Thursday, January 31, 2013

Apple Inc. (AAPL): Good Buy or Goodbye?

Apple Inc. (AAPL) is once again feeling the strain of investor tension. Trading volume has fallen off considerably, and StreetInsider calls it “anemic”.

Apple trades approximately 22.1 million shares on an average day at the exchange, but yesterday volume fell by 27% and the company traded only 14,887,300 shares. At noon Apple’s volume was showing only 4,750,000 shares, which means that if the pace remains the same, shares will only swap hands somewhere near 12 million times. This is yet another area the company seems to be bleeding.

While some investors may feel that lower volume is a positive sign, as it would seem that people have slacked off in selling their shares of the tech giant, other analysts and investors may feel differently. Lower volume could mean that buyers have failed to step up to the plate and purchase a company they feel could lose value in the coming quarter. The latter could be true, although Apple is trading at a major low compared to its September high.

This could be a good time for Apple management to reconsider the possibility of a stock split. Tim Cook notably called such a move stupid, but it’s possible he should reconsider his view in light of recent trading activity. Apple is in desperate need of new investor money and a stock split would bring an influx of fresh investors with much needed capital. Inc. (CRM) recently took the plunge and has asked for shareholders to approve a 4 for 1 stock split. This will make shares more affordable and attractive to a wider group of investors. This also will increase trading liquidity for common shares and make employee equity awards more attractive, according to Salesforce reports.

Apple Inc. (AAPL) may need to take note of the positive side of a split and consider making shares available to more people. Shares are currently trading at $455.52, which is $1.31 down from its opening price this morning and volume is at 5,607,507 as of 1:05 PM.

Wednesday, January 30, 2013

Apple Sheds Value After Beating Earnings Estimates, & Amazon Gains After Missing…Why?

Howard Lindzon, the CEO and co-founder of Stock Twits, which is a social network designed for investors to trade ideas in real time, posted an interesting article for TechCrunch yesterday. He points out that Apple Inc. (AAPL) began shedding value immediately after their earnings reports were released, although they beat the estimated earnings for the quarter. While this may seem surprising, Inc. (AMZN) investors showed an even more confusing reaction to their earnings report. Amazon missed estimates, yet the stock climbed after the report was released.

So, what caused these two tech giants to have completely opposite reactions to their earnings reports, and why did they move the opposite direction from what would typically happen in these cases? Well, according to Lindzon, the stock movement is all about guidance and expectations that have been made going forward.

Wall Street has come to expect more out of Apple Inc. than just about any other company in the world. However, in regards to Amazon, expectations are along completely different lines. Apple reported huge gross earnings, but the profit margin needs to grow if investors are to continue to be satisfied with the company. However, while Amazon posted lower than expected earnings in regards to gross profit, their profit margin is rising. Lindzon points out that if Amazon had posted higher profits, with  lower margins, Wall Street may have shown them the same reaction they showed to Apple.

Lindzon’s most interesting points center around the fact that Apple has recently soured on investors, shedding huge dollar amounts from its share price. However, he also notes that while the company may be the most valuable company in the world, there is a level of uncertainty when attempting to predict the future. Apple is in completely uncharted territory, and no one knows for sure what the company has in its future, but that has definitely not stopped them from attempting to predict what will happen.

Apple’s dismal performance in share price could be linked to the fact that the growth rate of the company has slowed, and the demand for more powerful gadgets at more affordable prices have caused the company’s profit margins to shrink. Wall Street investors are not intrigued with Apple’s profit, but rather are disgusted with guidance going into the next quarter. Inc. (AMZN) has been able to gain market trust with its growing profit margins, and steady business pattern. Jeff Bezos receives high praise from Lindzon, where he mentions that the man has done a “miraculous job” of keeping the Wall Street analysts focusing on growth in the area of sales. Amazon reported a margin of 24.1 %, and this number seemed to overjoy investors.

While everything could be completely reversed in the next quarter, chances are that until overall profits become the focus of the Street, Amazon will outperform Apple. It will be interesting to see how Tim Cook and Jeff Bezos guide their respective companies going forward, and with Apple’s newest iPad coming out in a 128 GB model next month, I think it is safe to say that Apple is going to go forward as strongly as possible. We will have to wait and see.

Tuesday, January 29, 2013

Apple Inc. Confirms The Existence of 128 GB iPad 4 With Retina Display

Apple Inc. (AAPL) has confirmed the existence of an even more powerful iPad 4. The new model will feature Retina display that measures 9.7 inches, a FaceTime camera, built in applications and many other features. With 128 GB of storage, this is the largest iPad yet, and it's comparable in features to Microsoft's latest Surface Tab.

