SAN FRANCISCO (Reuters) - The biggest names in consumer technology, stung by a string of disappointing quarterly results this month, are suiting up for what's shaping to be the fiercest holiday battle in years.
Investors and consumers have already largely written off flaccid quarterly numbers from tech behemoths like Microsoft, Apple, Google and Amazon. What counts is the next 60 days, when the biggest names in technology do battle at a near-unprecedented scale and pace.
Just on Thursday, Amazon compared its Kindle Fire with Apple's new iPad mini, point by point, in its earnings release, an unusual forum to name rivals. Apple CEO Tim Cook compared Microsoft's Surface tablet to an over-engineered car that can fly and float. And Microsoft went for the iPad, saying its Surface boasted twice its storage.
All three tablets will vie for the shrinking consumer dollar these holidays. By tech standards, it's getting ugly.
'The tablet space is where the growth is. That's why they are all fighting over it. PC shipments are down and some tablet buyers may never buy another PC,' said Michael Allenson, strategic consulting director in the Technology and Telecom Research Group at Maritz Research.
'Last holiday season, we saw a lot of buying of tablets in the $200 to $300 price range. This year, the iPad mini and Amazon's Kindle Fires are targeted as large gifts. They are trying to ride that wave and win as much as they can.'
The impending clash is far from decided.
Odds-on favorite Apple has lost some of its aura of invincibility, with Google's Android and Samsung making inroads into its reign in smartphones, Microsoft's quickening marketing blitz, and Amazon's Kindle nipping at its heels as the No. 2 tablet in the United States market.
That competition has weighed on Apple's share price, which is at three-month lows after it reported a second straight quarter of disappointing results, sullying its reputation for blowing away Wall Street estimates.
Google is struggling to figure out the dollars and cents of the mobile market and Microsoft is facing witheringly unimpressed reviews for its new Windows 8 platform and Surface tablet.
Meanwhile, Amazon's outlook for the holiday season is being taken as a disappointment, and Best Buy warned late Wednesday that sales and margins are falling.
CLAWS COME OUT
Tech companies hope lackluster calendar third-quarter results mean consumers have held off from buying gadgets so they can save up for something new and shiny this Christmas -- from the lowest-end Fire at $159 to a Surface around $499 or the biggest, fastest, newest iPad at $829.
The technology industry is grappling with a fundamental shift from deskbound computers or heavy laptops to sleek mobile devices like tablets, which are upending the traditional PC model and prompting companies like Google and Microsoft to invest deeply in hardware manufacturing.
Their entry however is raising the competitive stakes. Companies like Apple usually spend most of their time talking about how great their own products are, but with the competition more intense than ever, Apple CEO Cook spared a not-so-kind thought for Microsoft on Thursday.
'I haven't personally played with the Surface yet, but what we're reading about it, is that it's a fairly compromised, confusing product,' he said, later adding 'I suppose you could design a car that flies and floats, but I don't think it would do all of those things very well.'
Cook may have been going for levity, but the Twitterati booed his joke, since after all most gadget-heads would be very content with a flying, floating car.
Microsoft CEO Steve Ballmer, for his part, was pretty impressed with the company's handiwork, notwithstanding reviews that used words like 'disappointing' and 'undercooked.'
'We have a device that's uniquely good at being a tablet and a PC (with) no compromise on either one,' Ballmer told Reuters Television ahead of the Windows 8 launch event in New York on Thursday. 'Work. Play. Tablet. PC. Boom! One product.'
Google Executive Chairman Eric Schmidt, in a talk this month, took a shot at Apple, which has faced a barrage of complaints about glitches in its mapping software since dumping Google's service from its iPhone.
'What Apple has learned is that maps are really hard. They really are hard,' he said. 'Apple should have kept with our maps.'
Not to be outdone in the sniping, Amazon Chief Executive Jeff Bezos took a subtle swipe at Apple's high prices in the Internet retailer's quarterly results statement Thursday, saying 'our approach is to work hard to charge less.'
Right below those comments, Amazon listed head-to-head comparisons between its $299 8.9-inch Kindle Fire HD tablet, its $199 7-inch Kindle Fire HD device and Apple's iPad mini, which was unveiled on Tuesday.
Analysts were taken aback by how brazen Amazon was being in taking shots at peers.
'I have never seen them directly compare products in a results release like this, and in so much detail clearly calling out their competitors,' said RJ Hottovy, an equity analyst at Morningstar. 'This shows they are taking the tablet wars very seriously.'
(Additional reporting by Bill Rigby in Seattle; Writing by Ben Berkowitz; editing by Edwin Chan and Raju Gopalakrishnan)
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Thursday, October 25, 2012
Apple iPad sales disappoint, Street eyes holiday quarter
SAN FRANCISCO (Reuters) - Apple Inc delivered another quarter of lackluster results and iPad sales fell well short of Wall Street targets, pushing its stock down more than 1 percent.
The world's most valuable technology company, whose share price flirted after hours with sub-$600 levels for the first time since August, delivered results largely in line with expectations. It had missed revenue forecasts a quarter ago.
Apple sold fewer iPads than anticipated as the economy remained weak and consumers waited for the new iPad mini, which will hit store shelves next month.
Analysts say the real test for the company will come during the crucial holiday shopping season, when competition will reach fever-pitch with Apple, Amazon.com Inc, Google Inc and Microsoft Corp all fielding new gadgets.
'Going into earnings we were wondering if the slowing economy will catch up with Wall Street and it has,' said Channing Smith, co-manager of the Capital Advisors Growth Fund.
'Apple is very well positioned with the iPad and now the iPad mini. It has a great smartphone and we expect the iPhone 5 to sell very well. The outlook is conservative but that's not surprising. Err on the side of caution is a proven formula.'
Apple shipped 26.9 million iPhones, somewhat higher than the 25 million to 26 million that Wall Street analysts had predicted. Sales of the iPad came in at 14 million in the fiscal fourth quarter, well below lowered forecasts for the tablet.
It had just nine selling days of the new iPhone 5 in its fiscal fourth quarter - meaning all eyes are now trained on the current holiday quarter.
Apple ended its fiscal 2012 with a 45 percent increase in revenue to $156.5 billion, while net income was up 61 percent.
