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Apple Tops Expectations on Strong iPhone Sales

July 23, 2013 by Leave a Comment

Investors did not seem to mind, at least in the short term, sending the company’s shares about 4 percent higher in after-hours trading. Strong iPhone sales helped beat the expectations of Wall Street.

But Apple’s earnings report on Tuesday highlighted some of the challenges the company faces as it continues to expand overseas. The company sells plenty of devices in the United States, but sales have lagged in some larger overseas markets, which are crucial for its future growth.

China has been especially problematic for the company. Overall sales of Apple devices in China fell 4 percent compared with the same quarter last year. And in Hong Kong, Apple’s sales were down about 20 percent — a trend that Timothy D. Cook, the company’s chief executive, found puzzling.

“Hong Kong is an international shopping haven,” Mr. Cook said on the company’s earnings call in response to an analyst’s questions about Apple’s performance in China. “We saw some dramatic downturn there. It’s not totally clear exactly why that occurred.”

Gaining a foothold in foreign markets is becoming increasingly vital for Apple. Its growth has slowed in the most recent quarters, as its devices have largely saturated the United States and some top markets in Europe.

The tepid growth has led many investors to clamor for a new blockbuster product to restart growth and give Apple’s sagging stock a much-needed lift. But no such product has been announced. For several quarters now, Mr. Cook has suggested that the company has plenty of new products in the pipeline, and that some could reach the public this fall or next year.

The company could decide to introduce a cheaper iPhone to spur growth in China and other foreign markets, or even a so-called smartwatch that would compete in a brand-new market of wearable computers. Those ideas have long been discussed and considered at the company.

“Competition is heating up,” said Laurence Isaac Balter, chief market strategist at Oracle Investment Research, which has clients that own Apple shares. “They need to come up with some game-changers pretty soon.”

The third quarter is typically a slow time for Apple. That is because the company traditionally introduces a new iPhone model in the fall, so in the summer many consumers are waiting for the next model to be released.

But sales of iPhones were strong. The company sold 31.2 million iPhones, up from 26 million in the same period a year ago. It was the most Apple had ever sold in a third quarter.

Those sales helped generate a net income in the third quarter of $6.9 billion, or $7.47 a share. But that was down from $8.8 billion in the same quarter a year earlier. The company said revenue was roughly flat at $35.3 billion, from $35 billion a year ago.

The net income beat the expectations of Wall Street analysts. They had expected $7.32 a share and revenue of $35 billion, according to a survey by Thomson Reuters.

Analysts closely watch Apple’s gross profit margins. For the third quarter, Apple’s gross margin was 36.9 percent, down from 42.8 percent a year ago. In April, Apple warned that its gross margin would continue to fall in the fiscal third quarter to 36 to 37 percent.

Strong sales of Apple’s cheaper iPads and older iPhones are putting the squeeze on the margins. Apple did not disclose how many of each phone or tablet model it sold. But it said that while its iPhone 5 was the best seller, sales of the previous generations, the iPhone 4 and iPhone 4S, were also strong. Late last year, Apple added the cheaper iPad Mini to its lineup.

Even with the Mini, Apple’s iPad sales were a disappointment, coming in at 14.6 million for the quarter, missing analyst estimates for 16.7 million. Mac sales were also down slightly, at 3.8 million, from 4 million a year ago.

Investors concerned about Apple’s growth have punished the company’s stock. The stock price has fallen by roughly 40 percent from its peak of $705.07 in September. Shares closed at $418.99 on Tuesday, down 1.7 percent, before gaining ground in after-hours trading.

Apple may face a challenge in China, but the tech industry’s other two giants, Microsoft and Google, have their struggles, too. Microsoft posted a profit of almost $5 billion for the quarter, missing expectations of analysts, thanks in part to disappointing sales of its Surface tablet and an industrywide decline in sales of personal computers. Google also posted a profit, of $3.23 billion, but still missed analysts’ expectations as its desktop search business continued to slow and ad prices shrank.

Mr. Cook told investors to stay optimistic about Apple in China. About half a million people there are creating apps for iOS, Apple’s mobile software system for iPhones and iPads, he said. Sales of the iPad in greater China were up 8 percent and up 37 percent in mainland China, he said.

“Over the arc of time, China is a huge opportunity for Apple,” Mr. Cook said, “so I don’t get discouraged over a 90-day kind of cycle with economic factors.”

Article source: http://www.nytimes.com/2013/07/24/technology/apple-tops-expectations-on-strong-iphone-sales.html?partner=rss&emc=rss

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The Media Equation: Big News Forges Its Own Path

June 16, 2013 by Leave a Comment

During a visit to Toronto last week, I noticed the entire city was pivoting around a story by Gawker, a site that has a broad range of interests, but at its core is dedicated to detailing the running silliness of life in Manhattan.

I saw and heard Gawker mentioned dozens of times — on the television in the hotel and on the front pages of both The Globe and Mail and The Toronto Star, even while I was in line for the ferry.

Why? Because a month ago, while the rest of the city’s news media gossiped, looked for string or looked the other way, Gawker wrote that Rob Ford, the mayor of Toronto, had been caught on video smoking crack cocaine.

The Toronto Star, which had been looking into the story, immediately published its own take after the news broke, but Gawker then initiated a crowdsourced effort to buy the cellphone video. (The site reached its $200,000 goal, but by then the people who had claimed to have the video had gone to ground. John Cook, the editor of Gawker, says he still holds out a slim hope that the video will surface. Gawker will donate the money to an addiction recovery program in Canada if it doesn’t.)