Apple announced on Tuesday that the new iPad will be available on Friday, February 5th and the pricing guidelines indicate that it does closely compare with Microsoft's product. The iPad 4 will retail $800 for the wi-fi only model and $929 for the model that supports both wi-fi and cellular service. The new Surface Tab will retail for $899 for the 64 GB model and $999 for the 128 GB edition. The new Surface comes with Windows 8 and other upgraded features.

While it is surprising that the Apple product is the cheaper of the two in relationship to the Microsoft's 128 GB Surface tablet, ValueWalk reports that it may not be the more appealing device to individual consumers. According to Anna Peel, of ValueWalk's tech team, Apple is better off targeting businesses with this new product.

Apple has spent a lot of advertising dollars in attempts to draw businesses and organizations into purchasing their products, and it appears to be working. In a recent report, Apple claimed that almost every Fortune 500 company and more than 85% of Global 500 companies utilized the iPad in business matters on a daily basis. Microsoft is not going to lose this part of the market without a fight, and the new Surface is designed to work around the Microsoft Office suite, which makes it very attractive to companies who currently use Windows software to power their computers.

Apple needs this product to sell. The company has been suffering at the hands of short sellers and analysts of late. The stock has dropped in recent weeks, and only in the last few days has it started to come back. Currently it is trading at $457.90, which is still far below the price targets set in the middle of last Fall by Gene Munster and other analysts. Perhaps this iPad 4 could be the turning point that brings the company back to the position of most valuable company in the world.

Monday, January 28, 2013

Apple Inc. (AAPL) Beat Earnings Guidance, So Why The Rotten Share Price?

According to a report from ValueWalk, Apple Inc. (AAPL) beat their guidance estimates in the latest earnings report by more than $2 billion. Guidance was set at $52 billion and Apple reported $54.5 billion, which begs the question, why the rotten share price?

Apple opened this morning below $440 per share, which is a huge gap from its $705 high water mark of last Fall. So, what happened, and why are investors scurrying to get out of the way of the falling price?

Well, for starters, Apple missed the estimates of nearly everyone outside their own office. While they sold a record breaking 47 million iPhone units during the quarter, they missed estimates of 50 million units, which left investors feeling bruised and taken. Had they made the 50 million unit mark, BCG analysts believe the stock would have seen a positive movement, rather than the plunge in price we have been witnessing lately.

Another area where Apple is perceived to be hurting is its performance related to the index it trades in. The NASDAQ is mostly comprised of tech stocks, and Apple Inc. has been its driving force all year last year. The stock carried the weight of other, less successful companies through the rough quarters of 2012. While the NASDAQ remained steady overall, Apple Inc. took off and boosted the numbers of the entire exchange. When the NASDAQ languished, Apple flourished, keeping the trading floor busy. However, now the company follows more closely to the rest of the exchange, if not falling off even.

BCG has set their price target at $550, which is a $25 reduction from earlier estimates. While many people thought it would never happen, it appears that Jeff Gundlach may have made the right call, when he said Apple would come crashing down. However, the tech company will not stay down for very long, and now may be a great time to snap up some of Apple's shares, while the price is under $450 per share.

Friday, January 25, 2013

Apple Continues To Drop: Is The Tree Withering?

Apple Inc. (AAPL) is now trading at $444.73, which is yet another drop in price. Since the stock hit its high water mark, the stock has taken a downturn. This slide has gotten worse in the wake of earnings reports that missed estimates on iPhone sales, and it could get even darker.

Jeff Gundlach predicted that Apple would be worth only $432 per share, and he may be right in that assumption. His prediction contradicted many other analysts who set price targets anywhere from $750 to $1000 per share on the tech giant. Gene Munster of Piper Jaffrays had a target of $875 for the Cupertino company, but it appears that this could be a pipe dream in light of recent events.

Those who bought Apple shares when the company began its rapid climb to the top of the world’s most valuable companies list are now feeling the pain of starvation cramps as the company appears to be not only languishing but bleeding like a cut artery. The company’s stock has been shedding value like Jenny Craig sheds weight, and the pain doesn’t appear to be over yet.

According to some investors, Apple will have to regain its foothold in the smartphone market before it will regain their confidence. This could prove to be tough with Samsung Electronics Co. Ltd. (BC94) hammering out high sales numbers of its Galaxy flagship line. There are also the myriad companies who produce cheap smartphones powered by Google Inc. (GOOG)’s Android OS, which is Apple’s arch rival for smartphone market domination.

