July 22, 2017

State of the Art: All-in-One PCs From Vizio, H.P. and Apple

Right. Nobody knows.

And nobody cares. Today, it’s all about phones and tablets, baby. Nobody buzzes about the PC anymore. Innovation is dead. Sales are down, right?

Actually, there’s one pocket of surging sales and innovation in PC land: the luxury all-in-one computer, of the type made famous by the iMac.

I took a look at three silver, high-design, screen-on-a-stalk competitors: Apple’s new iMac ($1,300 and up), Hewlett-Packard’s SpectreOne ($1,300 and up), and the Vizio All-in-One Touch PC ($1,000 and up). (Lenovo, Dell, Samsung and Acer also offer, or soon will offer, very similar all-in-ones.)

What characterizes these computers? First, an emphasis on looks. They’re shiny, sleek, futuristic, uncluttered and cordless (they come with Bluetooth wireless keyboard and trackpad or mouse). They’re sculpture. In your kitchen or on your desk, they contribute to the décor even when they’re turned off.

The usual box of innards is missing. In the iMac, the guts are concealed behind the screen. In the Vizio, they’re in the foot of the monitor. In the H.P., they’re inside the stalk that supports the screen.

The second common trait is state-of-the-art components. These computers offer gorgeous, vivid, high-definition screens. And they’re fast; they’re powered by the latest Intel chips and lots of memory.

Third characteristic: no DVD drive.

What? Do these companies really think that the era of the disc is over? That nobody will ever again want to digitize music from a CD? Or burn some files to a disc to hand to a colleague? Or borrow a DVD from the library?

Apple, H.P. and Vizio seem to believe that everything is online now. Well, it’s not. Want to rent an Indiana Jones movie, “Jurassic Park” or “Schindler’s List”? How about “Star Wars,” “A Beautiful Mind,” “Bridget Jones’s Diary,” or “My Big Fat Greek Wedding”? Too bad; they’re not available to rent online.

You can, of course, buy an external DVD drive. But aren’t these called “all in ones”? A drive just looks stupid.

Now, on a laptop, eliminating the DVD drive is understandable. You carry laptops. Weight matters. Bulk matters. But why eliminate DVD drives on computers that stay in one place?

All right, end of rant.

The new iMac, clad in its traditional aluminum, is stunning. The stand is still a thin, curved L of metal — but now, the screen appears to be just as thin (0. 2 inches). Where are the guts?

Turns out it’s a trick — an illusion. Behind the screen, you see a substantial bulge; Apple tapered the aluminum as it approaches the screen, so that from front angles it seems that the whole screen is razor thin. Apple has also eliminated much of the glare that has long dogged today’s glossy screens. Viewed side-by-side with its rivals, the iMac is a lot less reflective.

There are two iMac sizes: 21.5 and 27 inches. The $1,300 and $1,800 base models come with a 1-terabyte hard drive, 8 gigabytes of memory and an i5 Intel processor. Each has four USB 3.0 jacks, two Thunderbolt jacks (for video input or output or external hard drives), and camera memory-card slot, awkwardly positioned on the back. Apple has ditched the FireWire jack it spent so many years promoting.

On the 21.5-incher, you can’t upgrade the memory yourself; what you buy is what you’ll have forever, unless you take it into the shop.

On the 27-inch model, you can install as much as 32 gigabytes yourself, through an easily opened door. (That, for the record, is about 262,144 times the memory as the original Macintosh.) Online, you can order your iMac with a 3-terabyte hard drive, 32 gigabytes of memory, a 768-gigabyte flash-memory drive and a $3,700 invoice.

Vizio isn’t a company you expect to be in the PC business; it made its mark selling high-quality, low-price TV sets. And sure enough, by far the best part of the All-in-One Touch PC is its lovely touch screen, available in 24- and 27-inch versions.

A nontouch version is also available, but the Vizio comes with Windows 8, which is far more pleasant to use with a touch screen.

E-mail: pogue@nytimes.com


Article source: http://www.nytimes.com/2012/12/06/technology/personaltech/reviewing-all-in-one-luxury-pcs-from-vizio-hp-and-apple-state-of-the-art.html?partner=rss&emc=rss

Starbucks Offers to Pay More British Tax Than Required

“Having listened to customers and to the British public, Starbucks in the U.K. will be making changes which will result in the company paying higher corporation tax in the U.K. — above what is currently required by law,” the company said in a statement.

Starbucks said that in 2013 and 2014 it would refrain from claiming certain tax deductions that helped reduce its tax bill in Britain to nothing over the past three years. The company said it would pay taxes over the next two years even if it does not post a profit in Britain, where it has more than 700 shops.

The tax practices of Starbucks, along with those of other U.S. multinational companies, including Google and Amazon, have come under intense scrutiny in Britain in recent weeks, even as the government has announced plans to extend its fiscal discipline for another year.

The chairman of the Public Accounts Committee of Parliament, Margaret Hodge, has accused the companies of “immoral” behavior and protesters have called for a boycott of Starbucks.

U.K. Uncut, a group that is campaigning against the government’s fiscal policies, has called for protests outside Starbucks stores on Saturday. The group dismissed the latest announcement from the company as a ploy.

“Offering to pay some tax if and when it suits you doesn’t stop you being a tax dodger,” Hannah Pearce, a spokeswoman for U.K. Uncut, said in a statement. “Starbucks have been avoiding tax for over a decade and continue to deny that it paid too little tax in the past. Today’s announcement is just a desperate attempt to deflect public pressure.”

In its 14 years of doing business in Britain, Starbucks has paid a total of £8.6 million, or $13.8 million, in corporate taxes there. The company has reduced its tax bill in Britain by channeling revenue through other company subsidiaries in jurisdictions where tax rates are lower. One unit in the Netherlands, for example, receives royalty payments from Britain.

