With all the fanfare that Apple often brings to a financial discussion, it's odd to hear the words "Apple" and "downgrade" in the same sentence. But those two words found themselves together in a sentence released by BTIG Research's Walter Piecyk when he downgraded Apple's rating on the company's shares from "buy" to "neutral."
And why shouldn't he? There is plenty for investors to be worried about in the company. First, they no longer have Steve Jobs. Old news I know, but it still has an effect on the company's future. More importantly, though, is that wireless carriers are getting fed up with the subsidies that they give to new iPhone buyers.
Carriers are taking a cut in their profit margins while Apple continually earns larger and larger portions. Take a look at AT&T: in 2010, AT&T's margin was over 44% but now are hovering around only 30%. "We expect post-paid wireless operators to remain firm in their plan to stunt the pace of phone upgrades in 2012 and we expect to see some initial evidence of their success in the current quarter," Piecyk said.
This would result in lower sales. But how much lower? Says Piecyk, "We expect Apple's iPhone sales to drop to 27.5 million units in Fiscal Q3, resulting in a revenue estimate that is $1 billion below consensus."
The insanely popular photo app and social sharing site Instagram has been aquired by none other than Facebook for a sum somewhere around $1 billion in cash and shares. CEO Kevin Systrom confirms that the service is not going anywhere and will continue to run as-is for now.
Zuckerberg confirms the acquisition and says that the Facebook team will be "able to work even more closely with the Instagram team to also offer the best experiences for sharing beautiful mobile photos with people based on your interests." This purchase comes with some incredible statistics.
This deal took place roughly 551 days after Instagram's launch meaning that they made $1B in value in less than 2 years. That's simply incredible. But there's more. This incredible company only has 13 employees! Also, with a valuation of $1 billion, that means each Instagram user is worth approximately $33 a piece.
Zuckerberg posted about this on his Facebook Wall:
This is an important milestone for Facebook because it's the first time we've ever acquired a product and company with so many users. We don't plan on doing many more of these, if any at all. But providing the best photo sharing experience is one reason why so many people love Facebook and we knew it would be worth bringing these two companies together.
We're looking forward to working with the Instagram team and to all of the great new experiences we're going to be able to build together.
If this is the kind of stuff that's going on around the planet, I'm pretty sure I don't want to live on it anymore. This is no joke, no April Fools. This is serious. A Chinese teenager sold his kidney on the black market just so he could buy an iPhone and iPad. 5 people have been arrested in relation to the incident.
The 17-year-old received a payment of 22,000 yuan, or about $3,500, to allow the surgical removal of his kidney. Ridiculous as it may sound, this payment only amounted to 10 percent of what the patient receiving the organ paid. This goes to show just how little the donor receives when selling organs on the black market.
This is just one of many incidents where youths are valuing electronic gadgets over their own bodies. It's a frightening trend. These kids think nothing of their future and make a quick decision to have a life changing operation just to be able to afford the latest electronic device. Worse yet, if their other kidney fails, they could be spending 10 times what they were paid in order to get a kidney transplant.
More and more governments around the world are taking to creeping and snooping on their own citizens. Americans have to watch out for the Patriot Act, and now, citizens of India have to watch out for their government. The Indian government is readying a system to allow them to monitor encrypted BlackBerry e-mail and BBM services.
This plan follows the installation of a BlackBerry server in Mumbai which hosts the data of the one million customers' data. The system is designed to allow "lawful access" to the data by the government if the user is suspected of criminal activity. There are some protections. In order to gain access, law enforcement must gain permission from the Union Home Ministry.
The system still requires law enforcement to send a request to the carrier or RIM for the data. Big businesses will not be affected by this because they're data uses a different system and the security authorities say that it is not of "high concern." RIM had no choice but to comply or shut down service after they were given an ultimatum similar to the one given by Saudi Arabia.
In stark contrast to the bleak news regarding HTC's financials, Samsung has reported record profits today as the first-quarter revenue is reported. Samsung close to doubled its profits from this time last year by bringing in $5.1 billion in profits which is up from $2.95 billion last year.
The figures have been helped along by the sales of the hot Galaxy lines of smartphones and tablets. The two main devices that aided these record profits have been the Galaxy S2 and the Galaxy Note. Sales of TVs, such as my own, have also helped propel the figures into the record setting range. "Sales of new models of smartphones, such as the Note, were better than expected," analyst James Strong told Bloomberg.
"They have a good line-up of new products, so they will be able to keep the momentum alive for two or three quarters, at least." Another analyst speculates that Samsung shipped 44 million smartphones during the first 3 months of the year. This would make Samsung the biggest manufacturer in the world for that time period.