Even with the negative response in the market, Apple’s CEO remained upbeat, citing that the numbers Apple reported in regards to iPhone 5 sales last quarter were record breaking and no tech company had ever had numbers like them. We will have to wait and see if his optimism carries over into the general sentiment of the market.

Thursday, January 24, 2013

AAPL Missed Earnings Leave Rotten Taste In Munster's Mouth

Apple Inc. (AAPL) has had its shares of ups and downs recently, but today is definitely making some investors nervous. The stock has dropped more than 10% since the market opened, and is currently trading at $454.84. This is a big difference from its all time high of $705, just this past Fall.

So, what has investors so worried? Why is the price of the most valuable company in the world falling like a brick from a skyscraper window?

The simple answer is that investors are afraid the interest in Apple products is waning. The iPhone is the premium smartphone on the market, but with many new Android phones that are a fraction of the cost being sold, demand seems to be lower than expected for the iPhone 5. Today's trading follows the earnings reports that Apple has released for the 1st quarter of FY2013.

According to the earnings report, Apple sold 47.8 million iPhones in the first quarter. While this is equal to 10.8 million more units than Apple sold in the same quarter for 2012, it still fell short of estimates that came in around 50 million. While investors seemed to be disappointed with the tech giant, Tim Cook, Apple Inc. (AAPL)'s CEO did not seem to be discouraged by the numbers at all.

Cook said, "No technology company has ever reported these kind of results."

He is correct in that statement. Although estimates may have been higher than actual sales numbers, Apple has turned an impressive corner in the last year. However, will its reign as the top tech company continue, or will investors fears prove to be true, as consumers take more interest in cheaper options? After all, it looks like Jeff Gundlach was right and Gene Munster was wrong this time around. Munster had a price target of $875 on Apple, while Gundlach said the company would be worth less than $450 this year. At the current moment, it appears that Gundlach may have been 100% correct. But will Apple resurrect itself?

I suppose, only time will answer that questions for sure, but I think it is safe to say that even with the drop in price, Apple is going to be a force to be reckoned with for the next few years at least.

Monday, January 21, 2013

iPhone 5S To Come In Color: Topeka Capital

It has been noted by Topeka Capital Markets analyst, Brian White (one of the first to report that Apple was working on the iPad mini) that Apple's next-generation "iPhone 5S" will launch in May or June, with two different screen sizes and five different color options. This was the case with the iPod touch.

In a poll published by BGR on January 2, 35% of respondents reported that they would purchase the next iPhone in either blue, pink or yellow if Apple were to launch the device in those colors. Another 28.4% said they would be interested in the new color options, but they would want to see how they look before making a purchasing decision. More than 2,000 people voted in the poll and about 85% of them live in the United States.

Though the results are not scientific, they do suggest that there would be a good market for color options and that this would be a good move for Apple. The only thing certain is that Apple will do as it always does and look to launch its next-generation smartphone with some significant new features.

As they were with the iPod touch, new color options may be among the next iPhone’s key new features when it launches later this year — and if that is indeed the case, it looks like the new colors will be met with significant interest from consumers.

Color might just be Apple's ticket to controlling the market. It seems that some people are tired of the black and white color options of the iPhone, and even though the phone's superiority is still there, the aesthetic design of the phone could be the difference between a tapering interest and record sales in the coming quarters.

Saturday, January 19, 2013

The Latest Rumor About the ‘iPhone 5S’

The word is that Apple may have come up with something new for its next version of the iPhone that is not only innovative but will be hard for the copy cats among the competition to, umm ….copy.

AppleInsider has reported that the ‘iPhone5S’ may contain a fingerprint sensor hidden in its home button. How cool is that? Not only does it enhance security, but just imagine a phone so competent that there is no need for usernames or passwords. It’s being reported that the sensor would also go a long way toward improving Apple’s Passbook app by augmenting the security and authentication of Passbook items such as boarding passes and tickets. Who knows, along with an NFC chip it may be the tool for turning your iPhone into a virtual wallet. How do they come up with this stuff? 

This time it is being attributed to their acquisition of AuthenTec and its advanced ‘Smart Sensor’ that does more than just read fingerprints. It appears that the intellectual property deal is paying off for Apple. The ‘Smart Sensor’ technology may be the marketing feature that once again puts Apple over the top by compelling its fans to upgrade.

And what will come of it when Apple transposes this technology to its other mobile devices? Someday soon you could own an iPad with a home button that can identify individual users.  The sensor would allow multiple users to have their own personalized home screen pop up with a touch of the home button.

This latest rumor could mean a milestone in Apple Inc. (AAPL)'s move to dominate the smartphone market. The company could definitely use a boost in the wake of its recent Maps debacle and the plunging price of its stock in the last few months.