Similar tax-reduction strategies are employed by many multinational companies. But Starbucks said that it would not make such transfers over the next two years.

“Specifically, in 2013 and 2014 Starbucks will not claim tax deductions for royalties or payments related to our intercompany charges,” the company said.


Article source: http://www.nytimes.com/2012/12/07/business/global/07iht-uktax07.html?partner=rss&emc=rss

DealBook: Trail to a Hedge Fund, From a Cluster of Cases

Donald Longueuil, who worked at SAC Capital Advisors, received inside information about the chip maker Marvell Technology from Noah Freeman and earned more than $1 million in profit. He pleaded guilty to conspiracy and securities fraud and is serving a two-and-a-half year sentence.Brendan McDermid/ReutersDonald Longueuil, who worked at SAC Capital Advisors, received inside information about the chip maker Marvell Technology from Noah Freeman and earned more than $1 million in profit. He pleaded guilty to conspiracy and securities fraud and is serving a two-and-a-half year sentence.

In April 2009, an F.B.I. agent visited the Silicon Valley home of Richard Choo-Beng Lee, a hedge fund manager with deep contacts inside technology companies. The government, the agent said, had overwhelming proof that Mr. Lee had engaged in insider trading. Within weeks, Mr. Lee confessed and began cooperating.

A year and a half later, in the parking lot of a New England prep school, the same agent approached Noah Freeman, a Harvard-educated money manager turned teacher. After the agent played a secretly recorded conversation of Mr. Freeman swapping illegal tips, Mr. Freeman admitted to crimes and started assisting the authorities.

Last winter, another agent confronted Mathew Martoma, a pharmaceutical-industry analyst, at his 8,000-square-foot Florida mansion. As they stood on the front lawn, with Mr. Martoma’s wife and children inside, the agent told him that they had evidence that he had broken the law.

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Overcome with stress, Mr. Martoma passed out.

Three criminal defendants — Mr. Lee, Mr. Freeman and Mr. Martoma — have a common denominator: Each had worked for SAC Capital Advisors, the hedge fund run by Steven A. Cohen, one of the most powerful figures in finance. By posting impressive annual returns averaging 30 percent across two decades, Mr. Cohen, a 56-year-old Long Island native, has amassed a fortune estimated at nearly $9 billion.

Mr. Cohen has not been accused of any wrongdoing and he may never be charged, but he has become a central focus of the government’s sprawling investigation into criminal conduct at hedge funds. A picture of the inquiry has emerged from interviews with people involved with the case.

The trail leading to SAC has emerged out of a cluster of cases, many of them connected to the prosecution of the fallen titan Raj Rajaratnam. Investigators heard SAC traders on incriminating wiretaps; in other instances, cooperators and informants accused the fund of misconduct. As the authorities painstakingly pieced together dozens of cases across multiple, overlapping conspiracies, again and again one name kept popping up: Mr. Cohen’s SAC.

Complete Coverage: Insider Trading at a Top Hedge Fund

Investigators have penetrated SAC and other funds by aggressively deploying techniques — wiretaps, cooperators and informants — once reserved for infiltrating the Mafia and narcotics rings. Government lawyers have reviewed millions of pages of documents and taken hundreds of depositions. Securities watchdogs, meanwhile, have developed more sophisticated methods to detect insider trading, which is defined as trading based on material, nonpublic information.

The long-running inquiry has linked six former SAC employees to insider trading while at the fund; three, including Jon Horvath, who has implicated one of Mr. Cohen’s top lieutenants, have pleaded guilty. At least six other former employees have been tied to insider trading after leaving SAC. Several more have received subpoenas, people briefed on the case say.

Since 2002, the financial industry’s self-regulatory groups have referred about 80 instances of suspicious SAC trading activity to federal authorities for further investigation. In 2007, as the citations piled up, the self-regulatory groups took a more aggressive tone, noting that the hedge fund had been “repeatedly” flagged for suspicious trading. (An SAC spokesman has said that the fund trades in thousands of stocks each day, so given its level of activity it is not surprising that the fund would show up in referrals.)

“Government lawyers go where the facts take them,” said H. David Kotz, a former inspector general at the Securities and Exchange Commission now with Berkeley Research, a consulting firm. “With so many disparate strands of the investigation leading to SAC, it makes perfect sense that they would be closely looking at the guy in charge.”

And they are looking very closely. A few years ago, the F.B.I. secretly recorded the telephone line at Mr. Cohen’s Greenwich, Conn., estate, said two people briefed on the investigation. It is unclear what precipitated the wiretapping and whether any evidence was collected. Federal securities regulators have had previous brushes with SAC in 2003 and Mr. Cohen in 1986, but neither inquiry resulted in any action. Last summer, S.E.C. lawyers deposed him.

Speaking to his roughly 1,000 employees last week, Mr. Cohen expressed confidence that he acted appropriately. In defending the fund, SAC cites its strong culture of compliance and says it is “outraged” and “deeply disturbed” by the conduct of former employees.

But with Mr. Martoma’s arrest Nov. 20 — the first case that directly ties Mr. Cohen to questionable trades — the investigation has entered a more serious phase. The S.E.C. warned the fund that it was preparing a civil fraud lawsuit against SAC related to Mr. Martoma’s case. A lawyer for Mr. Martoma, Charles A. Stillman, said that he expected his client to be exonerated.

And just as it did in the investigation of Mr. Rajaratnam and in the landmark 1980s prosecutions of the financial giants of that era, Michael R. Milken and Ivan F. Boesky, the government is pursuing lower-level employees and then seeking their cooperation in the hopes of building a case against the boss.

