pipeline, and what it can do to attract new sales and maintain its growth trajectory, analysts said.
Net income of $13.07 billion was virtually flat with $13.06 billion a year earlier.
CHINA IS BRIGHT SPOT
Investors' expectations heading into the results had already been subdued by news of possible production cutbacks by some component suppliers in Asia, triggering fears that demand for the iPhone, which accounts for half of Apple's revenue, and the iPad could be slowing.
Apple shares are down nearly 30 percent from a record high in September, in part on worries that its days of hyper growth are over and its mobile devices are no longer as popular.
Intense competition from Samsung's cheaper phones - powered by Google's Android software - and signs that the premium smartphone market may be close to saturation in developed markets have also caused a lot of investor anxiety.
Meanwhile, sales of the iPad came in at 22.9 million in the fiscal first quarter, roughly in line with forecasts.
On the brighter side, Chief Financial Officer Peter Oppenheimer told Reuters that iPhone sales more than doubled in greater China - a region that Apple Chief Executive Tim Cook has vowed to focus on as its next big growth driver.
The company will begin detailing results from that country.
'These results were OK, but they definitely raised a few questions,' said Shannon Cross, analyst with Cross Research. 'Gross margin trajectory looks fine so that's a positive and cash continues to grow. But I think investors are going to want to know what Apple plans to do with growing cash balance.'
'And other questions are going to be around innovation and where the next products are coming from and what does Tim Cook see in the next 12 to 18 months.'
(Reporting By Poornima Gupta; Editing by Bernard Orr)
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