Friday, January 18, 2013

Apple’s War Over Words

There is a war over words going on between Apple and Amazon regarding the term ‘app store.’ Apple coined the term in 2008 when it started its App Store and has filed an infringement suit against Amazon for using it. Amazon claims that the term is generic and therefore Apple cannot claim exclusive rights to it.

It seems that the legal system is tired of all the quarreling. District Judge Phyllis Hamilton in Oakland, California has already dismissed Apple’s claim that the Amazon Appstore was falsely presenting itself as an app store for iOS apps. She is persuaded that no one is confusing Amazon’s Appstore with Apple’s App Store.  

Meanwhile, San Francisco US Magistrate Judge Elizabeth Laporte has ordered the two tech giants to sit down together and try to work out a settlement for this new difference of opinion. If the clash is not settled by these talks, then in August Judge Hamilton will be given the opportunity to rule in this dispute as well. Apple first filed suit in 2011 and the battle has been going on for almost two years now. How likely is it that when they meet on March 21 that they will be able to come to terms?

Apple is wary and protective of the App Store because of its popularity. It has garnered more than 40 billion downloads and most of those transpired in 2012. Despite that, Apple is not doing very well right now.  Its stock price has been on a wild roller coaster ride over the last 12 months and there is wide speculation in the market that Apple is losing its edge. Is that because it is losing it's creative initiative or because other tech companies are taking 'tiny bites' out of it for their own sustenance?

Amazon's latest coup in this war came rather quietly as the Washington Post reports a new service that is aimed directly at cutting slices out of Apple's market. The Post reports that Amazon launched a new music service this week that is designed specifically for Safari and iOS users. This service allows Apple users to download music without the use of iTunes for the first time. This is sure to garner a following, as many users have complained about the somewhat high prices on iTunes in the past.

The price of Apple Inc. (AAPL) shares has plunged from its lifetime high of $705 per share, and is currently trading at $499.38. This plunge seems to be exactly the opposite of what everyone thought would happen when the stock began surging last summer.

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Thursday, January 17, 2013

Facebook Updates an App to Assist Mobile Users

Since going public last May, Facebook has been making an effort to assure its investors that it can keep up in today’s evolving market, where users are turning to mobile devices like Apple’s iPad and iPhone. To keep in harmony with that goal, Facebook has added a recording feature to its Messenger mobile app, allowing mobile users to message each other voice messages without using their voice minutes. If you've downloaded the new update you can tap the + button next to the box where you input a message, then tap Record, speak your message and then send it off.

And that is not all. In addition to the recorded message options, iPhone users in Canada are able to make voice calls via Facebook's mobile app. Users can tap the ‘i’ button in the app and hit ‘Free Call’ to call a contact. The feature uses existing data plans to record messages and make calls. If you use Wi-Fi it’s even less expensive because it doesn’t eat into your minutes.

According to market analysts, industry metrics indicate that people tend to stay in Facebook longer than almost any other Internet-based application. Having to leave Facebook to call someone can be distracting – not cool in a digital world.  So the next natural step is to use that mobile device for what it is designed to do, call people.

As the saying goes, “There is an app for everything,” and apps that assist mobile users to stay connected with fewer interruptions are sure to be popular.

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One if by land! Two if by…. iPad?

House Speaker John Boehner survived the revolution of the Republican led house. As the debate raged, Louisiana Rep. Jeff Landry bragged to Breitbart news that the anti-Boehner ranks were 17 to 20 members strong.  As it turned out, only nine voted against their speaker, while two didn't vote, and one voted present.  However, all of D.C. knows which House members were out to dethrone Boehner.  This is because of a list that one of the coup's leaders compiled on the House floor during roll call – using his iPad.
A Politico photographer captured Tim Huelskamp, a Republican from Kansas tapping his iPad during the roll call. Boehner had removed Huelskamp from a committee for refusing to cooperate, and he in turn was checking off a list of names of other Congressmen he thought might join him in voting against Boehner.  It was reported by Politico that the list was titled, "You would be fired if this goes out."  Only those involved know if any of the Republicans on the Kansas representative's list knew of its existence.
Perhaps Huelskamp anticipated that some poor aide would risk getting ‘fired’ and let the list become public. Perhaps he simply wanted to organize his battle in the most convenient way possible – on his mobile device.