That figure would be three times as many smartphones as last year, and beat out Apple iPhone sales by a significant margin. With the Galaxy S3 in the works and the hype surrounding it, it would appear that Samsung's profits won't be taking a downward turn for a good while.
HTC continues down a bumpy road as sales continue to drop. The cell phone manufacturer who used to be the baby of the Android market has seen sales slump starting with the second-half of last year. These numbers, at least, are pretty close to what the company had warned investors to expect.
HTC predicted these numbers in February when they last reported earnings. The company had been seeing sales doubling from year-ago levels until they hit a wall in the second-half of last year. HTC is struggling among competition from Samsung and Apple. Samsung is reporting record profits while HTC is seeing this slump, so it's not the market that is causing this.
HTC will be hoping to turn things around with its new line of high-end Android phones dubbed "One." The company has sunk a lot of money into a worldwide ad campaign. Also this week, HTC announced a new Evo-branded phone which is among the first for Sprint's new LTE network.
Twitter has redoubled its effort and commitment to fighting spam on the micro-blogging site by filing a lawsuit in the San Francisco federal court. The lawsuit names 5 of the most prolific spam tool providers, and the people that use them to flood the service with junk messages. The suit alleges that the people have broken the site's rules banning spam.
The 5 named are TweetAttacks, TweetAdder, TweetBuddy, James Lucero and Garland Harris. The total cost of combating these spammers? The suit says Twitter incurred bills of at least $700,000, with an incredible $300,000 of that dedicated to TweetBuddy alone. It's not clear just how much spam Twitter removes each day, but they do say that they now process an incredible 350 million tweets a day from 140 million active users.
"With this suit, we're going straight to the source," the company wrote on their blog yesterday. "By shutting down tool providers, we will prevent other spammers from having these services at their disposal. Further, we hope the suit acts as a deterrent to other spammers, demonstrating the strength of our commitment to keep them off Twitter."
Apple sure does like this 'new' word, and is using it to push that they're going to open up 'the new Apple Store' shortly, reports Apple Insider. The notice can be found at the top of Apple online stores geared for kindergarten through 12th grade institutions. From here, shoppers are greeted with an alert about 'the new Apple Store". Apple says on its tease:
The new Apple Store
Apple is launching a new online store, which is your tool to shop and place orders with Apple. Proposal creation, order status, and a dramatically simplified user interface will make it easier to do business with Apple - all in a secure and reliable environment.
The transition to the new store will be easy. Your current Apple ID and password will continue to work. In the coming weeks you will receive more information about the store's features, benefits, and launch date.
So it looks as though it'll be easier for education institutions, but what about the everyday user? Who knows for now. We should expect an overhaul or paint job on the Apple Store in general, but only time will tell. More as it comes.
The New York attorney general's office and half a dozen gaming companies teamed up to clean convicted felons from their servers. That's right, there are now 3,580 fewer registered sex offenders playing online games thanks to "Operation: Game Over." New York state law made this possible through the data they require when convicted offenders register.
This information includes e-mail addresses, screen names, and other online aliases. This information was then used by multiple gaming companies, including Microsoft, Sony, Apple, Blizzard, EA, Disney Interactive, and Warner Bros., in order to block the people from using their online services. This came from an announcement by New York Attorney General Eric T. Schneiderman.
"By leveraging the online identity information all registered sex offenders are required to provide, we are able to help reduce potentially harmful situations," Microsoft VP and Deputy General Counsel Rich Wallis said in a statement. "We're supportive of Attorney General Schneiderman's efforts to make the Internet, including online gaming environments like Xbox Live, safer for everyone."
Citing ever-increasing mobile demand, which we all know is insane right now, Toshiba is planning to build a new NAND flash memory plant to cope with this demand, according to claims by a Japanese business paper. The Nikkan Kogyo understood it would be the second piece of a fifth plant in the Yokkaichi whore future had previously been in doubt over the tough Japanese economy.
Construction is said to start in the summer, with the aim of it being operational by 2013. Right now, NAND memory is in the heart of virtually all smart devices (smartphones and tablets) and even solid-state drives, which the MacBook Air and Ultrabooks use exclusively. High-performance users, and even mid-range users also now use SSDs.
Toshiba is a main player in the SSD game, against the bigger competitor Samsung, Toshiba still ranks right up there, with the company sometimes being a source of storage supply for Apple. Toshiba is still considered one of the driving forces of the industry, where they're being quite aggressive in pushing flash technology and are planning 19nm manufacturing that could lead to single-chip 128GB memory which should help boost storage in the tight spaces in smart devices.
A Foxconn recruiter has let slip in an interview with World Business Satellite via TV-Tokyo that Foxconn are hiring 18,000 new employees to help manufacture the next-generation iPhone. The representative continued, saying that he believes the new iPhone could go on sale as early as June this year.