C. B. Lee

Had he made different career choices, Richard Choo-Beng Lee might have been an engineer at Apple or Intel. Instead, armed with a computer science degree and a knack for numbers, Mr. Lee became a star technology analyst on Wall Street.

Known as C. B., Mr. Lee worked in the 1990s at the brokerage firm Needham Company alongside Mr. Rajaratnam. In 1999, Mr. Lee landed at SAC, where he earned millions working for a team of tech-stock traders. After five years, he left, and in 2008 started his own California-based hedge fund, Spherix Capital.

That same year, a government informant taped incriminating calls with Mr. Rajaratnam, who by then had become a billionaire running the Galleon Group. On the basis of those calls, prosecutors received a judge’s approval to wiretap Mr. Rajaratnam’s cellphone. They also received permission to eavesdrop on Danielle Chiesi, a close associate of Mr. Rajaratnam. Ms. Chiesi was heard on calls with Mr. Lee passing inside information.

B. J. Kang, an F.B.I. agent, showed up at Mr. Lee’s modest San Jose, Calif., home in 2009. After pleading guilty, he closed Spherix Capital and became a cooperator, recording conversations that helped ensnare several defendants.

Securing Mr. Lee’s cooperation proved to be a major breakthrough because he helped them better understand SAC’s trading practices and culture. As part of Mr. Lee’s plea agreement, he agreed to share information about illegal conduct that he saw while working for Mr. Cohen.

He also provided investigators with detailed insights into expert-network firms, a growing business that connected traders with sources at publicly traded companies. Mr. Lee said SAC and other funds aggressively used these matchmaking firms, some of which were cesspools of inside information.

A few months after Mr. Lee “flipped,” the F.B.I. directed him to try to get rehired by SAC, said a person briefed on the case. Mr. Cohen entertained his request but ultimately rebuffed him, leery that Mr. Lee had abruptly closed his fund, this person said.

Jeffrey Bornstein, a lawyer for Mr. Lee, 56, said that his client continues to cooperate with the government.

Noah Freeman

When Noah Freeman graduated from Harvard in 1999, the stock market was roaring. After a stint in management consulting, Mr. Freeman tried his hand at hedge funds. He started at Brookside Capital, a unit of Bain Capital.

Mr. Freeman joined SAC in 2008, lured by a two-year, $2 million-a-year guarantee. The fund gave him several hundred millions of dollars to manage.

Mr. Freeman routinely shared his best ideas with Mr. Cohen. Unlike hedge funds with one manager making investment decisions, SAC has about 140 teams — each controlling several hundred millions of dollars. The teams give their “high conviction ideas” to Mr. Cohen, who directly manages only about 10 percent of the fund. SAC compensates employees based on a percentage of the winnings they generate for the fund, as well as on profits they make for Mr. Cohen’s portfolio.

An accomplished speed skater and triathlete, Mr. Freeman thrived in the high-stress world of hedge funds. But the pressure to perform was immense. To help gain an edge, Mr. Freeman became a big user of expert networks, especially Primary Global Research. His principal contact at Primary Global was Winifred Jiau.

Mr. Lee and other informants had told government investigators that Primary Global was especially dirty, and investigators began listening to its phone calls. On one call in May 2008, Ms. Jiau was heard giving Mr. Freeman inside tips about Marvell Technology. Mr. Freeman shared the information with another SAC colleague, Donald Longueuil, who used it to earn more than $1 million in profits.

SAC fired Mr. Freeman in 2010 for poor performance, according to a fund spokesman. Disillusioned with Wall Street, Mr. Freeman went into education. He took a job teaching honors economics at the Winsor School, a prestigious all-girls school in Boston. One day, in November 2010, Mr. Kang, the F.B.I. agent, was waiting for Mr. Freeman in the parking lot of Winsor.

As a government cooperator, Mr. Freeman wore a wire and secretly recorded conversations with Mr. Longueuil, who had been the best man at his wedding. Mr. Longueuil is serving a two-and-a-half year sentence.

In a Dec. 16, 2010 interview, Mr. Freeman told investigators that he thought that trafficking in corporate secrets was part of his job description at SAC, according to an F.B.I. agent’s notes of the interview, which were in a court filing and first reported by Bloomberg News.

“Freeman and others at SAC Capital understood that providing Cohen with your best trading ideas involved providing Cohen with inside information,” the agent wrote.

Prosecutors announced charges against Mr. Freeman and Mr. Longueuil in February 2011. Primary Global has closed. Ms. Jiau, who was found guilty at trial, is in prison. At her trial, Mr. Freeman testified that he gave investigators the names of at least a dozen people who he believed were involved in criminal conduct.

Mr. Freeman, 36, who has yet to be sentenced, is currently a stay-at-home father, and his cooperation could spare him prison time. His lawyer, Benjamin E. Rosenberg, declined to comment.

Jon Horvath admitted to insider trading while at SAC Capital and cooperated with investigators.Mary Altaffer/Associated PressJon Horvath admitted to insider trading while at SAC Capital and cooperated with investigators.

Jon Horvath

In November 2010, the F.B.I. raided two hedge funds that heavily used expert-network firms: Level Global Investors and Diamondback Capital Management. Both had strong ties to Mr. Cohen; each was started by SAC alumni.

Fourteen months after the raid, prosecutors charged seven traders — including two each from Level Global and Diamondback — in what it called a “criminal club” that made nearly $70 million trading on secret information gleaned from sources inside technology companies.

Among those arrested was Jon Horvath, an SAC tech-stock analyst who once worked at Lehman Brothers. Low key and analytic, Mr. Horvath lacked the swagger of many of his peers. For months, he maintained his innocence.