For the final fiscal quarter, it posted net income of $8.2 billion or $8.67 a diluted share in the fiscal fourth quarter, versus $6.6 billion or $7.05 a share a year earlier. Its earnings beat analysts' average forecast for $8.75.
Fiscal fourth quarter revenue rose to $35.96 billion, roughly in line with the average analyst estimate of 35.8 billion, according to Thomson Reuters I/B/E/S.
'Despite what you are reading about Europe, we did far better than our competitors,' Apple Chief Financial Officer Peter Oppenheimer said in an interview.
Apple heads into the quarter after refreshing almost all of its product lines, including introducing an upgraded, fourth-generation full-sized iPad. The December quarter will show how well consumers respond to Apple's latest gamble - the new, smaller iPad mini that will goes on sale November 2.
Sterne Agee's Shaw Wu attributed some of the quarter's weak iPad sales to Apple holding back supply of the third-generation iPad to stores, to clear the shelves ahead of the latest iPad.
'We were happy with the 14 million iPad sales in the quarter. It exceeded our expectations,' Oppenheimer said. 'But as the summer went on, the rumors were pretty rampant about the iPhone and iPad.'
For the December quarter, Apple forecast revenue of $52 billion, below the average estimate of $55 billion, according to Thomson Reuters I/B/E/S.
Apple ended the quarter with $121.3 billion in cash and securities, of which $83 billion was offshore, Oppenheimer said.
(Reporting by Poornima Gupta; Editing by Richard Chang)
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The world's most valuable technology company, whose share price flirted after hours with sub-$600 levels for the first time since August, delivered results largely in line with expectations. It had missed revenue forecasts a quarter ago.
Apple sold fewer iPads than anticipated as the economy remained weak and consumers waited for the new iPad mini, which will hit store shelves next month.
Analysts say the real test for the company will come during the crucial holiday shopping season, when competition will reach fever-pitch with Apple, Amazon.com Inc, Google Inc and Microsoft Corp all fielding new gadgets.
'Going into earnings we were wondering if the slowing economy will catch up with Wall Street and it has,' said Channing Smith, co-manager of the Capital Advisors Growth Fund.
'Apple is very well positioned with the iPad and now the iPad mini. It has a great smartphone and we expect the iPhone 5 to sell very well. The outlook is conservative but that's not surprising. Err on the side of caution is a proven formula.'
Apple shipped 26.9 million iPhones, somewhat higher than the 25 million to 26 million that Wall Street analysts had predicted. Sales of the iPad came in at 14 million in the fiscal fourth quarter, well below lowered forecasts for the tablet.
It had just nine selling days of the new iPhone 5 in its fiscal fourth quarter - meaning all eyes are now trained on the current holiday quarter.
Apple ended its fiscal 2012 with a 45 percent increase in revenue to $156.5 billion, while net income was up 61 percent.
For the final fiscal quarter, it posted net income of $8.2 billion or $8.67 a diluted share in the fiscal fourth quarter, versus $6.6 billion or $7.05 a share a year earlier. Its earnings beat analysts' average forecast for $8.75.
Fiscal fourth quarter revenue rose to $35.96 billion, roughly in line with the average analyst estimate of 35.8 billion, according to Thomson Reuters I/B/E/S.
'Despite what you are reading about Europe, we did far better than our competitors,' Apple Chief Financial Officer Peter Oppenheimer said in an interview.
Apple heads into the quarter after refreshing almost all of its product lines, including introducing an upgraded, fourth-generation full-sized iPad. The December quarter will show how well consumers respond to Apple's latest gamble - the new, smaller iPad mini that will goes on sale November 2.
Sterne Agee's Shaw Wu attributed some of the quarter's weak iPad sales to Apple holding back supply of the third-generation iPad to stores, to clear the shelves ahead of the latest iPad.
'We were happy with the 14 million iPad sales in the quarter. It exceeded our expectations,' Oppenheimer said. 'But as the summer went on, the rumors were pretty rampant about the iPhone and iPad.'
For the December quarter, Apple forecast revenue of $52 billion, below the average estimate of $55 billion, according to Thomson Reuters I/B/E/S.
Apple ended the quarter with $121.3 billion in cash and securities, of which $83 billion was offshore, Oppenheimer said.
(Reporting by Poornima Gupta; Editing by Richard Chang)
This article is brought to you by BUY A COMPUTER.
Microsoft unveils Windows 8, Surface tablet
NEW YORK (Reuters) - Microsoft Corp launched its new Windows 8 operating system and Surface tablet on Thursday in a bid to revive interest in its flagship product and regain ground lost to Apple Inc and Google Inc in mobile computing.
'We've reimagined Windows and we've reimagined the whole PC industry,' Microsoft Chief Executive Steve Ballmer told Reuters Television.
Windows 8 devices and the company's new Surface tablet, which aims to challenge Apple's popular iPad head on, go on sale at midnight on Thursday.
Steven Sinofsky, head of Microsoft's Windows unit and the driving force behind Windows 8, opened the launch event in New York in front about 1,000 media and PC industry partners.
He showed off Windows 8's new touch-optimized design, but emphasized that the system was built upon the base of Windows 7, Microsoft's best-selling software that recently passed 670 million license sales.
While Windows 7 was introduced three years ago, Windows 8 represents the biggest change in Microsoft's user interface since Windows 95 came out 17 years ago.
The radical redesign, which dispenses with the Start button and features square tiles for apps, may surprise some users. Initial demand for Windows 8 appeared solid, but customers were wary.
'We've seen steady pre-order sales on Windows 8 devices from early adopters,' said Merle McIntosh, senior vice president of product management at online electronics retailer Newegg. 'However, we expect that most average consumers are waiting until after launch to make a purchase decision.'
REVIEWERS, INVESTORS UNCERTAIN
Microsoft is offering several versions of Windows 8. The basic Windows 8, the full Windows 8 Pro and Windows 8 Enterprise for large organizations will all run on the traditional PCs, laptops and new tablets using Intel Corp chips.
Through the end of January, users running Windows XP, Windows Vista or Windows 7 can download an upgrade to Windows 8 Pro for $40.