The story got new life on Thursday morning, when law enforcement officials staged a huge raid in the area where the mayor is said to have been taped, and they made a number of arrests. All anybody could talk about was how it might affect the mayor. Mr. Ford has repeatedly denied that such a tape exists or that he uses crack cocaine.

By traditional news standards, what Gawker did was transgressive every which way: it called a sitting mayor of the fourth-largest city in North America a crackhead based on a video that it said it had seen but did not possess. It also asked its readers to chip in to pay for its version of journalism. (“Oh, you mean like The New York Times does every day with its paywall?” quipped Mr. Cook.)

But even though Gawker was working the far edge of journalistic practices, the rest of the press in Toronto was compelled to follow because the story was out there and taking on a life of its own.

It is not a totally new phenomenon. Any number of big stories have started out as untouchable in suspect news outlets like The National Enquirer, but eventually broke into the mainstream. But now information increasingly finds its own digital path, and if the news is big enough, it will be seen by all, regardless of who first puts it out in the world.

It is the supply side of an equation that my colleague Brian Stelter first touched on five years ago, citing a student who said, “If the news is that important, it will find me.”

Traditional news organizations used to be free to break news — or not — in their backyard and on their chosen beats. Now they have to be looking over their shoulder — at everyone. And in virtually every aspect of culture, from business to technology to fashion, the big guys now compete with a range of Web sites that break their share of news through obsessiveness and hyperfocus.

The big news that Rupert Murdoch was getting a divorce after a 14-year marriage to Wendi Murdoch did not come from tabloid newspapers, gossip magazines or E!, but from Deadline Hollywood, the business entertainment site run by Nikki Finke.

The business disruption in the media world caused by the Internet has been well documented. But a monopoly on scoops, long a cherished franchise for established and muscular news organizations, is disappearing. Big news will now carve its own route to the ocean, and no one feels the need to work with the traditional power players to make it happen.

Sources and news subjects simply have far more options now. In politics, for instance, people who have had rocky relationships with the news media can just fire up a video camera, upload to the Web and set up their own little news channel. Sarah Palin did it when she retired, as did Michele Bachmann more recently. Anthony Weiner, the disgraced former congressman, announced his candidacy for mayor of New York by releasing a video in the dead of night.

If an abuse of power akin to Watergate happened today, it might not take the might and muscle of The Washington Post to get the story. The Mitt Romney “47 percent” video, arguably a turning point in the last presidential campaign, came out on the Web site of Mother Jones, a relatively small liberal magazine.

In the 2008 campaign, the comment that got Barack Obama in hot water, about “bitter” voters who “cling to guns or religion,” was first reported on The Huffington Post by Mayhill Fowler, an unpaid blogger. And of course once big news breaks, everyone is forced to follow along.

The jailbreak on information reached a pinnacle less than two weeks ago, when Glenn Greenwald, a columnist for The Guardian, broke the news of systematic surveillance by the National Security Agency, after he was chosen by Edward Snowden as a conduit for a big leak. Having a large presence in Washington and a brand name does not ensure news supremacy: Mr. Greenwald is a former lawyer turned journalistic advocate of civil liberties — an American writing for a newspaper based in Britain while living in Brazil. Because a source picked him to break the biggest story of the year, the rest of us did as well. And the video that accompanied it, as in the instance of Mrs. Bachmann, Ms. Palin and Mr. Weiner, allowed Mr. Snowden to make his own case before he was defined by media and government.

“There has been an institutional bias that traditional outlets cling to — that anyone who doesn’t do the things that they do in the way that they do them isn’t doing real journalism,” Mr. Greenwald said in a phone interview. “Since nobody can say that the stories that we did are not serious journalism that has had a very big impact, the last week will forever put an end to that myth.”

In this instance, the historical strengths of big news organizations like the one I work for — objectivity, deep sources in the government and a history of careful reporting — were seen by Mr. Snowden as weaknesses. He went to Mr. Greenwald because they share values, because Mr. Greenwald is a loud and committed opponent of the national security apparatus and because he is not worried what the government thinks of his reporting. Of course, Mr. Greenwald had the international reach of The Guardian behind his story, and Mr. Snowden also shared information with The Washington Post, although it was clear that Mr. Greenwald’s past coverage on the issue was as important as where he worked.

The way to break a big story used to be simple. Get the biggest outlet you can to take an interest in what you have to say, deliver the goods and then cross your fingers in hopes that they play it large.

That’s now over. Whether it’s dodgy video that purports to show a public official smoking crack or a huge advance in the public understanding of how our government watches us, news no longer needs the permission of traditional gatekeepers to break through. Scoops can now come from all corners of the media map and find an audience just by virtue of what they reveal.

E-mail: carr@nytimes.com;

Twitter.com/carr2n.

Article source: http://www.nytimes.com/2013/06/17/business/media/big-news-forges-its-own-path.html?partner=rss&emc=rss

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Washington Memo: Torches and Pitchforks for I.R.S. but Cheers for Apple

May 22, 2013 by Leave a Comment

Armed with a blistering report that said Apple had avoided paying billions of dollars in taxes, senators this week had choice words for the company’s chief executive, Timothy D. Cook, when he appeared before the Senate’s Permanent Committee on Investigations on Tuesday.

They called him a “pretty smart guy” and praised the “incredible legacy” his company had left. They gushed over his products, calling Apple “a great company” that had managed to “change the world.”

True, Senator John McCain, Republican of Arizona, and Senator Carl Levin, Democrat of Michigan, vigorously attacked Mr. Cook over tax gimmicks. But the overall mood of the panel was summed up by Senator Claire McCaskill, a Democrat from Missouri, who declared, “I love Apple!”