Wednesday, January 16, 2013

Apple Inc. Could Have Overestimated Demand For iPhone 5

Apple Inc. (AAPL) has been in the cross hairs of analysts and investors alike since the Wall Street Journal reported the company had slashed orders for iPhone 5 components by as much as 50%. Now, CBS MoneyWatch reports that DisplaySearch, a respected market research firm, feels that Apple pushed an initial production run that was entirely too large to sustain. According to Paul Semenza, the senior VP of analyst services at DisplaySearch, the firm was made aware of the cutbacks shortly prior to New Year's.

He said, "It was a very quick ramp up. The Q4 (estimate) was originally about 61 million displays (for iPhone 5)...that may be dialed back, but anything near that number is still huge. That would support the theory that the ramp was too much to sustain."

To make a comparison, the iPhone 4S, which was launched in the final quarter of 2011, sold only 37 million units that quarter. The iPhone 5 blew the minds of many analysts as they announced that preorders of the new iPhone were selling 20 times faster than previous models. This could be the reason for the belief that demand for the iPhone 5 would continue into the new year. However that does not seem to be the case.

Another factor to consider is Google Inc. (GOOG)'s presence in the smartphone market. Their Android based phones are dominating global smartphone sales, and it appears that Apple may have been more than a little overly optimistic in its attempt to regain market share.

The Wall Street Journal's report on Sunday caused Apple shares to plunge to as low as $486, which is a far cry from the high water mark of $705 that was hit last year. The stock currently stands at $508 and seems to be recovering some ground, however, whether it will ever reach the $875 price target set by Gene Munster Remains to be seen.

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Tuesday, January 15, 2013

Apple Inc. Sales Declines Won't Cramp Quarterly Results: Munster

Gene Munster is still keeping the faith in Apple Inc. (AAPL)'s ability to produce string quarterly earnings. He notes in a recent statement that even though iPod and Mac computer sales figures are lower than last year at this time, they won't affect the overall earnings report.

ValueWalk has noted that Munster still expects the Cupertino company to post a strong earnings report, although the stock has fallen off by more than $200 per share from its high water mark of $705 last year. The stock dipped below $500 per share in trading on Monday, and has continued to drop today. At press time (1:05 PM EST) it is standing at $489.19, down 2.5% or $12.67.

Last night, Munster issued a report to investors that indicated he had analyzed the domestic retail data that the NPD Group had on Apple, and the December quarter will most likely show that Mac sales are down 14% on a year over year basis. He further mentions that Apple had reported Mac growth that exceeded the NPD data by roughly 12%, which would indicate a decline in Mac sales of about 2% year over year.

Munster, ever careful to consider everything in a situation, notes that comparison of last month with December of 2011 is not a truly accurate comparison, as the last month of 2011 had 5 weeks in it. Because of this, he said he "remains comfortable" with his estimated decline of 7 % in relationship to Mac sales. Translated into real numbers, this means that Apple Inc. (AAPL) sold approximately 4.8 million Macs in the December quarter.

iPod sales were also an item of interest, and according to the data from NPD, Apple sold between 11.5 million and 12.5 million iPods, which would fall directly in line with Munster's estimate of 12.3 million units. His analysis indicated that Apple is posting a 23% decline in iPod sales on a year over year basis. This number is 3% greater than the consensus estimate of 20% posed by the Street.

Munster tells investors not to worry about the declines in Mac and iPod sales, as Apple is most likely to post high numbers for the iPhone 5. Because of this, Munster has yet again espoused his faith in the company, and rated it at Overweight. He has set a price target of $875 per share.

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Saturday, January 12, 2013

Apple Focuses On Designing "The Best Products" For Chinese Customers

Yahoo News has released an update regarding the rumors of a cheaper iPhone in development for Chinese customers that seems to confirm that it could really be in the works. A Chinese paper printed a story on Thursday that was a revised edition of an earlier report.

The original report stated that Apple Inc. (AAPL) would not be manufacturing a less expensive model of the iPhone for its big push into the Chinese market. However, when the revised story was printed on Thursday by the Shanghai Evening News, the statements about the cheaper iPhone were completely removed, other than a brief mention that rumors had been circulating regarding the product.

The paper focused instead on Apple's marketing chief, Phil Schiller's statement that Apple would concentrate on making "the best products" for its Chinese customers, and would "never blindly pursue market share." This statement seems to indicate that the Cupertino based  company may be designing a lower cost iPhone, but they would not do so in a rushed manner, simply to gain sales in China.

The development of a cheap smartphone would completely reverse the image that Apple Inc. (AAPL) has projected for itself since the advent of the iPhone. Apple has consistently catered to the upper crust of the smartphone market, with the iPhone being made available to the general public through expensive subsidies offered by wireless carriers.

Apple did confirm that the Shanghai paper had been contacted about its original story, and they had indeed been asked to amend the report. While they would not confirm or deny the existence of the speculated cheaper phone, a reporter from the paper did admit that Schiller's remarks may not have been clearly presented in the article.