You can actually see the conversation here, (fast-forward to around the 7:10 mark) and although its spoken in Chinese, the translation is said to be in Japanese. The recruiter says it "seems" like it will go on sale in June, not it "will" go on sale in June. But, in the land of Apple, nothing is 100-percent until they say so.
Another thing to consider is that the camera in the video is off in the distance, so it is completely possible they didn't know they were being filmed, and was simply talking about the product, or something else, or trying to get new workers in the door. Who knows. A launch in a few months would mean the last release from Apple, the iPhone 4S, has only enjoyed 8 or 9 months on the market, but Apple will need to combat any release from Samsung, like the GALAXY S III, if they don't want to see their market share slowly erode away.
If you're living in Dubai, or plan on travelling there, you might want to not use social networking sites Twitter and Facebook, as the Dubai Police are keeping tabs on Twitter and Facebook to catch out 'culprits' who criticize the UAE. Dubai Chief of Police has called for legal action against Twitter, for users who do so.
Emirates 24/7 reports that the Dubai Police are keeping a 24-hour watch on both Twitter and Facebook, according to statements made Major Salem Obaid Salmeen, Deputy Director of Anti-Electronic Crimes of Dubai Police's Criminal Investigations Department. Salmeen says:
These electronic patrols are detecting and tracking all topics and materials written and presented on these websites.
Salmeen has made it quite clear that any violations of the law on the website would be as "punishable as in the real world". What could land you in trouble with the Dubai Police? Spreading rumors, defamation and even Facebook tagging without permission are all offenses that will get you in trouble, and following several instances, they've decided to make sure they catch each and every offender in the act.
The ACLU found some very disturbing statistics regarding wiretapping in the United States by police departments across the country. But, how much do the telecom companies charge the police for these taps? Well, it turns out the price varies from carrier to carrier. Data gathered from the Tuscon, Arizona police department shows the variety.
AT&T charges a flat activation fee of $325 in addition to a daily rate of $5 for data and $10 for audio transmissions. T-mobile, on the other hand, charges a flat rate of $500 per target. Verizon demands $700 a month plus a $50 administrative fee. Specific requests net an even higher charge. AT&T requires $150 for voicemail access while Verzion charges $50 per target for text message access.
Sprint is rather organized and has an entire breakdown of their charges. It runs $120 for pictures or video, $60 for e-mail messages, $60 for voice mail and $30 for text message access. Most of the companies won't charge in an emergency situation. More information can be found in the ACLU's findings here.
After Yahoo gave its former CEO Carol Bartz her walking papers last year, Yahoo is now in the process of laying of 2,000 additional employees. This move was announced earlier today. Not all the details are fully known, but more are supposed to be coming forth during its first-quarter financial results announcement on April 17.
The layoffs are expected to save $375 million annually. The new CEO Scott Thompson said the following about how the cuts are supposed to help the firm:
Today's actions are an important next step toward a bold, new Yahoo! - smaller, nimbler, more profitable and better equipped to innovate as fast as our customers and our industry require. We are intensifying our efforts on our core businesses and redeploying resources to our most urgent priorities. Our goal is to get back to our core purpose - putting our users and advertisers first - and we are moving aggressively to achieve that goal. Unfortunately, reaching that goal requires the tough decision to eliminate positions. We deeply value our people and all they've contributed to Yahoo!.
It seems as though RIM, the makers of Blackberry, just can't catch a break. Earlier today, we reported that there were reports circulating that a possible stabbing occurred at a RIM party. Now we are reporting about how they are being sued by a Dutch company which is accusing them of infringing on 6 patents.
Dutch semiconductor company NXP filed a lawsuit in a court in Orlando, Florida on Monday. The suit accuses that some of RIM's BlackBerry phones, together with the PlayBook tablet, have infringed on patents issued to the company between 1997 and 2008. RIM's stock, which has already fallen around 80% in the last year, fell another 9.6% after the news of the lawsuit broke.
In its complaint, NXP said it was seeking "recovery of damages at least for lost profits, reasonable royalties, unjust enrichment, and benefits received by RIM as a result of using the misappropriated technology." RIM will want to avoid a similar outcome to what happened back in 2006 when they were forced to pay out over $600 million after a 5 year legal battle.
Facebook is playing the Yahoo vs. Facebook lawsuit by the book. Facebook, in its turn, has counter sued Yahoo for infringing on 10 of its patents. This move was predicted by Erin-Michael Gill, the chief intellectual property officer for MDB Capital. "Facebook is following the playbook," he said. "They're doing exactly what potentially Facebook investors would expect them to do. They're leveraging the IP that they've acquiring the past few years. They're putting their best assets on the table and now can engage in negotiations from a far stronger position."