It was considerably different for the officials of the Internal Revenue Service, whose presence was also “requested” by lawmakers to face accusations that the agency had improperly targeted conservative Tea Party groups for special scrutiny.

On Wednesday, Lois Lerner, who leads the I.R.S.’s division on tax-exempt organizations, prompted angry denunciations from lawmakers by proclaiming her innocence and then quickly invoking her Fifth Amendment right to refuse to answer questions. Representative Tim Walberg, Republican of Michigan, marveled at the “amount of ineptitude” at the I.R.S. and proposed that Ms. Lerner’s refusal to answer questions from the committee suggested “there’s some concern about criminality” regarding what happened at the tax agency.

Representative John Mica, Republican of Florida, accused Ms. Lerner’s former boss, Douglas Shulman, of having “closed down or gagged” I.R.S. employees from telling the truth.

In short, Wednesday’s I.R.S. hearing felt like an inquisition — unforgiving, angry, prosecutorial.

Mr. Cook, by contrast, took his hot seat in front of senators who seemed halfhearted in their desire to beat up on the rich guy who makes their iPhones, and whose products are far more popular than they are.

“With him, they were just not going to go up against an American success story,” said Neil Eggleston, a veteran Washington lawyer who has prepared many government officials to face a grilling at the hands of lawmakers.

But Mr. Eggleston said Ms. Lerner and the other I.R.S. officials never had a chance at changing the narrative of their hearing. Before such sessions, Mr. Eggleston said, he is honest with his clients: “You are going to get beat up. You are going to get yelled at. There’s no way to turn the tide in your favor.”

The hearings of Mr. Cook were in striking contrast to those 15 years ago of Bill Gates, the chairman of Microsoft, who was skewered by lawmakers and his rivals over using monopoly power to run over his business rivals.

Mr. Gates was disdainful of Washington and politicians when he arrived from Seattle for his first Capitol Hill appearance in 1998. That did not serve him well. Microsoft’s Windows — highly crash-prone at the time — along with irritants like “Clippy,” the obsequious talking paper clip who popped up on computer screens offering to help write letters, hardly endeared Mr. Gates to consumers.

Not so Mr. Cook and Apple. Even the often-cantankerous Mr. McCain, who as recently as 2008 still used an old-fashioned flip phone, concluded his questioning with a jocular tech support query. “What I really wanted to ask you is why the hell I have to keep updating the apps on my iPhone all the time,” Mr. McCain said, prompting guffaws from the dais and the audience.

Public relations experts who help witnesses survive Capitol Hill hearings say the tenor of the sessions is often set well before the witnesses take their seats. How much the witnesses subsequently are pummeled often depends on whether they are able to tap into any reservoirs of good will on their issues among the public.

As an example, when lawmakers created a spectacle in 2005 by demanding the testimony of the nation’s top baseball stars during an investigation into steroid use, the questioning got rough. But the players were still heroes to millions — certainly more so than most of the lawmakers. (After the hearings, congressional staff members crowded around the sluggers, asking for autographed baseballs.)

In contrast, lawmakers pilloried the top executives of the auto companies in 2008 after they admitted to flying on corporate jets to Washington to beg the government for as much as $25 billion in help. Their appeals, though, came in the middle of an economic crisis and were roundly denounced by an outraged public.

This week, Mr. Cook tapped into the public’s good will to defuse the congressional anger. The I.R.S. officials had no such luck.

“This just shows the trust deficit that the I.R.S. has with the American public,” said Kevin Madden, a veteran Republican strategist who advises corporate clients on communications strategies. “The only thing that the American public hates more than the Congress right now is the I.R.S.”

There is always the possibility that a witness can change his or her fortunes by saying just the right thing at a congressional hearing.

Mr. Cook was well prepared, observers of his testimony said. During the hearing, he appeared to know as much about tax policy as the lawmakers asking him questions. (Mr. Cook might also have been helped by the “reality distortion field” that journalists often joked surrounded his predecessor, Steve Jobs, during rollouts of the latest “magical” iPhone or iPad.)

But Mr. Madden and others said the I.R.S. officials could hardly have said anything to defuse the anger, especially among Republicans eager to keep the issue alive.

Perhaps that was part of Ms. Lerner’s calculation when she decided to make an opening statement — and then shut up.

“I know that some people will assume that I’ve done something wrong,” she said. “I have not. One of the basic functions of the Fifth Amendment is to protect innocent individuals, and that is the protection I’m invoking today.”

Kitty Bennett contributed reporting.

Article source: http://www.nytimes.com/2013/05/23/business/torches-and-pitchforks-for-irs-but-cheers-for-apple.html?partner=rss&emc=rss

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C.E.O. Denies That Apple Is Avoiding Taxes

May 21, 2013 by Leave a Comment

“It’s important to tell our story, and I’d like people to hear directly from me,” Mr. Cook told a Senate panel during questioning by Senator John McCain, an Arizona Republican. Apple, he said, pays “all the taxes we owe — every single dollar.”

Rather than taking unfair advantage of what Congressional investigators say are a host of tax code loopholes, Mr. Cook said his company was actually a victim of an outdated tax system.

“Unfortunately, the tax code has not kept up with the digital age,” Mr. Cook said. “The tax system handicaps American corporations in relation to our foreign competitors who don’t have such constraints on the free movement of capital.”

On Monday, Congressional investigators unveiled a detailed report showing how Apple subsidiaries based in Ireland but spanning other regions had helped the company pay as little as one-twentieth of 1 percent in taxes on billions of dollars in income.