But in September, a month before trial, Mr. Horvath admitted to insider trading while at SAC and agreed to cooperate. In court, Mr. Horvath said that he — along with his SAC manager — traded on confidential financial results. “In each instance I provided the information to the portfolio manager I worked for and we executed trades in the stocks based on that information,” he said.

The portfolio manager is Michael S. Steinberg, according to two people briefed on the inquiry. Prosecutors have not charged him, but have named him an unindicted co-conspirator.

Barry Berke, a lawyer for Mr. Steinberg, 40, and Steven Peikin, a lawyer for Mr. Horvath, 42, declined to comment.

Though recently placed on leave, Mr. Steinberg is one of SAC’s longest-tenured employees. He joined in 1997, when it was just Mr. Cohen and several dozen traders; for years, he sat near Mr. Cohen on the trading floor and the two grew close. When Mr. Steinberg was married in 1999 at the Plaza Hotel, Mr. Cohen attended the black-tie affair.

Federal agents have asked Mathew Martoma to help build a case against Steven A. Cohen of SAC.Seth Wenig/Associated PressFederal agents have asked Mathew Martoma to help build a case against Steven A. Cohen of SAC.

Mathew Martoma

In 2008, a team of S.E.C. enforcement lawyers in New York, led by Sanjay Wadhwa, noticed a pattern in the “suspicious trading reports.” CR Intrinsic Investors, a unit of SAC Capital, had made an uncanny string of immensely profitable, well-timed trades in technology and health care stocks. Their suspicions raised, the team requested more trading reports from the regulatory arm of the New York Stock Exchange. Huge bets by CR Intrinsic on the pharmaceutical companies Elan and Wyeth, placed just before they announced disappointing results from a drug trial, jumped off the page.

The S.E.C. issued a subpoena requesting that SAC produce documents — e-mails, instant messages, phone and trading records — connected to the unusual trades. As they combed through e-mails, S.E.C. lawyers discovered reams of correspondence between Mathew Martoma, a drug stock specialist at CR Intrinsic, and Dr. Sidney Gilman, a neurologist.

Two days before Thanksgiving, federal agents arrested Mr. Martoma. Prosecutors said that Dr. Gilman had leaked him secret data about clinical trials that he was overseeing for an Alzheimer’s drug being jointly developed by Elan and Wyeth.

The case was a turning point in the investigation of SAC because, for the first time, the government linked Mr. Cohen to trades that it contends were illegal. Mr. Martoma and Mr. Cohen collaborated on the Elan and Wyeth transactions, prosecutors said, earning SAC profits and avoiding losses totaling $276 million. After Mr. Martoma learned from Dr. Gilman — whom he met through an expert network — that there were problems with the trials, he reached out to his boss, the government said.

“Is there a good time to catch up with you this morning? It’s important,” Mr. Martoma e-mailed Mr. Cohen in July 2008, just days before Elan and Wyeth announced their findings.

An hour later, Mr. Martoma and Mr. Cohen had a 20-minute telephone conversation. SAC promptly sold a $700 million position in Elan and Wyeth and then made a big negative bet. After the drug companies released the negative data, their shares plummeted.

An S.E.C. lawyer interviewed Mr. Cohen about the Elan and Wyeth trades this summer, according to a person briefed on the case. In sworn testimony, he said that SAC sold the stocks because Mr. Martoma told him that he had lost conviction in the position, this person said. Otherwise, Mr. Cohen had little recall of their conversation.

Federal agents paid a house call to Mr. Martoma a year ago, pressuring him to “flip” and help build a case against Mr. Cohen. While speaking with the agents in his front yard, Mr. Martoma fainted. After picking himself up, he declined to cooperate. When the S.E.C. deposed him earlier this year, Mr. Martoma refused to answer questions, invoking his Fifth Amendment right against self-incrimination.

The government has said it will not prosecute Dr. Gilman, who has agreed to testify against Mr. Martoma.

SAC continues to operate during the intensifying investigation. The negative attention and controversy aggravates and angers Mr. Cohen, said a friend, but his ability to compartmentalize allows him to maintain a focus on investing.

An SAC spokesman said Wednesday that Mr. Cohen is cooperating with the government’s inquiry.

During market hours, Mr. Cohen can be found at the center of his football field-size trading floor in Stamford, Conn., sitting among his traders, sifting through information, and buying and selling stocks. SAC, which manages $14 billion, is up about 12 percent this year through the end of last month.

“None of this stuff is material to his returns and it’s all just a lot of noise,” said Ed Butowsky, managing partner of Chapwood Investments, a longtime SAC client. “Steve Cohen is the Michael Jordan of the hedge fund business. When people are successful everyone likes to take shots at them.”

Ben Protess contributed reporting.

A version of this article appeared in print on 12/06/2012, on page A1 of the NewYork edition with the headline: Trail to a Hedge Fund, From a Cluster of Cases.

Article source: http://dealbook.nytimes.com/2012/12/05/trail-to-a-hedge-fund-from-a-cluster-of-cases/?partner=rss&emc=rss

Wall Street Flat

Extending Wednesday’s 6.4 percent decline, Apple was trading down 0.7 percent at $535 early on Thursday, after falling as much as 3.7 percent at the open, which brought the market capitalization of the world’s largest publicly traded company down to below $500 billion briefly. In September, it was capitalized at a record $663 billion.

Broadcom shares led the advance in chip makers with a 2.1 percent gain, one day after it forecast for fourth-quarter revenue at the high end of its target range, citing slightly better-than-expected sales in its mobile business.

The PHLX semiconductor index rose 0.4 percent.