For the first time, Microsoft has also created a version called Windows RT which will be pre-installed on its Surface tablet and other devices using low-power chips designed by ARM Holdings.
Early reviews of the Surface tablet, which starts at $499, have been mixed, with praise for its slick hardware, but concerns about battery life and limited software and applications available.
Microsoft has not said how many apps Windows 8 will have at launch, but it is expected to be a fraction of the 275,000 available to iPad users. The New York Times Co announced a reader app for Windows 8 on Thursday, and Amazon.com Inc launched a Kindle e-book app for the new system, but some big names such as Facebook Inc are not expected to feature.
Investors were uncertain about the prospects for success of Windows 8, but many feel a solid launch could help Microsoft's stock, which has languished between $20 and $30 for much of the last decade.
Apple's shares have significantly outperformed Microsoft's over the past 10 years, and its market value is now more than double Microsoft's. Microsoft shares were up 0.3 percent at $27.99 on Thursday afternoon, while Apple shares were down 0.8 percent at $611.70.
'This really is about debunking the notion that Microsoft is a dinosaur and they are relevant in a new climate of tablets and mobile,' said Todd Lowenstein, portfolio manager at HighMark Capital Management, which holds Microsoft shares.
'Extreme pessimism and almost utter failure is priced into the shares, so any kind of positive delivery on units, customer perception, would be really beneficial to the stock.'
(Writing by Bill Rigby in Seattle; editing by Bernadette Baum, Jeffrey Benkoe and Matthew Lewis)
This news article is brought to you by PARENTING KIDS - where latest news are our top priority.
'We've reimagined Windows and we've reimagined the whole PC industry,' Microsoft Chief Executive Steve Ballmer told Reuters Television.
Windows 8 devices and the company's new Surface tablet, which aims to challenge Apple's popular iPad head on, go on sale at midnight on Thursday.
Steven Sinofsky, head of Microsoft's Windows unit and the driving force behind Windows 8, opened the launch event in New York in front about 1,000 media and PC industry partners.
He showed off Windows 8's new touch-optimized design, but emphasized that the system was built upon the base of Windows 7, Microsoft's best-selling software that recently passed 670 million license sales.
While Windows 7 was introduced three years ago, Windows 8 represents the biggest change in Microsoft's user interface since Windows 95 came out 17 years ago.
The radical redesign, which dispenses with the Start button and features square tiles for apps, may surprise some users. Initial demand for Windows 8 appeared solid, but customers were wary.
'We've seen steady pre-order sales on Windows 8 devices from early adopters,' said Merle McIntosh, senior vice president of product management at online electronics retailer Newegg. 'However, we expect that most average consumers are waiting until after launch to make a purchase decision.'
REVIEWERS, INVESTORS UNCERTAIN
Microsoft is offering several versions of Windows 8. The basic Windows 8, the full Windows 8 Pro and Windows 8 Enterprise for large organizations will all run on the traditional PCs, laptops and new tablets using Intel Corp chips.
Through the end of January, users running Windows XP, Windows Vista or Windows 7 can download an upgrade to Windows 8 Pro for $40.
For the first time, Microsoft has also created a version called Windows RT which will be pre-installed on its Surface tablet and other devices using low-power chips designed by ARM Holdings.
Early reviews of the Surface tablet, which starts at $499, have been mixed, with praise for its slick hardware, but concerns about battery life and limited software and applications available.
Microsoft has not said how many apps Windows 8 will have at launch, but it is expected to be a fraction of the 275,000 available to iPad users. The New York Times Co announced a reader app for Windows 8 on Thursday, and Amazon.com Inc launched a Kindle e-book app for the new system, but some big names such as Facebook Inc are not expected to feature.
Investors were uncertain about the prospects for success of Windows 8, but many feel a solid launch could help Microsoft's stock, which has languished between $20 and $30 for much of the last decade.
Apple's shares have significantly outperformed Microsoft's over the past 10 years, and its market value is now more than double Microsoft's. Microsoft shares were up 0.3 percent at $27.99 on Thursday afternoon, while Apple shares were down 0.8 percent at $611.70.
'This really is about debunking the notion that Microsoft is a dinosaur and they are relevant in a new climate of tablets and mobile,' said Todd Lowenstein, portfolio manager at HighMark Capital Management, which holds Microsoft shares.
'Extreme pessimism and almost utter failure is priced into the shares, so any kind of positive delivery on units, customer perception, would be really beneficial to the stock.'
(Writing by Bill Rigby in Seattle; editing by Bernadette Baum, Jeffrey Benkoe and Matthew Lewis)
This news article is brought to you by PARENTING KIDS - where latest news are our top priority.
Microsoft set to unveil Windows 8, Surface tablet
NEW YORK (Reuters) - Microsoft Corp launches its new Windows 8 operating system and Surface tablet in New York Thursday, hoping to revive interest in its flagship product and regain ground lost to Apple Inc and Google Inc in mobile computing.
'We've reimagined Windows and we've reimagined the whole PC industry,' Microsoft Chief Executive Steve Ballmer told Reuters Television early Thursday ahead of the launch.
Windows 8 devices and the company's new Surface tablet, which aims to challenge Apple's popular iPad head on, go on sale at midnight.
Early reviews of the Surface tablet have been mixed, with praise for its slick hardware, but concerns about battery life and limited software and applications available.
The new design of Windows, which dispenses with the Start button and features square tiles for apps, may shock some users. Initial demand appears solid, but customers are wary.
'We've seen steady pre-order sales on Windows 8 devices from early adopters,' said Merle McIntosh, senior vice president of product management at online electronics retailer Newegg. 'However, we expect that most average consumers are waiting until after launch to make a purchase decision.'
Investors are uncertain about the prospects for success of Windows 8, but many feel a solid launch could help Microsoft's stock, which has languished between $20 and $30 for much of the last decade.
Apple's shares have significantly outperformed Microsoft's over the past 10 years, and its market value is now more than double Microsoft's. Microsoft shares were unchanged in early trading on Nasdaq at $27.92; Apple was steady at $615.55.
'This really is about debunking the notion that Microsoft is a dinosaur and they are relevant in a new climate of tablets and mobile,' said Todd Lowenstein, portfolio manager at HighMark Capital Management, which holds Microsoft shares.