Ted Ullyot, Facebook's General Counsel, said, "From the outset, we said we would defend ourselves vigorously against Yahoo's lawsuit, and today we filed our answer as well as counter-claims against Yahoo for infringing ten of Facebook's patents.... While we are asserting patent claims of our own, we do so in response to Yahoo's short-sighted decision to attack one of its partners and prioritize litigation over innovation."
Yahoo has sued Facebook because Yahoo has been unable to keep up in the changing landscape of the modern internet. They used to be an internet pioneer, but have fallen behind with the times. They are losing the search wars to Google. The counterclaim paints a different picture. Facebook is claiming that they are the damaged party. They want the court to dismiss Yahoo's case and award Facebook damages.
A new law in the state of Arizona could make my favorite pastime illegal. No, I'm not a cyber bully, I'm an internet troll. The new law has implications that could turn every chat room and comment section on the web illegal. The law is set to make just about any annoying, harassing or offensive online comment, reply or message illegal in the state of Arizona.
If I were to continue being a troll after the passing, I could be fined $250,000 and put in jail for 6 months. The bill takes an older telephone bill regarding these issues and just updates it to read "electronic or digital communications." No one took the time to consider the differences in the media, such as, you know, the internet doesn't sit there ringing at you. You actually have to voluntarily seek out the internet.
The online site TripAdvisor joins the fight against the behemoth that is Google. TripAdvisor follows Expedia who filed a complaint last week. TripAdvisor claims in the European Union filing that Google is using "anti-competitive and unfair practices...that harm the marketplace and consumer welfare."
Both Expedia and TripAdvisor are claiming that Google is using its dominant position in the search market to harm the marketplace. These two are added to the growing list of people who have complained about Google over the past year. The European Commission said, during its November 2010 investigation, it was examining whether Google artificially lowered rankings while boosting its own services.
Last year, Microsoft filed a formal complaint saying that it has "taken to entrench its dominance in the markets for online search and search advertising to the detriment of European consumers." Google has said that they will comply and help any investigation that occurs as a result of the complaint.
A new study from Canaccord Genuity is claiming that Apple and Samsung account for a combined 95-percent of all handset profits in Q4 2011. Apple accounts for 80-percent of profits, while the company behind the GALAXY range of handsets, Samsung, takes 15-percent. The remaining 5-percent is left to all of the other manufacturers.
This leave companies such as Research in Motion (RIM), HTC and Nokia with just 5-percent of the profits, considering they were at once time all top dogs of the market, this is a big change and I'm sure it's hard to swallow for these companies. CNET reports that Apple's iPhone is outselling all other phones combined at AT&T and Sprint, and with Verizon Wireless they are even with all Android phones available.
Samsung has seen incredible success with their GALAXY S range of phones, with the GALAXY S II selling 20 million units in 2011. The GALAXY S III is the most anticipated phone ahead of its official announcement, and Samsung's GALAXY Note has been selling quite well, even if it is half way between a tablet and smartphone. I'm predicting this market share will change with HTC dishing out their One series, and the GALAXY S III should be Samsung's home run this year.
It seems as though AMD execs have been jumping ship left and right. Is AMD really doing this poorly, or is there something else going on that's resulting in all of these resignations? Emilio Ghilardi left less than two months ago, and now Pat Patla, former General Manager and Corporate VP of AMD's Commercial Business unit, and Godfrey Cheng, Director of AMD's Client Technology Unit have left or are in the process of leaving.
First, let's look at Pat Patla. His departure is official. His LinkedIn profile confirms it as well as the Wall Street Journal. He has reportedly defected to Samsung where he holds the title of Vice President. The WSJ blog speculates that Samsung wants to build some ARM-based server chips, and Patla is a good fit because he oversaw the Opteron series from AMD.
Then we have Cheng. He hasn't officially left yet, but according to a Facebook post by him, he's tendered his resignation. "after almost 12 years at ATI Technologies / AMD, I tendered my resignation last week. I will be here for approximately the next week then I may wander the earth and get into adventures......" Cheng oversaw AMD's graphics marketing as well as the Client Technology Unit.
Acquisitions and mergers are a common occurrence in business and today sees Dell acquiring Wyse. Dell purchased Wyse for an undisclosed amount in order to focus more on its corporate customers. Wyse specialized in thin-clients, offering vertically integrated, centralized computing solutions for corporations.
Dell could benefit from Wyse's experience in the business computing market. Also, Dell may be setting its sights on the cloud as they referred to Wyse as a "cloud client" leader. Wyse has about 500 employees, 180+ patents, and is valued at roughly $350 million. Dell will probably combine Wyse's experience in centralized computing with its own reach and ability to produce inexpensive computers. This sounds like a match made in heaven.