Budget discussions continued to be a key focus for investors. President Barack Obama said there could be a quick deal to avert the “fiscal cliff” – tax hikes and spending cuts set to begin next year, possibly driving the U.S. economy back into recession – if Republican leaders agree to raise tax rates for those making more than $250,000 a year.

While Republican leaders in the House of Representatives insist that raising tax rates on the rich is a no-go, some GOP lawmakers now see it as inevitable to avoid the fiscal cliff.

“There are no real triggers here. It is just positioning going on for year-end, and this big decision” on the fiscal cliff, said Rick Meckler, president of hedge fund LibertyView Capital Management LLC in Jersey City, New Jersey.

He said Apple’s weakness was taking a toll on the market and expects equities to continue trading choppily through the day.

The Dow Jones industrial average fell 17.89 points, or 0.14 percent, to 13,016.60. The SP 500 dropped 1.78 points, or 0.13 percent, to 1,407.50. The Nasdaq Composite Index gained 2.89 points, or 0.10 percent, to 2,976.59.

Apple Inc’s rank in China’s smartphone market fell to No.6 in the third quarter as it faces tougher competition from Chinese brands, research firm IDC said Thursday. Apple’s 6.4 percent drop on Wednesday was its worst daily performance since December 2008 and dragged down the Nasdaq Composite.

Shares of Apple were down 0.7 percent at $535, after earlier falling more than 3 percent.

Sirius XM Radio shares rose 2.2 percent to $2.83 after its board approved a $2 billion stock repurchase and issued a special dividend, giving a big payout to its largest shareholder, Liberty Media.

Without action from Congress in coming weeks, tax cuts on capital gains and dividends will expire at the end of 2012.

Garmin shares rose 5 percent to $41.71 after Standard Poor’s said it would add the navigation device maker to its SP 500 index. Garmin will replace R.R. Donnelley Sons after the close of trading on December 11.

Several European equity benchmark indexes hit 2012 highs, boosted by hopes a U.S. budget deal will be reached before the year-end, and that the worst of Europe’s debt crisis might be over.

(Additional reporting by Herbert Lash; Editing by Bernadette Baum)


Article source: http://www.nytimes.com/reuters/2012/12/06/business/06reuters-markets-stocks.html?partner=rss&emc=rss

Apple to Resume U.S. Manufacturing

“Next year, we will do one of our existing Mac lines in the United States,” he said in an interview to be broadcast Thursday on “Rock Center With Brian Williams” on NBC.

Apple, the biggest company in the world by market value, moved most of its manufacturing to Asia in the late 1990s. As an icon of American technology success and innovation, the California-based company has been criticized in recent years for outsourcing jobs abroad.

“I don’t think we have a responsibility to create a certain kind of job,” Mr. Cook said in the Businessweek interview. “But I think we do have a responsibility to create jobs.”

The company plans to spend $100 million on the American manufacturing in 2013, according to the interviews, a small fraction of its overall factory investments and an even tinier portion of its available cash.

In the interviews, Mr. Cook suggested the company would work with partners and that the manufacturing would be more than just the final assembly of parts. He noted that parts of the company’s ubiquitous iPhone, including the “engine” and the glass screen, were already made in America. The processor is manufactured by Samsung in Texas, while Corning makes the glass screen in Kentucky.

Over the last few years, sales of the iPhone, iPod and iPad have overwhelmed Apple’s line of Macintosh computers, the basis of the company’s early business. Revenue from the iPhone alone made up 48 percent of the company’s total revenue for its fiscal fourth quarter ended Sept. 30.

But as recently as October, Apple introduced a new, thinner iMac, the product that pioneered the technique of building the computer innards inside the flat screen.

Mr. Cook did not say in the interviews where in the United States the new manufacturing would occur. But he did defend Apple’s track record in American hiring.

“When you back up and look at Apple’s effect on job creation in the United States, we estimate that we’ve created more than 600,000 jobs now,” Mr. Cook told Businessweek. Those jobs include positions at partners and suppliers.

Steve Dowling, a spokesman for Apple, declined on Thursday to provide additional details on Apple’s plans, referring to Mr. Cook’s interviews.

Apple has for years done the final assembly of some Macs in the United States, mainly systems that customers buy with custom configurations, like bigger hard drives and more memory than on standard machines.

Mr. Cook’s statements suggested Apple is planning to build more of the Mac’s ingredients domestically, although with partners. He told Businessweek that the plan “doesn’t mean that Apple will do it ourselves, but we’ll be working with people, and we’ll be investing our money.”

While Apple’s products are typically made in Asian factories owned by other companies, Apple itself often purchases the sophisticated manufacturing equipment required to make its cutting-edge designs, spending billions of dollars a year on such machines.

Foxconn Technology, which manufactures more than 40 percent of the world’s electronics, is one of Apple’s main overseas manufacturing contractors. Based in Taiwan, Foxconn is China’s largest private employer, with 1.2 million workers, and it has come under intense scrutiny over working conditions inside its factories.

In March, Foxconn pledged to sharply curtail the number of working hours and significantly increase wages. The announcement was a response to a far-ranging inspection by the Fair Labor Association, a monitoring group that found widespread problems — including numerous instances where Foxconn violated Chinese law and industry codes of conduct.

Apple, which recently joined the labor association, had asked the group to investigate plants manufacturing iPhones, iPads and other devices. A growing outcry over conditions at overseas factories prompted protests and petitions, and several labor rights organizations started scrutinizing Apple’s suppliers.

Almost all of the 70 million iPhones, 30 million iPads and 59 million other products Apple sold in 2011 were manufactured overseas. Apple employs 43,000 people in the United States and 20,000 overseas. An additional 700,000 people engineer, build and assemble iPads, iPhones and Apple’s other products, mostly abroad.