'Extreme pessimism and almost utter failure is priced into the shares, so any kind of positive delivery on units, customer perception, would be really beneficial to the stock.'
(Writing by Bill Rigby in Seattle; Editing by Bernadette Baum)
This news article is brought to you by WOMEN'S BLOG - where latest news are our top priority.
'We've reimagined Windows and we've reimagined the whole PC industry,' Microsoft Chief Executive Steve Ballmer told Reuters Television early Thursday ahead of the launch.
Windows 8 devices and the company's new Surface tablet, which aims to challenge Apple's popular iPad head on, go on sale at midnight.
Early reviews of the Surface tablet have been mixed, with praise for its slick hardware, but concerns about battery life and limited software and applications available.
The new design of Windows, which dispenses with the Start button and features square tiles for apps, may shock some users. Initial demand appears solid, but customers are wary.
'We've seen steady pre-order sales on Windows 8 devices from early adopters,' said Merle McIntosh, senior vice president of product management at online electronics retailer Newegg. 'However, we expect that most average consumers are waiting until after launch to make a purchase decision.'
Investors are uncertain about the prospects for success of Windows 8, but many feel a solid launch could help Microsoft's stock, which has languished between $20 and $30 for much of the last decade.
Apple's shares have significantly outperformed Microsoft's over the past 10 years, and its market value is now more than double Microsoft's. Microsoft shares were unchanged in early trading on Nasdaq at $27.92; Apple was steady at $615.55.
'This really is about debunking the notion that Microsoft is a dinosaur and they are relevant in a new climate of tablets and mobile,' said Todd Lowenstein, portfolio manager at HighMark Capital Management, which holds Microsoft shares.
'Extreme pessimism and almost utter failure is priced into the shares, so any kind of positive delivery on units, customer perception, would be really beneficial to the stock.'
(Writing by Bill Rigby in Seattle; Editing by Bernadette Baum)
This news article is brought to you by WOMEN'S BLOG - where latest news are our top priority.
Exclusive: Huawei partner offered U.S. tech to Iran
LONDON (Reuters) - An Iranian partner of Huawei Technologies Co Ltd, a Chinese company that has denied breaking U.S. sanctions, last year tried to sell embargoed American antenna equipment to an Iranian firm, according to documents and interviews.
The buyer - an Iranian mobile-phone operator - says it canceled the deal with Huawei when it learnt the items were subject to sanctions and before any equipment was delivered. Huawei, the world's second-largest telecoms equipment maker, uses products from a U.S. company, Andrew LLC, in some of the systems it sells.
Documents reviewed by Reuters show that Soda Gostar Persian Vista, a Tehran-based supplier of Huawei equipment in Iran, had offered to sell to MTN Irancell 36 cellular tower antennas made by Andrew for 14,364 euros. The equipment was to be delivered in Tehran on February 3, 2012, to 'Huawei warehouse ready for installation,' according to a MTN Irancell purchase order dated November 30, 2011.
Huawei, based in Shenzhen, China, has an agreement with CommScope Inc. in Hickory, N.C. - which owns Andrew - to purchase Andrew antennas and other equipment and use the products in Huawei systems, according to CommScope. The Andrew antennas were part of a large order for Huawei telecommunications gear that MTN Irancell had placed through Soda Gostar, the documents show.
Washington has banned the sale of U.S. technology to Iran for years. Huawei said in a statement that it complies with U.S. law and also requires third parties like Soda Gostar 'to follow applicable laws and regulations.' This month, the U.S. House Intelligence Committee criticized Huawei for failing 'to provide evidence to support its claims that it complies with all international sanctions or U.S. export laws.'
South Africa's MTN Group, which owns 49 percent of MTN Irancell, said the Iranian telecoms firm had requested 36 German-made antennas not subject to sanctions but that 'Huawei, through its local partner Soda Gostar, mistakenly provided details of U.S.-manufactured' antennas.
'This was later identified as an error and as a result the tender request was canceled with Huawei and the German goods obtained from a local reseller,' Paul Norman, MTN Group's corporate affairs officer, said in a statement. He added, 'The incident is illustrative of the strong processes in place in MTN and Irancell to ensure compliance' with U.S. sanctions.
In a statement, Vic Guyang, a Huawei spokesman, acknowledged that MTN Irancell had canceled the order. He added, 'We did not participate in the delivery of this project because Huawei has been and continues to be in strict compliance with all relevant international and local laws and regulations.' Officials at Soda Gostar could not be reached for comment.
Rick Aspan, a spokesman for CommScope, said the company was not aware of the aborted transaction. 'Obviously we're going to look into this a little further,' he said.
He described Huawei as a major customer of antennas and other CommScope telecommunications equipment. 'They purchase certain CommScope products that they incorporate into the systems they're making for their wireless operator customers,' he said. CommScope manufactures its products in a number of countries, including China.
Reuters has documented how China has become a backdoor way for Iran to obtain embargoed U.S. computer equipment. In March and April, Reuters reported that China's ZTE Corp, a Huawei competitor, had sold or agreed to sell millions of dollars worth of U.S. computer gear to Telecommunication Co. of Iran, the country's largest telecommunications firm, and a unit of the consortium that controls TCI. The articles sparked investigations by the U.S. Commerce Department and the Justice Department.
In a filing this month with the Hong Kong stock exchange, ZTE said it was cooperating with the investigations.
Reuters has also documented how MTN procured U.S. computer equipment through a network of companies in Iran and the Middle East when it launched MTN Irancell in 2006. MTN employees created presentations for meetings and wrote reports that openly discussed circumventing U.S. sanctions to source the equipment, Reuters reported in August.
(Edited by Simon Robinson)
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The buyer - an Iranian mobile-phone operator - says it canceled the deal with Huawei when it learnt the items were subject to sanctions and before any equipment was delivered. Huawei, the world's second-largest telecoms equipment maker, uses products from a U.S. company, Andrew LLC, in some of the systems it sells.