The paper apparently had paraphrased some of Schiller's remarks, rather than quoting him verbatim, and in the new report, this was altered to include only exact statements made by the Apple executive. However, the reporter, identified as Huang Yinlong, said the paper had made the changes of their own free will, and Apple had nothing to do with the decision to print a revised article.

Schiller's remarks about the advent of a cheaper iPhone did not deny that such a device was in the making. He simply stated that Apple had never blindly chased market share, and they had always focused on creating only the best products for their customers. However, if they hope to reach the market in China and become the number one smartphone manufacturer in that country, they will have to reach the mid and low end of the market. To do so will require them to produce affordable handsets.

This statement could simply mean that Apple is developing a cheaper smartphone that is the best in its price range. If so, the Samsung Electronics Co. LTD (BBC94) and other competitors who run on the Android OS had better watch out. Apple has continually developed excellent products, and if they manage to bring out a cheaper iPhone model, you can bet that if its priced in the same range as the less expensive Android phones, it will offer more features. I guess we will have to wait and see.

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Friday, January 11, 2013

China Will Be Apple Inc.'s Largest Market In The Future: Tim Cook

Apple inc. (AAPL)'s CEO, Tim Cook, made some statements during an interview with Xinhua News Agency of China, that seem to indicate his belief that China will soon be Apple's number one market. The United States currently holds the top slot in Apple's list of revenue earners, however China is holding a close second at the moment.

"China is currently our second largest market," Cook is quoted as saying, according to CBS News. "I believe it will become our first. I believe strongly that it will." Cook did not specify when he expected China to surpass the United States in market share, and Apple Inc. spokespeople in the China office have not yet commented on the report.

During 2010 and 2011 Apple's sales doubled, although 2012 showed slightly slower growth. The iPhone, iPad, and other i-devices are very popular with China's upper class. However, the smartphone market in China is dominated by Google Inc. (GOOG)'s Android OS. The more affordable handsets by manufacturers like Samsung and HTC, as well as those made by Chinese companies, control the market.

Cook reportedly did not comment on whether the rumors that Apple Inc. is developing a new, more affordable iPhone are true or not.

While he was in China, Cook also met with the chairman of China Mobile Ltd., which is the world's largest carrier network, with more than 700 million customers. Apple has already struck a deal with China Mobile to begin offering the iPhone, and no doubt, this will be one of the biggest boosts for Apple's market share in China.

While the actual topics of discussion were not released to the public, the press was told that the two companies discussed "bilateral cooperation". China Mobile has also indicated that several million of their customers currently had unlocked iPhones on the network. These phones were most likely bought abroad and then brought to the country.

One of the biggest issues facing Apple Inc. in China is the accusations and scandal surrounding Terry Gou's Foxconn. Apple's largest supplier has been facing accusations of worker mistreatment and paying lower wages than average. Cook claimed that the Taiwanese company is being held to high standards regarding their workers. He said, "we care very deeply about every worker that touches an Apple product, whether they are making it, selling it, serving it, or marketing it." He went on to say, "we hold ourselves to a very high standard there."

Apple is also in talks with Taiwanese and Chinese companies to take over Samsung's current role of supplying the A6X processors for its devices. Due to the nature of the relationship between Apple and Samsung, the Cupertino company felt it would be wise to move its processor business away from its largest competitor. While Apple currently makes up 80% of Samsung's processor sales, the Korean tech giant will not be caught flatfooted when Apple finally moves their business elsewhere.

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Thursday, January 10, 2013

Apple To Remove 80% Of Its Processor Orders From Samsung

Credit: Scott Stein/CNET

Apple Inc. (AAPL) and Samsung Electronics Co. LTD (BC94) do not get along, and it is no secret that they're bitter rivals. However, Apple has been Samsung's largest customer when it comes to the chips they build for smartphones. The iPhone has long contained Samsung chips, and this has been a sore spot for Apple of late.

In fact, Apple has recently announced they will be migrating away from Samsung as supplier of components for their products. No doubt, Tim Cook and the other executives at Apple expected Samsung to be in a position to lose revenue from this decision, but it appears that is not the case at all.

In response to Apple's desire to cut Samsung out of its supply line completely, Steven Woo told Reuters that the Korean tech giant has plans to "diversify our customer base". According to CNET's Don Reisinger, he said, Samsung has already taken steps to do this by adding "some Chinese customers."