At a meeting with Silicon Valley executives in 2011, President Obama asked Steven P. Jobs, then the Apple chief executive, what it would take to make iPhones in the United States. Mr. Jobs, who died later that year, told the president, “Those jobs aren’t coming back.”

Nick Wingfield contributed reporting.


Article source: http://www.nytimes.com/2012/12/07/technology/apple-to-resume-us-manufacturing.html?partner=rss&emc=rss

European Central Bank Cuts Growth Forecast and Leaves Rates Unchanged

FRANKFURT — Acknowledging that the economy is likely to remain weak into next year, the European Central Bank sharply reduced its growth forecast for the euro zone Thursday as it left its main interest rate unchanged at a record low.

In something of a reversal from earlier optimism that the economy would start to recover next year, the bank’s president, Mario Draghi, announced that the prediction was now for somewhere between growth of 0.3 percent of gross domestic product and a contraction of 0.9 percent. That compares with a previous forecast of 0.5 percent growth.

“Available statistics and survey indicators continue to signal further weakness in activity in the last quarter of the year,” Mr. Draghi, said, adding that “weak activity is expected to extend into next year.”

Among the risks that could hamper future growth, Mr. Draghi listed “uncertainties about the resolution of sovereign debt and governance issues in the euro area, geopolitical issues and fiscal policy decisions in the United States.”

He expressed confidence that European leaders would reach agreement soon on a unified regulatory framework for banks, but he insisted that such a system cover all 6,000 banks in the region — a position that is sure to displease Germany, which wants to retain control over the small banks that do most of the lending in that country.

National regulators have been criticized for failing to force their banks to confront their problems, delaying a resolution of the euro zone crisis.

“One should aim at having this mechanism covering all euro area banks,” Mr. Draghi said, warning that failing to do so could lead to the stigmatizing certain banks. “You want to avoid fragmentation in the banking market. You want to keep a level playing field.”

The decision to leave the benchmark interest rate at 0.75 percent was an acknowledgment that policy makers need to look for alternative ways of stimulating the persistently moribund economy.

The central bank’s benchmark rate has lost much of its power to influence market rates in troubled corners of the euro zone. Credit remains expensive in countries like Portugal and Italy because of lingering fear among lenders that the euro zone could splinter.

As a result, Mr. Draghi has searched for other means to stimulate lending, in particular by pledging to buy bonds of troubled countries like Spain to help contain their borrowing costs and remove fear of euro breakup.

So far, the mere threat of E.C.B. bond buying has been enough to push down rates on government bonds. But many economists wonder how long the tenuous calm on debt markets can last.

Inflation in the euro zone has fallen close to the E.C.B.’s official target of 2 percent, leaving room for a rate cut. Still, a cut would have been a surprise. The central bank “has explained before that it thinks such a cut would have no impact on the economy as the transmission mechanism remains impaired,” Marie Diron, an economist who advises the consulting firm Ernst Young, wrote in an e-mail.

Mr. Draghi gave no clear indication whether a rate cut had been discussed among the central bankers, saying only that “there was a wide discussion, but in the end, the prevailing decision was to leave the rates unchanged.”

Some members of the E.C.B. governing council may well have been concerned that a rate cut would use up one of the last policy weapons they have left.

“The E.C.B. is out of ammo,” Carl Weinberg, chief economist at High Frequency Economics in Valhalla, New York, wrote Wednesday in his daily memo to clients. “We cannot imagine what it might do at its meeting tomorrow that would make any difference.”


Article source: http://www.nytimes.com/2012/12/07/business/global/european-central-bank-leaves-interest-rates-unchanged.html?partner=rss&emc=rss

McAfee Antivirus Software Pioneer Arrested in Guatemala City

The interior minister, Mauricio Lopez Bonilla, told The Associated Press that Mr. McAfee, 67, had been arrested on charges of entering Guatemala illegally. He said that Mr. McAfee had been arrested at a hotel in the capital and taken to a detention center for migrants who are in the nation illegally.

Mr. McAfee had been on the run for almost a month since his neighbor, Gregory Faull, on the Belizean island of Ambergris Caye was found dead at his home on Nov. 11. Police there cited Mr. McAfee as a “person of interest” in their investigation, but Mr. McAfee disapppeared.

But he did not disappear from the Internet. He kept up a continuous stream of comment on his blog and on Twitter, accusing the Belizean authorities of persecuting him.

On Tuesday, he resurfaced in Guatemala, dressed in a suit, his blond curls dyed dark brown.

Accompanied by his 20-year-old Belizean girlfriend, Samantha Venagas, and his Guatemalan lawyer, Telésforo Guerra, Mr. McAfee said that he would seek political asylum in Guatemala. Mr. Guerra, a former Guatemalan attorney general, told reporters at a chaotic news conference outside the Supreme Court that his client was being persecuted because he refused to pay Belizean authorities off any longer.

Mr. McAfee has not been associated with the software company that bears his name since 1994, when he sold it and began to pursue his other interests. He ran a yoga retreat and then built a complex in New Mexico to indulge his hobby of flying motorized ultralight airplanes.

He moved to Belize about four years ago, buying properties on the mainland and on Ambergris Caye. It was there that he clashed with Mr. Faull, who complained about the unleashed dogs that Mr. McAfee kept on his property.

On Nov. 9, several of the dogs were found dead. They had been poisoned.

During his time in Belize, Mr. McAfee had apparently become interested in developing a designer drug called MDPV. He posted extensively about his experiments on a Web site.

But he attracted the attention of Belizean authorities, who raided one of his properties in April. He spent a night in jail, but law enforcement officials found no evidence that he was producing methamphetamine and dropped the charges.