Documents reviewed by Reuters show that Soda Gostar Persian Vista, a Tehran-based supplier of Huawei equipment in Iran, had offered to sell to MTN Irancell 36 cellular tower antennas made by Andrew for 14,364 euros. The equipment was to be delivered in Tehran on February 3, 2012, to 'Huawei warehouse ready for installation,' according to a MTN Irancell purchase order dated November 30, 2011.
Huawei, based in Shenzhen, China, has an agreement with CommScope Inc. in Hickory, N.C. - which owns Andrew - to purchase Andrew antennas and other equipment and use the products in Huawei systems, according to CommScope. The Andrew antennas were part of a large order for Huawei telecommunications gear that MTN Irancell had placed through Soda Gostar, the documents show.
Washington has banned the sale of U.S. technology to Iran for years. Huawei said in a statement that it complies with U.S. law and also requires third parties like Soda Gostar 'to follow applicable laws and regulations.' This month, the U.S. House Intelligence Committee criticized Huawei for failing 'to provide evidence to support its claims that it complies with all international sanctions or U.S. export laws.'
South Africa's MTN Group, which owns 49 percent of MTN Irancell, said the Iranian telecoms firm had requested 36 German-made antennas not subject to sanctions but that 'Huawei, through its local partner Soda Gostar, mistakenly provided details of U.S.-manufactured' antennas.
'This was later identified as an error and as a result the tender request was canceled with Huawei and the German goods obtained from a local reseller,' Paul Norman, MTN Group's corporate affairs officer, said in a statement. He added, 'The incident is illustrative of the strong processes in place in MTN and Irancell to ensure compliance' with U.S. sanctions.
In a statement, Vic Guyang, a Huawei spokesman, acknowledged that MTN Irancell had canceled the order. He added, 'We did not participate in the delivery of this project because Huawei has been and continues to be in strict compliance with all relevant international and local laws and regulations.' Officials at Soda Gostar could not be reached for comment.
Rick Aspan, a spokesman for CommScope, said the company was not aware of the aborted transaction. 'Obviously we're going to look into this a little further,' he said.
He described Huawei as a major customer of antennas and other CommScope telecommunications equipment. 'They purchase certain CommScope products that they incorporate into the systems they're making for their wireless operator customers,' he said. CommScope manufactures its products in a number of countries, including China.
Reuters has documented how China has become a backdoor way for Iran to obtain embargoed U.S. computer equipment. In March and April, Reuters reported that China's ZTE Corp, a Huawei competitor, had sold or agreed to sell millions of dollars worth of U.S. computer gear to Telecommunication Co. of Iran, the country's largest telecommunications firm, and a unit of the consortium that controls TCI. The articles sparked investigations by the U.S. Commerce Department and the Justice Department.
In a filing this month with the Hong Kong stock exchange, ZTE said it was cooperating with the investigations.
Reuters has also documented how MTN procured U.S. computer equipment through a network of companies in Iran and the Middle East when it launched MTN Irancell in 2006. MTN employees created presentations for meetings and wrote reports that openly discussed circumventing U.S. sanctions to source the equipment, Reuters reported in August.
(Edited by Simon Robinson)
This article is brought to you by COMPUTERS.
Wednesday, October 24, 2012
Apple's Mac flies in under the radar
SAN FRANCISCO (Reuters) - Amid the fanfare accompanying the noisy launch of the iPad mini this week, Apple Inc also took the wraps off new Mac computers.
The facelift may help revitalize an important lineup that -- while seeing growth tail off in the early part of 2012 -- yields 14 percent of revenue and still racks up sales growth numbers that are the envy of a flagging PC world.
On Tuesday, Apple took the lid off a slimmed-down iMac and a 13-inch laptop with a vastly improved screen, setting the stage for a potential revival in sales even as Hewlett-Packard and Dell Inc struggle just to stay level.
Earlier this year, Apple had also launched an updated MacBook Air - a product analysts say spawned over 20 touch-enabled designs from rivals called 'Ultrabooks,' which run Microsoft Corp's upcoming Windows 8 software.
Apple remains No. 3 in U.S. market share behind HP and Dell. But the Mac's premium pricing, at $1,000 and above, and its subsequent outsized margins mean a spike in revenue growth can give its bottom line a significant boost.
'The pricing and feature set of the refreshed iMac present an attractive combination, and I would not be surprised to see the new iMac stimulate desktop sales in the December quarter and beyond,' Barclays analyst Ben Reitzes said.
The decades-old Macintosh line that helped set a stumbling computer company back on its feet -- today overshadowed in both revenue and media appeal by the popular iPhone and iPad -- saw growth drop to single-digit percentages in the first two quarters of 2012 for the first time since 2009.
Yet sales outgrew the PC market, overall, by more than seven times over the 12 months to June, according to CEO Tim Cook, and has outpaced PC growth over the last six years.
Apple reports fiscal fourth quarter results on Thursday. The company will likely have sold 5.1 million Macs in the October quarter, up just 5 percent, Piper Jaffray & Co analyst Gene Munster estimates.
HALO EFFECT
On Tuesday, Apple Marketing Chief Phil Schiller called the Mac 'what began it all,' and he claimed the Mac was America's No. 1 laptop and desktop among individual models. Research houses Gartner and IDC figures place Apple third in the United States with a market share of about 13 percent.
Regardless where it places, at prices starting at $1,000 for its MacBook Air and going all the way close to $4,000 and growth -- while well off the 30-percent range of 2010 -- still defying the market, the Mac has proven a consistent money-spinner for the company even during troubled times for the traditional PC.
Intel Corp, HP and other stalwarts of the PC industry are now fighting to sustain growth as tablet computers eat into their PC-related businesses.
While the Mac line has not completely side-stepped PC market trends, it has held up better partly because it is targeted at a higher-spending clientele that values its consistency, vis-a-vis the often fragmented PC, where multiple vendors supply different components that don't always work seamlessly.
But it also owes its success in large part to a so-called halo effect stemming from consumers' experiences with the iPhone and iPad, said Loren Loverde, analyst with research firm IDC.
'They are on the positive end of halo effect both in terms of traffic and brand image,' Loverde said, adding that Apple also has yet to fully realize the international growth opportunities for Mac, and expects the new products to see good demand during the holiday quarter.