Mr. Cook sought to draw a sharp distinction between sales in the United States and those abroad, arguing the company had complied with local laws everywhere.

“The way I look at this is that Apple pays 30.5 percent of its profits in taxes in the United States,” he said. “We do have a low tax rate outside the U.S., but this is for products we sell outside the U.S.”

Again and again, Mr. Cook said Apple was proud to be an American company, even if the majority of its sales took place outside the United States and were taxed at lower rates. “We are an American company, whether we are selling in China or Egypt or Saudi Arabia.”

Before Mr. Cook and two other top Apple executives testified, however, other witnesses suggested Apple had pushed to take advantage of the tax code.

J. Richard Harvey Jr., a professor at Villanova Law School, estimated that Apple’s legal maneuvering had saved the company $7.7 billion in potential American taxes in 2011.

“Apple is an iconic U.S. multinational corporation that has enjoyed extraordinary financial success,” he said. “In addition to demonstrating excellence in designing, building and selling consumer products, Apple has been very successful at minimizing its global income tax burden.”

For example, in 2011, 64 percent of Apple’s global pretax income was recorded in Ireland, where only 4 percent of its employees and 1 percent of its customers were located, Mr. Harvey said.

While Apple has repeatedly insisted it does not engage in “tax gimmicks,” Mr. Harvey was dubious. “Apple does not use tax gimmicks? I about fell off my chair when I read that,” he said.

While Mr. McCain, the panel’s top Republican, and Senator Carl Levin, a Democrat, were critical of Apple, the company was not without its defenders on the panel.

“I’m offended by the spectacle of dragging in Apple executives,” said Senator Rand Paul, a Kentucky Republican. “What we need to do is apologize to Apple and compliment them for the job creation they’re doing.”

Instead of “bullying” Apple executives, Mr. Paul said, “we should have brought in a giant mirror to look at the reflection of Congress. If you want to assign blame, look in the mirror and see who created this mess.

“Apple hasn’t broken any laws, yet Apple is forced to sit through a show trial,” he said.

Mr. Paul’s comments drew a sharp response from Mr. Levin.

“Apple is a great company,” Mr. Levin said. “But they don’t have a right to decide in my book how much in taxes they are going to pay and to whom they are going to pay them.”

Article source: http://www.nytimes.com/2013/05/22/technology/ceo-denies-that-apple-is-avoiding-taxes.html?partner=rss&emc=rss

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Media Decoder Blog: Daulerio Is Leaving as Gawker Editor

January 10, 2013 by Leave a Comment

5:49 p.m. | Updated Gawker Media is getting a change in leadership. A.J. Daulerio, who became the editor of Gawker just over a year ago, is leaving and will be replaced by the writer John Cook.

Nick Denton, the founder and owner of Gawker Media, confirmed the moves in an e-mail to New York Magazine on Thursday. In an internal memo, Mr. Denton said that Mr. Daulerio’s tenure at Gawker “has been much like him: bold, infuriating, unpredictable … and often brilliant.” Mr. Denton called Mr. Cook “a surprisingly powerful opinion writer and a gossip of the most refined kind.”

Mr. Daulerio was named the head of Gawker in late November of 2011, replacing Remy Stern. He had moved up from his post as the editor of Deadspin, the company’s sports and men’s lifestyle site.

Mr. Cook has been working as a reporter at Gawker after previously being at Yahoo.

Here is the text of Mr. Denton’s memo to the staff:

AJ’s tenure at Gawker has been much like him: bold, infuriating, unpredictable… and often brilliant. He’s brought out work as compelling as Adrian Chen’s expose of Reddit’s most notorious troll; he’s drawn in new talents like Caity Weaver and Neetzan Zimmerman; and he’s melded both the writers he inherited and new hires into the strongest editorial team Gawker has ever seen. I don’t know how he does it.

I mean, I really don’t fully understand: AJ breaks all the usual rules of orthodox management and has still been the most successful editor of Gawker.com. (As a former editor of the site myself, I’m slightly piqued.)

Hamilton’s series on the pain of unemployment, the Bain files, web and hacker culture, Trayvon Martin, Rich’s fearlessly honest discussion of gaydom: all made possible by AJ. Even though AJ took the pressure off writers to deliver traffic with every piece, the site now draws 10m visitors a month.

It’s a testament to the power of encouragement.

And that’s why he’s passing the role to someone on the team. Continuity is our priority.

John Cook is the most experienced reporter on the team, a surprisingly powerful opinion writer and a gossip of the most refined kind. He has natural authority. John will preserve the crew and build on the success of 2012. I’m grateful to AJ for leaving Gawker in such great shape and I can’t wait to see what John and his colleagues will do in 2013. Roger Ailes’ excitement may be more muted.

Article source: http://mediadecoder.blogs.nytimes.com/2013/01/10/daulerio-is-leaving-as-gawker-editor/?partner=rss&emc=rss

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In Shift of Jobs, Apple Will Make Some Macs in U.S.

December 8, 2012 by Leave a Comment

On Thursday, Apple’s chief executive, Timothy D. Cook, who built its efficient Asian manufacturing network, said the company would invest $100 million in producing some of its Mac computers in the United States, beyond the assembly work it already does in the United States. He provided little detail about how the money would be spent or what kinds of workers might benefit.

Apple, which long manufactured parts in the United States but stopped about a decade ago, has been under pressure to create more jobs here given its market power. It sold 237 million iPods, iPads, Macs and other devices in the year ended in September.