After that experience, though, Mr. McAfee appeared to become increasingly convinced that he was being persecuted by the Belizean government. Officials deny that they are persecuting him.

Mr. Guerra told Guatemalan reporters late Wednesday that since there was no warrant for Mr. McAfee’s arrest and since his client was not a fugitive, he would seek to have his client released and returned to the hotel where he would remain under guard.

Article source: http://www.nytimes.com/2012/12/06/business/mcafee-antivirus-software-pioneer-arrested-in-guatemala-city.html?partner=rss&emc=rss

Storm Slowed Hiring in November, but Services Sector Grew

The ADP National Employment Report, which is closely watched as it comes two days ahead of the government’s monthly national employment report, showed on Wednesday that the private sector added 118,000 jobs during the month, below expectations for a gain of 125,000.

The report largely reinforced economists’ forecast for a weak reading in the Labor Department’s payrolls report on Friday. Economists expect the economy added 93,000 jobs in November, down from 171,000 the month before, according to a Reuters survey.

“It’s close to what the market was expecting. If Friday’s employment report from the U.S. Labor Department comes in similar to this, that would be a good outcome,” said Terry Sheehan, an economic analyst at Stone McCarthy Research Associates.

Wednesday’s data, which also included better-than-expected factory orders and productivity, presented a mixed picture of the American economy. That was partly a reflection of crosscurrents from the storm, as well as difficult budget negotiations in Washington aimed at averting the so-called fiscal cliff, a series of automatic government spending cuts and tax increases at the beginning of next year.

A report on the American services sector showed a similar slowing in hiring during the month. But forward-looking indicators pointed to faster growth as a rise in new orders and business activity helped offset a slowdown in employment and prices.

The Institute for Supply Management said its services index rose to 54.7 last month from 54.2 the month before. The reading topped economists’ forecasts for growth to 53.5, according to a Reuters survey. In the report, 50 marks the divide between growth and contraction.

“The much larger service side of the U.S. economy remains relatively healthy,” said Joseph Trevisani, chief market strategist at Worldwide Markets. “It has so far avoided the contraction in manufacturing, but worse is probably coming in the first quarter of next year as the economy continues to slow.”

Also on Wednesday, a report showed new orders received by factories unexpectedly rose 0.8 percent in October as demand for motor vehicles and a range of other goods offset a slump in defense and civilian aircraft orders. The Commerce Department also revised October’s figures upward on nonmilitary capital goods orders excluding aircraft in a hopeful sign that the slowdown in business investment in recent months might soon draw to a close.

Economists at Barclays said the strong reading, driven by orders and shipments of capital goods, equipment used to make other things, means the economy will grow faster than expected in the fourth quarter. They raised their gross domestic product growth outlook for the quarter to 2.2 percent from 2 percent.

The Labor Department reported that nonfarm productivity increased at an annual rate of 2.9 percent in the third quarter, a faster clip than initially expected, as businesses held the line on hiring even as output surged, with unit labor costs falling at their fastest pace in almost a year.

With the effects of the storm out of the way in the months ahead, hiring is expected to return to its previous trend even if more slowly than most would like to see with the employment rate still hovering near 8 percent.

Mark Zandi, chief economist of Moody’s Analytics, who helps compile the ADP report, said underlying jobs growth was closer to 150,000 in November after discounting the impact of the storm as well as seasonal jobs brought forward at the start of the holiday season.

“Abstracting from the storm, the job market turned in a good performance during the month,” he said. “Superstorm Sandy wreaked havoc on the job market in November, slicing an estimated 86,000 jobs from payrolls.”

Article source: http://www.nytimes.com/2012/12/06/business/economy/storm-slowed-hiring-in-november-but-services-sector-grew.html?partner=rss&emc=rss

In Inquiry, Drilling Company Chief Quits

The executive, Pietro Franco Tali, also served as deputy chairman of the company, in which the big Italian oil company Eni has a controlling stake.

A Saipem spokesman, Andrea Pagano Mariano, said the investigation related to contracts on oil and gas projects in Algeria involving the state oil company Sonatrach. He declined to elaborate.

Although Mr. Tali “is in no manner a subject of the prosecutor’s investigation, he felt that his resignation would better enable the company to respond to the prosector’s inquiry,” Saipem said in a statement. The activities were said to have occurred through 2009.

Eni, which has about 43 percent of Saipem’s shares, held an emergency board meeting Wednesday night, according to a news release. In recent days, it said, the board had urged the drilling company’s chairman, Alberto Meomartini, “to take immediate remedial actions in managing the situation.”

Eni’s chief financial officer, Alessandro Bernini, who held the same position at Saipem until 2008, also resigned Wednesday, although he “considers that his actions were right and proper,” according to an Eni release.

An Eni spokeswoman, Erika Mandraffino, said the accusations about Saipem came to Eni’s attention a few days ago. She declined to indicate what the inquiry involves in Algeria, where Saipem has billions of dollars’ worth of oil and gas operations and drilling contracts, and about 2,600 employees.

Saipem’s board named the chief operating officer of Eni’s gas and power division, Umberto Vergine, to replace Mr. Tali as Saipem’s chief.

The company also suspended Pietro Varone, chief operating officer of Saipem’s engineering and construction unit, following a notice of inquiry from the prosecutor related to the same investigation. Saipem’s board also ordered an internal audit using external consultants.

“Saipem believes that its business activities have been conducted in compliance with applicable, internal procedures” and its code of ethics, the company said, and has offered its full cooperation to the prosecutor’s office.

The investigation is a blow to ENI, which under its chief executive, Paolo Scaroni, is working to establish itself as a premier exploration and production company. Earlier on Wednesday, Eni announced a new natural gas discovery off the coast of Mozambique, where the company has become an early leader in staking a position in that country’s promising gas reserves.