Late Apple co-founder Steve Jobs introduced the Macintosh in 1984, and it became the first successful computer to feature a mouse and a graphical user interface -- a model that has stayed intact through the succeeding decades. The desktop Mac itself stuck to that interface but has radically shifted in design over the years, to today's slim, all-in-one form.
Analysts say the redesigned Macs may give Apple's December quarter an extra lift, but the quarter will hinge mostly on how many consumers bought iPads and iPhones, which combined accounts for 72 percent of the company's revenue.
Cook and other executives are likely to be questioned on the smartphone's supply issues and the ramp-up of the new 'iPad mini,' available in stores on November 2.
'The bigger question is likely the company's ability to ramp supply to meet the strong demand,' Baird Equity Research analyst William Power said. Recent investor concerns regarding Apple have included 'perceived slowing iPhone innovation, the lack of a strong developing market strategy for iPhone and current iPhone supply constraints.'
Apple's stock has reflected some of those concerns. While the stock is up 52 percent this year, it is down 12 percent from its record high of $705 on September 21. Despite the pullback, Apple is trading at 11.6 times next year's estimated earnings, same as the S&P 500 and far lower than some rivals like Amazon.com Inc, which trades at 100 times estimated 2013 earnings.
Investors will focus initially on the headline shipment numbers during the fiscal third quarter on Thursday. It is estimated to have sold between 24 million and 26 million iPhones in the July-September period.
And Apple said on Tuesday that it sold its 100 millionth iPad two weeks ago, which means that the company sold under 16 million last quarter. This is below the 17 million to 18 million some analysts had forecast.
Longer term, Apple could also face margin pressure as smartphones pass the 50 penetration rate in major developed markets, said BGC analyst Colin Gillis.
'The next stage of smart phone growth could be more focused on mid-to-lower priced offerings,' Gillis said. 'Apple may find it difficult to maintain margin while growing massive scale, particularly as the overall market for smartphones slows.'
(Reporting by Poornima Gupta; Editing by Lisa Shumaker)
This news article is brought to you by ECONOMY BLOG - where latest news are our top priority.
The facelift may help revitalize an important lineup that -- while seeing growth tail off in the early part of 2012 -- yields 14 percent of revenue and still racks up sales growth numbers that are the envy of a flagging PC world.
On Tuesday, Apple took the lid off a slimmed-down iMac and a 13-inch laptop with a vastly improved screen, setting the stage for a potential revival in sales even as Hewlett-Packard and Dell Inc struggle just to stay level.
Earlier this year, Apple had also launched an updated MacBook Air - a product analysts say spawned over 20 touch-enabled designs from rivals called 'Ultrabooks,' which run Microsoft Corp's upcoming Windows 8 software.
Apple remains No. 3 in U.S. market share behind HP and Dell. But the Mac's premium pricing, at $1,000 and above, and its subsequent outsized margins mean a spike in revenue growth can give its bottom line a significant boost.
'The pricing and feature set of the refreshed iMac present an attractive combination, and I would not be surprised to see the new iMac stimulate desktop sales in the December quarter and beyond,' Barclays analyst Ben Reitzes said.
The decades-old Macintosh line that helped set a stumbling computer company back on its feet -- today overshadowed in both revenue and media appeal by the popular iPhone and iPad -- saw growth drop to single-digit percentages in the first two quarters of 2012 for the first time since 2009.
Yet sales outgrew the PC market, overall, by more than seven times over the 12 months to June, according to CEO Tim Cook, and has outpaced PC growth over the last six years.
Apple reports fiscal fourth quarter results on Thursday. The company will likely have sold 5.1 million Macs in the October quarter, up just 5 percent, Piper Jaffray & Co analyst Gene Munster estimates.
HALO EFFECT
On Tuesday, Apple Marketing Chief Phil Schiller called the Mac 'what began it all,' and he claimed the Mac was America's No. 1 laptop and desktop among individual models. Research houses Gartner and IDC figures place Apple third in the United States with a market share of about 13 percent.
Regardless where it places, at prices starting at $1,000 for its MacBook Air and going all the way close to $4,000 and growth -- while well off the 30-percent range of 2010 -- still defying the market, the Mac has proven a consistent money-spinner for the company even during troubled times for the traditional PC.
Intel Corp, HP and other stalwarts of the PC industry are now fighting to sustain growth as tablet computers eat into their PC-related businesses.
While the Mac line has not completely side-stepped PC market trends, it has held up better partly because it is targeted at a higher-spending clientele that values its consistency, vis-a-vis the often fragmented PC, where multiple vendors supply different components that don't always work seamlessly.
But it also owes its success in large part to a so-called halo effect stemming from consumers' experiences with the iPhone and iPad, said Loren Loverde, analyst with research firm IDC.
'They are on the positive end of halo effect both in terms of traffic and brand image,' Loverde said, adding that Apple also has yet to fully realize the international growth opportunities for Mac, and expects the new products to see good demand during the holiday quarter.
Late Apple co-founder Steve Jobs introduced the Macintosh in 1984, and it became the first successful computer to feature a mouse and a graphical user interface -- a model that has stayed intact through the succeeding decades. The desktop Mac itself stuck to that interface but has radically shifted in design over the years, to today's slim, all-in-one form.
Analysts say the redesigned Macs may give Apple's December quarter an extra lift, but the quarter will hinge mostly on how many consumers bought iPads and iPhones, which combined accounts for 72 percent of the company's revenue.
Cook and other executives are likely to be questioned on the smartphone's supply issues and the ramp-up of the new 'iPad mini,' available in stores on November 2.
'The bigger question is likely the company's ability to ramp supply to meet the strong demand,' Baird Equity Research analyst William Power said. Recent investor concerns regarding Apple have included 'perceived slowing iPhone innovation, the lack of a strong developing market strategy for iPhone and current iPhone supply constraints.'
Apple's stock has reflected some of those concerns. While the stock is up 52 percent this year, it is down 12 percent from its record high of $705 on September 21. Despite the pullback, Apple is trading at 11.6 times next year's estimated earnings, same as the S&P 500 and far lower than some rivals like Amazon.com Inc, which trades at 100 times estimated 2013 earnings.