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

Some analysts are hopeful that the move by a big, innovative company like Apple could inspire a broader renaissance in American manufacturing, but a number of experts remain skeptical.

“I find it hard to see how the supply chains that drive manufacturing are going to move back here,” said Andre Sharon, a professor at Boston University and director of the Fraunhofer Center for Manufacturing Innovation. “So much of the know-how has been lost to Asia, and there’s no compelling reason for it to return. It’s great when a company says they want to create American jobs — but it only really helps the country if those are jobs that belong here, if it starts a chain reaction or is part of a bigger economic shift.”

Over the last few years, companies across various industries, including electronics, automotive and medical devices, have announced that they are “reshoring” jobs after decades of shipping them abroad. Lower energy costs in America, rising wages in developing countries like China and Brazil, quality control issues and the desire to keep the supply chain close to the gigantic American consumer base have all factored into these decisions.

“Companies were going abroad in pursuit of cost reduction, and it turns out there were a lot of unintended costs,” said Diane Swonk, chief economist at Mesirow Financial. “America has been looking a lot more competitive lately.”

Even so, the impact on the American job market has been modest so far. Much of the work brought back has been high-value-added, automated production that requires few actual workers, which is part of the reason America’s higher wages are not scaring off companies.

American manufacturing has been growing in the last two years, but the sector still has two million fewer jobs than it had when the recession began in December 2007. Worldwide manufacturing appears to be growing much faster, even for many of the American-owned companies that are expanding at home. General Electric, for example, has hired American workers to build water heaters, refrigerators, dishwashers and high-efficiency topload washers, but continues to add more jobs overseas as well.

Apple has not announced plans to move the complex, faster-growing portions of its product lines. Macs now represent a relatively small part of Apple’s business, accounting for less than 20 percent of its nearly $36 billion in revenue in its most recent quarter. The company’s iPad and iPhone products, which amount to nearly 70 percent of its sales, will continue to be made in low-cost centers of manufacturing like China, mostly on contract with outside companies like Foxconn.

Mr. Cook’s statements suggested Apple was planning to build more of the Mac’s components domestically, but with partners. He told Bloomberg 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.”

Whether Apple’s newly announced plan might help create other higher-paying jobs along the supply line depends on the nature of the manufacturing.

Other computer manufacturing has been trickling back to the United States after largely shifting overseas in the 1990s.

Charles Duhigg and Quentin Hardy contributed reporting.

This article has been revised to reflect the following correction:

Correction: December 8, 2012

An article on Friday about Apple’s decision to build some Mac computers in the United States included erroneous information from the company about the source of desktops that Hewlett-Packard sold in Europe up until five years ago. Most of the desktops — not all — were from China.

 

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

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Bits Blog: Apple Introduces New iPhone

September 12, 2012 by Leave a Comment

Things are winding down. The Foo Fighters wowed the crowd enough that people actually put down their iPads and laptops and gave the band a standing ovation. People are now filing out of the auditorium and walking into the hands-on area to see the new iPhone 5s with their own eyes.

“I hope you are as excited as we are,” says Mr. Cook.

Thanks for following our updates, and watch for our complete article about the event soon.

Yup, it’s the Foo Fighters, rocking out on stage in the Yerba Buena auditorium. Dave Grohl is singing “Times Like These.” I’m guessing this isn’t Apple’s signature “one more thing,” but you never know.

They’ve moved on to “There Goes My Hero.” Brings back memories: I totally slow-danced to this song in a musty bar somewhere.

Mr. Cook really should have hired Beyonce to close out the event with her hit “Upgrade U.”

Mr. Cook is back, introducing a live performance from the …. Foo Fighters?

A new 2-gigabyte iPod shuffle costs $49, and the 16-gigabyte Nano costs $149. The older 16-gigabyte iPod Touch is now $199, while the 32-gigabyte one costs $249. The new, souped-up iPod Touch starts at $299 for the 32-gigabyte model.

Audio technology is serious business for Apple. The company is showing a super-scientific video detailing how its new earbud design boosts the acoustic chamber in the ear, or something, and how sound travels from its earbuds into a user’s ear canal. It’s hard not to read this as a dig at HTC and Beats by Dre, which have teamed up to release special audio technology and headsets with HTC smartphones.

Beck Diefenbach/Reuters

Looks like Apple’s refreshing all of its accessories. In addition to rolling out new connector cords, the company is releasing a new version of its headphones, called EarPods. To date, the company has shipped 600 million of its signature white earbuds.

The new iPod Touch will also have Siri, so that should keep the kids entertained for awhile. Also, yellow is apparently the new black as well, because the new Touch comes in yellow, as well as blue, black and red. (Anyone else think they look kind of like a Lumia?)

Nick Bilton/The New York Times

More details on how the iPod Touch is stepping up its game: It will allow 40 hours of music playback and 8 hours of game play. Apple’s including a 5-megapixel camera with a flash on the new Touch, one that will have the same lens as the iPhone 5.

David Pogue notes on Twitter: “There’s a tiny metal circle on the back of the new Touch. Push it, it pops up, so you can attach a wrist strap.” Apple’s bringing back the wallet chain?

The crowd is loving a demo of a game called Clumsy that lets players mess around with a cute ninja character.

The iPod Touch is Apple’s prime gaming machine, with access to 175,000 games and entertainment apps. The company is introducing a skinnier version of the Touch, one that weighs 88 grams, is 6 millimeters wide and features the company’s high-resolution “retina” display. The Touch is also getting the A5 chip, giving the machine a boost in handling graphics.