Apple spends approximately $8.8 billion on Samsung processor chips, which makes up nearly 80% of the Korean company's business in the field, according to Goldman Sachs. However, with Apple looking to begin moving its business to other companies, and cut orders to Samsung by 80% by the year 2017, it's probably wise for Samsung to be building a wider customer base now.

According to the Commercial Times, this transition to other companies has already begun. Apple and Taiwan Semiconductor struck an agreement on a trial run of A6X processors, and it is assumed that if this run goes well, then the company could quite well receive all of Apple's business for the A6X processors.

Apple and Samsung have had several run-ins over the last twelve months. With various patent suits filed all across the world, judges have returned mixed decisions in the issues. While Judge Lucy Koh awarded Apple $1.05 billion in a suit filed in California, a U.K. judge ordered Apple to post a public apology to Samsung on their U.K. web site. It would appear that the rivalry is now affecting their business relationship, as Apple would prefer to inject capital into companies it is not in direct competition with.

While Goldman Sachs notes that it is wise for Apple to move its business elsewhere, finding a company that will provide the chips as efficiently and cost effectively as Samsung has will be quite a challenge. It will be interesting to see who will finally win the contract, or if it will have to be delegated to several smaller companies. Only time will tell.

Wednesday, January 9, 2013

Apple Designing More Affordable iPhone: Report

Apple has long been known to dominate the smartphone market's upper crust of customers. The iPhone has held the top spot for smartphone sales in this segment of the market for most of its existence. The iPhone has been a status symbol since its inception, and for many, it is more than just a phone.

The iPhone symbolizes achievement for many of its owners. Since it is the premier smartphone on the market, owning it has offered a sense of accomplishment to many consumers. The iPhone has always been considered the "Mercedes Benz" of smartphones, and the cost reflects this sentiment.

However, iPhone's high price may soon be a thing of the past according to FOX News. They report that sources have indicated that Apple Inc. Is working on a new model of the iPhone which is said to be more affordable than past models or the recent iPhone 5. This change will mean a huge alteration for Apple, as it has previously focused on the high end market.

According to sources, the new model will closely resemble the iPhone, but will be manufactured with a cheaper production cost. The main feature said to be less expensive about this proposed iPhone is a more affordable body structure. The current model, the iPhone 5, has an aluminum body that has driven production costs up. However, the new model may have a body made of polycarbonate plastic, which will be much less expensive.

The internal components could very well remain the same, or quite possibly, Apple could decide to recycle components from older models of the iPhone. Of course, there is always the possibility that Apple will decide to scrap the plans to build such a phone, and so far, the Cupertino company has declined to comment on the report. 

Apple is definitely feeling the pressure from its cheaper counterparts, as the company's market share has dropped in recent months. As of the last quarter of 2011, Apple Inc. (AAPL) held 23% of the worldwide smartphone market, but that number has plummeted to only 14.6% in the third quarter of 2012. It is safe to assume that the figure has improved somewhat due to the release of the iPhone 5 in September, but Apple is still struggling to maintain revenue and sales.

Google's Android OS has opened up the possibilities for handset manufacturers to build cheap handsets, and this has caused the Android OS phones to dominate the market. Apple will have to make a move toward the mid to low end of the market soon, if it hopes to continue to compete.

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Tuesday, January 8, 2013

eBay Finally Updates iOS App, Improving Features For Apple Users

Apple's iOS operating system is Android's biggest competitor and while it has not reached the userbase that Android has, it is still a force to be reckoned with. However, it would seem that some companies are focusing on their Android market more heavily than on iOS.

eBay is one of these companies. The e-commerce giant finally updated its app, according to This upgrade brings much wanted change to the application for both buyers and sellers alike. 

eBay version 2.7 has an improved category listing, pricing, and shipping guidance. It also has better photo editing tools for the sellers. The photo editing tools are a major boon, as a low quality photo can often inhibit sales.

Other improvements include the ability for sellers to save multiple drafts of their listings. While this may seem like a small change, it is a big help when the seller is listing several products that are very similar. You may also begin filling out your listing on the web, but then complete it from your iPhone or iPad, or the other way around. This offers more flexibility to users, which is something Apple and eBay can both profit from.

With faster checkouts and smoother search enhancements, the eBay app for iOS is finally matching up to the features that are already available on Android. Apple is the top seller of high end tablets and smartphones, and it might be wise for companies like eBay to focus more on their iOS applications, as iOS provides a large userbase for them.

Monday, January 7, 2013

Apple Inc. (AAPL) Reports 40 Billion Downloads From App Store

Apple Inc. (AAPL) has marked yet another milestone in its books, as ABC News reports that there have now been 40 billion downloads recorded in its App Store.