Although Eni stresses that Saipem is independently managed, the two companies are closely intertwined.

In an interview on Nov. 19, Mr. Scaroni said that while the company was divesting other noncore assets, he considered Saipem “a major asset.”

He said that Saipem was “managed at arm’s length” because Eni was only “one of the customers” of the engineering company. He said Saipem was the top candidate to build the portion of the proposed South Stream natural gas pipeline from Russia to Eastern and Western Europe, under the Black Sea.

Eni, along with Gazprom, is a crucial backer of the project.

Article source: http://www.nytimes.com/2012/12/06/business/global/drilling-company-chief-resigns-over-inquiry.html?partner=rss&emc=rss

Advertising: Campaigns for Electronic Cigarettes Borrow From Their Tobacco Counterparts

Marketers of e-cigarettes are introducing campaigns that echo the traditional appeals for tobacco cigarettes in both content and media placements.

For instance, the ads have catchy themes that could be deemed on a par with “I’d walk a mile for a Camel” or “Only Viceroy has a thinking man’s filter … a smoking man’s taste.” Ads for Njoy King carry the theme “Cigarettes, you’ve met your match” and ads for Blu eCigs carry the theme “Rise from the ashes.”

Some e-cigarette ads feature celebrity endorsers, in the way that ads for conventional cigarettes once featured actors, athletes, doctors and even cartoon characters. The actor Stephen Dorff began appearing in October in a campaign for Blu eCigs, which was acquired this year by Lorillard, the maker of mainstay cigarette brands like Kent, Old Gold and Newport.

Commercials for Blu eCigs, as well as brands like Njoy King, are running on cable networks, in the same way that spots for tobacco cigarettes were once shown on the ABC, CBS and NBC broadcast networks. (Because e-cigarettes are not tobacco products, they are not covered by the longtime restrictions on using commercials to sell tobacco cigarettes.)

And while no e-cigarette has a jingle in its commercials in the way that consumers were once serenaded with tunes like “Winston Tastes Good Like a Cigarette Should” and “Be Happy — Go Lucky,” Njoy King is using the hit song by Foreigner, “Feels Like the First Time,” in its commercials.

Njoy Inc., which also sells e-cigarette brands like OneJoy, is introducing this week the campaign for Njoy King, with a budget estimated at $12 million to $14 million through the next six months. The campaign, being handled by several agencies, includes the commercials; ads in print, in stores and online; sampling; the Njoy Web site, njoy.com; social media; and events in clubs and restaurants.

The campaigns for the various e-cigarette brands are “going to increase awareness and trial” and “bring some excitement to the category,” said Bonnie Herzog, an analyst at Wells Fargo Securities in New York who follows the tobacco industry — and also, increasingly, the e-cigarette industry.

“Let’s just say, my phone is ringing,” Ms. Herzog said. “It is not a fad.”

“E-cigarettes are to tobacco what energy drinks were or are to beverages,” she added. “It is a small category that is growing very fast, embraced by retailers and consumers.”

Annual sales for e-cigarettes in the United States are at $500 million, compared with $100 billion for tobacco cigarettes, Ms. Herzog estimated. But as “e-cigarettes continue to evolve in technology,” she said, and as additional large tobacco marketers “jump in” the category, it can become a “game-changer.”

In addition to Blu eCigs and Njoy Inc., Ms. Herzog also follows e-cigarette makers that include Vapor Corporation, which sells brands like Fifty-One and Krave, and the Fin Branding Group, which sells Fin. Blu eCigs and Njoy Inc. are considered to be the sales leaders.

“Our No. 1 objective is getting this product into people’s hands,” Andrew Beaver, chief marketing officer at Njoy Inc. in Scottsdale, Ariz., said of Njoy King.

“The more like the real thing” it is perceived to be, he added, “the more smokers get into the category.”

So the commercials describe Njoy King as “the first electronic cigarette with the look, feel and flavor of the real thing.” And print ads carry headlines like “The most amazing thing about this cigarette? It isn’t one.”

The commercials have been accepted by cable channels owned by Discovery Communications and Viacom, Mr. Beaver said, as well as local broadcast stations in markets like Chicago, Dallas, Los Angeles, New York, San Francisco and Seattle.

So far, no broadcast networks have agreed to carry the spots, he said, adding: “We applaud those cable networks and spot stations working with us to provide adult smokers an alternative to cigarettes, and our loyalty to them will be self-evident. Other networks have yet to see the light and until they do, they won’t see our money either.”

The Arcade Creative Group in New York, which is the creative agency for Njoy King, was asked to “let the product be the hero,” Mr. Beaver said, and “appeal to a broad audience of adult cigarette smokers, ages 21 to 45.”

Arcade, part of Sony Music Entertainment, was hired in June. “It was the first time in a pitch probably in my life that I ever favorably referred to my cigarette experience as a young guy” in the business, said Adam Owett, president of Arcade, who worked on Lucky Strike Lights and Carlton at the Daniel Charles agency in the 1980s and gave up smoking around 1988.

“The way I’ve been thinking of it is as ‘The shock of the old,’ ” Mr. Owett said, in that “the classic cigarette ad cues and images have basically disappeared from the advertising and media landscape.”

“This is a modern take on how you’d introduce a cigarette,” he added, that ought to “grab the attention of the committed smoker.”

The other agencies working on the campaign include Horizon Media, for media services; Factory 360, for sampling; Sloane Company, for public relations; and Forum Strategies and Communications, for public affairs and policy.

Article source: http://www.nytimes.com/2012/12/06/business/media/campaigns-for-electronic-cigarettes-borrow-from-their-tobacco-counterparts.html?partner=rss&emc=rss