The new Nanos have multitouch screens. Runners will be able to make use of a pedometer and Nike+ apps. Bluetooth integration will let users send music to their car stereos and wireless speaker systems like Jawbone’s Jambox.

We’ll aim to answer your questions about the Apple announcements. Leave a comment on this post and our reporters will pick a batch to answer.

To date, Apple has sold 350 million iPods. Apple is rolling out a new version of its Nano, the seventh edition of the smallest iPod. It is razor-thin, as in 5 millimeters, and uses the new Lightning connector tech. It comes in seven colors.

One of the cooler features of the new iTunes redesign: Users will be able to see upcoming concerts and other information about the artists in their library. Very similar to some of the offerings in Spotify. The update will roll out in late October.

The new iTunes looks very similar to Rdio, the streaming music service, with square music covers in the middle of the screen, playlists and account info on the side.

— Nick Bilton

The new iTunes incorporates iCloud right into it, meaning that users who are watching a movie on one device, like an iPad,  can seamlessly pick it up on another device, like an iPhone.

Nick Bilton/The New York Times

Apple now has more than 200 million customers using iTunes in the cloud, Mr. Cue says. In addition to introducing a new iTunes Store app, Apple has also upgraded  iTunes  for the Mac. The new iTunes makes it easier to create playlists for parties — you can quickly browse through a library and drag and drop songs into groups.

Nick Bilton/The New York Tiumes

So it seems that it is now standard for Apple executives to come on stage with their shirt untucked: Mr. Cook, Mr. Schiller and now Mr. Cue. What’s next, Birkenstocks?

— Nick Bilton

Eddy Cue, Apple’s senior vice president for Internet software and services, is on stage talking about upgrades to music. Apple has 435 million iTunes accounts on file. And the company is releasing a new version of iTunes. More than two-thirds of iTunes purchases come through iOS devices, so Apple revamped iTunes to reflect that, Mr. Cue says. ITunes customers can now share information about their purchases through Facebook and Twitter.

Mr. Schiller says the starting price of the iPhone 5 will be same as previous phones, $199 with a two-year contract and 16 gigabytes. The iPhone 4S will go to $99. The iPhone 4 will be free with contract. The phone goes on sale Sept. 21. Apple will start taking orders for the new phone  on Friday, and hopes to have it in 100 countries by the end of the year.

The video is showing off some of the splashier features of the new iPhone and operating system, like the maps, Siri’s souped-up capabilities and the ability to make FaceTime calls over cellular networks.

And here’s the iPhone 5 video: Jonathan Ive talking about the iPhone like he just met the woman of his dreams. I need a Kleenex.

— Nick Bilton

Apple is expanding its Siri voice assistant in iOS 6 so you can get sports stats and movie recommendations and make restaurant reservations. You can post directly to Facebook with Siri by dictating status updates, Mr. Forstall says.

— Nick Wingfield

The new Apple maps feature is another way Apple is slowly eliminating Google from iOS. As the new maps app will work on the iPad, too, it will be interesting to see if it will eventually come to Macs.

— Nick Bilton

Peter DaSilva for The New York Times

Apple hasn’t given a clear sense of why it changed the connector, other than it being smaller. I’d assume it’s to make the battery larger, but I’m surprised there was no explanation of a real benefit, like faster data speeds.

— Brian X. Chen

Scott Forstall, who is in charge of iPhone software at Apple, is on stage now, giving us a tour of iOS 6, the next version of Apple’s mobile software, on the iPhone 5. Apple’s new Maps feature will include turn-by-turn navigation and three-dimensional maps, and will show users places they might be interested in checking out, like restaurants and coffee shops.

Mr. Schiller is introducing the new iPhone connector cord, which is called Lightning. He says its more durable, reversible and “80 percent smaller.” The new cord technology is already embedded in many third-party systems. But before you start freaking out about having to rush out and buy new cords: Apple will also be selling an adapter, so all of those drawers full of old Apple chargers and connectors won’t have to go to waste.

Apple is gussying up its phone-calling technology — for those who still bother to make phone calls. The iPhone 5 is outfitted with three microphones and a noise-canceling earpiece.

Finally — the phone’s front-facing camera gets an upgrade, meaning that FaceTime conversations will no longer make video chatters cringe.

Mr. Schiller notes that these photos are from the iPhone 5’s actual camera, “untouched.” Seems to be a knock on Nokia, which got flack for a misleading video that wasn’t actually shot with its newest phone.

— Brian X. Chen

Nick Bilton/The New York Times

The new iPhone 5 camera will let users share their photo streams with friends. In addition, the camera has special software that will let users take panoramic photographs. Mr. Schiller is showing off a nice picture of the Golden Gate Bridge and bragging about its quality.

The iPhone camera is getting an upgrade. It now has an 8-megapixel sensor, backside illumination and a five-element lens. The improvements will be a big boon for low-light photography, typically the iPhone’s Achilles heel. The iPhone also includes a sapphire crystal to sharpen images, as well as systems to reduce digital noise and speed up the time it takes to snap a picture.

The guy behind me just moaned. “Geez, that’s really nice.”

Nick Bilton/The New York Times

Mr. Schiller’s back. The iPhone 5 has a larger, juicier battery, which includes 8 hours of 3G talk time, 8 hours of LTE browsing and 10 hours on Wi-Fi, he says.

Rob Murray, executive producer at Electronic Arts Studios, just took the stage to demonstrate a racing game. It looks crisp and real. This could be a big deal for apps makers, large and small.

The new machine has speedier innards, thanks to a new A6 chip designed by Apple. The chip is twice as fast in terms of CPU and graphics, Mr. Schiller says. “Not only is it a jump forward in performance, it’s 22 percent smaller,” he says. The chip means Web pages load twice as fast.