Investors will focus initially on the headline shipment numbers during the fiscal third quarter on Thursday. It is estimated to have sold between 24 million and 26 million iPhones in the July-September period.
And Apple said on Tuesday that it sold its 100 millionth iPad two weeks ago, which means that the company sold under 16 million last quarter. This is below the 17 million to 18 million some analysts had forecast.
Longer term, Apple could also face margin pressure as smartphones pass the 50 penetration rate in major developed markets, said BGC analyst Colin Gillis.
'The next stage of smart phone growth could be more focused on mid-to-lower priced offerings,' Gillis said. 'Apple may find it difficult to maintain margin while growing massive scale, particularly as the overall market for smartphones slows.'
(Reporting by Poornima Gupta; Editing by Lisa Shumaker)
This news article is brought to you by ECONOMY BLOG - where latest news are our top priority.
Tech focus now on Microsoft Windows 8, Surface tablet
SEATTLE (Reuters) - Firm sales numbers for Microsoft Corp's Windows 8 and its new Surface tablet will not be available for three months, but it may be clear long before then if it has a hit on its hands.
'We can definitely gauge it by chatter,' said Emily Chan, an analyst at Bernstein Research. 'There is a slight learning curve, so I don't think we will see that big pop that iPad saw.'
Microsoft is desperate for the new-look, touch-friendly Windows 8 to grip customers' imaginations, as it looks to regain ground lost to Apple Inc and Google Inc in mobile computing and shake up the moribund PC market.
Perhaps more important is its new own-brand tablet called the Surface, available only through its own stores and website, which will challenge Apple's iPad head on.
'I'd want to know the sales - and return rate - of the Surface,' said Sarah Rotman Epps at tech research firm Forrester. 'But those numbers will be hard to get since Microsoft is the only retailer.'
Early reviews of the Surface have been mixed, generally praising the slick hardware, but faulting battery life and the limited software and applications available.
Some worry that the first Surface model, which runs on a stripped-down version of Windows 8 called RT that is not compatible with old Windows programs, will cause some confusion and dissatisfaction among customers.
The three models for sale on Microsoft's U.S. website are already on back order, suggesting strong demand, but it is not known how many Surfaces Microsoft has manufactured.
'The fact it's back ordered is indicative that there's consumer interest,' said Michael Gartenberg, an analyst at tech research firm Gartner. 'How Microsoft introduces it, evangelizes it and explains it will determine long term success.'
BALLMER NOISE
Microsoft has not said if it will reveal sales figures for Windows 8 or of the Surface before its next scheduled earnings on January 24. The company tends to trumpet good news and stay silent otherwise.
After the launch of Windows 7 three years ago, CEO Steve Ballmer waited only a month to announce strong sales. A year later, he waited only 10 days to report record-breaking sales of the Kinect, the motion-sensing add-on for the Xbox. But Microsoft has never shared the sales of Windows-powered phones, which have a lowly 3 percent of the market.
If Ballmer stays silent about Windows 8 sales, it might indicate a less than stellar performance.
'I would definitely take it a sign that it's not super, super strong, but I won't take it as something negative,' said Chan at Bernstein, who is expecting 8.3 million Surface sales by the middle of next year.
That averages out at about 1 million a month, a third the rate of the iPad, which notched up its first million sales in 28 days and has now sold more than 100 million units, averaging about 3.2 million a month.
Gartner forecasts that Surface and other tablets running Windows RT will sell about 2.3 million units this year and 9.3 million next year, grabbing about 2 percent and 5 percent of the worldwide tablet market, respectively.
DOOR-BUSTERS
Retail activity will be closely watched. Microsoft will have more than 60 brick and mortar stores open for the release of Windows 8 on Friday, half of them 'pop-up' stores that will stay open for the holiday shopping season.
Third-party retailers are cautiously optimistic.
'We have seen pretty good response to our pre-orders for Windows 8,' said Best Buy Co Inc spokesman Jeff Haydock. 'Quite honestly, I don't know what to expect from Friday. I don't know if there will be lines or not. My sense is it will take some time for people to kind of come into the stores and check it out.'
Best Buy may give some color on how PC sales are going when it reports earnings on November 20.
Wal-Mart Stores Inc, the No. 1 U.S. retailer, said U.S. pre-orders for Windows 8 PCs 'have been better than expected.'
Online retailers Amazon.com Inc, Newegg Inc and TigerDirect Inc have been silent on Windows 8 pre-orders.
The full impact of PC sales on retailers will not be evident until chains report same-store sales for November.
QUICK REACTION
One early indicator of Windows 8's success will be the contents of the online Windows Store. Microsoft has had a harder time drumming up interest among developers for Windows 8, given the risk that there will be fewer users than competing platforms.
Microsoft will not disclose numbers, but there are expected to be 5,000 or so third-party apps available to U.S. users, in comparison with the iPad's 275,000. Some big names such as Facebook Inc will be missing.
In social media, the tenor of comments on the Twitter hashtags #Windows8 and #Surface will give an indication of their reception after Ballmer unveils them both on Thursday.
Many users likely will be shocked by the new design, which dispenses with the Start button and features square tiles for apps.
'Public reaction to the new UI will depend how well Microsoft explains why 'different' is better and teaches how the new experience works,' said Gartenberg. 'That all starts on Thursday.'
BY THE NUMBERS
The ultimate test for Windows 8 will be PC sales.
Industry trackers are expecting a bump for PC sales in the last two months of the year, but not enough to rescue the whole year, which is forecast to dip for the first time since 2001.
Some analysts had expected an uptick in production of laptops ahead of the Windows 8 launch, but PC makers facing an uncertain global economy have been wary about committing.
Chip maker Intel Corp, which is a good gauge of future PC demand due to its position early in the production process, expects the PC business to grow at only half the normal seasonal rate in the fourth quarter.
Chief Executive Paul Otellini recently told analysts he expects to have a better understanding of the success of Windows 8 in 90 days.
Stephen Baker, an analyst at retail research firm NPD Group, is expecting a 10 percent jump in PC sales for November and December over last year, but said comparisons will be difficult given a profusion of new devices and the volatility of year-ago data.