According to the report, last year has been a record breaking year in the number of apps downloaded. During 2012, more than 20 billion downloads were recorded. As of March of last year, Apple had only recorded 25 billion. These apps have been downloaded through the iPhone, iPad, and iPod Touch devices, and their popularity is undeniable.

Apple lays claim to having more than 500 million active accounts, and the holiday season helped the Cupertino company set new records. December alone saw more than 2 billion downloads. Apple has not announced how many devices were sold in the month leading up to Christmas, but it's conceivable that many people purchased iPads, iPhones, and iPods as gifts. This is the most likely cause of the spike in downloads. According to reports, Apple's app developers raked in more than $7 million thanks to the increased downloads.

Eddy Cue, Apple's Senior VP of Internet Software and Services said, "It has been an incredible year for the iOS developer community. We continue to invest in providing them with the best ecosystem, so they can create the most innovative apps in the world."

Apple is not the only ecosystem that made bank this holiday season, as Google's Android platform also witnessed a spike in downloads. On Christmas day alone, the two platforms recorded a combined 328 million downloads.

The mobile device craze seems to be more than just a passing fad, and Apple is well poised to continue to take advantage of the desire for mobility and Internet and phone access. This year holds much promise for the tech company.

Thursday, January 3, 2013

Apple, Microsoft, & Google: Who Will Control Our Homes First?

As smartphones become smarter, it is conceivable that in the near future most of our lives will be controlled by them. Most of the electronic devices in our lives anyways. The technology to use smartphones as a means to control everyday apparatus in our homes and offices is becoming more advanced almost daily. Already there are apps that allow us to use our phones to operate as a remote for our stereos, garage door openers, and many more items. It's possible that not far into the future, we will be able to control our security systems and televisions with them as well.

Forbes reports that Microsoft has already gained a step on Apple and Google in the race to control our daily electronics. They have done this by acquiring Id8 Group R2 Studios, an app development company. So far, the only known product of this company is a $99 application that was made for Android. The app is designed to control basic home functions, such as the security system, television, and other electronic pieces.
Google has their own app, called Android@Home, which is designed to offer similar functionality through Android based phones. Apple however, seems to be falling behind in this race, as they have relied heavily on selling 3rd party applications that offer these services.

One of the biggest obstacles to this technology is that the existing systems within the homes will not be compatible with it. However, this will open up a market opportunity for the manufacturers of each of these products, which could prove to be rather profitable. Companies like Whirlpool, General Electric, and other companies that build home appliances will have an opportunity to create devices that can be controlled through this technology, and stand to make a large profit in the process.

As time progresses, and technology increases, it only makes sense that more of our lives will become automated. However, I wonder if we are seeking to make them entirely too automated for our own good. Remember the Jetsons cartoon on television? There were times when having appliances that were remotely operated did not turn out to be all that profitable. In the world we live in, family dinner has been sacrificed for TV dinners and the late show, and movie night has given way to video games and chat rooms. 

Perhaps we shouldn't be in such a hurry for another way to make our lives faster, but rather slow down and enjoy the time it takes to walk across the room and flip the light switch. Only time will tell how far this technology will go, and only time will tell how it will affect us.

Wednesday, January 2, 2013

Apple Inc. (AAPL) Could Be Ready To Divorce Samsung

Apple Inc. (AAPL) has long used Samsung Electronics to build its processors for its mobile devices. However, it seems that the recent patent war between the two giants has taken a major toll on their business relationship. According to's Anna Peel, Apple is seeking the services of Taiwan Semiconductor Manufacturing Company in developing its future processors.

The report cites, which has the following information posted on their site:

TSMC is expected to start producing the A6X processors, which will be of the 28 nm type rather than the 32 nm type from Samsung, in the first quarter of 2013. This is earlier than what had been forecast by industry officials, who predicted that Apple would switch from Samsung to TSMC in the second half of the year. TSMC’s A6X yield is expected to be mounted on the fifth-generation iPad and the second-generation iPad mini, which are rumored to be released early this year.

Apple has dominated the patent battle between the two giants, and while it may not be surprising to hear this report, it will be interesting to see how it affects both companies in the future. There have been multiple lawsuits filed all across the globe, by both Apple and Samsung. The battles have led to decisions favoring both corporations, with Apple being awarded $1.05 billion last year. Samsung's latest and possibly the most publicized win over Apple came from the UK, when a judge ordered Apple to post a public apology to Samsung on its UK web site.

It will be interesting to see where the future takes these two tech giants, and what lies in store for each of them. No doubt, losing Apple's business as a client could harm Samsung's overall revenue, but it could also free them up to create better processors for their own mobile devices.