Good news for those sick of dropped signals and sluggish iMessage delivery: The iPhone 5 has chips that support additional bands and frequencies. It can handle HSPA+, DC-HSDPA and most importantly LTE, capable of delivering up to 100 Mbps per second. Mr. Schiller is detailing the carrier partners for the new iPhone: ATT, Verizon, Sprint, Telefonica, to name a few, in Europe, Australia, Asia.

Now, Mr. Schiller is demonstrating how the roomier screen of the iPhone 5 can be used by apps makers. The screen has 40 percent more color saturation, he says, which is the “most accurate display in the industry.”

He’s showing off new versions of a CNN app and an OpenTable app that takes advantage of the larger screen, giving more space for details and photographs.

The iPhone’s width is just right for navigating with your thumb, says Mr. Schiller, to make it easy to send text messages, swipe through pages and browse the Web. Seems like a dig at Android devices with wider screens.

The additional vertical space on the iPhone 5 screen will let users add a fifth, additional row of apps on the home screen — more room for Web browsing and reading, Mr. Schiller says.

The actual iPhone 5 matches previously leaked images from Asia. This shows that it’s gotten tough for Apple to maintain its culture of secrecy with so many component partners overseas.

— Brian X. Chen

It’s the thinnest phone ever made, says Mr. Schiller. It is 7.6 millimeters thick, or 18 percent slimmer than the iPhone 4S. The phone weighs 112 grams, which is 20 percent lighter than the previous iteration. The new screen is a 4-inch display, with the same high-resolution 326 pixels per inch as the previous version. It’s 1,136 by 640 pixels, 16×9 aspect ratio.

The next-generation iPhone emerges from the stage, riding on a pedestal. “It is an absolute jewel,” he says. “The most beautiful product we’ve made, bar none.”

It’s made of aluminum and steel, he said.

Justin Sullivan/Getty Images

Mr. Schiller is walking us through each version of the iPhone. “Today, we’re going to introduce the iPhone 5,” he says.

Last quarter, Apple sold its 400 millionth iOS device. “Today, we’re taking it to the next level,” Mr. Cook says. Phil Schiller, Apple’s marketing chief, is taking the stage.

Tim Cook, Apple's chief executive.Justin Sullivan/Getty ImagesTim Cook, Apple’s chief executive.

Mr. Cook, normally Mr. Nice Guy, is being funny and sarcastic. Noting that the iPad accounts for 91 percent of tablet Web traffic, Mr. Cook says, “I don’t know what these other tablets are doing.” (The crowd laughs, of course.)

— Nick Bilton

Apple now has 700,000 apps in the store, 250,000 for the iPad alone. That number elicited a few whistles and a loud smattering of applause. “There’s something in the App Store for everyone,” Mr. Cook says. The average customer is using more than 100 apps, he says.

Now Mr. Cook is talking about the latest iPad. It was announced in March, and the company sold 17 million iPads in the last quarter. “Yes, we are in a post-PC world,” Mr. Cook says. In total, there have been 84 million iPads sold through June. The iPad, said Mr. Cook, has 62 percent of the worldwide tablet market.

Mr. Cook says Apple customers have downloaded 7 million copies of the company’s latest Mac operating system, Mountain Lion, “making it the fastest-selling OS of all time.” In July, MacBook laptops grabbed a 27 percent share of the overall laptop market, he says.

Apple now has 380 stores in 12 countries, with the next one opening on Friday, Mr. Cook says. Apple is opening its first store in Sweden. Mr. Cook says 83 million customers visited Apple stores in June.

Mr. Cook is walking on stage, wearing a nice black button-down and blue jeans. He’s showing off photographs of an Apple flagship store in Barcelona. “It’s an amazing time at Apple, an extraordinary time.” He’s showing a video of an Apple store in Barcelona.

We’re here in the auditorium, people are filing in and the room is brimming with journalists, noted Silicon Valley venture capitalists like Ron Conway, and well-known apps makers like Ge Wang, founder and chief executive of Smule. Spotted in the front row: Al Gore.

Article source: http://bits.blogs.nytimes.com/2012/09/12/live-updates-from-the-apple-iphone-event/?partner=rss&emc=rss

Filed Under: Business News Tagged With: , ,

DealBook Column: Suggestions for an Apple Shopping List

July 31, 2012 by Leave a Comment

Timothy D. Cook, right, chief of Apple, with Julius Genachowski, the Federal Communications Commission chairman.Jim Urquhart/ReutersTimothy D. Cook, right, chief of Apple, with Julius Genachowski, the Federal Communications Commission chairman.

Question: What would you do if you had $117 billion?

That’s the challenge facing Tim Cook, Apple’s chief, whose company’s cash hoard keeps growing — by about $1 billion a week.

He could hold onto it. He could increase Apple’s dividend, which he instituted this year for the first time.

Or he could spend it.

Just last week, Mr. Cook acquired AuthenTec, a mobile security company, for $356 million in cash — a price equal to pocket lint for a company with the war chest the size of Apple’s.

The real question is whether Mr. Cook would ever spend Apple’s money on an “elephant” — Wall Street parlance for a huge deal.

Apple denizens often say that the company is not interested in deal making. It has, after all, invented some of today’s most successful consumer products. But that view misunderstands Apple’s history: some of its most important innovations were not invented within Apple; they were purchased from other companies.