Fourth-quarter PC shipment numbers from research firms Gartner and IDC will not be published until early January, although analysts say PC makers might start to drop hints about demand before then.
'There will likely be many milestones, but very few will ultimately be decisive. The key point is will PC sales continue to shrink or will they experience a boost,' said Al Hilwa at research firm IDC. 'We can probably begin to properly judge that with some ambiguity in January.'
(Additional reporting By Dhanya Skariachan in New York, Jessica Wohl in Chicago and Noel Randewich in San Francisco. Editing by Andre Grenon)
This article is brought to you by BUY A COMPUTER.
'We can definitely gauge it by chatter,' said Emily Chan, an analyst at Bernstein Research. 'There is a slight learning curve, so I don't think we will see that big pop that iPad saw.'
Microsoft is desperate for the new-look, touch-friendly Windows 8 to grip customers' imaginations, as it looks to regain ground lost to Apple Inc and Google Inc in mobile computing and shake up the moribund PC market.
Perhaps more important is its new own-brand tablet called the Surface, available only through its own stores and website, which will challenge Apple's iPad head on.
'I'd want to know the sales - and return rate - of the Surface,' said Sarah Rotman Epps at tech research firm Forrester. 'But those numbers will be hard to get since Microsoft is the only retailer.'
Early reviews of the Surface have been mixed, generally praising the slick hardware, but faulting battery life and the limited software and applications available.
Some worry that the first Surface model, which runs on a stripped-down version of Windows 8 called RT that is not compatible with old Windows programs, will cause some confusion and dissatisfaction among customers.
The three models for sale on Microsoft's U.S. website are already on back order, suggesting strong demand, but it is not known how many Surfaces Microsoft has manufactured.
'The fact it's back ordered is indicative that there's consumer interest,' said Michael Gartenberg, an analyst at tech research firm Gartner. 'How Microsoft introduces it, evangelizes it and explains it will determine long term success.'
BALLMER NOISE
Microsoft has not said if it will reveal sales figures for Windows 8 or of the Surface before its next scheduled earnings on January 24. The company tends to trumpet good news and stay silent otherwise.
After the launch of Windows 7 three years ago, CEO Steve Ballmer waited only a month to announce strong sales. A year later, he waited only 10 days to report record-breaking sales of the Kinect, the motion-sensing add-on for the Xbox. But Microsoft has never shared the sales of Windows-powered phones, which have a lowly 3 percent of the market.
If Ballmer stays silent about Windows 8 sales, it might indicate a less than stellar performance.
'I would definitely take it a sign that it's not super, super strong, but I won't take it as something negative,' said Chan at Bernstein, who is expecting 8.3 million Surface sales by the middle of next year.
That averages out at about 1 million a month, a third the rate of the iPad, which notched up its first million sales in 28 days and has now sold more than 100 million units, averaging about 3.2 million a month.
Gartner forecasts that Surface and other tablets running Windows RT will sell about 2.3 million units this year and 9.3 million next year, grabbing about 2 percent and 5 percent of the worldwide tablet market, respectively.
DOOR-BUSTERS
Retail activity will be closely watched. Microsoft will have more than 60 brick and mortar stores open for the release of Windows 8 on Friday, half of them 'pop-up' stores that will stay open for the holiday shopping season.
Third-party retailers are cautiously optimistic.
'We have seen pretty good response to our pre-orders for Windows 8,' said Best Buy Co Inc spokesman Jeff Haydock. 'Quite honestly, I don't know what to expect from Friday. I don't know if there will be lines or not. My sense is it will take some time for people to kind of come into the stores and check it out.'
Best Buy may give some color on how PC sales are going when it reports earnings on November 20.
Wal-Mart Stores Inc, the No. 1 U.S. retailer, said U.S. pre-orders for Windows 8 PCs 'have been better than expected.'
Online retailers Amazon.com Inc, Newegg Inc and TigerDirect Inc have been silent on Windows 8 pre-orders.
The full impact of PC sales on retailers will not be evident until chains report same-store sales for November.
QUICK REACTION
One early indicator of Windows 8's success will be the contents of the online Windows Store. Microsoft has had a harder time drumming up interest among developers for Windows 8, given the risk that there will be fewer users than competing platforms.
Microsoft will not disclose numbers, but there are expected to be 5,000 or so third-party apps available to U.S. users, in comparison with the iPad's 275,000. Some big names such as Facebook Inc will be missing.
In social media, the tenor of comments on the Twitter hashtags #Windows8 and #Surface will give an indication of their reception after Ballmer unveils them both on Thursday.
Many users likely will be shocked by the new design, which dispenses with the Start button and features square tiles for apps.
'Public reaction to the new UI will depend how well Microsoft explains why 'different' is better and teaches how the new experience works,' said Gartenberg. 'That all starts on Thursday.'
BY THE NUMBERS
The ultimate test for Windows 8 will be PC sales.
Industry trackers are expecting a bump for PC sales in the last two months of the year, but not enough to rescue the whole year, which is forecast to dip for the first time since 2001.
Some analysts had expected an uptick in production of laptops ahead of the Windows 8 launch, but PC makers facing an uncertain global economy have been wary about committing.
Chip maker Intel Corp, which is a good gauge of future PC demand due to its position early in the production process, expects the PC business to grow at only half the normal seasonal rate in the fourth quarter.
Chief Executive Paul Otellini recently told analysts he expects to have a better understanding of the success of Windows 8 in 90 days.
Stephen Baker, an analyst at retail research firm NPD Group, is expecting a 10 percent jump in PC sales for November and December over last year, but said comparisons will be difficult given a profusion of new devices and the volatility of year-ago data.
Fourth-quarter PC shipment numbers from research firms Gartner and IDC will not be published until early January, although analysts say PC makers might start to drop hints about demand before then.
'There will likely be many milestones, but very few will ultimately be decisive. The key point is will PC sales continue to shrink or will they experience a boost,' said Al Hilwa at research firm IDC. 'We can probably begin to properly judge that with some ambiguity in January.'
(Additional reporting By Dhanya Skariachan in New York, Jessica Wohl in Chicago and Noel Randewich in San Francisco. Editing by Andre Grenon)
This article is brought to you by BUY A COMPUTER.
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