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For example, the touch-sensitive gesture technology that made the iPhone and iPad possible was invented and patented by FingerWorks, which Apple acquired in 2005. Siri? Apple bought it in 2010. Even Apple’s current Macintosh operating system was an acquisition of sorts. It is built on the back of NeXT, acquired from Steve Jobs (they got him to return as part of the deal, too) in 1996. (Pixar, Mr. Jobs’s other big success, was an acquisition as well. He bought the company from George Lucas as part of a spinoff from Lucasfilm in 1986.)

A year before Mr. Jobs died, he strongly hinted that Apple would consider a big deal. “We strongly believe that one or more very strategic opportunities may come along, that we are in a unique position to take advantage of because of our strong cash position,” Mr. Jobs said in a call with analysts in 2010.

Having all that money can be daunting, so to help Mr. Cook, here is a potential shopping list — some must-buys and some pie-in-the-sky targets — that he may want to consider:

NUANCE This is the one no-brainer on the list. Nuance, based in Burlington, Mass., provides much of the speech recognition technology behind Apple’s Siri and dictation functions. Right now, Apple has merely licensed it and integrated it into both its mobile devices like iPhones and iPads as well as its new Macintosh operating system. Most users think it is Apple technology, but those services wouldn’t work without Nuance.

It should go without saying, but the importance of speech recognition is only going to increase in the future. Nuance has more patents for it and has developed the technology further than just about any firm in the world. At some point, Nuance will be able to hold Apple for ransom. Google and Microsoft are steadily building their own speech recognition technologies and they are catching up quickly. Nuance’s market value is $6.3 billion. Even if Apple paid twice as much, it would be a worthwhile investment.

TWITTER AND PATH Consider this a one-two punch. Apple should buy the social media companies Twitter and Path. Twitter is well known. The 140-character Twitterverse now has more than 140 million active monthly users. It is one of the few, if only, independent social media properties that could allow Apple to build its own social media platform to truly compete against the likes of Facebook and Google.

Twitter’s price tag is just north of $10 billion, and as my colleagues Evelyn M. Rusli and Nick Bilton reported in The New York Times last week, the idea has certainly crossed the minds of Apple executives.

Path is less familiar, but it would be an integral ingredient for Apple’s push into social media. Path is a fast-growing social media company that works on mobile devices only. It has cracked the code on making the mobile experience of sharing with friends enjoyable. Path would probably cost $250 million to $1 billion. If Apple were to stir together Twitter, Path and its own Photo Stream service — and leveraged all the data it has collected about its users over the years (while mindful of privacy issues) — the company would have quite a product that would keep consumers hooked.

RESEARCH IN MOTION Yes, this one may be a head-scratcher, considering that the iPhone seems to have eaten RIM’s BlackBerry for breakfast — and lunch. But with a marke value of $3.7 billion it is a relative bargain and could be had for four weeks’ worth of Apple’s spare cash).

Such a deal would instantly put Apple into the enterprise market, giving it access to corporate and government customers that require RIM’s highly secure servers. Apple could build access into RIM’s network directly into future iPhones and maybe even create an iPhone with BlackBerry’s famous keyboard, which for many of us would create the ultimate smartphone.

RIM’s relationships with corporate and government customers could be leveraged to sell other products like computers and iPads. RIM also owns QNX, a software that is being used in its next-generation BlackBerry devices. More important for Apple, QNX is used as an in-dashboard operating system, and it is already in 20 million cars, like Chryslers and Porsches.

Finally, there are RIM’s patents, said to be worth $1 billion to $4 billion alone, a virtual treasure trove for a company that is locked in brutal patent wars with rivals. Google paid $12.5 billion for Motorola Mobility last year, in part, to secure the company’s patent portfolio.

SQUARE Everyone is talking about the mobile wallet. Square, started by the Twitter co-founder Jack Dorsey, has created a unique new electronic payment system though iPhones and iPads. The next time you go to a coffee shop, there is a chance you can pay with your iPhone simply by saying your name when you get to the cash register.

Square’s value has crept up to more than $3 billion, which is high for a company that is still losing money. But if Apple could integrate Square into iTunes — which has over 400 million active credit cards on file from around the world — it could become a sensation overnight, pushing out rivals like VeriFone and PayPal.

SPRINT Yes, the phone company. This might seem the most out-there idea. But it solves many of Apple’s biggest problems.

Such a deal would give Apple its own wireless network, which it could upgrade to become the ultimate high-speed wireless carrier in the country. It could eventually use the network to bypass the cable operators to deliver content directly to the home on multiple devices, including the product that everyone speculates is on its way: a TV device.

With a stock market value of $13.5 billion, Sprint can be purchased for a song. Apple could easily spend four times more than that — say, $50 billion — to build out the Sprint network and turn it into a showcase for the next generation mobile technology. Apple could still offer its devices on other carriers, but its premium product would exist on its own network.

Think about it: Apple service, Apple Stores and simple Apple pricing. That would revolutionize the business. And such an investment would force the other carriers to step up their game, which would only help Apple. Most compelling is the possibility of Apple owning the last mile into everyone’s home (wirelessly) and be able to offer televised content. (I had considered Netflix as a suitable acquisition target, but if Apple had its own telephone company, it could negotiate directly with content providers on a level playing field with cable and satellite operators.)

The total cost for this grocery list, takeover premiums and additional investments included, is about $97 billion, give or take a couple billion. (Let’s put aside the thorny issue of how Apple can use its cash, much of which is abroad, without being taxed). That would leave Mr. Cook with $20 billion in the bank for walking-around money.

Article source: http://dealbook.nytimes.com/2012/07/30/suggestions-for-an-apple-shopping-list/?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,